Annual Report 2001

A n n u a l R e p o r t 2 0 0 1

Contents
1 Significant events Tele2 AB, formed in 1993, is the
2 President’s message
leading alternative pan-European
4–9 Tele2 in brief
telecommunications company offer-
4–5 Historical role
ing fixed and mobile telephony, data
4–11 History
network and Internet services under
8 Development of mobile communication

9 Continued investment in MVNO services the brands Tele2, Tango and Comviq
10 The Tele2 Group to 15 million people in 21 countries.
12 The Board of Directors Tele2 operates Datametrix, which
13 Senior Executives specializes in systems integration,
14 The Tele2 share
3C Communications, operating pub-
16 Nordic
lic pay telephones and public
30 Eastern Europe and Russia
Internet services; Transac, providing
35 Central Europe
billing and transaction processing;
38 Southern Europe

41 Luxembourg C3, offering co-branded pre-paid call-
43 Branded products & services ing cards and IntelliNet and Optimal
46 Financial review Telecom, the price-guaranteed resi-
47 Report of the directors dental router device. The Group
51 Income statement
offers cable-TV services under the
52 Balance sheet
Kabelvision brand name and together
54 Cash flow statement
with MTG, owns the Internet portal
55 Notes

89 Audit report
Everyday.com.

90 Addresses

92 Definitions

Annual General Meeting

The Annual General Meeting will be held at 1:30 pm on Notification can be made by phone to +46 33 724 12 67,
Thursday, May 16, 2002, at Gamla Stans Bryggeri in Stockholm. or in writing to:

Shareholders who wish to attend the Annual General Meeting Tele2 AB, Box 2094, SE-103 13 Stockholm, Sweden
must label the envelope “Annual General Meeting”
or by emailing to : bolagsstamma02@tele2.se
be entered in the share register maintained by the
Securities Register Center (Värdepapperscentralen VPC) Financial information
for the Annual General Meeting (registration must be Quarterly report, January–March April 24
completed by Monday May 6, 2002).
Annual General Meeting May 16
and notify the Company of their intention to attend no later Quarterly report, January–June August 5
than 1:00 PM on Friday, May 10, 2002. Quarterly report, January–September October 23

Significant events
• Tele2’s operating revenue for 2001 totaled SEK 25,085 million (2000: 12,440),
an increase of 54% from the pro forma figure of SEK 16,243 million for 2001.

• The total number of customers rose by 29% to 15 million on December 31, 2001,
corresponding to a net intake of 3.4 million customers for the full year 2001.

• The operating profit before depreciation and amortization (EBITDA) was
SEK 1,698 million (2000: 1,820, pro forma 2000: –371), with an EBITDA
margin of 7% (2000: 15%, pro forma 2000: –2%).

• Tele2 Sweden’s operating revenue for full-year 2001 totaled SEK 9,060 million,
up 14% from the previous year. The EBITDA increased by 38% to SEK 3,773
million (2000: 2,728). The EBITDA margin was 42%, as opposed to 34% in
2000. Mobile telephony’s operating revenue rose by 20% to SEK 5,720 million,
while the EBITDA was up by 41% to SEK 3,111 million. As a result, mobile tele-
phony’s EBITDA margin was 54%.

• Operating revenue in Central Europe and Southern Europe amounted to SEK
5,364 million (2000 pro forma: 3,108) and SEK 5,591 million (2000 pro
forma: 2,574), respectively, corresponding to increases of 73% and 117%.
EBITDA were improved to SEK –606 million (pro forma 2000: –1,640) and
SEK –1,331 million (2000 pro forma: –1,276).

Financial summary 2001 2000 2000
SEK M pro forma*

Operating revenue 25,085 16,243 12,440

Operating profit/loss before depreciation, EBITDA 1,698 –371 1,820

Operating profit/loss after depreciation, EBIT –1,356 –2,850 420

Operating profit/loss after financial items, EBT –1,944 –3,063 165

Profit/loss for the year 392 –3,618 –396

Profit/loss per share after dilution 2.70 –34.36 –3.47
* The pro forma accounts have not been subject to specific review by the Company’s auditors.

Tele2 Annual Report 2001 1

Tele2 operates in 21 countries.
• Tele2 is the only genuine pan-European tele- ments, which provide us with the opportunity to convert
com operator and therefore the most widely some 10% of our fixed-line customers to mobile users
recognized brand. within the first year alone.
• The company had a customer base of 15 mil- Tele2 can look back on 2001 with pride. We posted:
lion at year-end. • operating revenues for the full year of over SEK 25 billion,
• With revenue growth of 56% and in increase • Group operating profit before amortization and
in net profit before depreciation and amort- depreciation of SEK 1.7 billion, an increase of
ization of SEK 2.1 billion during 2001, Tele2 is SEK 2.1 billion.
the most rapidly growing operator in Europe. From the beginning, Tele2 has cultivated a corporate
The authorities in Europe that establish the terms by culture that encourages change and welcomes challenges.
which telecom companies operate are anxious to see We are always crossing new boundaries. The “nomadic”
effective competition. As a result, they are assisting us in aspect of our corporate culture constantly propels us
expanding our potential to operate profitably. As an excel- toward new opportunities for growth and earnings.
lent illustration of that trend, a growing number of coun- A cautious, short-term observer may regard such an
tries are allowing us to compete in the market for local approach as reckless. That was how we were frequently
traffic. Without requiring any new marketing efforts, such perceived before Tele2 was listed in 1996, and even after-
developments boost the demand to which we have access wards. But such skepticism is rare these days. Tele2 has
by some 50%. demonstrated its capacity to successfully take on new chal-
The acquisition of a major Russian mobile telephony lenges and utilize fresh commercial opportunities to forge
business was our biggest new venture for the year. The profitable businesses. It normally takes two to three years
market offers major potential. We have every reason to before Tele2’s expansion strategy receives the credit it
believe that Russian operations will be just as successful as deserves. When we launched a broad-based effort to enter
our Baltic businesses. The market area Eastern europe and the European fixed telephony market, there were observers
Russia have now recruited over 1 million mobile customers. who labeled us as excessive risk-takers. Nowadays, the
The task before us is to continue to make our fixed-line European fixed telephony business is a cornerstone of
network even more profitable. Many of our competitors our operations.
departed from that market in 2001. Their problem was The key to success for a company that operates in
that they had not accorded top priority to building up Tele2’s sectors is to constantly reconsider what it is doing,
a customer base. They had set their sights on infrastruc- remain sensitive to the wishes and expectations of con-
ture investments instead. Tele2 was once criticized for sumers, and avoid rigidity and bureaucracy.
choosing a customer-oriented strategy. Now we can see Tele2’s business concept has unwaveringly been to
just how wise that decision was. reduce its rates. That is still at the heart of our mission.
I have never been one to put my faith in grandiose For a growing number of customers, we are the company
dreams about the immediate emergence of 3G. On the that offers high-quality services in the markets where we
other hand, I am convinced that Tele2, just as when operate at lower rates than the old monopolies (or even
Comviq launched GSM ten years ago, will become the our infrastructure-oriented competitors).
price leader with solutions based on simplicity and cus- My first duty is to ensure that Tele2 is an efficient com-
tomer preferences. pany. Such an approach will benefit our customers when
Many telecom operators in Europe have a very high it comes to price and quality, as well as safeguarding the
debt ratio. Keep in mind that Tele2’s has one of the lowest interests of our shareholders.
debt ratios in relation to market market value in the Tele2’s various brands – particularly Tele2, Tele2Mobil,
industry. Tango and Comviq – have garnered respect for their abil-
Varying assessments of 3G should not obscure the fact ity to combine high quality with low rates. Such recogni-
that Tele2 possesses other strengths that will evolve tion is the fruit of a corporate culture that has learned to
dynamically and fortify the entire company. Once again, manage its assets properly and to invest in a way that
I would like to underscore our hopes for MVNO arrange- guarantees efficiency and quality at very low costs.

