Telia's Businesses

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Telia’s Businesses

Telia AB (publ) Investor Relations SE-123 86 Farsta, Sweden Tel. +46 (0) 8-713 10 00 Fax +46 (0) 8-713 69 47 www.telia.com Corporate Reg. No. 556103-4249 Registered Ofﬁce: Stockholm rfx+6() 0 5472. 604 (0)8 or fax +46 7143 713 (0)8 +46 These publicationscanbe ordered viatel. core businesses. developing our strategy for tion of Telia’s This isapresenta- Telia’s Businesses for 2001andmore. performance analyses balance sheet, income statement, Board ofDirectors, ofthe the report Here you willﬁnd Report 2001 Telia’s Annual and employees. suppliers customers, as groups such interest important and cooperation with Telia’s relationships information about This contains Telia’s Relationships

ii TELIA 2001 Businesses,financials and relationships and Businesses,financials pan-Nordic mobile services,withmore ontheway. During the year wethefirst launched countries. operator withaccesstoUMTSlicensesinallfour across theentire Nordic market andtheonly only mobileoperator withnetworks andservices order totake advantage ofourpositionasthe ing aNordic organization for mobileservicesin are establish- to thegeneral publicin2002).We inDenmark (GPRSwillbelaunched and Finland. actively. allowing ustomarket ourbroadband services efficient delivery systemsandcustomersupport, households andbusinesseswe have builtup already abletooffer ADSLtomostSwedish stepsalreadyimportant inplace. rationalizing ourcore businesses,withseveral all ourefforts andresources ondeveloping and and makes iteasiertostreamline ouroperations. mented aGroup structure thatfacilitates control refined the Telia have alsoimple- Group.We 2001 was have aneventful successfully year.We We have GPRSinSweden,Norway launched are Broadband salestookoff in2001.We After therefinement,we have concentrated as acompany. are areas three thatshedlighton important Telia as customers,suppliers andemployees. cooperation interest groups withimportant such information about Telia’s relationships and for theAnnual General Meeting. information for ourshareholders inpreparation The annual alsocontains report forreport 2001. tions. cultivating themarket andcontrolling ouropera- our strategy for developing ourcore businesses, describe ouroperations inthree perspectives. insight intothecompany,we have decidedto and production ofnetwork services. entering anew phasewhere thefocus isonsales that ourinternationalcarrier operations are This means and mostofthenetwork islitup. Our internationalcarrier network islargely ready The businesses,financialsandrelationships The third part,Telia’s Relationships,contains The contains secondpart Telia’s annual In thissection,Telia’s describe Businesses,we ToTelia increase hasextensive operations. o oRahTla32 24 28 Reach to How 20 Telia Management and Organization,Control 16 Marketing FixedNetworks 6 OperationsCarrier 12 International 8 Internet and Broadband Communications Mobile 2 CEO Fromthe TeliaRefinement Afterthe Contents 1 TELIA’S BUSINESSES Telia After the Refinement Efficient,flexible and focused higher up the value chain TELIA’S BUSINESSES

