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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

(Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934ORý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2011ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934ORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


000-22828 Commission file number

MILLICOM INTERNATIONAL CELLULAR S.A.(Exact name of Registrant as specified in its charter)

GRAND-DUCHY OF LUXEMBOURG(Jurisdiction of incorporation or organization)

15 Rue Léon Laval, L-3372 Leudelange Grand Duchy of Luxembourg(Address of principal executive offices)

François-Xavier Roger, T: +352 27759 114 E: francois.roger@millicom.com

(Name, Telephone, E-mail address of Company Contact Person)

Securities
registered or to be registered pursuant to Section 12 (b) of the Act:None

Securities
registered or to be registered pursuant to Section 12 (g) of the Act:None

Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act: Common Stock, par value $1.50 per share

Indicate
the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

104,939,217 shares of Common Stock as of December 31, 2011

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ý    No o

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934. Yes o    No ý

NoteChecking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 from their obligations under those Sections.

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes ý    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o


Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

o U.S. GAAP ý
International Financial Reporting Standards as issued by
the International Accounting Standards Board o Other

If 'Other' has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:
Item 17 o Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o    No ý





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TABLE OF CONTENTS



PageFORWARD-LOOKING STATEMENTS


1PRESENTATION OF FINANCIAL AND OTHER INFORMATION


2PART I


3ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS


3ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE


3ITEM 3.

KEY INFORMATION


3ITEM 4.

INFORMATION ON THE COMPANY


16ITEM 4A

UNRESOLVED STAFF COMMENTS


51ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


52ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


85ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


96ITEM 8.

FINANCIAL INFORMATION


98ITEM 9.

THE OFFER AND LISTING


99ITEM 10.

ADDITIONAL INFORMATION


100ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


110ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES


113ITEM 12A.

DEBT SECURITIES


113ITEM 12B.

WARRANTS AND RIGHTS


113ITEM 12C.

OTHER SECURITIES


113ITEM 12D.

AMERICAN DEPOSITARY SHARES


113PART II


118ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES


118ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS


118ITEM 15.

CONTROLS AND PROCEDURES


118ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT


119ITEM 16B.

CODE OF ETHICS


119ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


120ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES


120ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES


120ITEM 16F.

CHANGE IN CERTIFYING ACCOUNTANT


122ITEM 16G.

SIGNIFICANT DIFFERENCES IN CORPORATE GOVERNANCE PRACTICES


122ITEM 16H.

MINE SAFETY DISCLOSURE


122PART III


123ITEM 17.

FINANCIAL STATEMENTS


123ITEM 18.

FINANCIAL STATEMENTS


123ITEM 19.

EXHIBITS


123


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FORWARD-LOOKING STATEMENTS

Certain statements made in this document may be considered to be "forward-looking statements", as defined in the U.S. Private
Securities Litigation Reform Act of 1995, such as statements that include the words "expect", "estimate", "believe", "project", "anticipate", "should", "intend", "probability", "risk", "may",
"target", "goal", "objective" and similar expressions or variations on such expressions. These statements appear in a number of places in this document including, but not exclusively, "Information on
the Company", and "Operating and Financial Review and Prospects". These statements concern, among other things, trends affecting the Company's financial condition or results of operations, capital
expenditure plans, the potential for growth and competition in areas of the Company's business, the potential for new agreements or extensions of existing agreements to be signed with business
partners or governmental entities or licenses to be granted by governmental authorities, and the supervision and regulation of telecommunications' markets. Such forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties. Actual results may differ materially as a result of various factors.

These
factors include, but are not limited to:



Readers
are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of filing hereof with the U.S. Securities and Exchange Commission.
Millicom International Cellular S.A. undertakes no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or
circumstances after the date hereof, including, without limitation, changes in Millicom International Cellular S.A.'s business or acquisition strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.

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Table of Contents

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless the context otherwise requires, the term "Company" refers only to Millicom International Cellular S.A., a stock
corporation organized under the laws of the Grand Duchy of Luxembourg, and the terms "Group", "Millicom", "we", "us" or "our" refer to Millicom International Cellular S.A. and its subsidiaries,
joint ventures and affiliates. Unless the context otherwise requires, when used herein with respect to a licensed area, "persons", "population" and "pops" are interchangeable and refer to the
aggregate number of persons located in such licensed area and "equity pops" refers to the number of such persons in a licensed area multiplied by the Group's ownership interest in the licenses for
such licensed area. The term "Attributable Customers" refers to 100% of customers in the Group's subsidiaries and the Group's percentage ownership of customers in each joint venture. Persons,
population and pops data for 2011 and 2010 have been extracted from the
"CIAThe World Factbook" for 2011 for countries where the license area covers the entire country. In addition, information on the countries in which Millicom operates has been extracted
from the "CIAThe World Factbook" for 2011 with updates, where appropriate, from the U.S. Department of State's website.

Unless
otherwise indicated, all financial data and discussions thereon in this annual report are based upon financial statements prepared in accordance with International Financial
Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union and customer figures represent the total number of mobile customers
of systems in which the Group has an ownership interest. In this report, references to "dollars" or "$" are to U.S. dollars, references to "SEK" are to Swedish krona and references to "Euro" or
"€" are to the Euro.

As
a foreign private issuer, the Company is exempt from the proxy rules of Section 14 under the Securities Act of 1934, as amended (the "Exchange Act"), and the reporting
requirements of Section 16 under the Exchange Act.

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PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable for Annual Report filing.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable for Annual Report filing.

ITEM 3.    KEY INFORMATION

Selected Financial Information

The Group reports under IFRS, as issued by the IASB and as adopted by the European Union.

The
following table sets forth summary financial data of the Group as of and for the years ended December 31, 2011, 2010, 2009, 2008, and 2007. The data is based upon the Group's
audited consolidated statements of financial position as of December 31, 2011, 2010, 2009, and 2008, and audited consolidated income statements for the years then ended. The following
information is qualified in its entirety by, and should be read in conjunction with, such statements.

Unless
otherwise indicated all financial data and discussions in this document are based upon financial statements prepared in accordance with IFRS.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

Year Ended December 31,2011

2010(6)
(As Restated)

2009

2008

2007(in thousands of U.S. dollars, except per share data)Income Statements Data:Revenues(1)


4,529,597


3,920,249


3,372,727


3,150,559


2,429,082Operating profit(1)


1,257,021


1,041,730


851,023


818,222


630,662Profit for the period from continuing operations(1)


1,089,540


1,611,111


503,590


402,195


436,477Net profit attributable to equity holders for the period


924,515


1,620,277


850,788


517,516


697,142Basic earnings from continuing operations per common share

$
8.50

$
14.89

$
5.09

$
4.79

$
4.18Basic earnings per common share

$
8.87

$
14.97

$
7.84

$
4.80

$
6.90Weighted average number of shares in basic computation (in thousands)(2)


104,196


108,219


108,527


107,869


101,088Diluted earnings from continuing operations per common share

$
8.49

$
14.87

$
5.08

$
4.76

$
4.07Diluted earnings per common share

$
8.86

$
14.95

$
7.82

$
4.77

$
6.61Weighted average number of shares in diluted computation (in thousands)(2)


104,301


108,396


108,750


108,646


108,047Dividends per share

$
4.80

$
6.00

$
1.24

$
2.40





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As of December 31,2011

2010(6)
(As Restated)

2009

2008

2007(in thousands of U.S. dollars)Statements of Financial Position Data:Intangible assets, net


2,170,353


2,282,845


1,044,837


990,350


467,502Property, plant and equipment, net


2,865,117


2,767,667


2,710,641


2,787,224


2,066,122Investments in associates(3)


62,984


18,120


872


21,087


11,234Total assets


7,281,946


6,995,117


5,991,018


5,220,808


4,413,826Current liabilities


2,689,187


2,454,209


1,569,772


1,749,079


2,002,269Non-current liabilities


2,137,547


2,090,508


2,067,534


1,812,554


1,043,221Non-controlling interest


191,170


45,550


(73,673
)

(25,841
)

80,429Shareholders' equity


2,254,384


2,344,083


2,383,803


1,677,918


1,287,907




As of and for the year ended December 31,2011

2010

2009

2008

2007Operating Data (unaudited)(4):Total Customers:Prepaid


40,098,898


36,123,812


32,073,052


26,316,527


19,308,632Postpaid


2,986,194


2,465,768


1,847,052


1,374,147


977,166Monthly churn (%)(5):Prepaid


5.0
%

5.2
%

5.2
%

5.5
%

4.1
%Postpaid


2.4
%

1.9
%

1.7
%

1.1
%

1.3
%


(1)Includes
impact of revaluation of previously held interests in Honduras and excludes discontinued operations. A more complete description of the impact of
the revaluation is contained in Note 5 of the "Notes to the Consolidated Financial Statements" and of discontinued operations is contained in Note 7 of the "Notes to the Consolidated
Financial Statements".(2)The
average number of shares, which is calculated on a weighted average basis. There were 3,506,632 treasury shares as of December 31, 2011.(3)Investments
in associates under IFRS from 2007 to 2008 mainly represented Navega.com S.A. and its subsidiaries. Investments in associates in 2010
mainly represented Helios Towers Ghana, and in 2011 Helios Towers Ghana, Helios Towers Tanzania, Helios Towers DRC, and American Towers Colombia. See "Operating and Financial Review and
ProspectsResults of Operations".(4)Operating
data excludes discontinued operations.(5)Churn
rates are calculated by dividing the number of customers whose service is disconnected during a period, whether voluntarily or involuntarily (such as
when a customer fails to pay a bill) by the average number of customers during the period. We believe that we apply conservative policies in calculating customer totals and related churn rates. For
example, Millicom counts a customer as a "customer" only when the customer has made a revenue generating call within a 60-day period. Other operators with whom we compete generally use
less restrictive definitions, such as labeling a "customer" a customer who has made a revenue generating call within a 90-day or 120-day period. Our conservative definitions
may result in different churn rates and market share figures than if we used criteria employed by some other operators in calculating customer churn and market share.(6)Restated
to recognise the liability for the put option provided to our local partner in Honduras for his 33% stake of our Honduras operation, and the
related change in the value of the liability from July 1, 2010 to December 31, 2010. A more complete description of the restatement is provided in Note 4 of the "Notes to the
Consolidated Financial Statements".


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RISK FACTORS

In addition to the other information contained in this Annual Report, investors should carefully consider the risks described below.
Our financial condition or results of operations could be significantly affected by any of these risks.

The
following discussion contains a number of forward-looking statements. Please refer to the "Forward-Looking Statements" discussion at the front of this Annual Report for cautionary
information.

An economic downturn, a substantial slowdown in economic growth or deterioration in consumer spending could adversely affect our operating results and financial condition.

In 2011 our businesses have been impacted by the general worldwide economic climate and the effects of macro-economic conditions will
continue to impact on our results in 2012. In addition, further deterioration in the economic environment could have an adverse effect on the level of demand for our products and services. This could
also impact our growth in mobile telecommunications, and / or broadband products and services.

Telecommunications
in emerging markets in general and in our markets in particular, account for a significant part of GDP's and of disposable income. As such, any change in economic
activity level may impact our business.

General
inflation could affect our business as consumers' acceptance of potential price increases of our products is uncertain. Food price inflation may affect low income customers and
may lead to a redistribution of income within the countries where we operate.

Risks Relating to our Business

Emerging Markets Risks

Some of the countries in which we operate have a history of political instability and any current or future instability may negatively affect our revenues or ability to
conduct business.

We offer mobile telephony and cable services in 15 markets in Central America, South America and Africa. Many of the countries in which
we operate are considered to be emerging economies and can therefore be subject to greater political and economic risk than developed countries. The governments of these 15 countries differ widely
with respect to type of government,
constitution, and stability and many of these countries lack mature legal and regulatory systems. Some of the countries in which we operate suffer from political instability, civil unrest, or
war-like actions by anti-government insurgent groups. These problems may continue or worsen, potentially resulting in significant social unrest or civil war. For example, some
social unrest took place around the 2011 election in the Democratic Republic of Congo (DRC) and tension in Senegal before the February 2012 election.

We
face a number of risks as a result of such instability, ranging from the risk of network disruption, forced and illegal abuse of our network by political forces, to the risk that we
may have to evacuate some or all of our key staff from certain countries, in which case there is no guarantee that we would be able to continue to operate our business as previously in such countries.
Any of these events would adversely affect our revenues or results of operations.

Many of the countries in which we operate have weak legal and telecommunications regulatory regimes compared to those in developed countries.

We must obtain and retain licenses or similar concessions from the governments of the countries in which we operate to enable us to
provide telecommunications services. Our ability to operate is therefore dependent on the granting, retention and renewal of licenses in each country. These licenses

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generally
allow our companies to operate for a number of years, after which they are subject to renewal.

To
the extent that our operations depend on governmental approval and regulatory decisions, our local businesses may be adversely affected by changes in the political structure or by
actions or decisions of specific government representatives in each market. There is a risk that governments could arbitrarily revoke licenses or impose new conditions that we do not agree with and
may not get consulted about in advance. For example, in 2008 the government of Senegal challenged the validity of our license when we refused to pay additional amounts for the license that we validly
hold and that does not expire until 2018. We are currently in litigation relating to this dispute. We may not always have access to efficient avenues for appeal and may have to accept arbitrary
conditions imposed upon us. This could adversely affect our business and our revenues.

Our
only avenue of recourse may often be to the judicial system of the relevant country and the legal and court systems of many countries in which we operate are underdeveloped and can
be subject to political influence and other inherent uncertainties. It can therefore be difficult to obtain a rapid, fair and unbiased resolution of disagreements with governmental authorities. Our
ability to renew licenses and the costs of such renewals cannot be reliably predicted even if comparable renewals exist in other markets.

