The financial results of the nine months of 2004

1

• The financial results of the nine months of 2004
• 14 October 2004

2
Financial results in brief

• Q3 2003 incl. 2 mln EUR computer sale to Tallinn
  Educational Authority
• 9M 2003 incl. 4 mln EUR capital gain from the
  sale of 49 of the shares of AS Connecto
• ROA Net profit of the period, expressed as a
  percentage of average total assets ROE Pre-tax
  profit of the period, expressed as a percentage
  of average equity

3
Financial results in brief. Cash flow

• The net debt position of the Group has been
• Influenced by
• strong positive operating cash flow
• 70 mln EUR dividend payment in Q2 2004
• 24 mln EUR dividend tax payment in Q3 2004.

4
Financial results in brief. Balance sheet
Lower investments

• Activities of EMTEsindused
• Balances of AS EMT with other operators.

• International payments of Elion Enterprises Ltd.

• High dividend payment

5
Results by business segments
6
Revenue history

• All operating segments of the Group contributed
  to the revenue growth
• Growth in the mobile area was the strongest
• Q3 2003 of the fixed area includes 2 mln EUR
  from a deal with the Tallinn Educational
  Authority.

7
EBITDA history

• Intense competition has put pressure on margins
• Still, margins have been stable over the last
  three qurters.

8
Investments and depreciation

• The Elion Group invested 4 mln EUR in the third
  quarter of 2004. Majority of investment went into
  the Internet, IT and data communications area.
• The EMT Group invested 3 mln EUR. Majority of
  investments were made to improve the quality of
  the companys technological infrastructure.

9
Headcount
10
Estonian telco market
Market liberalised 1 January 2001 Elion is
not allowed to enter have not started yet
11
Fixed communications

• Main events in the voice area
• Opened to competition in the beginning of 2001,
  number portability and carrier pre-selection
  since 2004
• Competition effect mainly on international call
  prices
• Current situation is stable despite of
  pre-selection and number portability
• Mobile cannibalisation

• Main events in the data area
• Has always been open for competition
• Internet penetration is 52 (out of age groups
  6-74)
• 100 of public sector, 78 of enterprises and
  25 of Estonian homes are connected to Internet
• Growth areas are home connections and
  entertainment

12
Fixed voice communications. Market shares
Elion Enterprises AS has maintained its market
shares in all major categories. The company has
improved its market share by international call
minutes.
13
Internet content
Elion offers the most popular e-mail service in
Estonia
NETI is the most popular internet environment in
Estonia

• On average 105,000 visitors per day
• Some 2 million e-mails a day with a total volume
  of 35 gigabytes
• About 100,000 infected e-mails blocked by
  anti-virus software every day
• 300,000 users log in the portal about 4 million
  times a month

NETI search system enables to find information
fast and comfortably by using systemized
catalogue or by a keyword. NETI is the most
popular internet environment in Estonia with more
than 210,000 visitors and 360 000 inquiries a day.
14
Elion Group. Customers
The number portability require-ment came into
force from 1 January 2004. However, it has had no
significant effect on the number of customers of
Elion Enterprises. Elion Enterprises got 9,600
customers in Q3 through a subscription campaign
with no installation fee. The growth of the
permanent Internet connections accelerated again.
15
Elion Group. Revenues
The growth mainly comes from network services,
Internet, data communications and IT, and
non-core activities.
16
IT and Data market expected to boost

• Fragmented and competitive market
• Utilities
• Global players
• Niche IT companies
• Main business areas
• data connections
• hardware and software sales
• IT solutions
• maintenance
• IT infrastructure services
• IT business consultation
• IT Data market grows 10 yearly

17
Mobile communications
AS EMT has maintained its 47-market share

• Main events in the mobile area
• Price war intensified early this summer

• Operators are concentrating on specific customer
  groups (Seniors, Students, etc.)

• The first virtual network mobile operator
  confirmed its planned entry

• Mobile number portability requirement likely to
  become into force from 1 January 2005.

18
AS EMT. Customers and ARPU

• Fast customer growth continued also in Q3.
• Special offers and increase of the share of the
  prepaid customers have had their impact on
  monthly ARPU.

19
AS EMT. Revenues
All revenue categories are up, supported by fast
growth in the number of customers. Mobile data
communication services are gaining popularity.
20
EMT. EDGE

• EMT - history of data communications
• June 2001 EMT was the first operator in Estonia
  who started to offer GPRS.
• Data communication revenues have the fastest
  growth. The number of regular customers
  fourfolded during 2003.
• September 2003 EMT opens the first 3G testing
  network in Estonia.
• June 2004 GPRS becomes available for pre-paid
  customers.
• 28 June 2004 EMT is the first operator in
  Estonia who started to offer EDGE (Enchanced Data
  rates for GSM Evolution).

• EMT has over 50,000 regular WAP-users.
• SIMPEL GPRS is expected to further rise the
  number.
• EDGE shall improve quality of data communications
  for the existing customers.
• EDGE is expected to attract new customers and
  create ground for 3G.
• End 2004 min 10 of the mobile data service
  users are expected to use EDGE.
• End 2007 80 of EMTs exchanges support EDGE
  90 of the mobile data service users are using
  EDGE.

21
EMT Go

• EMT Go It is the new, colorful face of EMTs WAP
  service.
• EMT Go is available for both post-paid and
  pre-paid customers.
• EMT Go brings multi-media into WAP
• All WAP-phones support the new service.
• EDGE-phones make EMT Go to run much faster.

22
Share price developments

• 14 April 2004 TeliaSonera announced its cash
  offer.
• 15 April 2004 Q1 2004 results were released.
• 18 May 2004 the AGM decided to pay dividends
  0.51 EUR per A share and 639 EUR per B share.
• 8 June 2004 dividend list was fixed.
• 10 June 2004 the cash offer ended.
• 17 June 2004 dividends were paid out.
• 14 July 2004 Q2 2004 results were released.

23
Share capital

• 100 new A shares were issued and used to convert
  the B share owned by the government.
• 310,000 new A shares were issued and exchanged
  for B series bonds owned by employees covered by
  the share option program.
• In Septmber 2004, TeliaSonera (Baltic Tele)
  increased its shareholding to 49.26 by buying
  643,193 shares.