2 This meansthatfixed andmobilecommunications will convergence ofthesefour businessesdown theroad. sive andfunctionalsolutions. integrated toprovide customers withmore comprehen- The servicescanalready bebundled and ue togrow. strong market positionthatwe already enjoy. placed tocompeteandcreate profitability,based onthe because they are growth areas inwhichwe are well We have theseoperations chosen asourcore businesses • Internationalcarrier operations • Fixed networks • Broadband andInternet • Mobilecommunications marketing ofservicesin: Telia isnow fully focused onthedevelopment and Concentration tofour core businesses countries andtheBalticregion. oftheoperationspart was concentrated totheNordic functions were consequently divested,while thegreater Several businessesand create value andgrow profitably. businesses inwhich Telia to hasgreater opportunities operations have beenrefined down toanumber of This meansthat had beenestablishedfor thecompany. During 2001,Telia completedthestrategic focus that The willleadtoa implementationofIPtechnology The synergies between thesefour businessescontin- network construction andmaintenance,installation consulting operations. assistance,call centeroperations andinternational of 2000,includingthedirectory operations,directory beginning oftherefine andfocus efforts intheautumn it managed itselfwithitsown resources. sive anddiversified operations,the ofwhich greater part other traditional telecomoperators,Telia hashadexten- Like order tofree upmanagement resources andcapital. functions withinthecore businesses were divested in Operations outsidethecore businessesandcertain Extensive refinement goods andservices. and cultural conditionsandalarge flow ofinformation, cally well-defined area,with relatively similarlinguistic strong foothold intheregion andthatitisageographi- The reason for thisisthatwe already have a region. ed ouractivitiestotheNordic countries andtheBaltic tions tothesefour core businesses we have concentrat- the customerdimensionandininfrastructure. on abroad front andexploit economiesofscalebothin attractive solutionsfor customers,distribute ourservices voice anddata,greatly increasing our ability todevelop be integrated onthesameinfrastructure alongwith Certain functions have alsobeendivested,suchas Several businesseshave beendivested sincethe At thesametimethatwe have refined ouropera- the refine and focus efforts.focus and refine the after goals ny’sand direction compa- the employeesabout at tives Teliawith dialogs led execu- autumn the During 3 TELIA’S BUSINESSES 4 TELIA’S BUSINESSES changes onthemarket. less sensitive toeconomicfluctuationsandother This makes usnimblerandmore flexible, and partners. company,working more extensively withsubcontractors executive positions,alsoclimbed. women overall,as well asthepercentage ofwomen in The percentageaverage of age amongGroup employees. resulted inahigherlevel ofeducationandalower The divestitures have in theprocessing andvalue chain. more asaknowledge company,with itsfocus higherup autumn of2000. since thebeginning oftherefine and focus efforts inthe The number ofemployees hasbeenreduced by 15,000 with more subcontractors A knowledge company interests intheBrazilian mobileoperator Tess. alsodivested ourfinancial and theUnitedStates.We Finland aswell astheInternetservicesproviders inSpain company Eircom,the fixed network operations in interestsdivested intheIrish itsparticipating telecom of services,which we willbepurchasing from now on. us create acompetitive market inSweden for thesetypes These divestitures help administrative functions. support servicing ofaccessesandcustomerequipmentsome After therefinement,we are more ofanetwork After therefine andfocus efforts,Telia functions ofthegeographicAs part concentration,Telia Internationalcarrier • Fixed networks • Broadband andInternet • Mobilecommunications • of serviceswithin: Development andmarketing Core business operations Certain administrative support • Installationandservicingof • Network construction and • Divested functions functions accesses andcustomerequipment maintenance relationships withactive customers by rewarding loyalty. ships withattractive offers,and strengthening our value tocustomers,cultivating strong customerrelation- continuously developing competitive servicesofreal partners. ing usmore attractive tocontentproviders andother development ofnetworks andservices,while alsomak- nities tocreate synergies andeconomiesofscaleinthe with intensifyingcompetitionasthey generate opportu- Volume andcustomerbaseare essentialonamarket Sharper customerfocus that isexpected totake place. take anactive role intherestructuring oftheindustry strongest telecomoperators inEurope,enabling usto Telia today isfinancially oneofthe our finances. which hasapositive impactoncostsandprofitability. nities tocreate effective synergies andeconomiesofscale, egahcmre rsne This increases ouropportu- geographic market presence. as acompany bothintermsoftypebusinessand growth areas withgood profitability potential. The businessesonwhichwe have decidedtofocus are value for itscustomers andhencefor itsshareholders. After therefinement,Telia isbetterpositionedtocreate Greater tocreate opportunity value We cansecure ourcustomerbaseasanassetby The refine andfocus efforts have also strengthened Today Telia isalsomore consolidatedandfocused nentsriepoiesin Internetserviceproviders • Mobileoperator Tess• Internationalconsulting • Callcenteroperations • Directory assistance • Directory operations • Divested businesses Telecommunications • Finland operations inIreland and Spain andtheUnitedStates part of the refinement. the of part as divestedwere functions and Severalbusinesses data. fixed andmobilecommunications aswell asvoice and taking majorinitiatives tooffer solutionsthatintegrate That iswhy we are nowefficiently for thecustomer. thatourserviceswork togetherimportant smoothly and Itisalso are pursuing intensive servicedevelopment. withinmobilecommunicationsparticularly where we Effective segmentationisimportant, tion ofthemarket. market. our abilitytoproject ourservicesandproducts onthe order toimprove servicetoourcustomers andenhance serviceanddeliverychannels,customer processes in isalsounderwayoffers.Work onstreamlining sales and attract different customergroups usingtailored This enablesustobundleourservices business areas. nated withinasinglecustomerunitshared by the services,all salesandallcustomercontactsare coordi- ket,where we offer ourentire range ofproducts and control andevaluation. ness area tohelpclarify ourbusinessesandfacilitate coreEach businesswas placedinitsown unifiedbusi- structure soastoreinforce thebusinessorientation. During theyear,we modifiedtheGroup organizational to streamline the sales process. sales the streamline to areas,Teliaorder business the Sverige,in all for unit customer single a in coordinated been have sales and relations Customer We are also working onamore advanced segmenta- To increase thesalespressure ontheSwedish mar- and goals. all levels were involved inadialog about Telia’s focus Employees andmanagers on changes madeduring 2001. Telia’s strategic focus andto explain thesweeping implemented during theautumntogarner for support venture capitaloperations managed by Telia since1996. ed,including leasingandcollectingoperations andthe Only asmallnumber ofoperations remain tobedivest- Most oftherefine andfocus efforts are now complete. Internal communicationprogram Beoneofthetopthree leaders ontheEuropean carrier • We alsoaimto: Securing ourpositionastheleadingfixed network • Taking amarket-leading role inbroadband andthe • Refining ourpositionastheleadingmobileoperator in • tion by: Ourgoal istostrengthen thisposi- tions market today. Telia istheleadingplayer ontheNordic telecommunica- Market goals market operator inSweden Internet the Nordic countries andBalticregion An extensive internalcommunication program was 5 TELIA’S BUSINESSES 6 core businesses Concentrating fully on our CEO Marianne Nivert: Developing new value-added fixed servicesandstream- • Marketing andsellingourinternationalcarrier services • Increasing bandwidthinthefixed network nearest the • thethird Launching generation ofmobilecommunica- • primary initiatives withwhichwe are working: have already madegreat strides inthesix nesses.We and we are now concentrating fully onourcore busi- our core businessesthatwe canpurchase from others. operations functionswithin outsideourcore andcertain undergone rapid andextensive refinement,divesting services. operating networks anddeveloping communications Telia toconcentrate onitsmainmission,designingand for Inthissituationitisofvitalimportance competition. number ofplayers onthemarket isgrowing,intensifying At thesametime,the to develop new typesofservices. a paradigm thatwillmake shiftintechnology itpossible infrastructure are currently inmodernsociety.We facing Telecommunications isperhapsthemostimportant of fixed services,passedonfrom when we were the Telia hasavery widerangelining ourproduct portfolio. production. as theseoperations move from thebuild-upphaseinto ness. customers toutilize theInternetfully inlife andbusi- customer andoffering services thatwillenableour nications. age customers toincrease theiruseofmobilecommu- tions systemsanddeveloping servicesthatwillencour- The refine andfocus efforts are essentially complete To free upresources for thismission,theGroup has Marianne Nivert Stockholm,February 2002 entire OECDarea. among themostinnovative broadband developers inthe Sweden isconsidered broadband penetration intheEU. position withinthebroadband industry,with thehighest Sweden hastaken aleading continue toblaze thetrail. Andwe will opment asatelecommunications leader. Telia hasbeenthedriving force behindSweden’s devel- Focusing onourinitiatives outsideSweden inorder to • Improving servicetoourcustomers inSweden,where • secure future growth andprofitability. into attractive offers. streamline thesalesprocess andpackage ourservices are now coordinated allows usto “under oneroof.”This AllsalesinSweden we offer theGroup’s entire range. commercial value. provide allcommunications needsregardless oftheir only operator onthemarket andwere required to 7 TELIA’S BUSINESSES Telia is the only operator able to launch GPRS and UMTS services across the entire Nordic market. We launched GPRS in Sweden, Norway and Finland in 2001. GPRS will be introduced in Denmark in 2002. Telia is now building a Nordic organization for mobile services.