Even
where we have other options, such as claiming compensation in arbitration proceedings for violations of a bilateral investment treaty, the process can be lengthy and costly. For
example, a final decision from the arbitration we filed against the government of Senegal before the International Center for the Settlement of Investment Disputes in November 2008 is expected in the
course of 2012. Even if successful, the enforcement of any award favorable to us could be challenging.

Some of the countries in which we operate have political regimes that may not view foreign business interests favorably and may attempt to expropriate all or part of our
local assets or impose controls on our operations.

This risk exists in all of the countries in which we operate. For example, in 2008 the Bolivian government nationalized the
telecommunications company Entel, which had been privatized under previous presidential regimes. Other such actions might take place in our sector in connection with government decisions to regain
more control over national economies or industries considered to be of strategic national importance in the countries in which we operate.

We
are also exposed to risks that governments of the countries in which we operate may impose measures to lower tariffs offered to customers and improve the offer and availability of
mobile telephony and other telecommunications services in isolated rural areas, or increased taxes on private foreign owned businesses such as ours, to increase government revenues. Measures like
these may have the effect of increasing our network operation or rollout costs and reducing the profitability of our operations and threaten the return on investment.

Most of the countries in which we operate have underdeveloped economies with low gross domestic product ("GDP") per capita and therefore any increased inflationary pressures
and downturns could significantly impact our revenues.

We offer our services in emerging market countries with economies at various stages of development or structural reform and our
operations are largely dependent on the health of the economies in which we operate. Most of these economies have large populations living on a day-to-day basis and primarily
spending income on basic items such as food, housing and clothing, and have less income to spend on mobile telephony services. Downturns in
the economies of any particular country or region in which we operate may adversely affect demand for our services, which would negatively impact our revenues.

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Some
of these countries have historically experienced high inflation rates, although in recent years inflation rates in all countries where we operate have been reasonable. Periods of
significant inflation in any of our markets, notably food price inflation, could adversely affect our costs and financial condition as well as the purchasing power for telecommunications services at
the lower end of the customer pyramid.

Many of the countries where we operate lack infrastructure or have infrastructure in very poor condition and, particularly in Africa, have an insufficient electricity
supply.

With the exception of Mauritius and Colombia, the countries in which we operate often lack modern infrastructure or have infrastructure
in poor or very poor condition, including in particular roads and power networks. The lack of suitable infrastructure is particularly acute in countries recovering from civil wars, such as the
Democratic Republic of Congo (DRC) and Rwanda, and in countries suffering from civil war-like events, such as Chad. In general, the rural areas in each of our operations often lack even
the most basic infrastructure, as any development tends to be concentrated in urban areas. Millicom must often build its cell sites without the benefit of roads and other infrastructures, which
increases our network development and maintenance costs.

The
electricity supply is insufficient in certain countries in which we operate (predominantly in Africa, with the exception of Mauritius) due to underdevelopment of electricity sectors
compared to the pace of economic growth in such countries. In certain countries we must rely on diesel powered generators or solar panels to power our radio sites. In Chad, at December 31,
2011, almost 100% of our sites were powered by diesel powered generators. This increases our costs and impacts the profitability of our African operations. To some extent this is mitigated by the sale
of our towers in Ghana, DRC and Tanzania.

We have been subject to increasing foreign taxes or reducing tariffs in the countries in which we operate, which reduces amounts we receive from our operations and may
increase our tax costs or cut interconnection revenue.

Many governments and regulators in the countries in which we operate have imposed new taxes or increased the rates of existing taxes
applicable to corporations, or reduced tariffs (interconnect rates) to raise government revenue or to increase access to the service. Furthermore, competitive pricing pressure or provisions of new tax
laws may prevent us from passing these taxes onto our customers. Consequently, any increase in taxes applicable to our operating subsidiaries could reduce the earnings they generate or reduce the
consumption of our services. For example, we have had mobile termination rate cuts in Colombia, rain taxes in Colombia imposed in 2011, and will have increases in income tax rates from 2012 in El
Salvador, and expect new taxes in Bolivia and El Salvador and a flat tariff structure in Paraguay.

We could be subject to the impact of a deteriorating economic environment within developed countries.

Many people in the countries in which we operate receive significant inflows of funds from relatives and friends who work abroad in
more developed countries. A significant deterioration in the developed country economies resulting in job losses or reduced wages could impact the ability of those abroad to continue remitting funds.
Lower remittances would reduce disposable incomes of many of our customers which would negatively impact our revenues. For example, in 2009 remittances of funds from migrant workers in the United
States of America to Central America decreased by more than 10%. Deterioration in more developed economies could also put pressure on the amount of foreign aid provided to the developing countries in
which we operate and could increase local governments' needs to generate revenue through taxation and thereby reduce the ability of consumers to buy our products and services.

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Currency fluctuations or devaluations may reduce our profitability and the value of our assets.

Exchange rates for currencies of most of the countries in which our companies operate fluctuate in relation to the US$ and such
fluctuations may have an adverse effect on our earnings, assets and cash flows when translating local currency into US$. For each of our
operations that report their results in a currency other than the US$, a decrease in the value of that currency against the US$ reduces our profits while also reducing our assets and liabilities. To
the extent that our operations retain earnings or distribute dividends in local currencies, the amount of US$ we receive is affected by fluctuations in exchange rates against the US$. In addition,
exchange rates are impacting Millicom's earnings, assets and cash flows as many of our operating subsidiaries have US$ denominated debt, due to unavailability of, or lack of commercially acceptable
long-term financing in local currencies.

Due
to lack of available instruments in many of the countries or currencies in which we operate we are not able to hedge against foreign currency exposures. Millicom had a net exchange
loss of $26 million for the year ended December 31, 2011, compared to a loss of $15 million for the year ended December 31, 2010.

Most of our operations generate revenue in the currency of the country in which they operate. The governments of the countries in which our operations are located may impose
foreign exchange controls that could restrict our ability to receive funds from the operations.

As substantially all our revenues are generated by our local operations we are reliant on their ability to transfer funds to the
Company.

Although
foreign exchange controls exist in some of the countries in which our companies operate, none of these controls significantly restricts the ability of our operating companies to
pay interest, dividends, technical service fees, and royalty fees or repay loans by exporting cash, instruments of credit or securities in foreign currencies. However, foreign exchange controls may be
strengthened, or introduced in the countries where we operate, which could restrict the Company's ability to receive funds from those operations. Such restrictions could impact our ability to pay
dividends to our shareholders.

In
addition, in some countries it may be difficult to convert local currency into foreign currency due to limited liquidity in foreign exchange markets. The practical effects of this are
time delays in accumulating significant amounts of foreign currency, and exchange risk, which could have an adverse effect on the Group's results of operations.

Our ability to reduce our foreign currency exposure may be limited by restrictions in hedging instruments.

At operational level we seek to reduce our foreign exchange exposure through a policy of matching, as far as possible, cash inflows and
outflows. Where possible and where
financially viable, we borrow in local currency to hedge against local currency exchange risks. Our ability to reduce our foreign currency exchange exposure may be limited by lack of
long-term financing in local currency. As such, there is a risk that we may not be able to finance local capital expenditure needs or reduce our foreign exchange exposure by borrowing in
local currency.

We own our operating companies through holding companies in jurisdictions which may enact changes to their respective laws that may unfavorably impact our financial status
or tax treatment.

We hold ownership in our operating companies through subsidiaries in various jurisdictions in and outside Luxembourg, mainly, but not
exclusively, through holding companies incorporated in the Netherlands and the Netherlands Antilles. The laws or administrative practices relating to taxation (including the current position as to
withholding taxes on dividends paid by our local operations and

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tax
concessions we have obtained in certain of our countries of operation), foreign exchange controls, or other matters, are subject to change. Any such change could have a material adverse impact on
our financial affairs and on our ability to receive, or the tax treatment of, funds from our local operations especially as we now remit more significant amounts of money in the form of dividends,
royalties, management fees and repayment of shareholders' loans.

Our failure to comply with local and international laws and regulations could result in liabilities and sanctions and this could have a material adverse impact on our
business.

We are subject to local laws and regulations as well as several laws and regulations with worldwide application, including as
promulgated by:



These
laws and regulations affect where and how our business may be conducted. In addition, our shareholders, lenders, suppliers or other entities with which the Company and its
operating subsidiaries conduct business may be subject to or seek to comply with these laws and regulations. Although the Company focuses on compliance activities, there is a risk that
non-compliance issues may arise with respect to the Company or its operating subsidiaries or any employee thereof. Any instances of non-compliance may result in consequences
ranging from negative publicity and reputational damage to criminal and civil liability and the application of fines or disgorgement of profits to the Company on account of any of its employees or
directors or the employees or directors of any of its operating subsidiaries. Any of the foregoing would have a negative impact on our business, financial condition and, or results of operations.

Risks Related to our Operations and the Mobile Telephony Market

We face intense competition in the mobile telephone operator market.

Our mobile telephony operations face competition from other mobile telephone operators in the markets in which they operate, as well as
fixed line operators in some markets. Our main competitors are America Móvil (Claro), MTN, Bharti, France Telecom (Orange), Vodafone, and Telefonica.

Additional
mobile telephony licenses could be granted in some of our existing markets. Moreover, additional licenses may be awarded in markets where we already face competition from
other technologies that are being or may be developed and/or perfected in the future. In some of our markets, there may be more mobile telephone operators than the market is able to sustain. In
addition, in some of our markets, our competitors may have a greater coverage area than we do. The mobile telephone operators in each market compete for customers principally on the basis of services
offered, quality of service, coverage area, accessibility of distribution and price. Most of our competitors have substantially greater capital resources than we do. Price competition is significant
and voice is increasingly becoming commoditized as there are fewer factors differentiating the services offered by the different operators in our markets.

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As
new competitors enter our markets, and price and product competition intensifies, the risk exists that our customers may move to another mobile telephone operator, especially as the
majority of our customers are using a pre-paid model which allows them to freely move to a competitor at any time. This may result in a decline of our revenues, which would negatively
affect our results of operations.

The
emergence of new entrants with VOIP offerings for both voice and instant messaging, and convergence of social and search products and services with the mobile sphere further
increases competitive risks.

Any
failure by us to compete, or aggressive competitive behavior by our competitors in pricing their services or acquiring new customers could have a material adverse effect on our
revenues and overall results of operations.

The mobile telephony market is heavily regulated and taxed.

The licensing, construction, ownership and operation of mobile telephone networks, and the grant, maintenance and renewal of mobile
telephone licenses, as well as radio frequency allocations and interconnection arrangements, are regulated by national, state, regional or local governmental authorities in the markets in which we
operate. In addition, such matters and certain other aspects of mobile telephone operations, including rates charged to customers and resale of mobile telephone services, and user registrations may be
subject to public utility regulation in each market. Our operations also typically require government permits, including permits for the construction and operation of cell sites. While we do not
believe that compliance with these permit requirements has a material adverse effect on our Company, we may become subject to claims or regulatory actions relating to past or future
non-compliance with permit requirements, and change in the regulation of our activities, such as increased or decreased regulation affecting prices or requirements for increased capital
investments, may materially adversely affect us. In recent years budgetary pressure from many governments due to economic downturn has resulted in increased taxation.

Most of the countries in which we operate do not have universal service obligations. If such obligations were introduced the profitability of our operations may be
negatively impacted.

The purpose of universal service is to provide access to persons in non-urban and isolated areas to telephone and other
telecommunications services by infrastructure build-out through subsidies. The goal of universal service is to promote the availability of quality services at fair, reasonable and
affordable rates in all areas of a country, to increase access to advanced telecommunications services, and to enhance the availability of such services to all consumers, including those in isolated
rural areas, at rates that are reasonably comparable to those charged in urban areas.

There
is a telecommunications divide in all of the countries in which we operate in relation to access to telecommunications services (mobile, internet access, and higher bandwidth
telecommunication services) between urban and rural areas. When such services are available, they are usually at significantly higher cost to the customer than in urban areas due to lower population
density in rural areas that are often hard to reach due to lack of basic infrastructure, in particular roads and electricity. For example, Bolivia has introduced a universal service obligation in its
New Telecommunications Law of 2011 to be funded by telecommunications operators paying part of their revenue into the Universal Service Obligation Fund (USOF).

We
believe that universal service obligations are a risk in the telecommunications industry and expect more of the countries in which we operate to introduce such obligations in the
future. We believe this may have a negative impact on our profitability if it were to grow.

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We face substantial competition for obtaining, funding and renewing mobile telephone licenses.

In each market or potential market we face competition for licenses from major international telecommunications companies as well as
from local or regional competitors. While we try to minimize the amounts we pay for mobile licenses, worldwide competition for the granting or renewal of licenses is increasingly intense. We may not
be successful in obtaining or renewing mobile telephone licenses or, if licenses are awarded, in obtaining those licenses on terms acceptable to us. If we obtain further licenses or renew existing
ones, we may need to seek future funding through additional borrowings or equity offerings, and we may not obtain such funding on satisfactory terms or at all.

The industry is characterized by rapid technological change, which could render our products obsolete and cause us to incur substantial costs to replace our products.

Fixed network and other system equipment used in the mobile telephone industry have a limited life and must be replaced frequently due
to damage or as a result of ordinary wear and tear. In addition, expansion of existing networks may be required to remain competitive. Our networks are based on the GSM standard. In our Latin American
markets, Mauritius, Rwanda, Ghana and Tanzania, we have both GSM and 3G networks. The GSM standard has been most appropriate for our markets because it has the greatest availability of handsets with
strong functionality and has relatively low repair and maintenance costs.

