Teleca acquires Russia’s leading consulting company in mobile phone development

Teleca has acquired Telma, Russia’s leading consulting company focused on mobile phone development. With about 825 employees of which about 775 are engineers, Telma will form the base for Teleca’s low-cost activities in mobile phone development.

Telma is a successful company whose customers include Motorola, Freescale, Esmertec and McAfee. Its net revenue in 2005 was about USD 26 million (SEK 200 million) and pro forma earnings after financial items about USD 7.5 million (SEK 58 million). Average sales growth for the last 3 years has been about 65%. Telma was founded in 1991 and in 2004 became Russia’s second-fastest growing software development company. “For Teleca to remain a global leading player in mobile phone software it’s essential to be able to offer our customers a substantial low-cost element. The Telma acquisition means that 36% of Teleca Mobile employees will be in low-cost countries, where growth is expected to be higher than in high-cost countries,” says Dag Sundström, CEO of Teleca. “Telma has a reputation for offering excellent quality and good prices and is also certified to SEI CMM level 5. Its consultants are considered to have skills levels comparable to Teleca’s.” “We’re looking forward to working with Teleca with great confidence. By combining our strengths we’ll be able to improve growth and profitability,” says Valery Kalachev, CEO of Telma. “Teleca possesses impressive technical expertise and has good relations with all the major mobile phone manufacturers in the world. This combined with our ability to deliver advanced mobile phone projects at a very competitive price presents us with great opportunities.” Telma is located in Nizhni Novgorod, 450 km east of Moscow and Russia’s fourth largest city, with several technical universities and a number of IT companies. Cost levels in Nizhni Novgorod are considerably lower than in Moscow or St Petersburg. For more financial details see the additional press information published in connection with this press release. www.telma.ru For more information contact: - Dag Sundström, CEO, Teleca AB, mobile: +46-705116458 - Christian Luiga, CFO, Teleca AB, mobile: +46-703751604 - Johannes Rudbeck, Investor Relations Manager, Teleca AB, mobile: +46-705825656