8 mobile services Blazing the trail towards new Mobile Communications developing Telia asanintegrated Nordic mobileoperator. elementsofourstrategyservices are for important form andaNordic segmentationmodelfor ourrange of Nordic basicservices,withmore ontheway. year Telia aNordic launched price planandseveral pan- During the both infrastructure andservice development. the Nordic countries,we are abletoseize synergies in Having thelargest baseofmobilecustomers in market. we areserviceseffectively abletolaunch ontheNordic access toUMTSlicensesthroughout theNordic region, GPRS networks inalltheNordic countries andwith mobile operators. interestsRussia through inmarket-leading participating We alsohave astrong positionintheBalticstatesand strongposition isparticularly inSweden andNorway. Ourmarket services for bothconsumers andbusinesses. operations thatmanage networks anddevelop mobile IntheNordic countries we have wholly-owned sales. tries intermsofcustomernumbers,market share and Telia istheleadingmobileoperator intheNordic coun- collaboration. variousof formsinitiating and makermarket a as role active an playingby society information mobile the of development the promoting Wealso are scale. of economies generatessignificant and services new launching forplatform strong Telia’sa is base largecustomer Nordicgrow. to continues services mobile formarket The and Russia. growth inNorway,Denmark,Finland,the Balticstates taining ourleadingpositioninSweden andpursuing Nordic countries,the BalticstatesandRussiaby main- for This iswhy we mustTelia. secure ourposition inthe As theonly Nordic mobileoperator withGSMand A shared Nordic network architecture andbillingplat- Leveraging economiesofscaleisthecornerstone of Mobile businessistakingonever greater importance oit n t datgsfrues Teliasociety anditsadvantages for users. We have faith inthemobileinformation wireless dataservices. today we have continually improving for technology Itbegan withvoice,and countries sincethe1950s. Wireless communication hasbeenareality intheNordic Mobile evolution continues future businesslogic. industry tocreate ashared visionofthefuture and ways for mobileoperators,content providers andtheIT Arecent Telia initiativeindustry. was apublichearing on consensus andawillingnesstocooperate inthetelecom tofoster Itisalsoimportant their own mobilenetworks. capacity available tomobileserviceproviders thatlack market for otherplayers,chiefly by makingnetwork ing demandfor theseservices. own andthoseofothers,and encourag- and distributing new services,bothour that we focus onintegrating,bundling the role ofmarket maker,which means To dothiswe have taken on countries. ment ofthemobilemarket intheNordic is dedicatedtopromoting thedevelop- Open interfaces successful Nordic operator. our strategy for creating astrong and One primary taskistoopenupthe countries,millions Nordic the in customers mobile of Number 9920 2001 2000 1999 2.8 4.5 4.9 9 TELIA’S BUSINESSES 10 TELIA’S BUSINESSES odccutis This meansthatwe closeddown the Nordic countries. Telia concentrated commitmentstothe itsportal pan-Nordic strategy. GPRS servicesacross theNordic region,in linewithour This allows our customers touse the Nordic countries. mobile operator GPRSroaming tolaunch throughout InJanuary 2002 Telia MobilewasFinland. thefirst technology,inpacket-switching Sweden,Norway and In2001weGPRS,thefirst launched come online. new andexciting servicesashigh-capacitytechnologies willbeabletooffer stillmore over mobiledevices.We (MMS),allowing thetransmission ofimages andvideo developed toward MultimediaMessaging Services SMSservicesare now being new ways tocommunicate. of working andnew dimensionsincommunications. new servicesoffer greater flexibility,more efficient ways The voice-based telephony andmobile dataservices. Telia hasintensive product development bothin tions. create new areas ofapplicationfor mobilecommunica- moves towards increased penetration,it to isimportant Butasthemarket both consumers andbusinesses. mobile networks andpromoting mobileusage among driving themigration ofvoice from thefixed tothe central mobilebusinessisfor Telia. tions inalmostallNordic countries,which shows how tions hasnow surpassed thenumber offixed subscrip- The number ofmobilesubscrip- cated anddemanding. mobile usage intheworld,and customers are sophisti- The Nordic countries have amongthehighestlevels of ei salae nmbl nent During theyear Telia isaleader inmobileInternet. The huge successofSMS has openedthedoorto Falling prices andthegreater needfor mobilityare young people. young targetedat webmarket a is MobileNation grows. ices serv- mobile rangeof the as importance gaining is tion function. billing a and base customer to providesaccess Telia’s providersthat content for interface PocketMode,an services,Telialaunched content of development the owned by Telia and Tele2,was formed during theyear, Svenska UMTS-nätAB,jointly with partnership Tele2. a positive trend and hasledtheway by forming aUMTS Teliaships between seesthisas operators toreduce risks. tough buildoutrequirements are encouraging partner- network expansion,in particular,expensive licensesand In growing interest inalmostallareas. inpartnerships many well-established players,which iswhy there is Noteverybody cansucceedonamarket with services. Operators),many ofthemfocusing onanarrow range of service providers andMVNOs(Mobile Virtual Network traffic andreceive a20percent share ofthecontentvalue. charge for the tomer baseandabillingfunction.We content providers,giving themaccesstothe Telia cus- is why we have anew launched interface tothird-party This Access tocontenthaspreviously beenatightsector. ormarketNo portal web isbetterthanits content. New partnerships andforms ofcollaboration partners. simplifies collaboration withserviceproviders and The shared platform also platformtechnical isthesame. The customerinterface varies by segmentbutthe mented market webs usingtheInternet astheinterface. cally andorganizationally,achieves significantsynergies. Bringing together,techni- ourmobileportals in Sweden. and whichisnow offering mobilesubscriptions tousers Halebop,which hasoverportal 800,000 registered users ing allshares inthepreviously partly-owned Nordic andItaly,while Speedy portal acquir- Tomato intheU.K. Customer segmenta- Customer stimulating at Aimed There isanintenselevel ofactivityamongnew The are increasingly portals beingdeveloped asseg- Baltic interests are leaders intheirrespective markets Allour will beoneofRussia’s largest mobileoperators. approximately 146millionpeople,this new company mobile operator,MegaFon.With amarket reachof the year,Telia inthe first pan-Russian becameapartner During interests inmobileoperators inthosecountries. the BalticstatesandRussiathrough ourparticipating network there. in Denmarkaswe rapidly build upourown GSM900 contributed tocustomergrowth during theyear. subscription Dualprepaid hasbeenvery successfuland InFinland,the ofthecashcard launch to competition. op anddistribute new services. offers useconomicadvantages andenablesustodevel- network andacommonservicedevelopment platform The introduction ofaNordic IP a strong Nordic player. Telia’s sizeNordic isanadvantage countries. for creating Telia hasnearly 5millionmobilecustomers inthe Large customerbaseiskey the Nordic andBalticcountries andRussia. gies bothbetween theBalticoperations andbetween are minority shareholders,we willseektorealize syner- Even intheBalticstatesandRussia,where we partner. synergies andeconomiesofscaleorcollaborate witha our own decisionsonwhether,how andwhen torealize now infullswing. and work toestablishtheUMTSnetwork inSweden is We inthestrong are mobilegrowth participating in We willalsooffer more attractive servicesandprices The Nordic markets are amongthosemostexposed In ourwholly-owned Nordic operations we make SMS usage. MobilQuiz andBotfighter,which ledtorobust growth in for example Premium SMS,InfoBrain,QuickDeal, inteei lowae.This indicatesthatsize aloneis tion there isalsoweaker. however,customer loyalty islower andourmarket posi- InFinland andDenmark, we have large market shares. Customer loyalty ishighinSweden andNorway,where Attractive servicesfor different customersegments share ofthesecompanies. and ourholdingscorrespond toroughly a25percent for FriendFinder,making totally new applicationsavailable during theyear,including as positioningservicessuch Many new serviceswere launched Telia’s positions. factor insecuringthe mostimportant andimproving volume users andearly adopters who drive themarket. The program focuses mainly onhigh-value customers,i.e. gram,including activitestoincrease customerloyalty. customers,Telia iscontinuing torun anactive CRMpro- To reachnew targetstrategy. groups andkeep existing tohavea successfactor andthatitisimportant agrowth people. MobileNation,which offers servicestargeted atyoung of thisapproachistherecently market launched web Oneexample oped andoffered toprovide theseneeds. depending ongroup-specific needs,andservicesdevel- Customers must besegmented nities for growth. customer segmentationwillprovide additionalopportu- oiepoe.New SMSserviceswere alsolaunched, mobile phones. Still,an attractive range ofservicescontinues tobe New salesanddistributioneffective channels users to locate friends. locate to users FriendFinderenables that year,includingthe ing dur- launched were services Additionalpositioning 11 TELIA’S BUSINESSES Telia’s streaming service makes it possible to send television broadcasts over the Internet. All debates in the Swedish Riksdag (Parliament) will be broadcast live over the Internet and can be seen worldwide. Large picture: Kenneth Lantz,Member of Parliament, Kristdemokraterna (Christian Democrats). Small picture: Gunnar Steiner,head of video and web TV at the Swedish Riksdag.