“ For a growing number of customers, we are the
company that offers high-quality services in the markets
where we operate at lower rates than the old monopolies

2 Tele2 Annual Report 2001

President’s message

MVNO – a strategic breakthrough the common man was totally out of the question. For
As an MVNO Mobile Virtual Network Operator), Tele2 them, mobile telephony was destined to remain a per-
can be a full-fledged GSM operator without having its manent tool of exclusive business customers. And for
own infrastructure. There is a fundamental difference many European countries, they were right in the short
between MVNO status and the service provider agree- term. But Comviq got to work in Sweden. Today we can
ments that were once so common in the industry. A ser- boast of Europe’s most profitable mobile operator busi-
vice provider agreement turns a company into a distribu- ness, including an operating margin before write-offs of
tor of another operator’s telephony with the ability to better than 50%.
handle outgoing traffic only. An MVNO agreement gives 3G will revolutionize the availability of personalized
Tele2 its own exchanges and thus the capacity to handle information and entertainment. When the services are
incoming traffic as well. appealing enough, they will automatically create a vigor-
The reason that GSM operators find an MVNO agree- ous, rapidly growing market. What might seem like noth-
ment with a company like Tele2 so attractive is the large ing more than a wild fantasy is likely to be everyday fare
number of customers to which it obtains access. in a few years for those who are GSM users today. We are
Tele2’s broad customer base throughout Europe firmly currently working with GPRS technology, the stage pre-
positions it for similar MVNO agreements in one country ceding 3G. That is the stepping-stone to the services of
after another. Given that both parties have something to tomorrow. Our most inquisitive customers will have a lit-
gain from such collaboration, I believe that Tele2 will sub- tle taste of that which lies before us.
stantially augment its subscriber base by means of MVNO
agreements over the next few years. Deregulation is halfway there
We concluded MVNO agreements in Germany and the The European telecom market is far from fully deregu-
Netherlands during 2001. MVNO is one of the keys to lated. Tele2’s various subsidiaries report mixed results in
the success of Tele2’s aggressive expansion strategy. terms of how efficient that deregulation has been. It is of
The prospect of being able to grow without constructing the utmost importance that both the European Commis-
all too many of our own networks is highly appealing. sion and national deregulation agencies (including the
But Tele2’s own infrastructure – which will include 3G PTS, Swedish Competition Authority and Swedish
mobile telephony networks (UMTS) in Sweden, Norway Consumer Agency) consistently pursue a proactive com-
and Finland within a few years – makes us a very attract- petition policy. A greater sense of urgency is needed.
ive partner. The change will not take place overnight. It will be
many years before new companies are able to compete on
Our own infrastructure? equal terms with the old monopolies. Whether it is the
Having a strong core business in the Nordic countries is politicians, deregulation bodies or antitrust authorities, the
highly important for Tele2. We also have our own infra- establishment of each country tends to protect the old
structure in those markets – although its actual ownership, monopolies to the bitter end.
construction and operation are only peripheral to our But the European telecom market is entering a whole
business concept. But the infrastructure stems from the new era. Each step in that direction means higher volumes
commercial realities of the Swedish telecom market at the and sales. Tele2 is hard at work to ensure that it makes
time we started our business. a major contribution to revolutionizing the availability of
Once mobile telephony has incorporated mobile personalized information and entertainment – not to the
Internet, demand will in all probability take a big leap for- exclusive few, but to the broad European masses.
ward. There is understandable skepticism in that regard
today – that which is totally unknown is always hard to That is the way of the future!
imagine. Still, the question is not whether it will happen,
but when. Lars-Johan Jarnheimer
I can still remember all the pundits in 1995 who said
that Comviq’s business concept of mobile telephony for

“ ...Tele2’s debt is
among the lowest of Euro-
pean telecom companies...


Tele2 in brief
Tele2, which was established in 1993, is the leading alternative pan-European
telecom operator. The company offers GSM, public telecommunications and data
communications, and Internet services.
Tele2’s corporate culture rests on the fundamental principles of flexibility,
informality and cost-consciousness.

Tele2’s business concept is to have the most loyal and satisfied customers in the market by cost-
effectively selling and supplying voice, data and image communications solutions while providing
high-quality service.

The Group’s strong suits are low rates, a large customer base, industry-leading efficiency, access to well
known brands and the ability to rapidly adapt to new customer requirements and market conditions.

With its mobile telephony, fixed telephony, Internet, data A customer’s experience of a product or service must
communications, cable-TV and broadband capabilities, meet his or her expectations. We always place the cus-
Tele2 is able to provide the total solutions that customers tomer at center stage, and our chief gauge of quality is his
are increasingly looking for. The Group is continually or her satisfaction. Twice a year we conduct customer sur-
working to spread know-how among various countries veys, the purpose of which is to ensure steady improve-
and product lines in order to broaden its offering and ment. Tele2’s commitments, actions and products must
thereby boost profitability. be perceived as quality-oriented. Our customers must
Tele2’s quality assurance policy is based on guidelines always be able to trust Tele2 as a service provider.
that apply to the entire Group. The policy proceeds from For those who wish to read more about Tele2 and
the insight that one of the keys to achieving the compa- Comviq’s history, the book “Det svenska teleundret”,
ny’s goals is to maintain high quality in everything that it released by Ekerlids Publishers in June 2000, is an excel-
does. The Group’s fundamental principles and collective lent history of Tele2 and Comviq. The book chronicles
skills are the backbone of that effort. The watchword is events from the very beginnings in the late 19th century
constant improvement. through the groundbreaking deregulation of the 1990s.