New
technologies are being developed and, or upgraded such as fourth generation systems, including WiMAX and LTE (Long Term Evolution) and beyond LTE under research and development. Our
equipment may need to be replaced or upgraded or a mobile telephone network may need to be rebuilt in whole or in part, at substantial cost, to remain competitive. Unforeseeable technological
developments may also render our services unpopular with customers or obsolete. If our equipment or systems become obsolete, we may be required to recognize an impairment charge on such assets, which
may have a material adverse effect on our results of operations. LTE, a standard for 4G is currently under implementation in some countries and we may have to invest a significant amount of money to
follow competition and to secure our competitiveness with this technology.

Demand for spectrum, and governments seeking increases in revenue may result in high acquisition costs which would impact return on invested capital.

As competition intensifies and governments seek ways in which to develop additional revenue, the cost of acquiring spectrum, including,
but not limited to 4G may increase. In 2011 we spent approximately $44 million on acquisition of Spectrum (mainly in Colombia) and we expect to purchase significantly more spectrum in the next
few years. Uncertainty regarding the cost of spectrum may impact our profitability and return on invested capital.

The mobile telephony sector may be forced to open up access to its spectrum which may create further competition.

In line with trends in the U.S. and European Union, where spectrum could be opened to other commercial uses, such as 3G or LTE, and/or
new spectrum is freed such as the 700, 2100 and 2600 MHz band, new competitors may be given access to our markets. Although we do not believe such changes will occur in our markets in near
future, we believe these developments are likely to influence telecom regulatory trends in other parts of the world. If such trends become law in our markets, our competitive position in the relevant
countries may be adversely affected.

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If we cannot successfully develop and operate our networks and distribution we will be unable to expand our customer base and will lose market share and revenues.

Our ability to increase or maintain our market share and revenues is dependent on the success of expansion and management of our
networks and distribution. The build-out of our networks and distribution is subject to risks and uncertainties which may delay the introduction of service and increase the cost of network
construction. Such uncertainties may include natural disasters, the risk of hurricanes, volcanic activity and earthquakes in Central America, flooding in low-lying areas in Bolivia and
Paraguay, and landslides in Colombia. Other risks include sabotage and theft, which is an ongoing risk particularly in DRC and in Central America. To the extent we fail to expand our network and
distribution capabilities on a timely basis, we may experience difficulty in expanding our customer base.

In
addition, our ability to operate successfully is dependent upon our ability to deploy sufficient resources and operate our networks. The failure or breakdown of key components of our
networks, including hardware and software, may have a material negative effect on the results of our operations.

Furthermore,
we depend upon a small number of major suppliers for essential hardware, software and services, mainly network infrastructure and mobile devices. These suppliers may, among
other things, extend delivery times, raise prices and limit supply due to their own shortages and business requirements. If these suppliers fail to deliver products and services on a timely basis, our
business could be adversely affected. We notice an increased concentration in the industry of mobile telephone suppliers which may put us at a disadvantage as we remain a small player in the industry.

Transferring the ownership and control of our passive infrastructure could adversely impact the availability and quality of service we can offer to our customers.

We entered into four transactions in 2010 and 2011 whereby we have sold and leased back a significant amount of our passive
infrastructure (towers) in Africa and in Colombia. Through these transactions Millicom is transferring control of the passive infrastructure which could potentially impact the quality of service we
offer to our customers if the service providers cannot meet contractual obligations and are unable to implement remedial actions in a timely manner.

Rapid growth and expansion may cause us difficulty in obtaining adequate managerial and operational resources and restrict our ability to successfully expand our operations.

Our operating results depend, in a significant part, upon the continued contributions of key senior management and technical personnel.
Management of growth will require, among other things:



Our
success will depend on our ability to continue to attract, develop, motivate and retain qualified personnel. Competition for personnel in our markets is intense due to scarcity of
qualified individuals in particular in Africa. Our failure to successfully manage our growth and personnel needs would have a material negative effect on our business and results of operations. We
also need

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increasingly
new competencies for the new categories we enter into, including media for entertainment and banking for mobile financial services.

In
many cases in Africa, we must use higher cost expatriate personnel due to lack of local technical expertise. We are developing local expertise in-house but it may take
time for them to become fully operational.

Future growth will depend upon our ability to innovate and develop new products.

Voice and SMS (82.5% of our revenues) are increasingly commoditized and offer less growth opportunities. Our future growth therefore
relies on our ability to develop our business in new areas which require different skills and knowledge and which offer different risk profiles. We expect that a large part of our future growth will
come from products and service innovation. If we are unable to find new products and services that are attractive for our customers our future growth could be adversely affected. This could also
jeopardize the sustainability of our existing business as customers could switch to other operators if they offer better new services.

Certain new mobile products and services are complex, require more expensive handsets and increase our exposure to fraud, money laundering, and reputational risk.

Certain new products and services, such as mobile financial services, are complex and involve new distribution channels, and/or new
regulatory and compliance requirements. Some of these new products may involve cash handling exposing us to risk of fraud and money laundering and potential reputational damage if these were to occur.

Consumers
may need a 3G handset to access some of our new products. While declining over time, the current cost of 3G handsets with entry level average around US$120 is still out of
reach of many of the consumers in our markets and we need to partially subsidize the cost of the handsets. These handset subsidies may put pressure on our profitability and the need for these devices
may threaten our affordability based business model.

Our operations are dependent upon interconnection agreements and transmission and leased lines.

Our operations are dependent upon access to networks not controlled by us, primarily fixed line networks controlled by current or
former government owned public telecommunications operators or competing mobile telephone operators. Our financial results are affected by the cost to secure interconnection through transmission and
leased lines. We may not be able to maintain interconnection or leased line agreements on appropriate terms to maintain or grow our business. A number of regulators have, or are expected, to reduce
interconnection rates. As we are often one of the largest suppliers of telephone services in the countries in which we operate, this could reduce our revenue. For example, in 2010 the regulator in El
Salvador reduced mobile terminated call interconnection rates by 70% and in Colombia expected to be by more than 20% in 2012. As our customer base in El Salvador receives significantly more calls from
other networks than it makes, the change in the interconnect rate has a significant impact on the revenues and profitability.

Concerns about actual or perceived health risks relating to electromagnetic and radio frequency emissions, as well as extensive publicity or possible subsequent litigation,
may have a negative effect on the market price of our shares, our financial position or the results of our operations.

Media and other reports have suggested that electromagnetic and radio frequency emissions from mobile telephone handsets and base
stations may cause health problems, including cancer. There is also concern that emissions may interfere with the operation of certain electronic equipment, including aircraft guidance systems,
automobile braking and steering systems (e.g. GPS), or civil and military radars. Although we expect that the actual or perceived risks relating to mobile communications devices

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and
base stations, or press reports about these risks will not adversely impact our business, its actual impact is difficult to estimate. It may have the effect of reducing our customer growth rate,
customer base, customer use rates, or increasing costs related to customer or third party claims, which could have a negative impact on the market price of our shares.

If
a link between electromagnetic or radio frequency emissions and adverse health concerns is demonstrated, government authorities are likely to increase regulation of mobile handsets
and base stations. Mobile telephone operators and handset manufacturers may be held liable for all or part of the costs or damages associated with these concerns. Any such regulations, or any
litigation brought by potential victims, could also have a materially adverse effect on our financial position and results of operations.

General Risks

Our ability to generate cash depends on many factors beyond our control and we may need to resort to additional external financing.

Our ability to generate cash is dependent on our future operating and financial performance. This will be impacted by our ability to
successfully implement our business strategy, as well as general economic, financial, competitive, regulatory, and technical elements and other factors beyond our control. If we cannot generate
sufficient cash, we may, among other things, need to refinance all or a portion of our debt, obtain additional financing, delay capital expenditure or sell assets. We may have difficulty to access
financial markets as we do not have investment grade rated credit. In addition, as a consequence of the financial crisis many banks have refocused on domestic markets and tightened lending criteria.
Our headquarters are in Luxembourg, a country with few national banks. Restrictions in our ability to raise or generate cash could impact the operating performance of our business.

High levels of penetration of mobile phone services in some of our markets could inhibit future growth.

Most of the Latin American markets where we operate have mobile phone penetration levels close to 100% with the exception of Bolivia
and to a lesser extent Guatemala. Although there are opportunities for further growth, high penetration rates in Latin America could lead to a slowdown in growth in those markets. Likewise, urban
areas in the markets where we operate in Africa have a high penetration rate for mobile phones and opportunities for increasing the penetration rates in our African markets are largely in rural areas
where Average Revenue Per User (ARPU) is lower and costs are higher, which could threaten our future growth and profitability.

The level, structure and obligations connected with our debt may have an adverse effect on our financial health.

As of December 31, 2011, Millicom's total consolidated indebtedness was $2.4 billion, representing our share of the
indebtedness of our subsidiaries and joint ventures, from which corporate guarantees issued by the Company secured $0.7 billion of the indebtedness. The Group's share of total debt and
financing secured by either pledged assets, pledged deposits issued to cover letters of credit or guarantees issued by the Company was $1.4 billion at December 31, 2011.

If
we substantially increase our level of indebtedness, it may have significant negative consequences for us. For example, it may:



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Our ability to receive funds from and to exercise management control over some of our operations is dependent upon the consent of shareholders who are not under our control.
Disagreements or unfavorable terms in agreements governing our joint ventures may adversely affect our operations.

In Guatemala and Mauritius our local partners have sufficient rights to prevent us from having full control. Our ability to withdraw
funds, including dividends, from these operations and to exercise management control over our partners may depend on consent of the other participants. While the precise terms of the arrangements
vary, our operations may be negatively affected in the event of disagreements with our partners.

We
rely upon dividends and other payments from our operations to fund the Company's obligations and commitments. Our operating companies are legally separate and distinct from the
Company and have no obligation to pay amounts due with respect to the Company's obligations and commitments or to make funds available for such payments. Our local operations do not guarantee the
Company's obligations or commitments. The ability of our operations to make such payments to the Company is subject to, among other things, the availability of funds, agreement of our partners, the
terms of each operation's indebtedness and local law. The majority of our local operations have entered into financing facilities, which may be guaranteed by the Company, many of which restrict the
payment of dividends by those operations to the Company. Claims of creditors of our operations, including trade creditors, will generally have priority over our claims.

Certain insiders own significant amounts of our shares, giving them substantial management influence.

At December 31, 2011, Investment AB Kinnevik, our largest shareholder, owned 37,835,438 shares in Millicom, representing
approximately 36% of voting shares on that date, and the Stenbeck Family (who control Kinnevik) own an additional 874,542 shares. Kinnevik and its affiliates, having a significant ownership in
Millicom, could have and exert significant influence over the strategic, operating and financial policies of Millicom. The influence that they have may potentially conflict with the Company's
interests.

Some of our directors hold positions with Investment AB Kinnevik ("Kinnevik"), which may present conflicts that may be resolved in a manner not consistent with your
interests.

Two Millicom board members hold executive and/or director positions with Kinnevik. Such positions may create, or appear to create,
potential conflicts of interest when decisions of the Board of Directors may have different implications for the Company or Kinnevik. There is a risk that these conflicts may ultimately be resolved in
a manner not consistent with your interests.

The ability of investors to enforce civil liabilities under U.S. securities laws may be limited.

We are incorporated under the laws of the Grand Duchy of Luxembourg (European Union). Most of our directors and executive officers are
residents of countries other than the United States. Most or a substantial portion of our assets and those of most of our directors and executive officers are located

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outside
the United States. As a result, it may not be possible for investors in our securities to effect service of process within the United States upon such persons or upon us or to enforce in U.S.
courts or outside the United States judgments obtained against such persons. In addition, it may be difficult for investors to enforce, in original actions brought in courts in jurisdictions located
outside the United States, liabilities predicated upon the civil liability provisions of U.S. securities laws. We have been advised by our Luxembourg counsel, Allen & Overy that the United
States and Luxembourg do not have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money
rendered by a federal or state court in the United States based on civil liability, whether or not predicated solely upon United States federal securities laws, is not enforceable in Luxembourg.
However, if the party in whose favor such final judgment is rendered brings a new suit in a competent court in Luxembourg, the party may submit the final judgment that has been rendered in the United
States to a Luxembourg court for the purpose of recognition by such court and enforcement in Luxembourg. A judgment by a federal or state court of the United States against us will be regarded by a
Luxembourg court only as evidence of the outcome of the dispute to which such judgment relates, and a Luxembourg court may choose to rehear the dispute.

We intend to terminate the registration of our common shares under the Exchange Act once the applicable conditions are met and will no longer file reports with the SEC.

We intend to terminate the registration of our common shares under the Exchange Act once the applicable conditions are met. If all
conditions are met, we will be able, and intend, to terminate the registration of our common shares under the Exchange Act. Once registration under the Exchange Act has been terminated, we will no
longer be subject to the disclosure requirements of the Exchange Act and will not be required to file annual reports on Form 20-F and furnish reports on Form 6-K.

ITEM 4.    INFORMATION ON THE COMPANY

Background

Overview

We are a global group providing communications, information, entertainment, solutions and financial services in emerging markets. We
operate various combinations of mobile and fixed telephony, cable and broadband businesses in 15 countries in Central America, South America and Africa. The Group was formed in December 1990 when
Investment AB Kinnevik ("Kinnevik"), formerly named Industriförvaltnings AB Kinnevik, a company established in Sweden, and Millicom Incorporated ("Millicom Inc."), a corporation
established in the United States of America, contributed their respective interests in international mobile joint ventures to form the Group. Our strategy of being a low cost provider focused on
affordable and innovative services using mass market distribution methods, has enabled us to continue to pursue growth while delivering operating profitability.