12 Internet services Building a broadband market for Broadband and Internet ProLane VPN provides thesamecapacityasdedicated • DedicatedInternetaccess,ProLane,provides practically • Cablebroadband accessprovides 500kbps,equivalent • ADSL,withbroadband communication over copper • ISDNInternetaccessisavailable atspeedsof64or • Oursimplestconnection,dial-upInternet,provides • Telia hasawiderange ofInternetconnections. Wide range ofaccesses broadband,butparticularly alsonarrowband. pate continued robust demandfor accessservices, customers antici- quicklyandoffer attractive prices.We existing platforms technical sothatwe can reachour are developing theseaccesseson their own needs.We so thatourcustomers canselecttheservicesthatsuit Our strategy istooffer accessatarange ofbandwidths usage. Internet support that services offercommunications-related also access,we Internet as well As services. Internet and broadband in position leading a capturing of aim the with businesses and households formarketbroadband access,Teliaa Internet building high-speed is for demand the byDriven offices ina Virtual Private Network. graphically distributed businessestointerconnect their access,with theaddedadvantage ofenablinggeo- unlimited capacity. to ADSL. telephone exchange. anybody livingwithinaradius of4.5kilometers from a Itistechnicallypossibletooffer ADSLto customers. residential customers and1or2Mbpsfor business 500kbpsfor wire,is available inthree different speeds: 128 kbps. speeds of56kbps. Early broadband launch large share ofSwedish owners property to The Telia. begin actively marketing ourbroadband access plans. ourdelivery timesand ustoshorten support,enabling we builtupeffective systemsfor delivery andcustomer communication. upgrading thecablenetwork for two-way broadband households insingle-family andmulti-family dwellings. ADSLservicesare alsoavailable toindividual building. by ADSLorviaafiber-based datanetwork laidinthe Access iseither multi-family dwellings asearly as1999. holds,Telia agroup launched connectionservicefor the next three years. tobroadbandplanning toswitch within currently usingdial-upaccessare approximately halfofthehouseholds burgeoning andsurveys indicatethat The number ofbroadband customers is mostly through dial-upconnections. households have Internetaccesstoday, Denmark isalsonearthetopoflist. broadband penetration percapita. Internet accessintheEUandhighest Sweden hasthehighestpenetration of Our early broadbandhelpedustobinda launch During theyear Broadband salestookoff in2001. While developing ourADSLsolutionswe alsobegan To broadband accessfor kickstart Swedish house- Sixty-four percent ofSwedish and Denmark (‘000) Denmark and Sweden in connections broadband of Number 9920 2001 2000 1999 17 81 303 13 TELIA’S BUSINESSES general agreements that we have signed so far cover Telia currently has approximately 1,140,000 Internet 1,165,000 potential ADSL connections and 520,500 access customers,making us the leading Internet service potential cable network connections in Sweden. provider in Sweden with over 50 percent of the broad- As companies become more cost-conscious they are band market. In Denmark we are the largest provider of increasingly turning to the Internet for their internal and cable broadband services. external communication. Most companies in Sweden with over 500 employees have some form of Internet Communications-related services connection and of the largest companies,85 percent Accesses are our main business,representing the greater have dedicated access. part of our revenues. But we also develop communica- Approximately 60 percent of companies with five or tions-related services that support Internet usage. fewer employees have Internet access. Many of these Our residential market focus is on information, are expected to upgrade their Internet connections entertainment,leisure and security services for the during 2002. whole family.We develop content services together with During the year we launched an ADSL service for our partners and we have partnership agreements with business customers,Telia Bredband Företag. The demand suppliers of games,sports,news and entertainment. for this service is very strong,especially from small and Services aimed at residential customers are available medium-size companies. at our Internet portal www.comhem.se. More and more Large companies demand high-capacity connections of the services available on this award-winning portal with superior reliability. For these customers we have are broadband services.We also offer residential cus- developed a dedicated-access service,Telia ProLane,in tomers security services such as virus protection soft- which the capacity selected by the customer is exclusive ware and firewalls that can be downloaded and upgrad- to that customer and therefore guaranteed available. ed over the Internet. Companies with geographically distributed opera- For businesses we develop services for streaming, tions can use the Telia ProLane VPN solution and build e-mail,hosting and security. There is growing demand their own intranet and extranet. This service was for streaming services,sound and animation over the launched in 2001 to strong demand. Internet as more and more companies use their web- We offer broadband Internet access in Denmark sites for live news broadcasts,press conferences and through our wholly-owned cable television company similar events. Telia is the leading provider and most of Telia Stofa. Sweden’s larger companies and organizations are Telia We also offer dial-up access on the Danish market. customers.

Telia offers broadband to Swedish households via ADSL and the cable network. ADSL already reaches 70 percent of households and most businesses in Sweden.

The website www.comhem.se will be the main portal for all of Telia’s Internet customers in Sweden.

14 compared with23percent in1999. nesses indicatethattheirInternetsalesare profitable, Inretail,76 percent ofbusi- e-commerce isprofitable. growing percentage ofcompaniesare that reporting At thesametime,a the Danestakingsecondplace. Internet more thanany othernationality inEurope,with Swedes shoponthe pace thanexpected five years ago. Servercertifikat (server certificates). access),Elektroniska ID-kort(electronic IDcards) and e-post (secure e-mail),Säker webbaccess (secure web Ourrange ofsecurity servicesincludesSäker Verisign. collaboration withtheleadingAmerican company Telia develops thesesecurity solutionsin identification. Infrastructure) usingelectronic signatures for personal direct marketing. E-mail Marketing Tool,an e-mailservicespecifically for Telia servicesinallthree launched areas,including Telia During theyear strengthen theircustomerrelationships. services issurging ascompaniesstrive tocultivate and Demandfor e-mail increases intrade andindustry. Web-hosting isagrowing businessasInternetusage security solution. Telia istheSwedish leaderinthistypeofpayment and subscribing totheservices,which includesupport. payment andsecurity solutionsover theInternetby Customers candownload andupdateour Internet. enable ourcustomers toreceive payments over the E-commerce continues togrow,though ataslower Our security solutionsare basedonPKI(PublicKey We have developed two uniqueservicesthat hockey games.hockey and professionalsoccer Swedish of broadcasts pay-per-view launched surgedwhen TV Telia Demand for digitalfor Demand such asheatingandlighting. such enabling residents tomonitorandcontrol functions also offered interactive management property services, begin in2002. cable television market,digitization ofthenetwork will assports,games andnews.services such in demandfor digital boxes. casts metwithgreat successandcontributed toasurge These broad- made available onpay-per-view in2001. andmusic. broadcasts ofsports,films Digital TV customers are alsoabletoorder pay-per-view customers receive adigital box andsome70channels. For afixed monthly fee comhem’s cable subscribe. through year,with 20percent ofhouseholdsexpected to year andsurveys indicatethat2002willbeabreak- of ourcablecustomers. largely digitized anddigital TV isavailable to 1.2million The Swedish network is million residential connections. hem istheleadingcabletelevision provider with1.4 InSweden com and through Telia Stofa in Denmark. Telia offers cabletelevision through comheminSweden Growing interest indigital TV residential andbusinesscustomers. accesses andservicesintoattractive plansfor both needs ofallourcustomers. refine ouraccessoffers tomeetthevarious stillfurther cable accesscanbothoffer higherspeedsandwe aimto ADSLand ing ourpricing modelsandsubscription forms. all of Telia’s Internetcustomers inSweden. tion isthatwww.comhem.se for willbethemainportal Onehigh-profile example ofthisintegra- ing andsales. include coordination platforms,market- ofourtechnical These efforts generate synergies andeconomiesofscale. We are now integrating ourInternetoperations to Integration andbundling Property ownersProperty with two-way cablenetworks are In Denmark,where Telia Stofa has40percent ofthe Digital TV customers alsohave accesstointeractive Swedish professional soccerandhockey games were Demand for digital TV inSweden surged during the As ourrange ofservicesexpands,we are bundling As we integrate ouroperations,we are alsoreview- 15 TELIA’S BUSINESSES Telia can connect customers to the Viking Network at over 100 locations worldwide.

16 International Carrier Operations International backbone network for the broadband services of the future

Telia has succeeded in rapidly establishing a high-quality ﬁber-optic backbone network,the Viking Network,adapted to sophisticated broadband services. The network is mainly concentrated in Europe and the United States and customers can be connected to it from many different locations around the world. Telia’s goal is to be among the three leading operators on the European carrier market.