Tele2 AB
Lars Johan Jarnheimer, CEO
Håkan Zadler, CFO

Nordic Eastern Europe Central Europe Southern Luxembourg Luxemburg
Branded products
Sweden and Russia Germany Europe Luxembourg & Belgien
services
Norway Estonia Netherlands France Liechtenstein Liechtenstein
Optimal Telecom
Denmark Latvia Switzerland Italy Belgium T2
IntelliNet
Finland Lithuania Austria Spain 3C C3
Tango
Datametrix Poland Ireland Portugal Transac 3C
Tele2
Czech Republic Transac
United Kingdom
Russia Everyday

Historical role An Internet pioneer
In 1986, Comvik Skyport AB put up a satellite link for transatlantic
data communications. In 1989, Comvik signed agreements with the
“Det svenska teleundret” (The Swedish Telecom Miracle), National Swedish Rail Administration on a joint fiber optic network.
written by Anders Johnson and published by Ekerlids The company changed its name to Tele2 AB in 1990.
Publishers in June 2000, illustrates the central role that According to Johnson, “That prepared the company for the
Tele2 and the businesses that now comprise it have played deregulation of the telephony market in 1993 and allowed it to
in making Sweden a global telecommunications leader. quickly become the second largest fixed-line operator. The infra-
Although much of the book focuses on the collaboration structure that Comvik had built also played a key role in the
between Ericsson and the National Swedish Telecom- advances of the Internet in Sweden. In 1991, Tele2 became the first
munications Administration, that is not the end of the Swedish company to offer Internet access”.
Sunet, the university data communications network, did not have
story. Two parts of the book focus on the innovations that
the wherewithal to arrange Internet access for all businesses and
Tele2 has made.
individuals outside the academic world. Snus (Swedish Network
Users Society) filled that gap:


Tele2 in brief

Operations at year-end 2001 resulting in significant savings for Tele2. Similarly, the
At year-end Tele2’s operations consisted of fixed and need to erect new infrastructures will be reduced, since
mobile telephony with the brands Tele2, Tele2Mobil, both parties’ existing infrastructure can be utilize to handle
Comviq and Tango. Tele2 supplied services to some 15 traffic.
million customers in 21 countries. Tele2 also has a UMTS license in Finland (through
The Tele2 Group also includes a number of other its part ownership in Suomen Kolegee Oy), Norway and
companies with data and telecom services: Lichtenstein, which creates significant opportunities for
• X-Source, active in IT-outsourcing, coordination gains. With its large customer base, its
• Datametrix, specialized in system integration, technical expertise and four licenses, Tele2 is the most
attractive partner for both suppliers and other operators.
• Optimal Telecom, with the products Linjeväljaren,
Internet and Optimal wireless,
Acquisition of FORA Telecom
• 3C Communications, which sells telephony and An agreement was reached at the end of the year
Internet services via pay phones and Internet terminals, through which Tele2 will acquire Millicom International
• Transac, data processing of card transactions and Cellular’s Russian mobile telephone company FORA
invoices, Telecom B.V. this is a logical development in light of the
• C3 offers phone cards for fixed telephony, success that Tele2 has achieved in the Baltic countries,
• IntelliNet, fixed telephony service with lowest-price particularly in the Estonia operations acquired from
guarantee. Millicom in 1998. Russia is a growth market with sub-
stantial potential, and with its eight GSM licenses, Tele2
The Group also offers cable-TV services under the has an excellent base for its operations.
brands Kabelvision and Tele2, as well as broadband ser-
vices. MVNO contracts in Germany and the Netherlands
The Everyday.com Internet portal is a company that On August 30, 2000, Tele2 signed the world’s first
is jointly owned by Tele2 and Modern Times Group MVNO (Mobile Virtual Network Operator) contract
(MTG). with the mobile operator Sonofon in Denmark. During
Tele2 is listed on exchanges in Sweden and the US. 2001, Tele2 signed two additional MVNO contracts.
It is listed on Stockholmsbörsen’s Attract 40 list with In August, Tele2 announced that it had become the
the symbols TEL2A and TEL2B and on Nasdaq as Netherland’s MVNO with the signing of a contract with
TLTOA and TLTOB. Telfor, a GSM operator owned by British Telecom.
In Germany, Tele2 signed a MVNO contract with
Tele2 and Telia to build joint UMTS network VIAG Interkoms, which means that Tele2 can now also
At the beginning of the year, Tele2 and Telia offer its customers mobile telephony. Tele2 is already
announced that they had established the jointly owned one of Germany’s largest alternative telecom operators.
company, Svenska UMTS-Nät AB, to build and oper- Both the MVNO and Service Provider (SP) roles
ate a network for next-generation UMTS (Universal have arisen as a means of further opening the mobile
Mobile Telecommunications System) mobile telephony. market to competition. In both cases, the operator leases
This agreement means that Tele2 and Telia will have capacity in an existing network and thus does not have
equal access to the license that Tele2 was awarded. It also to build its own radio network. The difference between
means that the risks and costs will be shared equally, MVNO and SP is fundamental. In the first case, one

“Their goal was to start up a commercial Internet access service. GSM pioneer
When Snus approached the National Telecommunications According to Johnson, Comviq “was the most innovative operator
Administration, it encountered total indifference. A group of when it came to marketing and distribution… Under the leadership
English consultants engaged by the agency had determined that of CEO Lars-Johan Jarnheimer (currently CEO of Tele2), Comviq was
the Internet was a fleeting technology without a future. The agency to turn GSM into a mass market”.
suggested a mediocre service that it had developed on its own. “The Swedish GSM networks started up in the autumn of 1992 at
Snus then turned to Comvik Skyport, which was more interested.” a time when the Swedish economic climate was beset by a highly
That led Comviq to establish Swipnet, a special company to pro- unusual combination of sky-high interest rates and the collapse of
vide Internet access. Despite internal resistance, the agency eventu- the krona. The economy was at a standstill and it was very difficult
ally started its own IP network. to launch new products… To jump-start sales, Comviq introduced
Nevertheless, Johnson writes that “as late as the autumn of new features that its competitors subsequently imitated.”
1995, the manager of Telia Infomedia Interactive (also responsible Tele2 breaks new ground – then and now.
for the Internet) said that the Internet was merely a colorful
garbage can.”
Tele2 was in the vanguard of the Swedish Internet revolution.


