Strategic changes at Teleca

· Mobile focus accompanied by management changes · Acquisition of Russia’s leading mobile devices consulting company

The measures outlined below are designed to help Teleca increase its focus and reduce delivery costs. · Mobile focus – from 1 April Teleca is organised as three divisions: Teleca Mobile, Teleca Systems and Benima. As independent units Teleca Systems and Benima now have a more distinct market profile that will enable them to focus better on consulting business, to the benefit of both customers and staff. Several interesting possibilities regarding ownership outside Teleca will be considered, including a possible transition to companies quoted on the stock exchange. Teleca will therefore become synonymous with Teleca Mobile, while conditions will be created to strengthen the business activities of Teleca Systems and Benima. For more about each business, see appendix 1. · The newly appointed heads of the respective divisions are René Svendsen-Tune, Örjan Frid and Tore Helgeson. Teleca’s carefully planned transition to Teleca Mobile means that no double management positions are required. René Svendsen-Tune will therefore take over as CEO from Dag Sundström on 1 June 2006. · Teleca is acquiring the consulting company Telma in Russia, which has about 825 employees. This will provide Teleca with a substantial low-cost production capability and make a significant contribution to profitability. Telma has successfully developed its consulting business with global customers in the mobile phone sector, primarily as a result of advantageous price/performance relationships. The merger with Teleca will give rise to considerable cost and income synergy effects. Telma will be part of Teleca Mobile. · The board of directors’ forecast of improved sales and profits in 2006 remains unchanged. Group profits for the first quarter will be lower than last year’s because of lower profits in Products. Teleca Mobile Together Teleca’s Products and Mobile Devices divisions form a world-leading product and consulting organisation for mobile phone software. Long-term competitiveness is now strengthened through the acquisition of Telma, which means that Teleca Mobile can benefit from substantial low-cost skilled resources in consulting projects, while simultaneously allowing in-house Obigo product development at a lower cost. For Popwire, which has not reached its targets during the first quarter, the intention is to restructure the business with a lower cost base. This will be achieved partly by moving some parts to Obigo to achieve bigger economies of scale and partly by moving some parts of the company to the consulting business. Negotiations with the unions will start soon. Teleca Mobile will include business area Obigo, which will primarily consist of the current Products business and directly connected system integration resources. The business area will be operated from a product logic perspective. Business area Mobile Consulting will primarily produce tailor-made solutions for the largest mobile device companies. The business area will be operated from a consultant logic perspective. It will create increased business opportunities for leading global customers and a better chance of remaining at the leading edge of technology if both products and solutions can be offered in such a focused segment as mobile phone software. It is important to separate the products and solutions businesses operationally, since they are run from different business logic perspectives. Extensive management experience of selling both products and services to global customers will be gained by the arrival of René Svendsen-Tune as CEO. Teleca Mobile will be managed from Lund /Malmö. The intention is eventually to move the head office to the same location. Compared with competitors such as Access of Japan and Openwave of the United States, the ability of Teleca Mobile’s substantial consulting business to support large customers in the development of new-generation mobile phones is a competitive advantage. In addition, Obigo’s new release means that Teleca Mobile has a very competitive product portfolio. This, together with significant low-cost production, creates a large potential for a truly global business. Teleca Systems and Benima At the same time as Teleca’s future focus becomes clearly concentrated on software for mobile phones, conditions will also be improved in Teleca Systems and Benima. As independent units Teleca Systems and Benima now have a more distinct market profile that will enable them to focus better on consulting business, to the benefit of both customers and staff. Several interesting possibilities regarding ownership outside Teleca will be considered, including a possible transition to companies quoted on the stock exchange. Irrespective of the solution, this change is predicted to provide Teleca with significant funds and a good chance to develop and strengthen the businesses. Teleca Systems, which is formed from the divisions Enterprise & Operators and Network Equipment Providers, will be managed from Stockholm by Örjan Frid, the current head of Enterprise & Operators. No operational changes will take place at Benima and Tore Helgeson will continue to head the business, with Gothenburg as its base. Telma Telma is a successful consulting company with about 825 employees, of which about 775 are engineers in the software sector. Customers include Motorola, Freescale, Esmertec and McAfee. Telma turned over USD 26 million (SEK 200 million) last year and reported pro forma earnings after financial items of about USD 7.5 million (SEK 58 million). Average sales growth for the last 3 years has about 65%. Telma was founded in 1991 and in 2004 was Russia’s second-fastest growing software development company. Telma has received several quality awards and is certified according to SEI CMM level 5. As a global player in mobile phone software it is important for Teleca to be able to offer its customers a substantial low-cost element. After the acquisition 36% of Teleca Mobile employees will be in low-cost countries, where growth is expected to be higher than in high-cost countries. Telma has its operations in Nizhni Novgorod, 450 km east of Moscow and Russia’s fourth-largest city, with several technical universities and a number of IT companies. Costs in Nizhni Novgorod are considerably lower than in Moscow or St Petersburg. Telma’s consultants are considered by Teleca to have skills levels comparable to Teleca’s