There has been an explosion in the number of players on settlement arrangements between countries. This sys- the telecommunications market over the last decade.We tem cannot meet the demands made by the new com- have seen communications flows growing both interna- munications services and new players. tionally and globally,as well as new and more exacting The response to these demands was a lot of stitch- requirements on the technical platforms and networks ing up of communications solutions,the result being in that produce and carry telecommunications services. many cases a costly patchwork. The Swedish telecom market has long been one of At this point Telia decided to establish its own inter- the most open in the world. A large number of players national fiber-optic network based on the latest tech- had already established themselves in Sweden by the nology and suited to all types of traffic — not only mid-90s. Most of these players lacked their own net- telephony,but also advanced interactive broadband work capacity and Telia was faced with a decision. services. Should we be satisfied with delivering the interconnect Telia has significant experience in network construc- traffic required by law or should we open up our infra- tion and operation and in network service development. structure and network capacity to our competitors on With our extensive fixed network operations in Sweden commercial terms? Telia chose the latter path,becoming and Denmark we can realize one of the first operators in the world to sell its own economies of scale by coordinating Sales of capacity and IP traffic,Gbps network structure as a wholesaler. our purchasing and by sharing As our operations expanded into our neighboring resources. 281 263 countries we began doing network business outside Sweden,starting in Denmark. Our wholesale operations High-quality network in Europe have shown robust growth since that time and are today and the United States 183 153 an important business alongside our retail operations. Telia has succeeded in rapidly establishing a high-quality international New demands on international networks backbone network,the Viking Net- Interactive Internet-based services make new demands work,based on fiber-optics and on networks and technical platforms in terms of quality, featuring wavelength technology. capacity and functionality. The international telephony The network is mainly concentrated Q 1 Q 2 Q 3 Q 4 system is dominated by coaxial cable,with complicated in Europe and the United States 2001 2001 2001 2001 TELIA’S BUSINESSES

17 Seattle

Portland

Buffalo Albany Cleveland Boston Salt Lake City Chicago New York Denver Philadelphia Brookhaven Helsinki Baltimore Manasquan Kansas City Herndon Tuckerton Oslo San Francisco Sacramento Stockholm St. Petersburg Santa Clara Modesto Tulsa Fresno Gothenburg Los Angeles Phoenix Dallas Riga Tucson Atlanta Nörre Nebel Copenhagen Moscow Kaliningrad Houston Vilnius amburg Gdansk Dublin H Hannover Lowestoft Berlin Miami Amsterdam Poznan Leipzig Warsaw London Düsseldorf Lodz Ruckinge Dresden Brussels Cologne Prague Katowice Frankfurt Nuremberg Rouen Strasbourg Brno Stuttgart Vienna Caen Paris Bratislava Munich Budapest Rennes Basel Zürich Nantes Geneva Lyon Venice Bordeaux Milan

Biarritz Marseille

Barcelona Existing networks and networks under construction. Madrid Valencia Planned expansion.

and customers can be connected to it from many The two continents are integrated by the TAT 14 Atlantic different locations worldwide. cable which was lit up during the year with Telia as a partner. To establish the network as cost-effectively as We currently have a sales force and technical possible,we constructed surplus capacity in our fiber resources in over 20 countries and are able to connect and ducts,which we sold to other operators or used for customers at over 100 locations around the world. swaps. This enabled us to finance parts of the network buildout and to strengthen and expand our network. Four main product families Opening up our capacity in Europe has helped us gain We offer services within four product families: access to an extensive fiber-based carrier network in the • Infrastructure United States through swaps. • Capacity • Voice Most of the network is lit up • IP traffic The Viking Network is largely ready and most of the In addition we offer co-location arrangements,where- network is lit up. Telia currently has 16,000 kilometers of by customers can install equipment in our facilities, fiber-optic network in Europe. as well as virtual private network solutions based on Telia’s network in the United States has also been IP,IP-VPN. brought into service.The American network is 18,000 kilo- Telia acts as a wholesaler on the carrier market. This meters long and connects eleven major urban areas that means that our customers are other carriers,telecom exchange 75 percent of America’s long distance traffic. and mobile operators,and service providers.We also TELIA’S BUSINESSES

18 address large end-customers who procure communications solutions on the wholesale market,primarily through partners.We have seen robust growth across all product areas.

Turbulence on the carrier market The carrier market was characterized by turbulence in 2001. The background to this is complex. A large number of players have entered the international carrier market in recent years. Some of them operate their own networks,but many are “middlemen” without capacity of their own who only buy and sell trafﬁc,primarily voice. Many of these companies faced

financial difficulties with the fall of the stock market and The international carrier network is monitored from network were forced off the market. The buildout of broadband management centers in Jönköping,Stockholm and Washington DC. on the retail market has also been delayed. Altogether this led to surplus capacity and hefty price pressure on the market. This instability is expected to continue in 2002. By Our customers have moved up the value chain in the all indications,the carrier market must go through a current market turbulence and uncertainty. Customers consolidation phase before the situation will stabilize. who previously chose to buy unrefined products such as Telia is monitoring developments closely and is prepared pure fiber are now demanding leased capacity,while to take action depending on the situations that arise. many capacity customers now prefer to buy IP and voice We are convinced that there will be great demand transport. Telia is well placed to adapt to these new for high-quality international backbone networks such conditions. Most of the Viking Network is lit up,enabling as the Viking Network when the expansion of broad- us to offer capacity as well as IP traffic and voice. band is seriously underway in Europe and the UMTS networks are established and lit up. Goal: to be among Europe’s top three carriers Telia owns more of its infrastructure than any other Sales and production phase carrier in Europe and is the only European carrier with Most of the Viking Network is already established. All significant network resources in the United States.We that remains is to complete the buildout initiated in have a competitive range of IP services and are a major Eastern Europe,chiefly in Russia and the Baltic countries, distributor of trans-Atlantic IP traffic. In terms of sales, where we decided to build our own infrastructure during 2001 we were fifth among European carriers. because of a shortage of fiber in the region. Our long-term goal is to put Telia among the top The planned network buildout in Southern Europe three carriers in Europe in terms of profitability and will be effected by swapping capacity with other infra- geographic network coverage.We see this as a long-term structure owners. project and we know that getting there will take Telia’s carrier business is currently moving from an patience and perseverance. investment phase into sales and production. This means Telia’s IP networks in Sweden and Denmark are that we are strengthening our marketing and sales integrated with the Viking Network. This means Telia’s resources and moving responsibility for sales closer to end-customers have access to a very powerful global the market. network for interactive broadband services. TELIA’S BUSINESSES

