#1Telia Company TELIA COMPANY DIVESTS ITS INTEREST IN AZERCELL March 5, 2018#2"It is satisfying that we are able to announce a joint agreement with Turkcell to sell Azercell in Azerbaijan. This is the fourth divestment in our effort to, over time, leave Eurasia and focus on the Nordic and Baltic regions within the framework of our New Generation Telco strategy." - Johan Dennelind, March 5, 2018 2#3TRANSACTION HIGHLIGHTS 3 Rationale Target company Valuation Financial effects Time table ● ● ● The next step in our effort to over time leave Eurasia 51.3% in Azertel Telekommünikasyon Yatrırım Dış Ticaret A.Ş. (Azertel), which owns 100% in the Azeri mobile operator Azercell Telecom LLC (Azercell) Fintur Holdings B.V. is selling 51.3% in Azertel for a purchase price of EUR 222 million (approximately SEK 2.2 billion of which SEK 1.3 billion attributable to Telia Company) Net cash position of Azertel and Azercell is approximately SEK 2.8 billion (100%) Purchase price corresponds to an EV of EUR 197 million, which implies an EV/EBITDA of 2.1x Negative net cash effect for Telia Company of SEK 1.5 billion, leaving the transaction to increase net debt to EBITDA by an estimated 0.1x Estimated negative effect on Net income of SEK 3.0 billion, with no material impact on equity The transaction has been completed today and the proceeds have been delivered to Fintur Holdings B.V. Other: Currency fluctuations may impact the final result of the transaction#4SHAREHOLDER STRUCTURE FA Invest (Malta) 6.5% 24.02% Turkcell İletişim (Turkey) Cenay İletişim (Turkey) 42.2% Azertel (Turkey) 100% Azercell (Azerbaijan) -41.45%- Fintur Holdings (Netherlands) 51.3% Telia Company -58.55%* 100% Sonera Holding (Netherlands) Azın Telecom (Azerbaijan) Shares sold ● ● ● ● Telia Company's total economic interest in Azercell is 35.14% (or 30.04% excluding the interest owned through Turkcell) Turkcell has an economic interest in Azercell of 21.24% UBOS of FA Invest and Cenay Iletisim are not known to Telia Company Purchaser is Azerbaijan International Telecom (Azln Telecom) LLC, a wholly-state owned company#5FINANCIAL IMPACTS IMPACT ON NET DEBT AND FINANCIAL LEVERAGE SEK in billions 5 1.1x 33,8 Net debt end 2017 2,8 -1.3 Net debt Net debt to EBITDA Azercell net cash Azercell proceeds 1.2x 35,3 Proforma net debt IMPACT ON NET INCOME SEK in billions -0,1 Capital loss of transaction -2,9 Recycled FX effects with no equity impact -3,0 Net effect on net income discontinued operation#6COMPLIANCE REVIEW AND DUE DILIGENCE OF BUYER Compliance and responsible business Due diligence Azercell has over the years implemented a well-functioning Ethics and Compliance function and necessary processes and procedures to manage the key Ethics and Compliance risks A Human Rights Impact Assessment of our operations in Azerbaijan has been conducted The purchasing entity has undergone a thorough due diligence process, conducted by both internal and external expertize Key individuals have been screened Anti-money laundering control over a source and flow of funds has been conducted#7ANOTHER PROOF-POINT OF OUR STRATEGY TO FOCUS ON THE NORDICS AND BALTICS Date December 2015 April 2017 May 2017 September 2017 October 2017 October 2017 January 2018 March 2018 7 Company Ncell Tcell Turkcell Turkcell MegaFon MegaFon Geocell Azercell Amount SEK 9,100 million SEK 238 million SEK 4,426 million SEK 4,127 million SEK 3,200 million SEK 8,600 million SEK 700 million SEK 1,600 million Valuation Enterprise value Enterprise value Equity value Equity value Equity value Equity value Enterprise value Enterprise value#8TELIA COMPANY ADVISORS UBS SULLIVAN & CROMWELL LLP Hergüner Bilgen Özeke HOUTHOFF BURUMA CO pwc Homburger Transaction advisor Lead transaction counsel Turkish legal counsel Dutch legal counsel Azeri legal counsel Swiss legal counsel ● Due to the complex nature of the transaction with several parties involved, Telia Company has (in addition to internal resources) engaged a number of well- known advisors • These cover both financial, tax, legal and compliance aspects