As
at December 31, 2011, Millicom had 13 mobile operations in 13 countries focusing on emerging markets in Central America, South America, and Africa. Millicom operates its mobile
businesses in El Salvador, Guatemala and Honduras in Central America; in Bolivia, Colombia and Paraguay in South America; and in Chad, the Democratic Republic of Congo, Ghana, Mauritius, Rwanda,
Senegal and Tanzania in Africa. Millicom's operation in Laos was sold on March 9, 2011, Sierra Leone was sold on November 25, 2009; and operations in Sri Lanka and Cambodia were sold
respectively on October 16 and November 26, 2009 (see note 6 to the consolidated financial statements).

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In 2008, Millicom acquired 100% of Amnet Telecommunications Holding Limited, a provider of broadband and cable television services in Costa Rica, Honduras and El
Salvador, of fixed telephony in El Salvador and Honduras, and of corporate data services in the above countries and in Guatemala and Nicaragua. Management and operation of the cable business has now
been integrated with our mobile operations in El Salvador, Honduras and Guatemala.

As
at December 31, 2011, the 13 countries where we had mobile operations had a combined population of approximately 265 million. This means that 265 million people
are covered by our mobile licenses and could receive mobile services under the terms of our mobile licenses if our networks covered the entire population. We had 43.1 million total mobile
customers as at December 31, 2011.

Starting
in 2012 we are structuring our business around five categoriescommunication, information, entertainment, solutions and mobile financial services, so as to position
Millicom as a customer-centric organisation.

There
are three key components to the new structure: (1) In-Market Organizations, (2) Global Categories and (3) Global Support Functions. This new
organizational structure is designed to support Millicom's strategic goals to accelerate the development of new products and categories, deepen its consumer understanding skills and bring innovation
to its
go-to-market strategies, while continuously focusing on increasing efficiency. The head office of Millicom will remain in Luxembourg, while some categories and functions will
be operated from Miami.

Our
markets are attractive due to their relatively low degree of utilization of fixed and mobile telephony services as compared to more developed markets. We believe there is opportunity
for further growth in these markets because our services provide the means to communicate and to gain access to information and other services. Millicom believes significant growth potential exists in
value added services ("VAS"). VAS now accounts for more than 28% of our recurring revenues and continues to grow at more than 20% year-on-year. Central America and to a lesser
extent South America now have high penetration levels and voice growth will be lower in the future than it was in the past.

We
expect that over time our revenue mix will shift to a higher proportion of data, entertainment, solutions and mobile financial services as these are some of the fastest growing areas
of our business. Currently we expect higher returns on invested capital on entertainment and solutions (including mobile financial services) as these services are less capital intensive than voice
services.

Summary of Highlights and Recent Developments

In March 2011, we completed the sale of our 74.1% shareholding of our operation in Laos to VimpelCom.

In
May 2011 we voluntarily delisted Millicom ordinary shares from NASDAQ in the US and consolidated the listing of its shares in the form of Swedish Depository Receipts (SDRs) on NASDAQ
OMX in Stockholm as from June 3, 2011. The last day of trading of Millicom ordinary shares on NASDAQ in the U.S. was May 27, 2011. We intend to terminate the registration of our common
shares under the Exchange Act once the applicable conditions are met.

On
June 8, 2011 Millicom's joint operation in Guatemala signed a bilateral tower sharing agreement with Telefonica Guatemala, whereby both parties granted access, with
discretionary consent, to co-locate equipment.

In
July 2011, Millicom's operation in Colombia signed a sale and lease-back agreement with American Towers Infraco, a subsidiary of American Tower International Inc.,
for more than two thirds of its cell sites.

During
Q4 2011 in Latin America VAS surpassed one third of Latin America revenues and VAS now represents 28.5% of Group revenue.

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In
December 2011 in Rwanda, two years since our launch, we turned EBITDA positive as we reached critical mass with one third of the market using our services.

During
2011 we demonstrated our continued commitment both to enhancing the returns from holding Millicom shares, and to improving the efficiency of our capital structure by returning
close to $1 billion to shareholders through the repurchase of more than 4.6 million shares for close to $500 million and payment of $494 million in dividends.

Strategy

Our strategy is to be a leading wireless/broadband operator in emerging markets, operating with the lowest possible cost base, and
offering the customer better value for money whilst at the same time bringing innovative products and services through high quality networks and wide distribution. We see large opportunities to
develop new services in the information category (3G/data), in entertainment, in solutions and in mobile financial services. We aim to achieve growth through innovation, cross-selling and
up-selling services to high value customers while maintaining strong operating margins and generating solid cash flows. We have rolled out our tigo® brand across most of our
operations and added a fourth dimension, "Affinity", to create our quadruple "A" operating strategy (we added one A to what was a triple A strategy):



Focus on growth.We see more and more opportunities to grow in value-added services ("VAS"), especially in our more mature markets. VAS
(non-voice) accounted for 28.5% of recurring revenues in the last quarter of 2011. Our focus remains on growing revenues through innovative products in the Information, Entertainment,
Solutions and Mobile Financial Services categories.

We
believe there are still opportunities for further growth in Africa due to relatively low mobile penetration levels (the weighted average penetration rate in our markets in Africa is
48% as at

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December 31,
2011) and increasing demand for additional services obtainable through mobile phones such as mobile internet and mobile financial services.

We
will continue to invest in our existing mobile operations where we believe we can generate attractive returns. In addition, we would consider opportunities to increase our equity
ownership in those of our operations where we still have either joint-venture or non-controlling partners, provided it is permitted under the terms of our licenses, through
buy-outs of our partners. We may, using a disciplined financial approach, participate in consolidation within our markets through the careful evaluation, selection and pursuit of strategic
opportunities. While we are still focusing on returns in terms of EBITDA margins and EPS, return on invested capital (ROIC) is become an equally important and relevant measure as we trade more and
more in categories such as entertainment and mobile financial services which generate a lower EBITDA margin but are not as capital intensive. We will also look to continue our expansion into other
services such as broadband in our existing markets. We would consider external growth opportunities that meet our risk and returns criteria outside our existing markets, mainly in Latin America and
Africa.

Innovating with new products and services.In 2012 Millicom will continue to launch innovative value-added services such as money
transfers, bill
payments, insurance services, airtime credits, airtime transfers; music related services, gaming, social networking, interactive content services and advanced SMS services to address the needs of our
customers. In 2010 and 2011, Millicom rolled out mobile payment and transactional services in seven of its markets (Paraguay, Tanzania, Rwanda, Ghana, El Salvador, Honduras and Guatemala) providing
added convenience to Millicom's customers. This roll-out will continue in 2012, notably in Bolivia, DRC and Chad, as a new revenue growth opportunity but also as another tool for us to
attract and retain customers, reduce churn, and increase customer loyalty.

Improving cost efficiencies and capturing synergies.We continue to seek ways to further reduce our cost base by optimizing our
operations. We
maintain a strict centralized cost control program that lowers operating costs across our operations. In addition, we expect to realize additional synergies across our operations, through further
sharing of infrastructure, information, human resources and other support functions, best practices and technologies and centralized negotiations of financing and supply contracts for network
equipment.

As
part of our asset productivity improvement program, we have now sold and leased back most of our towers in Ghana, Tanzania, the Democratic Republic of Congo and Colombia, creating
significant value through a combination of cash, reduction of operating expenses, decrease of future capital expenditure and retention of equity stakes in the newly created tower companies, which
purchased our towers.

Introducing new technologies.We may consider introducing further new technologies in markets where customer demand is strong for the
relevant
technologies or products and where we believe the introduction of the new technologies are likely to generate substantial incremental revenue.

Voice
technologies, such as VoIP (Voice over Internet Protocol), are increasingly widespread. VoIP allows voice communication by sending data over data networks. These services are
increasingly present in competing with fixed-line services and international calls rather than with mobile telephony services, notably in our markets (penetration of 3G access in our
customer base in Latin America was 8% by the end of 2011).

Demand
for broadband services continues to grow in some of our markets, particularly in the relatively mature markets in Latin America. We are meeting this growing customer demand, with
our 3G (HSDPA/HSPA+) networks as this provides a very spectrally efficient wireless solution. This technology has been deployed in Latin America using the current existing 850 and 1900MHz spectrum.

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Other
new technologies appearing include Long Term Evolution (LTE) and mobile WiMAX 802.16m based on OFDMA technology. These technologies allow operators to have an all IP packet only
connection. We have acquired WiMAX licenses in selected countries and may acquire LTE and/or WiMAX licenses or spectrum in our other countries of operation where they are available to ensure we can
offer data services at reasonable prices if and when our customers demand them.

If
future successful technologies are different from those adopted by us, we may decide on additional investments in network equipment and training.

Sales, marketing and distribution.We pursue a low-cost, innovative and high-impact approach to sales, marketing and
distribution. Except in a few countries, we provide limited handset subsidies, predominantly to postpaid customers who accounted for 7% of our customer base at the end of 2011. As a result, we
typically have lower overall customer acquisition costs than operators in developed countries. In addition, we are focused on strengthening our distribution footprint and expanding our
mass-market customer reach by distributing prepaid reloads
through mass-market or retail outlets such as local convenience stores, newspaper stands, and street vendors.

We
believe that our focus on branded services helps us to expand our market share and reduces our operating costs. We focus our advertising on cost-effective promotions. We
have rebranded almost all of our products under the tigo® brand (except in Mauritius).

Competitive Strengths

We believe that our competitive strengths enable us to benefit from increasing demand for services provided by mobile operators in
emerging markets. Our competitive strengths include:

Leading market positions.We enjoy either market position of number one or number two in 12 out of 13 mobile markets which allows us to
benefit from
economies of scale and to improve our margins with more on-net calls.

Delivering profitable growth.Our ability to grow our businesses while delivering strong profitability is one of our key strengths. We
have generally
been able to acquire licenses at low cost with minimum build-out requirements. We aim to increase the penetration of new services (mobile internet, mobile financial services) in our
markets while controlling customer acquisition costs through creation of well-known affordable products. Additionally, we have developed an extensive low cost distribution network in most
of our operations that provides our customers with broad service coverage, further leveraging our brand name.

Value added services.Given our leading market positions and the high level of penetration in our markets we are well poised to
capitalize on
opportunities in cross-selling and up-selling higher value services to our existing customer base. Our focus is therefore directed toward optimizing our customer intake and retention of
higher ARPU customers rather than net intake.

Track
record of innovation.    We believe that innovation is another key to our success. In nearly all our markets, we were the first to launch branded prepaid mobile services
(now prevalent in our markets).
We have been the first to focus on non-traditional distribution channels to increase mass-market prepaid customer reach in our markets. For example, we have used freelance
distributors, such as street vendors, and sold prepaid cards in mass market outlets, which has reduced costs of sales and marketing. We have also introduced e-PIN and per second billing in
most of our markets.

We
are offering 3G broadband services in all of our Latin American markets, Mauritius, Rwanda, Ghana and Tanzania. We are offering WiMAX services in selected countries where we have
acquired WiMAX licenses (such as in Paraguay, Bolivia and El Salvador), and will continue to expand if and when our customers demand these services and we are able to provide them at reasonable
prices. Value Added Services (VAS) represented close to 29% of recurring revenues in the fourth quarter of 2011.

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Low operating costs and high capital efficiencies.We establish services in markets that we believe offer high potential financial
returns and
substantial operational leverage. We operate sizeable networks covering areas of the highest population density and business activity. Any further build-outs of our network infrastructure
are demand or regulation driven. Our outsourcing maintenance and operation of towers, while retaining equity stakes in tower operating companies, will further improve efficiency and contribute to
lower overall operating costs.

Integrated strategy.We actively pursue many synergies inherent in our multi-country operations and increasing scale in our existing
markets. Such
synergies include sharing information and best practices in services, human resources, technologies and market strategies; centralized negotiation of financing and of supply contracts for network
equipment, and the rollout of the single tigo® brand to most of our operations. For example, our operations in Africa have been able to draw on the operational and managerial experiences
and resources of our operations in Central and South America. We are continuing implementation of a common financial and operational platform (ERPEnterprise Resource Planning) in all our
markets during 2012 and 2013. Likewise we are investing to have a common CRM (customer relationship management) platform in all countries.

Diversified operations.We believe our 13 mobile operations based in 13 countries on two continents at December 31, 2011 provide a
balance of
established cash flow generation and further growth potential. Our diversification across countries, continents and increasingly products (communication,
entertainment) also lessens our exposure to unfavorable changes in a single market, geographic region or currency. No single operation contributed more than 17% of our revenues for 2011 (2010: 16%).

Highly skilled senior management.Our highly skilled senior management has extensive experience in both the Telecommunications Industry
and the
Fast-Moving Consumer Goods sector, which are critical to properly implement our operating strategy. Many of our senior executives have spent more than 10 years working in emerging
markets and have demonstrated their ability to manage costs in rapidly growing businesses and starting up and successfully integrating new businesses.

License Acquisition

As we established an early presence in most of the markets in which we operate, in most cases we have been able to secure our licenses
at low cost. Historically, we have been successful in renewing our maturing licenses, generally on terms similar to the original licenses, although we may not be able to do so in the future. In some
cases, we operate with prominent local business partners through companies over which we typically exercise management control.

