BEGINNING OF A NEW ROAD

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BEGINNING OF A NEW ROAD

• TEO LT, AB CORPORATE PRESENTATION

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HISTORY OF THE COMPANY
1992-1997
1998-2002
2003-2005
2006-
State-owned company
Re-branding
Privatisation and modernisation
Market liberalisation
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TEO LEADERSHIP IN LITHUANIA

• No. 1 in fixed voice telephony
• No. 1 in broadband internet
• No. 1 in data communication and leased lines
• No. 1 in Call Center services
• No. 1 in the social partnership
• Most liquid share on Vilnius stock exchange

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BUSINESS OF TEO
VOX - voice services for residential customers
ZEBRA - internet services for residential
customers
GALA digital television services
TEO VERSLAS - voice, internet, data
communication and IT services for business
customers
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TEO PART OF TELIASONERA GROUP

• TeliaSonera - largest operator in the Baltic
  region
• Consolidated mobile and fixed business in Estonia
  and Lithuania
• Consolidated mobile business in Latvia
• Minority holding in fixed business in Latvia
• Baltic countries 10.4 of total TeliaSonera net
  sales (2005)
• TEO 2.3 of net sales and 3.3 of EBITDA (2005)

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TELIASONERA CUSTOMERS IN THE BALTICS

• Estonia - 677,000 mobile- 388,000 fixed
  voice- 121,000 datacom broadband
• Latvia - 735,000 mobile- 624,000 fixed voice-
  68,000 datacom broadband
• Lithuania - 1,889,000 mobile- 798,000 fixed
  voice- 126,000 datacom broadband

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TEO IS A PUBLIC COMPANY

• Amber Teleholding A/S - subsidiary of TeliaSonera
  AB
• State of Lithuania reduced its stake from 10.03
  (2003) to below 2 by giving shares of the
  Company to the citizens of Lithuania as a
  compensation for realty redeemable by the State
  of Lithuania (realty seized during the Soviet
  times)
• UAB Lintel, a member of TEO Group, holds the
  treasury stocks since IPO
• More than 12 thousand shareholders

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TEO GROUP
TEO LT, AB(voice, internet, wholesales, data
communication, digital TV services Internet
portal Zebra)
UAB Lintel (directory inquiry 118, contact
center services, treasury stocks)
100

• In 2006, disposed construction business, UAB
  Comliet
• Disposed UAB TietoEnator Consulting (26)
• Acquired remaining 40 in UAB Baltic Data Center
• 100 stake in OOO Comliet-Kaliningrad
  (Kaliningrad Region, Russian Federation)
• Dormant Baltic Data Centers subsidiary in
  Latvia, Baltic Data Center SIA

UAB Baltic Data Center (IT infrastructure
services)
100
UAB Voicecom (NMT-450 network)
100
UAB Kompetencijos Ugdymo Centras (training and
consultancy)
100
VI TEO Sportas (womens basketball team TEO,
fitness club ZEBRA SPORT)
100
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TELECOMMUNICATIONS MARKET IN LITHUANIA (H1 2006)

• Total revenue LTL 1,289 million (LTL 1,148
  million in H1 2005)
• Growth 12.32 (y-o-y)
• Penetration per 100 residents fixed voice
  23.3 mobile voice 130 internet 42.1
  broadband internet 8.4
• Investments LTL 214 million

Source Report of Communications Regulatory
Authority
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TEO COMPETES IN ALL AREAS EXCEPT MOBILE VOICE

• CATV market is very fragmented 51 players,
  market revenue LTL 33 million (H1 2006), only 2
  operators with market share above 10.
• Radio and TV program transmission is dominated by
  one player. Market revenue LTL 10 million (H1
  2006).

Source Report of Communications Regulatory
Authority
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VOX - VOICE TELEPHONY SERVICES

• Number of main lines in service -2.5 (y-o-y)
• Disconnected lines mainly none revenue generating
  ones
• Stable number of business customers lines 175
  thousand
• Number of subscribed payment plans 606 thousand
• Total traffic -2.3
• Number of alternative operators customers 52
  thousand (Q2 2006)
• VoIP services launched in August.

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ZEBRA - INTERNET SERVICES

• Number of broadband internet connections 93.8
• 3 major internet payment plans - Basic (up to
  256 kbps during off-peak and weekend time for 26
  LTL), - Optimum (up to 1 Mbps without
  limitations for 49 LTL),- Premium (up to 4 Mbps
  without limitations for 79 LTL).
• More than 600 wireless internet (Wi-Fi) access
  points. Connection speed increased up to 4Mbps.
  1,000 access points by end of 2006.
• Number of dial-up internet access users 16
  thousand (30 thousand a year ago).