19 Telia VisCom,a complete solution for visual communication over IP and ISDN,available directly to the user’s PC.

20 be managed efficiently A mature business that must wholesale customers while continuing to streamline our operations. our streamline to continuing while customers wholesale and retailfor value-addedservices newdeveloping and services sophisticated forplatform work net- our Werefiningcurrently are Sweden. in telecommunications all of largepart a for dation foun- arethe operations Fixedarenetwork networks fixed Telia’sour and business originalcore Fixed Networks national telecommunications companies. interestsand theBalticstatesthrough in participating telephony. market we holdthenumber three positioninfixed Intheretail owner andthelargest network wholesaler. value. telephony businessintheretail market intermsof market andwe have approximately 75percent of the largest supplierofnetwork products inthewholesale the totalmarket. wholesale markets large enablesustoreach sectionsof Operating inboththeretail and service providers. that we develop for end-customers,operators and rings in55locationsincludingCopenhagen. largest cities,anationwidetelephony network andfiber network,anoptic backbone IPnetwork covering thesix network inDenmark,where we have anationwidefiber- Powercom strengthen our hasenabledustofurther reach every householdandbusinessinSweden. Ourfixed networks,including accessnetworks, and IP. logical networks for telephony,data communications of anationwidefiber-optic network backbone and Telia’s fixed network resources inSweden are madeup Telia hasan extensive customerbasefor fixed We alsohave fixed network operations inPoland In Denmarkwe are the secondlargest infrastructure Telia are isthefixed network leaderinSweden.We Our fixed network isthefoundation oftheservices The acquisitionoftheinfrastructure company accesses andtelephony services. interconnect copperproducts,broadband traffic,to offer everything from leasedlines,network capacityand the players intheSwedish andDanishmarkets. offer awiderrange ofservicesinthewholesale market. are workingenues to from fixed network operations.We our wholesale businessrepresented 14percent ofrev- In2001 Our wholesale operations have great potential. Growing wholesale business create value for large customergroups. service andquality,and servicesthat requires efficient operations,superior relationships withourcustomers vating andsustaininglong-term Culti- economies ofscaleessential. effective management and dramatically inrecent years,making mature andprices have beenslashed tomers. some hundreds ofwholesale cus- 600,000 businesscustomers and residential customers,almost combined we have 4.4million InSweden andDenmark networks. Telia opened itsSwedish copper-based access In Sweden,operating underthebrand Skanova,we Telia already hasbusinessrelationships withmostof The fixed network businessis Revenues,SEKmillions 31,704 9920 2001 2000 1999 Wholesale market Wholesale Retailmarket 29,963 30,716 21 TELIA’S BUSINESSES networks to other players in March 2000,actually before with the Group’s other offerings as customized total the EU regulation took effect. Today we have a broad solutions. spectrum of copper products that make it possible for Competition on the Danish market has caused a other players to distribute their services on the copper line. shakeout of smaller players. To increase the profitability The most advanced of our wholesale services, of our Danish operations we are focusing on services TeleHost,enables companies to add fixed telephony to and customer segments where we can be a strong com- their regular product range. Skanova produces the petitor.We are also looking to increase sales to existing service and provides billing data while the client compa- customers and improve customer service through new ny deals with the customers. billing systems and efficient call center solutions. A substantial share of mobile traffic is carried over During the year we laid the ground for continued the fixed network. During the year Skanova signed positive development of our associated companies in the agreements with 3GIS and Svenska UMTS-nät to deliver Baltic region. The fixed network operators in Estonia and network capacity for their UMTS services in Sweden. Lithuania,Eesti Telecom and Lietuvos Telekomas respecti- The acquisition of Powercom fortified our position vely,are working on increasingly competitive markets in the Danish wholesale market during the year. and are continuing to show good customer growth. Netia is positioned as a second operator in Poland. Broad range on the retail market Netia is focusing on business customers in certain Telia has a very large range of services on the Swedish geographic regions in an effort to increase profitability. retail market. These many offerings are partly passed on Our objectives are to secure our position as the from when we were the only operator on the market market leader in Sweden,boost our positions and and were required to provide all communications needs strengthen profitability in Denmark and develop our regardless of their commercial value. investments in the Baltic region. We are currently working to streamline our product portfolio by clearing out less profitable products and Initiatives in corporate networks, focusing on high-demand services with substantial conferencing services and voice control value-added. Our objective is to develop more standard- We are developing new services as we streamline our ized services that can be integrated with each other and operations.

No more random slips of paper! With Telia Röstringning you can set up an address book at Mina Sidor (“My Pages”) and place voice-activated calls.

Major capacity reinforce- ments were made on the backbone network in southern Sweden during the year.

22 Corporate networks are more and more becoming the 1. Increased capacity in the fiber-optic hub of business communications and Telia is undertak- backbone network ing major initiatives to develop effective network solu- Telia’s fiber-optic backbone network links 3,000 locali- tions. During the year we launched several services that ties in Sweden that are home to 91 percent of house- facilitate teleworking,simplify network connections for holds and 95 percent of businesses.We are installing small offices and enable companies to analyze and additional fiber in our network to meet the growing control the traffic in their networks. demand for capacity. The next step planned is to offer wireless broadband During the year we added substantial capacity to access to corporate networks and IP telephony,which is our network in southern Sweden and also laid fiber- expected to surge in 2002. optic cable between Stockholm and Haparanda. Another strategic initiative involves conferencing services. More and more companies are holding confer- 2. Increased capacity in access networks ences and meetings over the Internet instead of travel- nearest the customer ing. Demand for conferencing services,including basic Fiber-optic networks in larger Swedish cities have been telephony services as well as more sophisticated data- expanded,primarily in Stockholm,Gothenburg and based solutions,showed strong growth in the autumn Malmö. of 2001. During the year we launched VisCom, Our major efforts to increase capacity nearest the a conferencing service based on IP and ISDN that customer are currently focusing on ADSL. At year-end makes PC-based videoconferencing and teamwork we were able to offer ADSL to 70 percent of Swedish possible. households and most businesses. Simplicity is a key concept to us,which is why voice Telia received a license during the year to build control is our third major initiative. Our voice-activated broadband access networks based on fixed radio. Radio calling service for residential customers is called Telia solutions are mainly aimed at small and medium-size Röstringning. For business customers we have developed businesses,but have potential for residential use in the a voice-activated switchboard called DigiTala. It is based future as well as to mobile base stations. on SIP (Session Initiation Protocol),which enables it to satisfy a wide range of customer needs as well as con- 3.Technology shift to IP nect to other operators’ IP and telephony networks in Our long-range plans involve IP-based fixed networks,a Sweden and abroad. technology that efficiently meets the increased demand Fixed network based communications will continue for interactive broadband services. This change is under- to provide very reliable and affordable residential solu- way and the pace will be set by market trends and tions in the foreseeable future. The focus of our contin- technical requirements. ued service development is on mobility: services that The IP network in Sweden was expanded further and provide freedom and flexibility for home use and wire- equipped with new functions such as Quality of Service, less applications with user-friendly interfaces to other which will enable our customers to select their level of Telia products. service quality and performance,and Multicast,which allows the IP network to be used for telephony and Three dimensions other real-time solutions such as television and radio of network development broadcasts. In 2001 we began to implement IPv6 in the As demand for interactive broadband services climbs,we IP network. This protocol will resolve the current short- are refining our fixed networks in terms of capacity, age of IP addresses. functionality and traffic control.We are developing three dimensions of our networks: TELIA’S BUSINESSES

23 Marketing Entire sales force in Sweden gathered “under one roof”

Telia has structured its market organization to make it easy for customers to obtain good service and to enable Telia to market its services efﬁciently. Effective customer meetings are essential for building good customer relations. In Sweden,where we offer a wide range of services,all sales activities have been gathered under one roof.

The business areas are responsible for sales of their own of services,the business areas have opted to set up a products. This means that the business areas organize common market unit,Telia Sverige,for sales and market- their own marketing and decide what sales channels are ing to end-customers. used on the various geographic markets. Coordinating sales realizes beneﬁts for both our customers and Telia. A common sales unit can coordi- Swedish market nate its actions and tailor sales channels to different Common unit for sales and customer care customer groups,making it easier for customers to ﬁnd In Sweden,where Telia markets a full,very broad range what they need from Telia. Gathering these functions in

Telia’s 83 retail outlets are making changes aimed at increased efﬁciency and proﬁtability.