Licenses
are generally sought through competitive application processes in which licenses are awarded on the merits of applications. In some cases, our operations pay royalties on
revenue or income to governments and all of our mobile operations pay interconnection fees to other telecommunications operators during license periods. Although the pursuit of mobile telephone
licenses is usually highly competitive, historically our operating companies have been successful in obtaining licenses over other license applicants, including major international telecommunications
companies.

From
time to time, Millicom encounters difficulties when negotiating terms of existing licenses. Millicom is currently engaged in a dispute with the Senegalese government regarding
maintenance of the existing license of Sentel GSM S.A. (Sentel) our operation in Senegal. Millicom's commitment to its business in the Republic of Senegal (Senegal) remains strong and its
subsidiaries Millicom International Operations, B.V. (MIO B.V.) and Sentel have vigorously pursued all available remedies in the matter before an international arbitration forum. In July
2010, the ICSID panel ruled that it has jurisdiction over the claims brought by Sentel and MIO B.V., overruling the objections to ICSID's jurisdiction made by Senegal. On November 10,
2010, Senegal withdrew its action against Sentel and

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Millicom
in the court proceedings in Senegal. The ICSID arbitration panel conducted a hearing in December 2011 and a decision on the merits of the case is expected in 2012. Millicom remains in
effective control of its Senegalese operations. However, due to the nature of the dispute, the status of the process for arbitration proceedings, a lack of qualitative information from which to assess
possible outcomes, and a lack of financial information, significant uncertainties exist as to the financial impact (if any) of the dispute. The uncertainties are such that, at the date of filing of
this Annual Report, it is not practicable to include a reasonable and accurate assessment of the possible financial effect of this dispute.

Management Structure

The Millicom management team is led by President and Chief Executive Officer, Mikael Grahne, previously Chief Operating Officer (COO)
of Millicom for 7 years, who took over the position from the former Chief Executive Officer, Marc Beuls, on March 2, 2009. The Chief Executive Officer has overall responsibility for the
business and Millicom's strategy. Our Chief Financial Officer, François-Xavier Roger, oversees the financial, administrative and accounting areas and from 2012 our Mobile Financial
Services category. We operate in three major geographic regions of the world: Central America, South America and Africa. From 2012 Mario Zanotti is our COO Categories and Global Sourcing
(previously COO Latin America) and Regis Romero is COO Global Markets (previously COO Africa). They both report directly to our Chief Executive Officer and are responsible for
day-to-day operations. The Global HR function is headed by Jo Leclère, Chief HR Officer.

We
believe this structure allows us to maintain a high degree of coordination, cooperation and sharing of information among the various managers while providing a degree of regional
responsibility that ensures quick and effective decision making.

The Industry

Technology Overview

Mobile telecommunications is a fast moving industry. Growth in mobile services has outpaced fixed line, and Internet is starting to
gain momentum. Telecommunications is less about voice and increasingly more about messaging and data. High speed Internet access, which delivers data applications such as broadband information
services and interactive entertainment, is rapidly making its way into homes and businesses around the world.

In
all our markets we use GSM/GPRS/EDGE technology, and in 10 of these markets, we also use 3G (third generation) technology. These technologies are by far the most commonly adopted for
mobile telecommunications systems in the world. GSM/GPRS/EDGE is often referred as 2G (second generation) technologies and they offer great value-added services and secure transmissions. GSM systems
allow excellent roaming capability.

3G
networks support high data bandwidth applications such as full motion video, video conferencing and full Internet access to mobile devices. In Millicom, we have adopted UMTS
(Universal Mobile Telecommunications System) that is based on W-CDMA (Wideband Code Division Multiple Access) radio technology. 3G is constantly evolving, and as a result, the network
speeds are increasing dramatically. Through the use of HSPA (High Speed Packet Access) and HSPA+ technology, data speeds in 3G can reach speeds substantially faster than in 2G networks, depending on
the capabilities of the devices and the network.

3G
technologies have enabled us to offer our users a wide range of advanced services while achieving greater network capacity through improved spectral efficiency. 3G enables us in Latin
America, Mauritius, Ghana, Rwanda and Tanzania to offer new services to our users like video calls,

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Table of Contents

mobile
broadband data, and full Internet experience with richer mobile content. The main reasons of having introduced 3G /HSPA networks are:

New market opportunities.It has allowed us to enter into new business opportunities, such as the wireless broadband market, which we
believe has
significant growth potential. It accounted for 46% of our recurring revenue growth in Q4 2011 and 36% for the year ended December 31, 2011.

Increased data and voice capacity.Our 3G/HSPA networks give us more capacity to provide data and voice services than our GSM networks
using our
current spectrum.

Cost effective deployment.Our 3G networks are normally co-located with existing infrastructure allowing faster and cost effective
network deployment.

During
2011, our markets experienced rapid growth in the 3G networks using HSDPA (High Speed Downlink Packet Access) technology; and, the introduction of HSPA+ or Evolved
High-Speed Packet Access will provide our users with even higher speed capabilities.

The
industry has recently begun to deploy 4G (Fourth Generation) technologies such as LTE (Long Term Evolution). This allows operators to have an all IP connection and achieve greater
speeds than 3G networks. Most mobile operators in the world, including Millicom, have chosen the LTE evolution path for achieving greater speeds. However, since LTE is still in an early stage of
development, the availability of handsets and devices supported with this technology is limited and the prices are still higher than for 3G.

Broadband
represents a large growth opportunity in our markets. We have initiated a transformation program to modernize our networks and drive new revenue streams from value added
services, implementing DPI/PCRF (deep packet inspection/policy and charging rules function), real-time billing systems, cache engines, peering, Single RAN and Single Core technologies in
several markets. As the demand for higher mobile backhaul capacity and quality increases, we are gradually moving from TDM (time-division multiplexing) to IP-based backhaul as
necessary.

During
2011, we sold cell site towers in Colombia and continued the transfer of towers in Ghana, DRC, and Tanzania to monetize our assets and to reduce our operating costs by leasing
back infrastructure, which is being shared with other operators. In other markets we proactively pursue new infrastructure sharing agreements in order to reduce both our CAPEX and OPEX.

Development of the Mobile Telecommunications Industry

Mobile Telecommunications in Developed Countries.The first mobile telecommunications networks were introduced in Scandinavia in the
early 1980's and
experienced modest growth for the first few years. Over recent years, mobile telecommunications have grown rapidly. All developed countries now have mobile telecommunication service and the levels of
penetration have increased substantially in these countries.

Given
the rapid growth of mobile telecommunication traffic in developed countries and high levels of penetration, the industry is increasingly introducing new technologies that will
expand capacity and improve service. In most developed markets, mobile operators have already implemented "third generation" mobile technology and are starting to introduce "fourth generation" mobile
technology that will allow faster access to the Internet.

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Table of Contents

Mobile Telecommunications in Developing Countries.While the mobile telecommunications industry is well-established in the developed
world, the mobile telecommunications industry in the developing world is still in a growth phase. Millicom believes that mobile telecommunications will continue to grow in developing countries because
of poor quality of existing fixed-line services, unsatisfied demand for basic telecommunications service, and increasing demand from users seeking convenience of mobile telephones. In some
countries the mobile communications network provides significantly improved access to local and international fixed-line networks compared with the existing fixed-line service,
as well as access to the Internet. Millicom believes that growth potential in its markets will first come from increased penetration of new services (including data and mobile financial services).
Increased penetration of voice mobile remains possible in Africa where penetration rates (the number of customers per 100 people) are lower than in more developed countries although penetration levels
in urban areas are reaching close to 100% levels.

Other Mobile Industry Trends

The integration of mobile services with broadband, fixed line and cable TV services to offer packages known as "triple" and "quadruple"
play services continues to develop as an opportunity in the industry.

Development
of solutions including mobile financial services, mobile medical services and other consumer convenience solutions are emerging, and expected to provide opportunities for
growth and enhancement of use of mobile devices in the industry. The telecom industry could in emerging markets provide affordable access to information (data / internet) and to financial services in
the same way as it brought affordable access to communication.

Competitive Position in the Market

The following table shows certain estimated information regarding the competitive position of Millicom's operations in each of its
mobile telephony markets as at December 31, 2011. This information was derived from active customers based on interconnect activity on our own networks. Millicom operates in developing
economies and markets and believes that the data research available in these countries is not always accurate, consistent or verifiable. Therefore, the information provided here is given in ranges of
market share to indicate the relative size and market position of Millicom's mobile telephony operations in comparison to its competitors.

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Table of Contents

Estimated Market Share Ranking at December 31, 2011(i)Market

Greater
than 50%

Between 25%
and 50%

Between 10%
and 25%

Less
than 10%

December 31,
2011(i)Central AmericaEl Salvador



Millicom

Am. Móvil
Digicel
Telefonica

Red Intelfon

1 of 5Guatemala

Millicom

Am. Móvil

Telefonica



1 of 3Honduras

Millicom



Am. Móvil
Digicel

Honducel

1 of 4South AmericaBolivia



Entel
Millicom

NuevaTel



2 of 3Colombia

Am. Móvil



Telefonica
Millicom



3 of 3Paraguay

Millicom

Personal



Am. Móvil
Vox

1 of 4AfricaChad

Millicom

Bharti (Airtel)



Salam

1 of 3DRC



Millicom
Vodacom
Celtel



CCT
Standard

1 of 5
(ii)Ghana

MTN

Millicom

Vodafone
Bharti (Airtel)

Expresso

2 of 5Mauritius

Orange

Millicom



Mahanagar T.

2 of 3Rwanda

MTN

Millicom





2 of 2Senegal

Orange
(France T)

Millicom



Expresso
Kirene

2 of 4Tanzania



Vodacom
Millicom
Bharti



Zantel
TTCL Mobile
Bol
Sasatel

2 of 7


(i)Source:    Millicom
market share derived from active customers based on interconnect activity on our own networks.(ii)Kinshasa/Bas
Congo area.


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Table of Contents

Operations

Description of operations

Descriptions of each of our operations and other related businesses are provided below. The description of our operations is divided
into the following regions and businesses*:



The
table below sets forth our revenue from continuing operations by operating segment, in percent of total revenues, for the periods indicated.

2011

2010

2009

2008

2007Central America*


41
%

42
%

45
%

45
%

48
%South America


38
%

35
%

32
%

32
%

33
%Africa


21
%

23
%

23
%

23
%

19
%Total


100
%

100
%

100
%

100
%

100
%






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Table of Contents

Subsidiaries and their Market Presence

The following table shows certain information for each of Millicom's mobile operations as at December 31, 2011.

Market

Company Name

Ownership

Method of
Consolidation(1)

Start-Up/
Acquisition
Date

Estimated
Population
of Area
under
License(2)

Mobile
Penetration
as of
December 31,
2011(3)(percent)





(million)

(percent)Central AmericaEl Salvador

Telemóvil El Salvador S.A.


100.0
%
S


1993

6


112
%Guatemala

Comunicaciones Celulares S.A.


55.0
%
JV


1990

14


89
%Honduras

Telefónica Cellular S.A.


66.7
%
S


1996

8


85
%South AmericaBolivia

Telefónica Celular de Bolivia S.A.


100.0
%
S


1991

10


68
%Colombia

Colombia Móvil S.A. E.S.P.


50.0
%
S


2006

45


103
%+1 shareParaguay

Telefónica Celular del Paraguay S.A.


100.0
%
S


1992

6


96
%AfricaChad

Millicom Tchad S.A.


100.0
%
S


2004

11


29
%DR of Congo

Oasis S.P.R.L.


100.0
%
S


2005

72


50
%Ghana

Millicom Ghana Company Limited


100.0
%
S


1992

25


66
%Mauritius

Emtel Limited


50.0
%
JV


1989

1


93
%Rwanda

Tigo Rwanda S.A.


87.5
%
S


2009

11


30
%Senegal

Sentel GSM S.A.


100.0
%
S


1999

13


65
%Tanzania

MIC Tanzania Limited


100.0
%
S


1994

43


40
%Total











265


(1)JV =
Joint Ventures. Under IFRS, joint ventures are consolidated using the proportional method of accounting in which only our share of the assets,
liabilities, income and expenses of the joint ventures in which we have an interest are consolidated. Millicom determines the existence of joint control by reference to the joint venture agreements,
articles of association, capital structure and voting protocols of the board of directors of the relevant entity, as well as the influence it has over day-to-day operations. S = Subsidiary. Subsidiaries are entities over which we have control and are fully consolidated. (2)Source:    The
U.S. Central Intelligence Agency's "The World Factbook" for 2011/ 2012.(3)Source:    Millicom.
We derive penetration rates from estimates of the total active customers in the relevant market based on interconnect
traffic.


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Table of Contents

Selected Operating Data

The following table presents, at the dates and for the periods indicated, selected operating data for each of Millicom's mobile
continuing operations.