Tele2 in brief

company in practice becomes a reseller of another com- local calls as of January 1, 2002. In Switzerland, as well
pany’s telephony services, since only outgoing traffic is as in Italy, Tele2 is the second largest alternative oper-
handled. The MVNO role includes owning telephone ator in fixed telephony, Tele2 is that largest alternative
switches, which are thus able to handle incoming traffic. operator for fixed telephony in the Austrian market.
An MVNO issues its own SIM cards, can invoice the During 2001, Tele2 began its offensive in the
customer directly and develop its own services, which is Spanish market. In Luxembourg and Lichtenstein,
a clear advantage in competitive markets. Tele2 is established as a mobile operator under the
For the customer, there is no difference between hav- brand name Tango.
ing a subscription with a conventional operator or an
MVNO. This model opens significant growth opportu- Future opportunities
nities for a company like Tele2, which has a large cus- An important trend during 2001 was that interconnect
tomer base in many countries but lack infrastructure charges were lowered or are scheduled to be lowered in
for mobile telephony. the near future in several of the markets in which Tele2
is active. Interconnect charges are the fees that a telecom
Fixed telephony in UK operator pays in order to switch traffic to other net-
Tele2 and the Royal Mail initiated a partnership during works, thus enabling calls between customers of various
the year through which Tele2’s phone cards and fixed operators. Since Tele2 in other respects has low costs for
telephony services are sold at all post offices in UK. infrastructure, reduction of interconnect charges will
have a very positive impact.
Advances in Eastern Europe Another positive trend during the past year was that
The Tele2 brand was launched in Latvia and Estonia several countries introduced, or will introduce in the
during 2001. Tele2 is now the largest alternative mobile near future, number portability, which means that a
telephone operator in the Baltic region. Tele2 is also the customer is able to retain a mobile telephone number
largest alternative operator for fixed telephony in Estonia. when changing operators.
Pre-selection for local calls is also gaining ground.
Continental Europe – an overview This means that profitable local calls are now also avail-
In Germany, Tele2 is the third largest alternative operator able to Tele2, thus creating significant opportunities.
in fixed telephony. In the Netherlands, Tele2 is the coun- Local pre-selection will be introduced in Sweden and
try’s next largest alternative operator in fixed telephony France in the beginning of 2002. Toward the end of the
and also established Tele2 as an MVNO during 2001. year, the Netherlands, Switzerland, Austria and
Tele2 is also the largest alternative operator in France Germany will also introduce local pre-selection.
and will probably be able to take additional market Tele2 has a well established presence in all major
share, since France introduced number pre-selection for markets and is closely monitoring the business oppor-
tunities being created as deregulation continues.

– Industriförvaltnings AB Kinnevik – Kinnevik gets ready to provide
decides to enter the telecommu- traditional voice and data – Comviq launches its own analog
nications market. telecommunications services. network for mobile telephony.
Late 1970s 1980s 1981


Tele2 in brief

Development of third-generation mobile telephony purchasing decisions must take the environment into
From Tele2’s perspective, there are many factors favor- consideration. Tele2 is particularly conscious of environ-
ing UMTS: mental safety issues when it comes to mobile telephony.
• It will be a common standard in the Western world It is of the utmost importance that we not only com-
and Japan. That AT&T in the US is moving towards ply with prevailing environmental standards, but that
GSM and UMTS means that the telecom world is we keep abreast of research both in Sweden and abroad.
moving toward a standard with very broad support. The group is an active participant in public discussions
about health, safety and the environment.
• The Nordic region will have a head start in the
European market, since the beauty contests held here
Personnel and skills development
for awarding licenses prescribe rapid deployment.
Tele2 pursues an ongoing skills development effort to
Experience and business concepts can be exploited in
ensure that its employees possess the kind of know-how
emerging markets.
that will enable us to keep pace with the evolution of
• All data traffic is moving towards higher bandwidth the market and the needs of customers. The group aver-
and mobility. aged 2,172 employees in 2001, as opposed to 1,747 in
• In Sweden Tele2 will share infrastructure with Telia, 2000. Tele2 does business in 21 European countries.
which will significantly reduce costs for network Just over half of its employees are in the Nordic area.
build-out. That is the region in which Tele2 originated and in
which it still has the largest operations.
Environment and personnel All new employees complete a basic course that covers
Tele2’s operations, goals, principles, and quality assur-
Strict environmental requirements ance objectives. A series of new graduates are chosen for
Tele2’s operations have only a limited impact on the a trainee program each year. The program is primarily
environment. The company has drawn up an environ- devoted to on-the-job training in various countries and
mental policy for the entire group. The policy insists parts of the organization.
that environmentally approved products be used. In We also have an 18-month, multi-phase leadership
addition, waste materials generated throughout the project for the group’s managers.
office network, as well as scrapped materials, should be
treated in an environmentally sound manner. Finally,

Tele2 is one of the primary sponsors of Victory Challenge, the
Swedish syndicate that is an official challenger in Americas’ Cup, the
world’s oldest and most prestigious sailing trophy. The challenger
race, the Louis Vuitton Cup, begins on October 1. With Tele2’s logo-
type on the spinnaker of one of the Americas’ Cup boats, the media
impact in Tele2’s most important markets will be substantial.

– Agreement with National
– A satellite link for Swedish Rail Administra-
data communications – Comviq obtains tion on a joint fiber optic – Tele2 AB is formed
is established. a GSM license. network. (Currently Tele2 Sverige AB).
1986 1988 1989 1990


Tele2 in brief

Development of mobile 1991 – the first GSM call
GSM (Global System for Mobile communication) is the
communication second generation of mobile telephony. This digital system
was introduced in 1991, the year in which the world’s first
Mobile telecommunication is continuously evolv- GSM call was placed in Finland. During 1992, the first
ing. Today Tele2 is taking part in the build out portable digital mobile phones were launched, and in the
of third-generation mobile telephony and the same year, Comviq started its own GSM network.
UMTS (Universal Mobile Telecommunications From the start, the GSM system was able to transfer data
System) in Sweden, Norway and Finland. at speed of 9.6 kbit/s. GSM is currently a global standard.

With UMTS, higher bandwidth of up to 2 Mbit/s will allow 2001 – GPRS taken into operation
more information to be transferred, compared with today’s GPRS (General Packet Radio Service) was implemented to
GSM with 9.6 kbit/s. This will allow users to surf the increase data speeds in GSM networks. GPRS also facili-
Internet, listen to music, play games and watch video clips. tates the transition from GSM to UMTS. Tele2 currently
UMTS is an attempt to create a global standard for 3G. offers GPRS services in several application areas, thus
Tele2 has access to UMTS licenses in Sweden, Norway enabling users to send email and surf the Internet, for
and Finland (through its part ownership of Suomen example. Mobile phones are improving constantly and
Kolmegee Oy), as well as in Lichtenstein. being used by more and more people. Tele2’s ambition is
During 2001, Tele2 and the Swedish operator Telia to be the price leader and to be able to offer customers
established a joint network company, Svenska UMTS-nät more value and greater enjoyment for their money.
AB. Together, Tele2 and Telia will build and operate GPRS allows significantly faster data transmission
a nationwide Swedish UMTS network. On January 1, speeds in GSM networks than previous technologies and
2002, Tele2 was able to present a functioning network is expected to support speeds up to 115 kbit/s in the
with sufficient signal strength to fulfill its promise for the future. It will also be possible for mobile telephone users
starting date for UMTS. By the end of 2003, the network to be constantly connected to the GSM network, even
will cover 99.98% of the Swedish population. when they are not making calls. Instead of paying for con-
nection time, users will pay for the amount of information
1981 – Comviq introduces analog mobile telephony that is sent.
There have been different variants of mobile communica-
tion by telephone starting as early as the 1930s. The first
analog network was launched in Sweeden in 1981 by
Comviq AB. But it is the NMT (Nordic Mobile
Telephone) system that is commonly regarded as the first
generation of mobile telephony.
NMT is an analog technology that was developed in the
Nordic countries. NMT was an attempt to create a system Transfer capacity
that worked not just in a single country, but also between Maximum speed Initially
countries. In Sweden, Telia operated NMT networks on
GSM 9,6 kbit/s 9,6 kbit/s
two frequency bands: 450 MHz and 900 MHz. Telia
GPRS 115 kbit/s ca 50 kbit/s
closed the NMT 900 network on December 31, 2000.
UMTS 2 Mbit/s 384 kbit/s

– The fixed telephony market is deregulated.