24 respectively tooperators andserviceproviders. offering nationalandinternational network services International Carrier are active ontheSwedish market, addition,Skanova of (part Telia Networks) and Telia In network ofexternal resellers throughout Sweden. private individualsthrough itsown anda sales channels companies,325,000 smallbusinessesand4.5million companies andorganizations,58,000 medium-size andcustomercare. billing,claims,aftermarketing positive impactonsales. lored totarget groups andtospecificcustomers,with a integrate ourservicesasofferings thatare bettertai- This enablesustobundleand entire range inSweden. about thecustomerandprovides anoverview ofour systems. redundant asduplicatedsupport functions,such one unitalsohelps Telia reduce costsby eliminating Sales by phone. by Sales Service TeliaCustomer Telia Sverige was formed atthesametimeas Telia Sverige handlescontactswith950major Telia Sverige handlescustomercontactfrom salesto A commonsalesunitalsocentralizes ourknowledge Consumersand businesses voice response. voice interactivethrough and Internet the oversales Electronic TeliaNetsales Mobile Consumersand Telia businesses stores. in Sales Telia’sown Teliastores Consumersand Services Internet businesses Telia TeliaSverige external resellers.external through Sales TeliaHandel Consumersand services inSweden for bothconsumers andcompanies. the maingateway toourentire range ofstandardized in2002withthegoalchannels ofmakingwww.telia.se ucts andservices. available for consumers for basic fixed-telephony prod- Interactive voice response self-servicewas alsomade www.telia.se for consumers andfor businesscustomers. Aself-servicewebsite was at launched during theyear. Telia began settingupelectronic self-servicechannels Electronic for channels basicservices complex solutionsbeingoffered through personal sales. telephone usinginteractive voice response,with more advisory services,electronically over theInternetandby thosethatdonotrequire in-person volume services,i.e. istosellstandardized policy products andhigh- year.The Organization ofthesaleseffort tookplaceduring the 2001. launch ofthenewlaunch businessarea organization onApril 1, International businesses Carrier We willcontinue developing our automatedsales Telia days peryear. Sverige isopen24/7,365 Telia solutions. integrated of Sales TeliaPartner municipalities and municipalities Largecompanies, county councils county organizations, Networks Telia International Carrier.International and Infonet Telia with collaboration in communications international of Sales reach Global Businesses 25 TELIA’S BUSINESSES 26 TELIA’S BUSINESSES product range. response tocustomerdemandandchanges in Telia’s locations andretail floorspaces are regularly modifiedin The product range,store efficiency andprofitability. Sweden are alsomaking changes aimedatincreased The 83retail outletsmanaged by Telia throughout Upgrading retail outlets levels atthecustomer servicecenters. actions were undertakenduring theyear toraise skill Several dling increasingly sophisticatedcustomerissues. are automated,customerservicecenters willbehan- locations inSweden. concentrate itscontactcenteroperations from 31to13 including specialistteams. New work methodshave alsobeenintroduced, e-mail. tomers may take placenot only by phone,butalsovia This meansthatcontactwithcus- greater efficiency. by phone,have beenreorganized ascontactcenters for Our customerservicecenters,which provide direct sales Customer servicecenters reorganized organization. 28 to4locationsinorder tocreate amore powerful marketing operations willbeconcentrated from Tele- keting andisplanningtostepuptheseactivities. Telia Netsalesalsoengages inactive sellingby telemar- As salesofhigh-volume andstandardized services For efficiency gains,Telia further hasdecidedto to increase efficiency.increase to order in locations 13 to 31 fromconcentrated be will centers service Customer orders.and issues tomer cus- complex more handle nels. chan- self-service electronic via electronically sold be will services high-volume and Customer service will service Customer Standardizedproducts wthoeaos Sweden isakey market operators. switch makesnumber portability iteasyfor customers to eiin The introduction of carrier petition. The Swedish retail market isexposed tofierce com- Continued customerloyalty initiatives with Telia PartnerontheSwedish market. telecommunications solutions,working inpartnership are Telia Sverige’s specialist unitsfor globaldataand business customers. persons,which was previously limitedtothevery largest tions for Swedish businesscustomers. offering effective internationalcommunications solu- mobile,voice anddataisbuildingup resources for the development ofsolutionsthatintegrate fixed and communications solutions. customers andorganizations with more sophisticated A specialunit,Telia majorbusiness Partner,provides customer solutions Enhancing skillsfor sophisticated Sweden. intensive cooperation withtheleadingresellers in to increase salesviaexternal resellers through more are seeking wide network of8,000external resellers.We Alongside Telia’s own stores,Telia Sverige hasanation- Infonet Svenska ABand Telia InternationalCarrier Telia willbroaden itssystemofdesignatedcontact Telia Partnerisnow upgrading itscompetencefor preselection and for Telia. mobile servicesfor consumers inits Telia Family product. and serviceproviders inDenmark. of network capacityandnetwork servicestooperators AsinSweden,Telia manages its own sales associations. mainly through Telia Stofa’s own stores andtheantenna resellers andbroadband Internetandcabletelevision and mobileservicesare mainly soldthrough external Fixed Telia offers awiderange ofservices inDenmark. marketOverseas platformimportant for ourinternationalinitiatives. It generates alarge ofourrevenues part andisan concentrated inStockholm. providers inSweden,has itsown salesresources,mainly services asawholesaler tooperators andservice Skanova,which sellsnetwork capacityandnetwork Network serviceswholesaling withinSkanova forand greater opportunities members toearnpoints. gram withmore willbeexpanded targeted further offers The pro- with 700,000private consumers joiningsofar. The program hasenjoyedtargeted great success, offers. be exchanged for Telia products andalsoreceive special Program are awarded participants pointsthatcan vices. consumers andthosewho choose Telia for multiple ser- The program rewardsprivate high-volume consumers. have usedinrecent years topromote loyalty among During theyear Telia successfully bundledfixed and Telia Fördel isacustomerloyalty program thatwe and Europe. sales ofIP-basedcarrier servicesinthe UnitedStates the year anagreement was concludedwithCiscofor During resellers,mainly inFrance,Poland andtheU.K. force insome20countries worldwide,but alsouses Teliahandled by hasitsown ourown sales resources. outlet business. under the Telia brand inorder tostreamline theretail being combinedintoasinglenationwideretail chain These Telia are owns two retailinFinland. chains stores. through awell-developed network ofexternal resellers. Sales ofmobileservicesinNorway are managed Sales ofinternationalcarrier servicesare primarily Mobile servicesare soldinFinland through ourown tions. solu- communications cated sophisti- morefor companies major of needs the satisfy to order in competence its ing Teliaupgrad- is Partner 27 TELIA’S BUSINESSES Organization, Control and Management Defined responsibilities and strictly commercial intercompany relations

The Group structure reinforces Telia’s business orientation,facilitates internationalization and streamlines sales on the Swedish market,where Telia offers its entire range of products and services.

Shareholders Peter Augustsson, Chair of the Board and President of Telia is listed on the A List of Stockholmsbörsen (the SAAB Automobile Stockholm Stock Exchange). The Swedish state is the Carl Bennet, Chair of the Board of Directors of Boliden, largest shareholder with a 70.6 percent interest. Elanders,Getinge and other companies Somewhat over 68 percent of the remaining shares Ingvar Carlsson, former Prime Minister of Sweden, are owned by Swedish institutions and companies and Chair of the Board of the Swedish Foundation for approximately 19 percent by over 786,000 Swedish Strategic Research individuals. Non-Swedish shareholders represent slightly Anders Igel, President and CEO of Esselte over 13 percent. At the Annual General Meeting the Lars Olofsson, Executive Vice President Nestlé S.A. shareholders appoint Telia’s Board of Directors for a Caroline Sundewall, independent business consultant period of one year. Marianne Nivert, President and CEO of Telia Berith Westman, Chair of the Swedish Union of Clerical Board of Directors and Technical Employees in Industry,telecommunica- Telia is led by a Board of Directors consisting of twelve tions section (SIF-TELE) ordinary members: eight external members (one vacant Elof Isaksson, Chair of the Union of Service and seat),Telia’s President/CEO and three union representatives. Communication Employees (SEKO) within Telia The Board of Directors makes decisions on issues of Magnus Brattström, Vice-Chair of the Union of strategy,investments,organization and ﬁnancing. It also Service and Communication Employees (SEKO) monitors Telia’s day-to-day operations and its executive within Telia management. The Board of Directors appoints the President of President and CEO Telia AB,who is also CEO of the Telia Group. The Board Marianne Nivert has been President and CEO of Telia of Directors also appoints the Vice President. since October 2000. The CEO is responsible for the Group’s strategic development and business control and The members of the Board of Directors are: manages and coordinates its day-to-day operations in Lars-Eric Petersson, Chair of the Board. President and accordance with the direction determined by the Board CEO of Skandia of Directors. TELIA’S BUSINESSES