As at December 31,Total Customers

Prepaid Customers as %
of Total CustomersMarket

2011

2010

2009

2011

2010

2009Central AmericaEl Salvador


3,026,854


2,728,136


2,780,229


87
%

89
%

92
%Guatemala


7,122,987


6,308,543


5,379,467


95
%

95
%

96
%Honduras


4,476,593


4,448,317


4,742,014


93
%

93
%

95
%Subtotal Central America


14,626,434


13,484,996


12,901,710


93
%

93
%

95
%South AmericaBolivia


2,686,504


2,404,406


2,023,412


90
%

92
%

93
%Colombia


4,854,354


4,293,423


3,743,671


80
%

81
%

83
%Paraguay


3,613,754


3,441,423


3,048,134


82
%

86
%

89
%Subtotal South America


11,154,612


10,139,252


8,815,217


83
%

85
%

87
%AfricaChad


1,894,278


1,429,350


1,017,159


100
%

100
%

100
%DR Congo


2,381,987


2,156,151


1,511,105


100
%

100
%

100
%Ghana


3,508,372


3,525,146


3,094,176


99
%

100
%

100
%Mauritius


497,882


471,579


437,428


93
%

92
%

92
%Rwanda


1,192,259


549,532


74,785


100
%

100
%

Senegal


2,378,500


2,356,064


2,090,067


100
%

100
%

100
%Tanzania


5,450,766


4,477,510


3,978,457


100
%

100
%

100
%Subtotal Africa


17,304,044


14,965,332


12,203,177


100
%

100
%

100
%Total


43,085,090


38,589,580


33,920,104


93
%

94
%

95
%


CENTRAL AMERICA

Millicom's mobile and cable operations in Central America are located in El Salvador, Guatemala, and Honduras Costa Rica and Nicaragua.
Our Central American mobile licenses covered approximately 28 million people as at December 31, 2011. Our cable operation has a large network in Central America with approximately
1.4 million homes passed, which together with Millicom's existing mobile network gives Millicom opportunities for future growth with cost efficiencies. Our cable operation has approximately
721 thousand Revenue Generating Units ("RGUs") across Central America with cable and broadband customers in Guatemala, El Salvador, Honduras and Costa Rica as well as corporate data customers
in Guatemala, Nicaragua, El Salvador and Honduras.

Costa Rica

Population:

5 millionGDP real growth:

4.0%

(est. 2011)GDP per capita:

$11,300

(est. 2011)


Although
explored by the Spanish early in the 16th century, initial attempts at colonizing Costa Rica proved unsuccessful due to a combination of factors, including: disease from
mosquito-infested swamps, brutal heat, resistance by natives, and pirate raids. It was not until 1563 that a permanent settlement of Cartago was established in the cooler, fertile central highlands.
The area remained a colony for some two and a half centuries. In 1821, Costa Rica became one of several Central American provinces that jointly declared their independence from Spain. Two years later
it joined the United

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Provinces
of Central America, but this federation disintegrated in 1838, at which time Costa Rica proclaimed its sovereignty and independence. Since the late 19th century, only two brief
periods of violence have marred the country's democratic development. Although it still maintains a large agricultural sector, Costa Rica has expanded its economy to include strong technology and
tourism industries. The standard of living is relatively high. Land ownership is widespread.



Prior to the global economic crisis, Costa Rica enjoyed stable economic growth. The economy contracted 0.7% in 2009, but resumed growth
at about 4% in 2010 and 2011. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialized
agricultural products have broadened export trade in recent years. High value added goods and services, including microchips, have further bolstered exports. Tourism continues to bring in foreign
exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country's political stability and relatively high education
levels, as well as the fiscal incentives offered in the free-trade zones; and Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America.
However, many business impediments, such as high levels of bureaucracy, difficulty of enforcing contracts, and weak investor protection, remain. Poverty has remained around 15-20% for
nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Unlike the rest of
Central America, Costa Rica is not highly dependent on remittances as they only represent about 2% of GDP. Immigration from Nicaragua has increasingly become a concern for the government. The
estimated 300,000-500,000 Nicaraguans in Costa Rica legally and illegally are an important source ofmostly unskilledlabor, but also place heavy demands on the
social welfare system. The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) entered into force on 1 January 2009, after significant delays within
the Costa Rican legislature. CAFTA-DR will likely lead to increased foreign direct investment in key sectors of the economy, including the insurance and telecommunications sectors recently
opened to private investors.



We are the leading Cable operator in Costa Rica and recently launched fixed telephony with very good reception from the market,
allowing us to now offer Triple Play. We have the best High Definition TV offer in the market and broadband speeds of up to 10 Mbs, which is the highest speed offered in the market by any provider.
These have allowed us to position ourselves in the top of mind of consumers as a pioneer in technology



The government of Costa Rica moved to a total liberalized telecom market in the country from 2008. A new Telecommunications Law was
enacted in June 2008 and the
new regulatory body SUTEL is in operation. Amnet has obtained licenses to provide fixed telephony, internet, and data and value added services. The company started offering fixed line telephony
services at the end of the first quarter of 2011, and will be able to offer customers triple play bundles (cable TV, internet and fixed telephony).

El Salvador

Population:

6 millionGDP real growth:

2.0%

(est. 2011)GDP per capita:

$7,600

(est. 2011)


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El Salvador's government system is a Democratic Republic. Following deterioration in the country's democratic institutions in the 1970s, a civil war took place
between 1980 and 1992 and came to an end as the two opposing sides signed a peace accord. The former president, Elías' Antonio Saca González of the right-wing
Arena political party, was elected in 2004 for a five-year term ending on June 1, 2009. New presidential elections took place on March 16, 2009 and Mauricio Funes Cartegena,
of the left-wing FMLN political party was elected as president.



Despite being the smallest country geographically in Central America, El Salvador has the third largest economy in the region. The
economy took a hit from the global recession and GDP contracted by 3.5% in 2009. The economy began a slow recovery in 2010 on the back of improved export and remittances figures. El Salvador's
service-oriented economy depends largely on remittances and low-cost textile and agricultural exports. As of November 2010, remittances increased 2.3% compared to the same period in 2009,
driven primarily by economic recovery in the U.S. Low-cost textile manufacturing, better known as 'maquilas', increased 1.3% as of September 2010 compared to the same period in 2009, while
'maquilas' exports increased 14.9% for the same period. Importantly, employment in the private and public sector, as of September 2010, increased 2.8% and 2.6% respectively, driven primarily by
economic recovery in the
manufacturing sector. For the same period, agricultural production increased 5.0%, stimulated by favorable international prices and credit alternatives. Remittances accounted for 17% of GDP in 2011,
and about a third of all households receive these transfers. El Salvador has promoted an open trade and investment environment, and has embarked on a wave of privatizations extending to
telecom, electricity distribution, banking, and pension funds. With the adoption of the US dollar as its currency in 2001, El Salvador lost control over monetary policy. Any counter-cyclical policy
response to the downturn must be through fiscal policy, which is constrained by legislative requirements for a two-thirds majority to approve any international financing.



El Salvador's telecommunications market is amongst the most liberalized in Central America. In 1996, the government passed a
telecommunications law designed to encourage competition in all areas of the sector and permitted foreign investment for the first time. The law governs all activities of the telecommunications
sector, with particular emphasis on the regulation of the public telephony service, utilization of radio spectrum, access to essential resources and numbering plans. Since the sector privatization in
1998, foreign and local operators have made significant investments in infrastructure improvement. This has resulted in considerable growth in the number of mobile connections, partly as a result of
the underdeveloped fixed-line network with waiting time for connections often running to several years. Mobile operators have capitalized on this by offering fast, high quality service
with nationwide coverage.

Millicom
has a 100% equity interest in Telemóvil El Salvador, S.A. (Telemóvil). Millicom accounts for this operation as a subsidiary using the full
consolidation accounting method.

Telemóvil
launched its operations in 1993 and was the only mobile services provider until 1999. Since its entry into the market, Telemóvil has expanded its
coverage of the main cities rapidly and remains the market leader. The GSM network was launched in August 2004. Services offered also include broadband internet, fixed wireless telephony and public
telephony. Telemóvil's 3G/HSDPA network was launched in September 2008 offering services such as video calls, mobile internet (datacards) and all current 3G network telecommunication
services. Telemóvil was awarded a 15-year mobile license in September 1991 which was subsequently extended until 2018. Telemóvil acquired WiMAX spectrum in
1998. As at December 31, 2011, Millicom's network in El Salvador comprised of 1,048 cell sites and covered 94% of the total population.

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In
2011 there were 5 mobile services providers in the country. Telefónica and Telecom (initially owned by France Telecom) entered the market in 1999 as the second and
third mobile operator, respectively. Digicel (privately owned) entered the market in 2001 with a GSM network as the fourth operator. Digicel was subsequently acquired by the Caribbean operator with
the same name and in 2011 a merger was announce with Claro (América Móvil) of Mexico which acquired France Telecom's interest in Telecom in 2003. In October 2005,
Intelfon (privately owned) entered the market as the fifth mobile operator, offering services based on the iDen push-to-talk technology.



We are the leading Cable operator in El Salvador where we also offer broadband and fixed telephony. We have consolidated certain
regions during the last year focusing in the quality of our product by improving our High Definition TV product and offering the highest Broadband speeds in the market. We have worked on the
integration of the Cable business with our Mobile business and focused on improving Customer Service as a key aspect of our future growth.

Guatemala

Population:

14 millionGDP real growth:

2.8%

(est. 2011)GDP per capita:

$5,000

(est. 2011)


Guatemala's
government system is a Constitutional Democratic Republic. In 1996, peace accords were signed which brought an end to a 36-year civil war. Although Guatemala has
completed a successful transition from military to civilian government, the military retains considerable political power. In September 2011, Mr. Otto Perez Molina of the Patriotic Party was
elected as president in a run-off election with 53.7% of the vote and took office in January 2012. The campaign of Mr. Perez advocated a hard-line approach to rising
criminality in the country.



Guatemala is the most populous of the Central American countries with a GDP per capita roughly one-half that of the average
for Latin America and the Caribbean. The agricultural sector accounts for nearly 15% of GDP and half of the labor force; key agricultural exports include coffee, sugar, and bananas. Remittances
increased by 6% over 2009 and GDP growth was almost 3%. Economic growth fell in 2009 as export demand from US and other Central American markets fell and foreign investment slowed amid the global
recession, but the economy recovered gradually in 2010 - 2011 and is forecast to return to more normal growth rates by 2012.

The
1996 peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and since then Guatemala has pursued important reforms and macroeconomic
stabilization. The Central American Free Trade Agreement (CAFTA) entered into force in July 2006 spurring increased investment and diversification of exports, with the largest increases in ethanol and
non-traditional agricultural exports. While CAFTA has helped improve the investment climate, concerns over security, the lack of skilled workers and poor infrastructure continue to hamper
foreign direct investment. The distribution of income remains highly unequal with the richest decile comprising over 40% of Guatemala's overall consumption. More than half of the population is below
the national poverty line and 15% lives in extreme poverty. Poverty among indigenous groups, which make up 38% of the population, averages 76% and extreme poverty rises to 28%. 43% of children under
five are chronically malnourished, one of the highest malnutrition rates in the world. Given Guatemala's large expatriate community in the United States, it is the top remittance recipient in Central
America, with inflows serving as a primary source of foreign income equivalent to nearly two-thirds of exports.

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Between 1996 and 1998, Guatemala implemented a liberalization and privatization program. The General Telecommunications Law was passed
in 1996 and opened the sector to competition with immediate effect, including the removal of all regulatory restrictions on prices and quality of service, and also prepared the ground for
privatization of the incumbent operator Guatel, re-named Telgua, which took place in 1998. The law also created a regulatory authority, the Superintendencia de Telecomunicaciones (SIT),
which is primarily responsible for the allocation of radio spectrum, resolving access disputes and administering the national numbering plan. Regulations to require registration by users of mobile
services come into force in 2012.

Millicom
has a 55% equity interest in Comunicaciones Celulares, S.A. (Comcel). The remaining 45% of the company is owned by Miffin Associates Corp., a Panamanian company
controlled by our local partner Mr. Mario David Lopez Estrada. Millicom accounts for this operation as a joint venture using the proportionate consolidation accounting method.

Comcel
operates GSM/GPRS/EDGE and 3G/HSDPA networks. The GSM/GPRS/EDGE network was launched in August 2004 and the 3G/HSDPA network was launched in August 2008. Comcel also provides
international long-distance services, roaming service, internet services and local telephony services. In January 1990, Comcel was awarded its initial 20-year license to
operate a nationwide 800MHz network. In March 2003, Comcel was awarded a revised license to operate 10MHz of frequency for a period of 15 years until 2018. In August 1998, as validated in
October 2001, the license to operate another 4MHz spectrum was awarded for the period until 2013. This license can then be extended for a further 15 years. Comcel acquired 25 MHz in the 2.5 GHz
spectrum to operate WiMAX in July 2006. As at December 31, 2011, Millicom's network in Guatemala comprised of 2,981 cell sites and covered 99% of the total population.

Comcel
was the first mobile operator in Guatemala when it launched commercial operations in 1990. The operation enjoyed a sole provider position until 1999 when Telefónica
and Telgua (owned by América Móvil) entered the market. In 2001, BellSouth of the U.S. entered the market as the fourth operator and Telefónica of Spain
acquired BellSouth's operations in 2004. In March 2003 two additional mobile licenses were granted. One license was granted to Electrónica Industrial, S.A., which sold the
usufruct of the spectrum to Comcel in November 2006. The other license was granted to Digicel Guatemala S.A., which in 2009 was purchased by Comcel, after Digicel failed to obtain an
interconnection agreement with any other operators.



Guatemala's cable business, through its VPN technology, provides a broad number of services with corporate VOIP, IP video conferencing
and IP-PBX. Through private lines, Amnet supplies dedicated circuits between two or more client's offices.

Honduras

Population:

8 millionGDP real growth:

3.5%

(est. 2011)GDP per capita:

$4,300

(est. 2011)


Honduras's
government system is a Democratic Constitutional Republic. Since the regional peace process in the late 1980s, democracy in Honduras has been strengthened. Presidential
elections took place in November 2005, with the opposition candidate Manuel Zelaya Rosales of the Partido Liberal party being elected and taking office in January 2006. Mr. Zelaya left power in
June 2009 and an intermediary government took his place to run the country until the new elections, held in November

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2009
with the same political parties leading the polls, and won by Porfirio Lobo Sosa with 56.3% of the vote, the candidate running for the National Party.