– NetCom Systems is formed to hold and develop the
Kinnevik Group’s telcommunication companies in the
Nordic countries.

– Comviq GSM starts its – Kinnevik and Orkla set up NetCom ASA, Norway. – NetCom Systems launched the
own GSM network. NetCom Systems owns 25% of the company. forerunner to Tele2 Norway.
1992 1993 1993


Tele2 in brief

Continued investment in In August 2001, Tele2 became the first MVNO in the
Netherlands, when a contract was signed with Telfort,
MVNO services a GSM operator owned by British Telecom. This means
that customers can now be offered mobile services in
During 2001, Tele2 entered MVNO contracts addition to the fixed telephony services already provided.
with mobile operators in the Netherlands and Tele2 is constantly seeking opportunities to refine its
Germany. These contract allow Tele2 to offer products. With the contract in the Netherlands, will fol-
mobile services as a complement to the fixed low the launch of prepaid calling cards, subscriptions,
telephony that the company already provides. and international roaming, meaning contracts with other
operators that make it possible to use a mobile phone in
This approach is cost-efficient and flexible,
other countries.
while offering customers more services at lower
Tele2 is one of Germany’s largest alternative telecom
cost. Tele2 was world’s first operator to offer operator, with more than one million private and busi-
MVNO services through its contract with the ness customers in fixed telephony. With the MNVO
Danish operator Sonofon in August 2000. Tele2 contract with VIAG Interkom signed in December 2001,
is currently active as an MNVO is Denmark, the Tele2 can now offer mobile services to its German cus-
Netherlands and Germany. tomers via VIAG Interkom’s network. Germany is
Europe’s largest telecom market and thus an important
A Mobile Virtual Network Operator (MVNO) is an market for Tele2.
operator that offers mobile services but does not have its During 2001, the number of mobile phones exceeded
own frequency licenses and only limited infrastructure. the number of fixed subscriptions in Sweden. Having a
Instead, the MVNO leases capacity from a mobile tele- mobile phone has become just as self-evident as having a
phone operator with an existing networks and uses its fixed phone. Seven of ten Swedes now have a mobile
own switches to handle both incoming and outgoing phone. Sweden and the other Nordic countries have
telephone traffic (unlike Service Providers, who only always been in the lead in the development of mobile
handle the outgoing traffic). telephony, and it is therefore natural that Tele2 is taking
An MVNO issues its own SIM cards, invoices cus- the lead in the growth of MVNO.
tomers directly and can develop its own services, which Interest for MVNO is very great. Established operators
provides clear advantages in competitive markets. For the are increasingly eager to load their existing networks with
customer, there is no difference between having a sub- traffic. Although MVNO is primarily a European phe-
scription with a conventional operator or an MVNO. nomenon, interest is spreading to the US and the rest of
This model creates substantial growth opportunities for the world. MVNO is a clear example of how technology
Tele2, which has a large customer base in many coun- can be adapted to create greater value for the end cus-
tries, but lacks infrastructure for mobile telephony. tomer. New services are now being created in pace and in
MVNO contracts provide more cost-efficient and flex- harmony with market development. Tele2 will continue
ible access to mobile telephony services, while customers its investments to achieve MVNO status in the countries
are offered less expensive access to these services. where this is possible.

– NetCom Systems’ stock is spun off to Kinnevik
shareholders. At the same time, these shares are
listed on Stockholmsbörsen’s O list.
– Through its Tele2 A/S subsidary, NetCom Systems
becomes Tele2 Danmark’s very first rival on the
Danish telecom market, shattering a century-old
monopoly. – NetCom Systems is listed – The Norwegian telecom
on Nasdaq. Year-end market is deregulated.
1996 1997 1997/1998


Nordic
Total number of
subscribers:

. . ..
6,274,000

Central Europe
.
. . . . Total number of
subscribers:
3,191,000

. . . ..
Eastern Europe
and Russia
Total number of
subscribers:

.
996,000

Luxembourg
Total number of
subscribers:
211,000

. . Southern Europe
Total number of
subscribers:
4,286,000

The Tele2
Group – NetCom AB increases its Ritabell stake to 94.8%.
– Equal access pre-selection reform in Denmark, Norway and
– Acquisition of a 48% stake in Ritabell Sweden.
(mobile telephony operator), the initial – NetCom AB divests its NetCom ASA stake to Société
penetration of the Baltic market. Européenne de Communication S.A. (SEC) in exchange for
– NetCom Systems AB changes its name to newly issued SEC stock. Following the deal, NetCom AB
NetCom AB. holds 17.8% of SEC’s capital.
1998 1999


The Tele2 Group

The Tele2 Group consists of six market areas: The market area Luxembourg includes Lichtenstein,
Nordic, Eastern Europe and Russia, Central Luxembourg, 3C and Transac and a license for fixed
Europe, Southern Europe, Luxembourg, telephony in Belgium.
Tele2 is represented in most countries outside the
and Branded products and services.
Nordic region.
Nordic is the largest market area and includes Tele2 In most of Tele2’s markets, the company is by far the
operations in Sweden, Norway, Denmark, Finland and biggest challenger to the previous monopoly.
Datametrix. Operations in Nordic differ from other Cross-selling – the marketing of additional products
market areas in that they have been running longer, par- and services to existing customers – is a central strategy,
ticularly in Sweden, and a broad portfolio of products is the emphasis being on supplementing fixed with mobile
offered. telephony. There are major opportunities for the cross-
The market area Eastern Europe and Russia consists selling of new products and services to the existing cus-
of operations in the Baltic countries Estonia, Latvia and tomer base.
Lithuania, as well as Poland, the Czech Republic, Russia Tele2 is continually working on spreading know-how
and X-Source. among product lines and countries. Customer offerings
The market area Central Europe includes Germany, and successful concepts create synergies, since they can
the Netherlands, Switzerland, Austria and Ireland. also be copied in other markets. This increases prof-
The market area Southern Europe includes operations itability by creating economies of scale, thus improving
in France, Italy and Spain and a license in Portugal. resource utilization while facilitating market launches.
Net
Increase intake
Number of customers, thousands 12-31-2001 12-31-2000 % 2001
By market area
Nordic ...................................................................................................... 6,274 5,472 15 802
Eastern Europe and Russia ...................................................... 996 278 258 718
Central Europe ................................................................................... 3,191 2,702 18 489
Southern Europe .............................................................................. 4,286 2,942 46 1,344
Luxembourg ........................................................................................ 211 160 32 51
Total 14,958 11,554 29 3,404
By business area
Mobile telephony ........................................................................... 3,710 2,559 45 1,151
of which prepaid ................................................................................ 2,179 1,396 56 783
Fixed telephony and Internet ................................................ 11,248 8,995 25 2,253
Total 14,958 11,554 29 3,404

