Tore Johnsen – CEO of Telenor Pakistan

Pakistan - A brief look at economics and politics

• Population of 165 million • Per capita income increasing • High inflation rate • Prevailing political tension • Security situation fairly stable Five criteria identified before entering Pakistan..

• High growth potential • Forward looking telecom policy • Investment friendly climate • Good regulatory execution • Acceptable political and economic situation

Initial assumptions vs actual development..

Initial business Actual 2007 case 2007 SIM penetration 11% 48%

Telenor subs (mill) 2.9 14.6

ARPU (PKR) 663 269

Capex (PKR bn) 13 41 3 years of building network and distribution

Network Distribution

• 5,500 sites and 55% coverage • 125,000 scratch card agents • Largest Edge network in Pakistan • 110,000 easy load top-up points • 60,000 SIM distribution agents

6 300 160 No of sites, EoY No of agents, EoY (thousands) 132 4 700

2 000 50

200 5

2005 2006 2007 2008E 2005 2006 2007 2008E

3 years of tremendous growth

Market share Telenor subscribers (mill)

60 % >18

50 % 14.6

40 %

10.7 30 % Telenor 6.7 20 % Warid 3.2 10 % 1.9 Zong 0.8 0 % 1H05 2H05 1H06 2H06 1H07 2H07 1H08E H105 H205 H106 H206 H107 H207 H108E Stable ARPU and improving margins

ARPU (PKR) Revenues (PKR bn) and EBITDA %

27 16% 17% 0,27 287 279 4% 268 0,07 253 262 254 22 20 -17% -0,13 191 17 -40% 15 -0,33 12 12 -0,53 8 -0,73 7 4 -0,93 2 2 0.5 -1,13

H105 H205 H106 H206 H107 H207 Q108 -3 H105 H205 H106 H206 H107 H207 Q108 -1,33

Operating expenses driven by site costs

• Fibre backbone to reduce Opex split traffic costs 100% 100% • Site related costs driven by number of sites and increased energy costs • SAC driven by subscriber growth • General marketing costs increasing Capex driven by increased traffic

Capex split 2007 • Around 50% of capex

related to sites. Outlook Other stable Subscribers • Scale effects expected in transmission and core network

• Subscriber driven capex Sites will increase slightly Core

Transmission

Surroundings impacting our business

• Increasing food prices and inflation • Unstable energy supply • Reignited security tensions • Field security situation 3G coming up

• 6 blocks of 5MHz available • 3 operators to be allocated 3G spectrum • Uncertainty regarding timeline and conditions

Maintaining competitive edge

• Maintain innovator position • Leverage on brand, distribution, and quality network • Enrich customer experience • Operational efficiencies to secure long term profitability • Exploit broadband opportunities Telenor Pakistan Outlook 2010-2011

• SIM penetration above 70% • Market share above 25% • EBITDA in mid thirties • Capex/sales below 25%

Summary

• Still strong growth potential • Tough competition but solid market position • High quality network and distribution • 2G capex peak in 2007 • Manageable surroundings