Honduras, the second poorest country in Central America, suffers from extraordinarily unequal distribution of income, as well as high
underemployment. While historically dependent on the export of bananas and coffee, Honduras has diversified its export base to include apparel and automobile wire harnessing. Nearly half of Honduras's
economic activity is directly tied to the US, with exports to the US equivalent to 30% of GDP and remittances for another 20%. The US-Central America Free Trade Agreement (CAFTA) came into
force in 2006 and has helped foster foreign direct investment (FDI), but physical and political insecurity may deter potential
investors; about 70% of FDI is from US firms. The economy registered marginally positive economic growth in 2010, insufficient to improve living standards for nearly 60% of the population in poverty.
The Lobo administration inherited a difficult fiscal position with off-budget debts accrued in previous administrations and government salaries nearly equivalent to tax collections. His
government has displayed a commitment to improving tax collection and cutting expenditures. This enabled Tegucigalpa to secure an IMF Precautionary Stand-By agreement in October 2010. The
IMF agreement has helped renew multilateral and bilateral donor confidence in Honduras following the Zelaya administration's economic mismanagement and the political coup.



The Comisión Nacional de Telecomunicaciones (Conatel) was created in October 1995 as the national regulatory authority
and reports directly to the Ministry of Telecommunications. It operates a licensing system for all telecommunication services in Honduras and is in charge of promoting the modernization and
development of the sector by encouraging private investment, free competition and improved quality of service. Although Empresa Hondureña de Telecomunicaciones (Hondutel), the state
owned national incumbent operator, has a monopoly over local and long-distance telephony services, the government has opened value-added services and mobile telephony to competition.
Mobile operators have the right to carry international traffic for their own customer base.

Millicom
has a 66.67% equity interest in Telefonica Celular S.A. (Celtel). The remaining 33.33% of Celtel is owned by Proempres Panama S.A. (Proempres), a
privately-held company controlled by our local partners. On July 1, 2010 Millicom reached agreement with Proempres whereby Proempres granted Millicom an unconditional call option
for the next five years for its 33% stake in Celtel and Millicom granted to Proempres a conditional put option for the same duration in the event of a change of control of Millicom. As a result of the
above agreement as from July 1, 2010 Millicom accounts for this operation as subsidiary using the full consolidation accounting method.

Celtel
operates a GSM/GPRS/EDGE network and a 3G/HSDPA network. The 3G/HSDPA network was launched in August 2008. Celtel also provides international long-distance services
and local telephony services. In June 1996, Celtel was awarded a 10-year license to operate a nationwide mobile network for a price of US$5.1 million. The license was transformed
into a 25-year license in March 2005 with an expiry date of June 2021 at a cost of US$4.8 million. Celtel has already acquired a WiMAX license but have not yet performed a
commercial launch. As at December 31, 2011, Millicom's network in Honduras comprised of 1,536 cell sites and covered 95% of the total population.

Celtel
launched commercial operations in 1996 as the first mobile operator in Honduras and today operates a GSM and a 3G network. Until late 2003, Celtel enjoyed sole provider status in
the mobile market, when Megatel entered the market with a GSM network as the second operator. In the first
quarter of 2008, América Móvil (previously Megatel) launched its 3G network. The third mobile license was issued to Hondutel (the State owned fixed line incumbent) but
its operations have only limited

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coverage
in the 5 main cities of the country. A fourth license was issued to Digicel Honduras S.A., who launched operations on November 2008 with a GSM network, and in December 2011 has been
acquired by América Móvil (Claro).



The broadband business began to develop in the late 1990s and today Honduras' cable operation is one of the major providers of cable
modem broadband access. Honduras has a TV household penetration of only 67% and the country's cable TV household penetration is 41%. The operation is in the process of network rebuild, and recently
launched triple play (cable TV, internet, fixed telephony), to be followed in the near future by an integration of Millicom's mobile services. Internet services are offered for residential customers
and packages are offered for small and medium businesses. For a bigger corporate level, internet services are offered in larger capacities. In addition the cable business offers services such as data
transmission, corporate networks, point-to-point connection and fiber access in the region.

Nicaragua

Population:

6 millionGDP real growth:

4.1%

(est. 2011)GDP per capita:

$3,200

(est. 2011)


The
Pacific coast of Nicaragua was settled as a Spanish colony from Panama in the early 16th century. Independence from Spain was declared in 1821 and the country became an
independent republic in 1838. Britain occupied the Caribbean Coast in the first half of the 19th century, but gradually ceded control of the region in subsequent decades. Violent opposition to
governmental manipulation and corruption spread to all classes by 1978 and resulted in a short-lived civil war that brought the Marxist Sandinista guerrillas to power in 1979. Nicaraguan aid to
leftist rebels in El Salvador caused the US to sponsor anti-Sandinista contra guerrillas through much of the 1980s. Free elections in 1990, 1996, and 2001, saw the Sandinistas defeated,
but voting in 2006 announced the return of former Sandinista President Daniel Ortega Saavedra. The 2008 municipal elections were characterized by widespread irregularities. Nicaragua's infrastructure
and economyhard hit by the earlier civil war and by Hurricane Mitch in 1998are slowly being rebuilt, but democratic institutions face new challenges under the Ortega
administration.



Nicaragua, the poorest country in Central America and the second poorest in the Hemisphere, has widespread underemployment and poverty.
The US-Central America Free Trade Agreement (CAFTA) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods. Textiles and
apparel account for nearly 60% of Nicaragua's exports, but increases in the minimum wage during the Ortega administration will likely erode its comparative advantage in this industry. Ortega's
promotion of mixed business initiatives, owned by the Nicaraguan and Venezuelan state oil firms, together with the weak rule of law, could undermine the investment climate for domestic and
international private firms in the near-term. Nicaragua relies on international economic assistance to meet internal- and external-debt financing obligations. Foreign donors
have curtailed this funding, however, in response to November 2008 electoral fraud. In early 2004, Nicaragua
secured some $4.5 billion in foreign debt reduction under the Heavily Indebted Poor Countries (HIPC) initiative. Managua still struggles with a high public debt burden although it succeeded in
reducing that burden substantially in 2011. The economy grew at a rate of about 4% in 2011.

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In 2005, the fixed line sector was officially privatized and a competition law was issued in 2006, however full liberalization is
pending, which is not the case for the mobile sector, which is open to full competition. Since privatization, access to fixed-line and mobile-cellular services has improved but teledensity
still lags behind other Central American countries.

SOUTH AMERICA

Millicom's mobile operations in South America are located in Bolivia, Colombia and Paraguay. Our South American licenses covered
approximately 61 million people as at December 31, 2011.

Bolivia

Population:

10 millionGDP real growth:

5.0%

(est. 2011)GDP per capita:

$4,800

(est. 2011)


Bolivia's
system of government is a Social Unitarian State. The government has pursued an economic and social reform agenda since the early 1990s. Democratic civilian rule was
established in 1982, but leaders have faced difficult problems of deep-seated poverty, social unrest and illegal drug production. In December 2005 Bolivians elected Movement Toward
Socialism leader Evo Morales as president by the widest margin of any leader since the restoration of civilian rule in 1982, after he ran on a promise to change the country's traditional political
class and empower the nation's poor majority. However, since taking office, his controversial strategies have exacerbated racial and economic tensions between the Amerindian populations of the Andean
west and the non-indigenous communities of the eastern lowlands. One of these strategies was the "recuperation of the natural resources to the hands of the state": nationalization of the
entire hydrocarbon sector (gas, production, transportation, refining, and storage companies), the main mining companies, and also Entel, the main telecom operator previously privatized in 1997. This
nationalization process has been confirmed under the new constitution approved in January 2009. New elections were held in December 2009 and Evo Morales was confirmed as president in January 2010. The
government has majorities in both the senate and parliament, resulting in increased social stability and smoother enactment of new laws.



Bolivia is one of the poorest and least developed countries in Latin America. Following a disastrous economic crisis during the early
1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-2005 was characterized by political instability, racial tensions,
and violent protests against planssubsequently abandonedto export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the
government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms
then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee. After higher prices for mining and
hydrocarbons exports produced a fiscal surplus in 2008, the global recession in 2009 slowed growth. A decline in commodity prices that began in late 2008, a lack of foreign investment in the mining
and hydrocarbon sectors, a poor infrastructure, and the suspension of trade benefits with the United States pose challenges for the Bolivian economy. During 2010-2011 an increase in world
commodity prices resulted in large trade surpluses. The country is a major producer of tin and gold, and, although its exports of zinc and silver are small parts of the world market, they account for
a significant portion of export earnings. Bolivia also has reserves of antimony, tungsten (wolfram), lead, copper, and lithium.

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In 2011 a new Telecommunications Law was voted whereby licenses (previously concessions) will have a 15 year duration period,
universal service obligations (fund) introduced, as well as tariff and roaming service requirements, all of which have yet to be enacted.

The
new constitution guarantees the "concession previous rights". As a result, our Concession Contract rights were not affected. One of the most relevant changes resulting from the new
constitution was the elimination of the Sirese system, an autonomous government agency responsible for regulating the five basic utility sectors: telecommunications, electricity, transport, oil and
gas and water. These functions were taken over by a Government Ministry. Regulations to require registration by users of fixed line and mobile services entered into force in 2010. Renegotiation of
concession contracts are expected in the near future with a focus on coverage and quality of service.

Millicom
has a 100% equity interest in Telefonica Celular de Bolivia S.A. (Telecel Bolivia). Millicom accounts for this operation as a subsidiary using the full consolidation
accounting method.

Telecel
Bolivia launched commercial operations in 1991 through an offering of analogue mobile services in Bolivia's three main cities of La Paz, Santa Cruz and Cochabamba. Telecel
Bolivia introduced the first prepaid mobile telephony offering in Bolivia at the end of 1996 and launched digital services through its TDMA network in 1997. Telecel Bolivia started offering nationwide
GSM services in December 2005 and was the first and only operator in Bolivia to offer 3G services since 2008. Telecel Bolivia was awarded a 20-year license in 1990 to operate a mobile
network in Bolivia's three main cities (La Paz, Santa Cruz and Cochabamba). The license was extended in 1995 and will
expire in November 2015. Telecel Bolivia's license was extended in 1997 to cover the rest of the country for a period of 20 years. In December 2002, Telecel Bolivia was also awarded a
40-year license to provide long-distance telecommunication services in Bolivia. This license is mainly used to carry Telecel Bolivia's mobile traffic. In May 2006, Telecel
Bolivia was awarded a 40-year data concession to provide services in Bolivia. As at December 31, 2011, Millicom's network in Bolivia comprised 982 cell sites and covered 58% of the
total population.

From
1991 to 1996, Telecel Bolivia was the only mobile operator in Bolivia. Móvil de Entel, the mobile subsidiary of incumbent operator Entel, launched its mobile services
in 1996. In 1997, the government of Bolivia privatized Entel by selling a 50.9% stake to Telecom Italia. More recently, Entel was renationalized. In 2001 NuevaTel (a joint venture, now 72% owned by
Trilogy International Partners of the United States, and 28% by Cooperative of Telecommunications Cochabamba, one of Bolivia's largest telecommunication cooperatives) entered the market with a GSM
network and in 2010 commenced 3G services. Since 2002 Entel heavily subsidized GSM services and since then has been the leading operator in terms of customer numbers.

Colombia

Population:

45 millionGDP real growth:

4.3%

(est. 2011)GDP per capita:

$10,100

(est. 2011)


Colombia's
system of government is a Constitutional Republic. The President of the Republic of Colombia (Colombia) is Mr. Juan Manuel Santos who has been in office since August
2010, succeeding former president Mr. Alvaro Uribe who held the presidential office since August 2002. A 40 year conflict between government forces, anti-government insurgent
groups and illegal paramilitary groups, heavily funded by the drug trade, escalated during the 1990's. The insurgents lack the military or popular support necessary to overthrow the government and
violence has been decreasing since 2002 but insurgents continue attacks against civilians and large parts of the countryside are under guerrilla influence. Most paramilitary members have demobilized
since 2002 in an ongoing peace process,

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although
their commitment to ceasing illicit activity is unclear. During his term former president Alvaro Uribe stepped up efforts to reassert government control throughout the country. However,
neighboring countries worry about the violence spilling over their borders. In January 2011, Colombia assumed a non-permanent seat on the UN Security Council for 2011-2012.



Colombia experienced accelerating growth between 2002 and 2007, chiefly due to improvements in domestic security, rising commodity
prices, and to President Uribe's
pro-market economic policies. Foreign direct investment reached a record $10 billion in 2008, but dropped to $7.2 billion in 2009, before beginning to recover in 2010,
notably in the oil sector. Pro-business reforms in the oil and gas sectors and export-led growth, fueled mainly by the Andean Trade Promotion and Drug Eradication Act, have
enhanced Colombia's investment climate. Inequality, underemployment, and narco-trafficking remain significant challenges, and Colombia's infrastructure requires major improvements to sustain economic
expansion. The Santos administration has highlighted five "locomotives" to stimulate economic growth: extractive industries; agriculture; infrastructure; housing; and innovation. Colombia is third
largest exporter of oil to the United States. Due to the global financial crisis and weakening demand for Colombia's exports, Colombia's economy grew only 2.7% in 2008, and 0.8% in 2009 but rebounded
to around 4.4% in 2010The economy continued to improve, buoyed by reduced public debt, the export-oriented growth strategy, improved security, and high commodity prices (oil in particular). The
government continues to encourage exporters to diversify their customer base beyond the United States and Venezuela, traditionally Colombia's largest trading partners; the Santos administration
continues to pursue free trade agreements with Asian and South American partners and awaits the approval of a Canadian trade accord by Canada's and EU's parliaments. The business sector remains
concerned about Venezuela's trade restrictions on Colombian exports, an appreciating domestic currency, and the pending US Congressional approval of the US-Colombia Trade Promotion
Agreement. . In late 2010, Colombia experienced its most severe flooding in decades, with damages estimated to exceed $6 billion.