Number of customers by market area Number of customers by business area

15,000 15,000

10,000 10,000
Luxemburg
Southern Europe
Central Europe 5,000 5,000
Mobile
Eastern Europe telephony
and Russia
Fixed telephony
Nordic and Internet
0 0

Q4/01 Q4/00 Q4/01 Q4/00

– NetCom is awarded
– NetCom becomes the first mobile UMTS licenses in Norway
virtual network operator (MVNO) in and Sweden. – Acquisition of FORA Telecom.
Denmark. – Netcom acquires Baltikom – Joint UMTS company with Telia.
– NetCom acquires Société Européenne GSM, Latvia’s second – NetCom changes its name
de Communication S.A. largest mobile operator. to Tele2.
2000 2000 2001


The Board of Directors

Left to right: Lars-Johan Jarnheimer, Bruce Grant, Marc J. A. Beuls, Jan Hugo Stenbeck,
Lars Wohlin, Vigo Carlund, Sven Hagströmer, Pelle Törnberg, Håkan Ledin

Vigo Carlund Lars-Johan Håkan Ledin Sven Hagströmer
(born 1946) has worked for Jarnheimer (born 1937) has an M.Eng. (born 1943) was chairman of
Kinnevik companies since CEO and Managing Director and an M.B.A. He worked for the board of Hagströmer &
1968, including as President (not a member of the Board). LM Ericsson for many years Qviberg from its inception in
of Svenska Motor AB and before becoming President 1980 until 1995. He is chair-
(Born 1960) has an M.B.A.
Korsnäs AB. In 1997, he be- (now deputy chairman) of man of the boards of
He has been CEO and
came Vice President of Millicom in 1987. Between Investment AB Öresund, AB
Managing Director of Tele2
Industriförvaltnings AB 1995 and 1996, he was Custos and also Acando since
AB since March 1999.
Kinnevik (Kinnevik), and in President of NetCom Systems. 2001. Other board assign-
Jarnheimer has held various
May 1999 he took over as He has been a member of the ments: ProtectData, Quartz
posts with IKEA, Hennes &
President. He has been a Board of Tele2 since 1994. Pro, LGP Telecom Holding
Mauritz and SARA Hotels,
member of the Board of Tele2 Holding: 30,000 class B shares. AB, Perbio Science AB and
and was President of ZTV for
since 1995. HQ Fonder. Member of the
a short time before coming to
Holding: 379 class B shares Board of Tele2 since 1997.
Comviq as Vice President. He Pelle Törnberg
was President of Comviq in Holding: 30,000 class B shares.
Marc J. A. Beuls (born 1956), is president of
1993–97. Jarnheimer was part
Metro International since
(born 1956) has a B.S. in of group management at Saab
2000. In 1987, he started the Lars Wohlin
Economics. He has been with Automobiles with responsibili-
TV production company (born 1933) has a D.Econ.
Millicom International ty for the Nordic countries,
Strix. Since 1993, he has been and was head of the Swedish
Celluular S.A. since 1992 and Russia and the Baltic states,
responsible for all media com- Industrial Institute for
has been President & CEO and was CEO of Saab Opel
panies in MTG (formerly Economic and Social Research
since January 1998. In 1997 Sverige AB in 1997–98. Since
Kinnevik). Board assignments: in 1973–76. He served as
he was appointed Managing year-end 1998, he has been
MTG, Invik, SEC, Millicom Undersecretary of State in the
Director of Banque Invik S.A. Vice President of
and P4. Member of the Board non-Socialist Cabinet from
in Luxembourg. Marc Beuls Industriförvaltnings AB
of Tele2 since 2001. 1976 to 1979 and as a
previously held executive posi- Kinnevik and President of
Investment AB Kinnevik. Holding: 4,100 class B shares. Governor of the Swedish cen-
tions at Generale Bank in Bel-
Board assignments: MTG, tral bank from 1979 to 1982.
gium. He has been member of
Arvid Nordquist HAB, Jan Hugo Stenbeck From 1983 to 1996, he was
the Board of Tele2 since 1998.
Millicomn, Invik AB and chairman of the board of the
Chairman of the Board
Svenska UMTS-Nät AB. Drott real estate company and
Bruce Grant Stenbeck (born 1942) is also President of the Urban
(born 1959) is president of Holding: 2,000 class B shares chairman of the boards of Mortgage Bank of Sweden.
XSource Corporation Inc. and 48,000 options. Kinnevik, Millicom, Invik and He has been a member of the
Board assignments: Kinnevik, MTG. Member of the Board of Board of Tele2 since 1996.
Korsnäs AB, Metro Inter- Tele2 since 1993.
Holding: 900 class B shares.
national S.A. and Transcom Holding: 811,332 class A
WorldWide S.A. Member of shares.
the Board in Tele2 since 2001.


Senior Executives
Lars-Johan Jarnheimer Håkan Zadler
Born 1960 Born 1960
President and CEO, CFO
Tele2 AB M.B.A
M.B.A. Employed since 2000
Employed since 1992 Holding: 3,000 class B shares
Holding: 2,000 class B shares
and 48,000 options

Fredrik Berglund Johnny Svedberg
Born 1961 Born 1962
Market area director, Market area director,
Nordic Eastern Europe and Russia
B.S. in market economics B.S. in market economics
Employed since 1995 Employed since 1990
Holding: 30,000 options Holding: 1 class A share, 240 class
B shares and 8,000 options

Roman Schwarz Jean-Louis Constanza
Born 1947 Born 1961
Central Europe Southern Europe
President, Tele2 Germany President, Tele2 France
and Switzerland M.B.A
M.B.A Employed since 1998
Employed since 1991

Jean-Claude Bintz Magnus Mandersson
Born 1956 Born 1959
Luxembourg Branded products & services
President of Tango M.B.A
Employed since 1989 Employed since 1999