consultants in Teleca Mobile. Teleca is paying a purchase price of USD 22 million plus two earn-out payments totalling USD 0–35 million. The first earn-out payment is payable in August 2006 if Telma’s earnings after financial items for the first half of 2006 exceeds USD 4 million. In the event of profits of USD 4 million or USD 6 million for the first half-year, the earn-out payment will be USD 6.5 million and USD 8 million respectively. The second earn-out payment is due in February 2009 and is based on continued sales and profit growth. The maximum second earn-out payment is USD 35 million minus the first earn-out payment. This implies very strong improvements in the results corresponding to 75% annual growth and a margin of 40%, which are significantly higher than Teleca’s expectations. The structure is created so that a substantial earn-out payment benefits both Teleca and Telma’s previous owners. Teleca expects continued good growth in profitability. Telma is consolidated from 1 March 2006. Telma’s results in 2006 are expected to increase Teleca’s earnings per share by about SEK 0.50. To this can be added the synergy created by using Telma’s organisation in Teleca’s customer projects and Obigo’s product development. To take advantage of substantial synergy effects, special resources will be assigned for this under the management of Jackie Boscher, who is currently MD of one of Teleca’s subsidiaries in France. The business in Russia will continue to be headed by the current CEO, Valery Kalachev, and deputy CEO, Sergey Parshin, who are also the previous owners. The transaction is conditional on certain customary financial and legal conditions being fulfilled in connection with the change of ownership. For more information, see www.telma.ru René Svendsen-Tune René will take over as CEO of Teleca on 1 June 2006. His main long-term task will be to lead the development and expansion of Teleca Mobile. René, who is 50 years old, a Danish citizen and a graduate electrical engineer specialised in electronics, is currently part of the top management of Nokia Networks, Nokia’s telecom networks division, where he is senior vice president of Customer & Market Operations. He has global responsibility for Nokia Networks’ customer organisation, including marketing, sales and services. He also has budget responsibility for a business unit with a turnover of 6.6 billion euros in 2005 and a global workforce of 7,000. René has wide-ranging experience of managing organisations that sell both products and services in a global market. As one of the few “non-Finns” he has reached a top position at Nokia Networks after several distinguished achievements during his 12-year career at Nokia. One of his first positions was as CEO for Nokia Networks in Denmark and Norway, where he increased sales tenfold during a 5-year period. In 2000 René was given the responsibility of bringing Nokia’s 3G offering to the market, which was a success. He then became responsible for Nokia Network’s overall sales. René combines personal characteristics such as listening and analytical and executive implementation with strong line experience of managing organisations that sell both services and products on the global market. This together with the fact that René has always performed very well in his various leadership roles, means that Teleca’s board of directors believes that René is very well qualified to develop Teleca Mobile’s considerable potential. Forecast The board of directors’ forecast of improved sales and profits in 2006 remains unchanged. Popwire, which is part of Teleca Mobile, has had a weak start to the year because of delayed project deliveries and costs associated with finalising a new product release of the PC Connectivity software. In addition the positive market reception of Obigo’s new release is expected to result in increased order intake during the coming quarters, which will later have a positive effect on earnings. Group profits for the first quarter will be lower than last year’s because of lower profits in Products. Telephone conference Teleca will present the strategic changes at a telephone conference at 09.30 (CET) on Tuesday 11 April. There will be an opportunity to ask questions during the conference. Conference telephone numbers: +46-858536966 or +44-2071380832. A recording of the presentation will be available until 19 April. Replay dial-in numbers: +46-858769441 or +44-2078061970. Replay passcode: 4337018 The presentation will be in English. For more information please contact: Dan Olofsson, Chairman of the Board, Teleca AB, telephone: +46-406659000 Dag Sundström, CEO, Teleca AB, mobile: +46-705116458 René Svendsen-Tune, mobile: +45-40540068 Johannes Rudbeck, Investor Relations Manager, Teleca AB, mobile: +46-705825656 Teleca is a world-leading consulting company that develops and integrates advanced software and IT solutions. Teleca helps its customers shorten development times and use the most suitable technology more effectively. The company consists of about 3,800 experts based in 17 countries in Asia, Europe and North America. Teleca is quoted on the Stockholm Stock Exchange’s Attract 40 list. www.teleca.com Teleca’s three divisions Appendix 1 Division Teleca Mobile Teleca Systems Benima Manager René Svendsen- Örjan Frid Tore Helgeson Tune Area of business Software Develops and Solutions in applications and supports advanced industrial IT and tailor-made software and IT- automation that software solutions for helps customers to development for customers in manufacture more mobile devices. Telecom, efficiently and Teleca has Automotive, Life secure. produced Science and solutions for Enterprises. over 200 mobile phone models, with more than 400 million products sold across the globe. Major customers Arima, BenQ Aerocrine, Akzo Nobel, Alfa /Siemens, Huawei, Alcatel, AMS, Laval, Astra Tech, LG, Motorola, Axis-Shield, Kvaener Pulping, Nokia, Panasonic, Ericsson, Siemens LKAB, OKG, Samsung, Sony Medical, Vodafone Ringhals, Ericsson, Toshiba Westinghouse Competitors Access, BVRP/ Cap Gemeni, Jaako Pöyry, Avanquest, , Combitech, IBM, Rejlers, Semcon, Elektrobit, ITS, TCS, Tieto Sweco,WSP, ÅF Opera, Openwave, Enator, WM-data, Sasken, SysopenDigia Number of 2,172 1,227 495 employees Dec 2005 pro forma * Net sales 2005 1,586 1,245 496 pro forma, MSEK * * Preliminary figures. Teleca Mobile Mobile including Telma, Russia. Detailed financial information for each division will be reported in the Interim Report for the first quarter 2006.