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NEW SERVICES

• July 2006 TEO started transmission of digital
  terrestrial television (DVB-T) signals in Vilnius
  area
• Licence for construction of 2 out of 4 national
  DVB-T networks for transmission of 10 TV programs
  per network
• By 2012 DVB-T should completely substitute
  analogue terrestrial transmission of TV programs
  in Lithuania
• September 2006 PC maintenance service for small
  and medium size companies

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GALA NEW GENERATION TELEVISION

• IP TV launched in October
• Basic package - 38 TV programs
• 4 additional packages news, cinema, leisure and
  knowledge
• Basic monthly fee 35 LTL
• Available for almost all TEO customers all over
  the country
• Digital video and audio quality
• Selection of broadcasting language
• Internet and e-mail on TV screen
• More IP TV functionalities in spring of 2007

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MAJOR FINANCIAL INDICATORS

• In 2005- revenue 1.5- EBITDA 5.7- EBITDA
  margin 48.6- net profit 149.9-
  investments LTL 74 million
• In H1 2006- revenue 0.3- EBITDA 4.2-
  EBITDA margin 51.1- net profit 74.9-
  investments LTL 29 million

Revenue, EBITDA and Net Profit (LTL million)
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REVENUE
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OPERATING EXPENSES AND EMPLOYEES
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BALANCE SHEET AND CASH FLOW(H1 2006)

• Total assets LTL 1,172 million
• Cash and short term financial investments LTL
  268 million
• Loan granted LTL 100 million
• Borrowings LTL 12.4 million
• Net debt is negative (LTL -255 million)
• Gearing ratio -24.5
• Equity to assets ratio 9 to 10
• ROA 6.5
• ROE 6.0
• Paid-out dividends LTL 124 million

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DIVIDEND PAYOUT

• Dividend payout ratio for 2005 was also
  determined by decrease in retained earnings of
  parent Company by LTL 216 million due to changed
  subsidiaries accounting policy from equity method
  to accounting at acquisition cost

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MOST LIQUIDE SHARE ON VILNIUS STOCK EXCHANGE

• Initial Public Offering (IPO) in June 2000
• Shares listed on Vilnius Stock Exchange (VSE
  ticker TEO1L)
• Global Depository Receipt (GDRs) program 1 GDR
  10 shares
• 12.16 of shares are represented by GDRs (30 June
  2006).
• GDRs are listed on London Stock Exchange (LSE
  ticker TEOL).
• Share price - all times high 3.19 LTL (June
  2000) - all times low 0.75 LTL (October 2002)

Market Capitalisation of the Company at the end
of period (LTL million)
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CORPORATE GOVERNANCE OF TEO
Shareholders Meeting
Audit Committee
Remuneration Committee
Board
General Manager

• AGM within 4 month after the end of the financial
  year
• The Board consist of 7 members elected for a 2
  years term
• New Board was elected on 24 April 2006
• Audit and Remuneration Committees consist of 3
  Board members each

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BOARD OF TEO
Erik Hallberg, TeliaSonera AB
Gintautas intelis, TEO LT, AB
Morgan Ekberg, TeliaSonera AB
Valdo Kalm, CEO of EMT, TeliaSonera Group
Gert Tiivas, East Capital Asset Management AB
Matti Hyyrynen, EBRD, Head of Vilnius and Riga
office
Brita Hanberger, TeliaSonera AB
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MANAGEMENT OF TEO
Jan-Erik Elsérius (born 1943) Chief Financial
Officer and Deputy General Manager
Darius Didgalvis (born 1969) Chief Operating
Officer and Deputy General Manager
Darius Gudaciauskas (born 1975), Chief Sales
Officer and Deputy General Manager
Nerijus Ivanauskas (born 1970), Chief Marketing
Officer and Deputy General Manager
Arunas ikta (born 1968), General Manager (CEO)
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SOCIAL PARTNERSHIP

• More than LTL 3 million annually spend for
  sponsorship and support of- educational
  projects- local communities- cultural events-
  social projects- women basketball
• Swedish Business Awards 2006
• One of the most attractive employers

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THANK YOUFOR YOUR KIND ATTENTION
ANY QUESTIONS? WWW.TEO.LT
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BEGINNING OF A NEW ROAD

• TEO LT, AB CORPORATE PRESENTATION