Björn Lundström Ib Andersen
Born 1965 Born 1955
Director of network Director of network operations
planning and M.B.A
implementation M. Eng. Employed since 2000
Employed since 1991
Holding: 1,500 options

Roger Mobrin Jeanette Almberg
Born 1968 Born 1965
Director of billing operations and Director of customer service
coordination M.B.A.
Technical college engineer Employed since 1995
Employed since 1995 Holding: 1,500 options
Holding: 50 class B shares
and 1,500 options

Karl-Johan Nybell Lars-Erik Svegander
Born 1968 Born 1941
Director of product management Personnel director
M.Eng. Employed since 1991
Employed since 1995 Holding: 1,500 options
Holding: 1,000 options


The Tele2 share

Number of shares shares and depository receipts in SEC. By the end of the
Tele2’s A and B series shares were listed on the O-List of issue period, a total of 40,784,480 shares had been issued.
Stockholmsbörsen on May 14, 1996 in conjunction with At the end of 2001, all shares in FOR A Telecom B.V.
the distribution of the Company to the shareholders of were acquired in exchange for 2,461,449 newly issued Tele2
Industriförvaltnings AB Kinnevik. Following the distribu- B shares. As of December 31, 2001, a convertible debenture
tion, Kinnevik owned no shares in Tele2 but held a convert- corresponding to 100,000 B shares was converted to shares.
ible debenture corresponding to 25,555,555 shares. During The new issue was submitted to PRV, the Swedish Patent
1996, Kinnevik sold portions of the debenture, after con- and Registration Office, for registration.
version to shares, to institutions and Invik & Co. AB. As of December 31, 2001 there were a total of
To promote interest in the Company’s share in the US 147,360,175 shares in Tele2 AB plus two convertible
and to increase its liquidity, the Tele2 share was listed on the debentures with detachable options corresponding to
Nasdaq exchange in the US on January 22, 1997. A few 200,000 B shares.
months later, a new issue of two million B shares was imple- Series A shares carry 10 votes, while B shares carry one
mented. With this issue, Tele2 sought to broaden the vote.
Company’s international ownership interest and to support
the Nasdaq listing. The proceeds for the share issue, which Ownership structure
amounted to SEK 220 million, were primarily used for At year-end 2001, Tele2 had about 64,000 shareholders,
ongoing investment requirements, in particular for the compared with about 68,000 one year previously. The pro-
development of Tele2’s Danish and Norwegian operations. portion of institutional owners corresponded to about 88%
In conjunction with the new issue, Industriförvaltnings (2000: 85%) of the share capital and about 81% (2000:
AB Kinnevik sold the major portion of its remaining con- 88%) of the voting rights on December 31, 2001.
vertible debenture in Tele2 after conversion to 6,000,000 B
shares. Analysts who followed Tele2 during 2001
By the end of the first half of 1997, Invik & Co. AB had Michael Andersson Evli Securities
converted its debenture, corresponding to 6,700,000 B Johan Broström Hagströmer & Qviberg
shares, thus increasing Tele2’s shareholders’ equity by SEK Fredrik Danielsson Carnegie
335 M. Mattias Gredmark Aros Maizels
During the second quarter of 1998, all outstanding Lena Hansson Julius Baer
debentures were converted into 755,555 B shares. Viking Kjellström HSBC
At the Annual General Meeting in May 2000, the Board Johan Klevby Alfred Berg
of directors was authorized to settle an option commitments Peter Kurt Nielsen Deutsche Bank
through a new share issue. In October 2000, 200,000 new Richard Rosenbacke Den Danske Bank
B series shares were issued, as well as three convertible Henrik Sandell Swedbank
debentures with detachable options with rights to new sub- Jeremy Taylor UBS Warburg
scription of a total of 300,000 B shares. Tomas Tomasson Schroder Salomon Smith Barney
At an Extraordinary General Meeting of Tele2 AB on Per Trygg Enskilda Securities
August 25, 2000, a proposal was approved to issue at most Peter Warléus Handelsbanken
40,901,585 series A and series B shares in Tele2 to share- Henrik Wikström ABG Securities
holders and holders of depository receipts in Société Stefan Wård CAI Cheuvreux Nordic
Européenne de Communication S.A. (SEC) in exchange for

Ownership structure, December 31, 2001 Current ownership structure
Share of Share of
A shares B shares A+B shares No. of votes capital, % votes, %

Invik group ................................................................................ 9,724,108 3,090,696 12,814,804 100,331,776 8.7 24.0
Kinnevik group ...................................................................... 6,498,880 16,467,678 22,966,558 81,456,478 15.6 19.5
Millicom Telecommunications S.A. .................. 5,384,316 9,331,344 14,715,660 63,174,504 10.0 15.1
Emesco ............................................................................................ 2,209,997 48,400 2,258,397 22,148,370 1.5 5.3
Confidentia Forvaltnings AB .................................... 898,076 — 898,076 8,980,760 0.6 2.2
Stenbeck, Jan-Hugo ......................................................... 811,332 — 811,332 8,113,320 0.6 1.9
Nordea Allemansfond Beta ...................................... 619,850 1,046,500 1,666,350 7,245,000 1.1 1.7
Brotherton N.V. ..................................................................... — 4,039,993 4,039,993 4,039,993 2.7 1.0
AMF Pensionforsakring AB ....................................... — 3,982,000 3,982,000 3,982,000 2.7 1.0
Nordea Bank SA ................................................................... 245,750 189,666 435,416 2,647,166 0.3 0.6
Total, ten largest owners ..................................... 26,392,309 38,196,277 64,588,586 302,119,367 43.9 72.4
Other shareholders ............................................................ 3,614,638 78,559,616 82,671,589 115,203,331 56.1 27.6
Total .................................................................................................. 30,006,947 117,353,228 147,260,175 417,322,698 100.0 100.0


The Tele2 share

Share price trend on Stockholmsbörsen

Tele2’s closing price each week AFGX Number of shares traded (000s), including after-market trading

900
800
700
600
500

400

300
30,000

200 25,000

20,000

15,000
100
10,000

5,000

50
96 97 98 99 00 01 02

Share price trend on Nasdaq

Tele2’s closing price each month Nasdaq composite index Number of shares traded (000s), including after-market
100
90
80
70

60

50

40
900

800
30
700

600

500
20
400

300

200

100
10
97 98 99 00 01 02


The Nordic market area

includes Sweden, Norway,

Denmark, Finland and

Datametrix.

The number of customers

was 6,274,000 at year-end.

Nordic Licenses Fixed Mobile Internet Launch
Market position among
alternative operators

Sweden • • • • 1981/1993* 1

Norway • • • • 1998 1

Denmark • • • • 1996 1

Finland • • • • 2000 New player

* Mobile telephony was launched in 1981 and fixed telephony in 1993.



