TELIA COMPANY INTERIM REPORT JANUARY-MARCH 2016

CONTINUED EARNINGS GROWTH IN CORE MARKETS
First quarter summary

  · Former segment region Eurasia is reported as discontinued operations.
  · Net sales in local currencies, excluding acquisitions and disposals,
declined 1.1 percent. In reported currency, net sales declined 0.9 percent to
SEK 20,394 million (20,589). Service revenues in local curren-cies, excluding
acquisitions and disposals, declined 0.9 percent.
  · EBITDA, excluding non-recurring items, increased 10.4 percent in local
currencies, excluding acquisi-tions and disposals. In reported currency, EBITDA,
excluding non-recurring items, increased 10.4 per-cent to SEK 6,217 million
(5,632). The EBITDA margin, excluding non-recurring items, rose to 30.5 per-cent
(27.4).
  · Operating income, excluding non-recurring items, increased 19.0 percent to
SEK 4,198 million (3,526).
  · Total net income attributable to the owners of the parent increased to SEK
3,766 million (3,714) and earnings per share to SEK 0.87 (0.86). Total net
income decreased to SEK 3,911 million (4,110).
  · Full year outlook is changed.


COMMENTS BY JOHAN DENNELIND, PRESIDENT AND CEO

”We continue to shape our company for the future with a clear focus on our core
operations in the Nordic and Baltic countries. Four out of seven markets now
carry the Telia brand and with new roam-like-home offerings in place we can
further leverage our position and boost customer loyalty. To emphasize our
common purpose, culture and values, we have also adopted a new name for our
group - Telia Company.

In the first quarter, the earnings development was en-couraging and our
continuing operations reported double digit EBITDA growth compared to the
corresponding period last year.

Our Swedish operation was a key contributor to the higher profitability,
supported by better sales mix and lower costs. Service revenue growth in the
consumer segment stayed positive, backed by solid demand for fiber solutions,
good traction within TV and mobile cus-tomers migrating to larger data buckets.
We continue to offer more to our customers as highlighted by our recent social
media proposition. The enterprise area remains highly competitive, putting
pressure on service revenues despite bright spots in the SME/SoHo segments.

In Finland, we continue to see positive effects from up-sale activities and
price adjustments, leading to 4 per-cent increase in mobile billed revenues,
supporting profitability. We experienced network disturbances in the quarter,
additional measures have therefore been implemented together with our main
vendors to ensure a solid customer experience going forward.

We took a further step on the Norwegian market when we successfully rebranded
the Netcom brand to Telia. Positive effects from last year’s acquisition of
Tele2 Norway continued to support margin and we have now reached our synergy
target of SEK 1 billion. Our greater scale and extensive 4G coverage have
improved our customer proposition and make us well positioned for the future.

There was further progress in the Baltic region and all three countries
delivered positive service revenue growth backed by strong demand for mobile
data ser-vices. In Lithuania, the integration of Teo and Omnitel continued with
further positive effects on profitability.

In mid-April, we completed the divestment of our Nepa-lese operation Ncell to
Axiata. It is comforting that we have been able to hand over the operation to an
estab-lished player in our industry. The process to exit the other Eurasian
markets continues and we will give further updates as we progress. The operating
environment remains demanding in several parts of the region, with intense
competition and pressure on currencies due to macroeconomic challenges.

There was no decision on dividend at Turkcell’s Ordinary General Assembly in
March. We voted in favor of the proposed dividend through our direct ownership,
but the main owners were unfortunately not able to agree on this topic. We
continue to work hard to solve the governance issues.

We have an ambitious investment agenda in 2016, with initiatives to drive both
growth and strengthen long-term competitiveness. This involves an acceleration
of the Swedish fiber roll-out as well as further build out of 4G capacity and
coverage across our core markets. In addition, we work with our business
transformation agenda which will reduce complexity and costs over time.

2016 has started well from an earnings perspective, but we expect growth to slow
as we face tougher year-over-year comparisons in the quarters to come. However,
we raise our expectations somewhat for the full year and anticipate EBITDA on a
comparable basis to be in line or slightly above the level in 2015 for the
continuing operations. CAPEX excluding license and spectrum fees for the
continuing operations is expected to be SEK 14-15 billion.”

Johan Dennelind
President and CEO

QUESTIONS REGARDING THE REPORTS

Telia Company AB
www.teliacompany.com
Tel. +46 8 504 550 00


Telia Company AB discloses the information provided herein pursuant to the
Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading
Act. The information was submitted for publication at 07:00 CET on April 20,
2016.