28 with strategic issuesofinterest to theentire Telia Group. Group Management,which hasanadvisoryrole,deals Group Management human resources. and finance,legal issues,strategy,communication and by Group staff units includingspecialistsinaccounting business. and Jan Rudberg withspecialresponsibility for new bility for Corporate Development andHuman Resources; Lars Härenstam withspecialresponsi- Financial Control; includes BoJacobsson,CFO andHeadof Corporate ing committeefor theGroup’s businessareas. opment andbusinesscontrol andconstitutes thesteer- the CEOonissuesaffecting theGroup’s strategic devel- The Executive Committee serves inanadvisoryrole to Executive Committee Committee andGroup Management. The CEOappointsbusinessarea headsand theExecutive The Executive Committee initstasks issupported In additiontotheCEO,the Executive Committee Group StructureGroup Mobile Telia Services Internet Telia President and CEO and President Board of Directors of Board Shareholders Åsander. Indra BusinessArea Head: based accessesandservices. Kenneth Karlberg BusinessArea Head: mobile voice communication. mobile servicesandthatintegrate fixed and the Group’s external range. commercial prices for servicesandproducts includedin company transactions,the businessareas charge For inter- ment tosales,operation andmaintenance. tive products onallgeographic markets,from develop- business areas have totalresponsibility for theirrespec- The coreEach businessisanindependentarea. Business areas development manager within Telia Networks. Director Kongstad,and Michael Joel Westin,business heads,the headof Telia Sverige,Communications Group Management includesallof thebusinessarea In additiontothemembers oftheExecutive Committee, International Carrier Telia Internet Servicesisresponsible for Internet- Telia Mobile isresponsible for themobilenetwork, Telia Networks Telia 29 TELIA’S BUSINESSES Telia International Carrier is responsible for international Product development carrier operations. Business Area Head: Erik Heilborn. Telia Research works on behalf of the business areas,its Telia Networks is responsible for the fixed network, efforts focusing mainly on communications for the fixed telephony services and data communications home and business,network services and personal services as well as for IP infrastructure in Sweden and communications. Director: Claes Nycander. Denmark. Business Area Head: Kennet Rådne. Ethics council Telia Sverige Telia has an ethics council made up of representatives of A common sales and customer care unit,Telia Sverige, the management of each business area,the Director of has been set up in the Swedish market. The common Human Resources,the Communications Director and unit makes it possible to streamline customer contacts the Chief Attorney,headed by the Director of Ethics and and tailor attractive offers for different customer groups. Environmental Affairs. The staff organizations are repre- President: Anders Gylder. sented on the council by Berith Westman.

Telia Group Management: 1. Marianne Nivert, President and CEO. 2. Eva Lindqvist, Head of Telia Equity,which is being

6 transferred to Telia Holdings. 8 3. Bo Jacobsson, CFO and Head of Corporate 4 10 7 9 5 Financial Control. 4. Kenneth Karlberg, Head of business area 11 Telia Mobile. 3 2 1 12 5. Michael Kongstad, Communications Director. 6. Joel Westin, business development manager within business area Telia Networks. 7. Lars Härenstam, responsible for Group Development and Human Resources. 8. Anders Gylder, Head of Telia Sverige. 9. Kennet Rådne, Head of business area Telia Networks. 10. Jan Rudberg, responsible for new business. 11. Erik Heilborn, Head of business area Telia International Carrier. 12. Indra Åsander, Head of business area Telia Internet Services.

30 The council has the task of ensuring that Telia acts in accordance with high ethical standards and complies with established guidelines.

17,150 employees The Telia Group has 17,150 employees, of which 13,365 work in Sweden.

Auditors Telia is audited by Ernst & Young,headed by Authorized Public Accountant Torsten Lyth,assisted by Authorized Public Accountants Gunnar Widhagen and Filip Cassel. Telia also has its own internal audit.

31 32 TELIA’S BUSINESSES -al [email protected] E-mail: 4366 713 (0)8 +46 Fax: 1000 713 (0)8 +46 Telephone: Sweden Farsta, 86 SE-123 Telia Mailing address: AB, Head ofbusinessarea Erik Heilborn Telia InternationalCarrier [email protected] E-mail: 1520 411 (0)8 +46 Fax: 100 90 (0)8 +46 Telephone: Sweden 95Stockholm, SE-103 Box 7735, Telia Mailing address: AB, Head ofbusinessarea Indra Åsander Telia InternetServices [email protected] E-mail: 9758 601 (0)8 +46 Fax: 300 90 (0)8 +46 Telephone: Sweden 86NackaStrand, SE-131 Telia Mailing address: AB, Kenneth Karlberg Head ofbusinessarea Telia Mobile [email protected] E-mail: 3003 713 (0)8 +46 Fax: 1000 713 (0)8 +46 Telephone: Sweden Farsta, 86 SE-123 Telia Mailing address: AB, Marianne Nivert President andCEO How to Reach Telia -al [email protected] E-mail: 6947 713 (0)8 +46 Fax: 1000 713 (0)8 +46 Telephone: Sweden Farsta, 86 SE-123 Telia Mailing address: AB, Director Tobias Lennér and ExternalCommunications Investor Relations [email protected] E-mail: 6997 713 (0)8 +46 Fax: 1000 713 (0)8 +46 Telephone: Sweden Farsta, 86 SE-123 Telia Mailing address: AB, KongstadMichael Communications Director Corporate Communications [email protected] E-mail: 9990 466 (0)8 +46 Fax: 5500 466 (0)8 +46 Telephone: Sweden 90NackaStrand, SE-131 Telia Sverige, Mailing address: President Anders Gylder Telia Sverige [email protected] E-mail: 4330 605 (0)8 +46 Fax: 1000 713 (0)8 +46 Telephone: Sweden Farsta, 86 SE-123 Telia Mailing address: AB, Head ofbusinessarea Kennet Rådne Telia Networks rfx+6() 0 5472. 604 (0)8 or fax +46 7143 713 (0)8 +46 These publicationscanbe ordered viatel. core businesses. developing our strategy for tion of Telia’s This isapresenta- Telia’s Businesses for 2001andmore. performance analyses balance sheet, income statement, Board ofDirectors, ofthe the report Here you willﬁnd Report 2001 Telia’s Annual and employees. suppliers customers, as groups such interest important and cooperation with Telia’s relationships information about This contains Telia’s Relationships

ii TELIA 2001 EN/LZTA 802 2124. Production: Telia AB and Intellecta Corporate AB. English translation: Interverbum Språktjänst AB. Photos: Mats Lund Mats Photos: AB. Språktjänst Interverbum translation: English CorporateAB. TeliaIntellecta and AB Production: 2124. EN/LZTA802 qvist, Lars Nyman (page 19), Carl-Axel Fridolf (page 22). Printing: Duro Graﬁska. Printed on environmentallyapprovedpaper.on Printed Graﬁska. Duro Printing: 22). Fridolf(page Carl-Axel 19), (page Nyman Lars qvist,

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Telia’s Businesses

Telia AB (publ) Investor Relations SE-123 86 Farsta, Sweden Tel. +46 (0) 8-713 10 00 Fax +46 (0) 8-713 69 47 www.telia.com Corporate Reg. No. 556103-4249 Registered Ofﬁce: Stockholm