Sweden
With a complete offering in the areas of Growth continues
The number of mobile telephony customers, including
mobile telephony, fixed telephony,
prepaid customers, increased in 2001 by 21% to
Internet, data communications, cable-TV 2,532,000 (2,087,000). Prepaid calling cards accounted
and broadband, Tele2 Sverige AB is for 65% of all customers.
Call minutes per month and user (MoU) rose in the
Sweden’s leading alternative provider of fourth quarter of 2001 by 19% to 117, as opposed to 98
telecommunications services. in the fourth quarter of 2000.
Despite an accelerated rate of new customers in the
Among Tele2 Sweden’s strengths are attractive rates, a third and fourth quarters, average monthly revenue per
large customer base, its own infrastructure and access to user (ARPU) including prepaid calling cards was SEK
well-known brands, as well as the ability to quickly adapt 206 for all of 2001 and SEK 204 for the fourth quarter.
to new customer requirements and market conditions.
Tele2 offers a highly advanced range of services. With its High brand recognition
mobile telephony, fixed telephony, Internet, data com- 96% of the Swedish population recognizes the Tele2 and
munications, and cable-TV capabilities, Tele2 is able to Comviq brands.
provide the total solutions that customers are increasingly
looking for. Tele2 is awarded a UMTS license
Tele2 is widely known for its flexibility, customer In December 2000, the Swedish National Post and
focus and cost awareness and has shown impressive Telecom Agency (PTS) awarded Tele2 one of the coun-
strength by not only protecting its customer base from try’s four UMTS licenses to construct and operate third
competitors, but also by substantially increasing it. generation (3G) mobile networks. In March 2001, Tele2
and Telia and Telia Mobile AB subsidiary signed an
Mobile telephony – the Comviq agreement to form a joint (50/50) company to build and
and Tele2Mobil brands run the network. The collaboration will considerably
Tele2 markets its mobile services under the Comviq and reduce the cost of construction. The joint venture was
Tele2Mobil brands. Comviq addresses the consumer approved by the Swedish Competition Authority in
market, while Tele2Mobil primarily courts the business March 2002.
market. The services are positioned for price leadership.

Comviq’s advertising spots generate consid-
erable attention, particularly this one, which
in a humoristic manner points out that
Comviq’s customer receive a bonus when
they receive calls.


Marknadsområde Xxx

Mobile
telephonyTele2 Sverige AB
markets its
mobile services
under the
Comviq and
Tele2Mobil
brands. Comviq
focuses on the consumer market, while
Tele2Mobil primarily courts businesses.
The services are positioned as the price
leaders.



High mobile penetration and stiff competition Service Providers
Mobile telephony penetration in Sweden is near the top Tele2 has contracts with two service providers, Dial n’
worldwide. Including prepaid calling card customers, Smile and Optimal Telecom. Whereas Optimal Telecom
Comviq and Tele2Mobil had 36% of the Swedish mobile offers mobile prepaid calling card services under the
telephony market at the end of the fourth quarter in Tango trademark, Dial n’ Smile markets mobile subscrip-
2001. Their biggest competitors are Telia Mobile (48% tion services in both the private and business segments.
of the market) and Europolitan (16%). Comviq has a
very strong position in prepaid calling cards, which are SMS usage accelerates
growing more rapidly than any other segment. Despite SMS usage continued to increase substantially during the
the emergence of many new service providers, better year. Comviq launched a new SMS portal offering a wide
than one out of every two first-time mobile telephony range of services. The new SMS Content product paved
subscribers during the year were with Comviq or Tele2. the way for external content providers to sell directly to
There are ten mobile telephony providers in Sweden. Tele2’s subscribers. Among the most popular offerings
Tele2’s success reflects the strength of its brand and its are images, ring tones, stock prices and horoscopes.
unique position among mobile telephony users. Number Community services and the ability to send SMS mes-
portability, the ability to switch operator while keeping sages to live television shows also enjoy major potential.
the same phone number, has spurred competition. That The company introduced its popular Comviq
has accrued to Tele2’s advantage as well. Community SMS meeting place during the year. The
new Tele2 directory service, with which employees can
Comviq request an SMS message of any phone number at their
Comviq’s business concept is simple: to make mobile place of business, is particular useful during non-office
telephony available to as many people as possible at the hours.
lowest possible rates. In addition to prepaid calling cards,
Comviq offers a number of different subscription plans. Faster data transfer to mobile phones
The success of prepaid calling cards has contributed to The GPRS service that Tele2 launched in 2001 allows its
Tele2’s rapid growth. The company launched its extreme- customers to be connected 24 hours a day at greater
ly popular Selfnavigator service during the year. bandwidths. Provided free of charge through May 31,
Subscribers can go directly to the website to order sup- 2002, the service has been a media splash and served as
plementary services, review their bills, get their account clear evidence that Tele2 is working hard to offer the
balance, and track interest charges. Moreover, prepaid lowest rates.
calling card customers can access WAP services. GPRS gives our customers faster connections not only
Tele2 launched several widely acclaimed marketing to mobile Internet, but also to Tele2’s IQ Menu and T2
ventures, including a prizewinning television advertising Menu WAP portals. The portals include everything from
campaign for Comviq Kontant prepaid calling cards. sports results and the latest news to games and entertain-
Comviq’s new website included information on numer- ment. A popular entertainment service during the year
ous SMS services. SMS and calling rates were lowered was Bridget Jones Diary. New functionality was intro-
during the year for both peak and offpeak. duced on the portal during the year, including email ser-
vices that provide users with access to their email from
Tele2Mobil – new contracts their mobile phones in the same manner as from a PC.
Tele2 continued to score triumphs in the business seg-
ment, including a contract with the Region of Scania, UMTS and MMS
during the year. In addition to renewing its mobile con- During 2002, even more acronyms will come into use.
tract, IBM signed one for fixed telephony as well. The commercial launch of third-generation UMTS
Furthermore, Tele2 concluded new mobile and fixed mobile telephony is approaching. The rate at which ser-
telephony contracts with the Swedish municipalities of vices are introduced will be determined by customer
Eskilstuna, Köping, Arboga, Kungsrör and Ekerö. The requirements and the availability of phones. In addition,
company also entered into mobile and fixed telephony the launch of MMS (Multimedia Messaging Service) is
contracts with NEA-gruppen and Scribona. SMS and approaching. MMS is an extension of the successful SMS
calling rates were lowered during the year for both day- concept that will allow users to send not only text, but
time and nighttime. images and sound to each other.
During the year, Volvo, which has been a fixed tel-
ephony, Internet and to a certain extent data network
customer, decided to integrate mobile telephony from
Tele2 into its operations, thus replacing portions of fixed
telephony with mobile telephony.


Fixed
telephony Due to stiffer
competition,
customers can
now call more
cheaply – regard-
less of the desti-
nation or time of
day. In a market where rates did not
fall as sharply as during previous years,
Tele2 Sweden retained its price leader-
ship throughout 2001.


Annual Report 2001

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