The Communications Ministry manages the radio electric spectrum and in addition there is a regulatory entity known as the
Telecommunications Regulatory Commission (CRT), which is in charge of issuing and controlling the regulatory framework applicable to the industry. Colombia is a "calling party pays" country.
Interconnection is mandatory and it cannot be interrupted without previous permission from the regulator. Millicom's operation, Colombia Móvil S.A. (Colombia
Móvil) has fully operational interconnection agreements for voice and SMS services with the other mobile operators and is considering the interconnection conditions for other data
services, such as MMS. The Colombian telecommunications market is very competitive with about 30 fixed local operators, two mobile operators, one mobile PCS, one digital trunking and around thirty
five long distance operators, which are owned by private and public shareholders.

In
October 2006, Millicom acquired 50% plus one share of the share capital of Colombia Móvil. UNE Telecomunicaciones S.A. ESP, a company owned and controlled by the
municipality of Medellín, and Empresa de Telecomunicaciones de Bogotà ETB S.A. ESP, a company owned and controlled by the municipality of Bogotà,
each own 24.99% of the share capital of Colombia Móvil. Emtelco (a subsidiary of EPM), Colvatel (a subsidiary of ETB) and Empresa Aguas del Oriente Antioqueño (a
subsidiary of EPM) each own one share in Colombia Móvil in order to comply with the minimum legal requirement of five shareholders. Millicom accounts for this operation as a subsidiary,
using the full consolidation accounting method.

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In
2011, Millicom acquired 40% of the subsidiary of American Towers in which Colombia Móvil is selling and leasing back a portion of its cell sites. At the same time we
have provided our local partners with a put option that expires in July 2013 to acquire up to half of our shareholding in this entity.

Colombia
Móvil was awarded three licenses in February 2003 to offer Personal Communications System (PCS) services in the three zones, covering all of Colombia. The PCS
licenses each have a term of 10 years and allow Colombia Móvil to offer voice, data and video services without additional license requirement for value added services.
Additionally, Colombia Móvil has one license for offering carrier services, with a term of ten years, extendable for an additional ten years. Colombia Móvil S.A.
ESP is operating in Colombia with GSM/GPRS/EDGE/HSPA/HSPA+ technology, on the 1900 MHz band, with 55 MHz of spectrum in the 1900MHz band composed of 50MHz of spectrum which is expiring in 2013 and
5MHz which is due to expire in 2021. Colombia Móvil has another license that permits it to offer several telecommunication services, named "Título Habilitante
Convergente" which was awarded in April 2008 and it has a term of 10 years renewable. Through this license, Colombia Móvil is offering value added services, has offered
international gateway services since July 2003 and is able to offer bearer services. As at December 31, 2011, Millicom's network in Colombia comprised 3,095 cell sites (of which 1,346 owned and
operated by the subsidiary of American Towers in Colombia) and covered 74% of the total population.

Mobile
telephony was introduced in Colombia in 1993. The country was divided into three zones, with two licenses per zone, in band A and B in the 850 MHz frequency band. Millicom
operated in the northern zone of Colombia through a subsidiary called Celcaribe S.A. from 1993 to 2001 when it sold the business to América Móvil. After an initial
period with six regional mobile players, the industry went through a consolidation process and today there are three mobile companies, with a fourth virtual player Uff, entering in 2010 providing
services on Colombia Móvil's network: Movistar, a subsidiary of the Telefónica group, Comcel, a subsidiary of América Móvil, Avantel, a
digital trunking operator (privately owned) and Colombia Móvil, majority owned by Millicom.

Paraguay

Population:

6 millionGDP real growth:

6.4%

(est. 2011)GDP per capita:

$5,500

(est. 2011)


Paraguay's
governmental system is a Constitutional Republic. The 35-year military dictatorship of Alfredo Stroessner was overthrown in 1989 and, despite a marked increase in
political infighting in recent years, relatively free and regular presidential elections have been held since then. President Nicanor Duarte Frutos of the Partido Colorado political party oversaw a
period of economic recovery and greater stability of public finances after taking office in 2003. Presidential elections which took place in 2008 resulted in the election of Fernando Lugo (a former
Roman Catholic bishop allied with the main opposition party, the Liberal party). Next elections will be held in April 2013.



Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer
goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living
from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. The economy grew rapidly between 2003
and 2008 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion. Paraguay is the sixth largest soy producer in
the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.8% in 2009, as lower

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world
demand and commodity prices caused exports to contract. The government reacted by introducing fiscal and monetary stimulus packages. Growth resumed at a 14.5% level in 2010 the highest in South
America but slowed to about 6% in 2011 as the stimulus subsided. Political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to
growth.



The Telecommunications Law of 1995 was aimed at liberalizing the sector through the creation of the Comisión Nacional de
Telecomunicaciones (Conatel), the regulatory authority of the telecommunications sector. Although the law succeeded in opening up the mobile and value added sectors, including the internet service
provider market, state owned incumbent Copaco has retained its monopoly position in the fixed-line and international calls market. This monopoly remains despite Conatel's decision to
enforce regulation which will allow international connectivity to Internet Fiber Optic networks in the border with Argentina or Brazil, as VoIP services, though this is rejected by the Copaco Workers
Union.

Telefonica
Celular del Paraguay S.A (Telecel) is 100% owned by Millicom. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

Telecel
started operations in 1992. It primarily operates a GSM network which is GPRS/EDGE enabled. Telecel also operates the largest broadband wireless network with WiMAX,
broadband mobile and fiber optic in Paraguay and was the market leader in the Paraguayan broadband market in 2011.

In
2008, Telecel launched 3G/HSDPA services. Telecel was awarded a 10-year license for an 800MHz network in 1991, which was renewed in October 2001, October 2006, and in 2011
renewed until 2016. The 1900MHz PCS license that was due to expire in November 2012 was also renewed for an additional 5-year period. The ISP services license was renewed in 2009 until
2014 and in 2010 Conatel announced that both ISP and data licenses were to become a single license. In August 2008 Telecel launched Fiber to the Home (FTTH) services, with an initial phase of 25
Central Offices and an initial capacity of 2,000 ports, covering the metropolitan area of Asuncion, Ciudad del Este and Encarnación. As at December 31, 2011, Telecel's network in
Paraguay comprised 983 cell sites and covered 94% of the total population.

Until
1998, Telecel enjoyed a sole provider position in the mobile market when Personal (owned by Telecom Italia) entered the market as the second operator. In 1999, Vox (a joint venture
between KDDI Corporation of Japan and Mr. Toyotoshi, a local businessman) entered the market with a GSM network as the third operator. In 2010 Vox was acquired by Copaco, the state owned fixed
line operator. Hutchison Whampoa-owned Porthable entered the market as the fourth mobile operator in 2001, followed in 2005 by América Móvil, which acquired Porthable,
re-named CTI, from Hutchison Whampoa, currently operating under the brand name Claro.



During 2012 Telecel plans to commence roll-out of a greenfield cable operation in the greater Asunción area.

AFRICA

Millicom's Africa cluster consists of its mobile operations in Chad, the Democratic Republic of Congo, Ghana, Mauritius, Rwanda,
Senegal and Tanzania. Our African licenses covered approximately 176 million people as at December 31, 2011.

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Chad

Population:

11 millionGDP real growth:

2.5%

(est. 2011)GDP per capita:

$1,900

(est. 2011)


Chad's
government system is a Unitary Republic based on the amended constitution of June 2005. The country endured three decades of civil war as well as an invasion by Libya before peace
was restored in 1990. The government drafted a democratic constitution and held flawed presidential elections in 1996 and 2001. In 1998, a rebellion broke out in northern Chad, which continues to
sporadically flare up despite several peace agreements between the government and the rebels. In 2005, new rebel groups emerged in Western Sudan (Darfur) and have made probing attacks into eastern
Chad. Power remains in the hands of an ethnic minority. In June 2005, President Idriss Déby held a referendum successfully removing constitutional term limits. In April 2006, an
attempted coup against Mr. Déby's government was defeated. In May 2006, Mr. Déby was re-elected president for a five-year term. At
the time of the election, the country was facing a growing conflict with Sudan, high unemployment and a growing insurgency fueled by deserting members of the Chadian military and the United Front for
Democratic Change rebel group. During the first two weeks of February 2008, rebel groups opposing the Government of Mr. Deby made attacks on cities along the Sudanese border and into N'Djamena.
By order of the Government, during this period all networks were shut down in N'Djamena and along the Sudanese border. In 2008-2009, after the Chadian Army had defeated three major rebel
attacks and the Sudanese Army repulsed a rebel attack that reached the suburbs of Khartoum, international pressure for the normalization of Chad-Sudan relations intensified. Several
Chad-Sudan agreements brokered by third parties had failed from 2006 to 2008, following which N'Djamena and Khartoum moved to resolve their differences bilaterally. This resulted in
January 2010 in a Chad-Sudan peace accord, according to which the sides agreed to end the proxy war by breaking with rebel clients, normalize relations, and secure their border through
joint military cooperation. President Deby publicly renounced past support for Sudanese rebels, a key Sudanese and international demand, and committed Chad to assist international efforts to resolve
the Darfur crisis through peaceful negotiation. In April 2011 Mr. Déby was re-elected with 84% of the vote for a further five-year term



Chad's primarily agricultural economy will continue to be boosted by major foreign direct investment projects in the oil sector that
began in 2000. At least 80% of Chad's population relies on subsistence farming and raising of livestock for its livelihood. Chad's economy has long been handicapped by its landlocked position, high
energy costs, and a history of instability. Chad relies on foreign assistance and foreign capital for most public and private sector investment projects. A consortium led by two US companies has been
investing $3.7 billion to develop oil reservesestimated at 1 billion barrelsin southern Chad. Chinese companies are also expanding exploration efforts and are
currently building a 311-km pipeline and the country's first refinery. The nation's total oil reserves are estimated at 1.5 billion barrels. Oil production came on stream in late
2003. Chad began to export oil in 2004. Cotton, cattle, and gum arabic provide the bulk of Chad's non-oil export earnings.



The Ministry of Posts & Telecommunications was responsible for regulation of the telecoms sector until the Telecommunications
Act was passed in 1998. The enactment of the law paved the way for the creation of a new regulatory authority, the Office Tchadien de Régulation des
Télécommunications (OTRT), in 2000. In the same year, the Société des Télécommunications du Tchad (Sotel
Tchad) was established to operate basic fixed-line telephony services in the country during a five-year exclusivity period. The amount of fixed telephone lines installed was
estimated at 13,000 in 2004. The government

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has
sold 60% of Sotel Tchad to Libyan state-owned firm LAP Green Network for $90 million. Due to breach of contract 2011, the Chadian government annulled the contract and restored the national
operator as a national asset.

Millicom
Tchad S.A. (Millicom Tchad) is 100% owned by Millicom. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

Millicom
Tchad launched commercial operations in the capital city, N'Djamena, in October 2005. The company offers tigo® branded prepaid services over its GSM network and
services include GPRS, EDGE, MMS and e-PIN and has an international gateway. In November 2004, Millicom Tchad was awarded a 10-year license to operate a nationwide GSM
network in Chad. The company's license was amended in July 2005 to allow for international gateway operations and in January 2007 for GPRS/EDGE. Millicom Tchad does not have a WiMAX license
because no such licenses have yet been issued in Chad. As at December 31, 2011, Millicom's network in Chad comprised 377 cell sites and covered 78% of the total population.

Airtel
Tchad, in which Indian based Bharti is the 100% majority shareholder, is the only other major mobile operator in Chad. Airtel Tchad was acquired in 2010 from Zain which started
operations as the first mobile operator in Chad in 2000.

Democratic Republic of Congo (DRC)

Population:

72 millionGDP real growth:

6.5%

(est. 2011)GDP per capita:

$300

(est. 2011)


The
DRC's government system is a Unitary Republic. Following the withdrawal of Rwandan forces from eastern DRC in 2002, the Pretoria Accord was signed by all relevant parties to end four
years of regional war involving Angola, Chad, Namibia, Sudan and Zimbabwe supporting the Congolese regime being challenged by Rwanda and Uganda. A transitional government was set up in July 2003 with
Joseph Kabila. He was joined by four vice-presidents representing the former government, former rebel groups and the political opposition. New elections had been due by June 2005 after a
transition period of two years. The transitional government held a successful constitutional referendum in December 2005 and elections considered generally free and fair for the presidency, National
Assembly, and provincial legislatures in 2006. These were the first democratic elections in approximately 40 years, since the election of Patrice Lumumba, Congo's first ever elected head of
state. President Kabila was inaugurated president in December 2006. Provincial assemblies were constituted in early 2007, and elected governors and national senators in January 2007. In 2008, the war
in the East started again, with one million refugees displaced, and the international community and the United Nations fully involved in the humanitarian crisis. On March 23, 2009, the
Government of the D.R.C. signed separate peace agreements with (1) the CNDP, (2) the North Kivu armed groups, and (3) the South Kivu armed groups. The rebel groups agreed to
transform their movements from military to political in nature, while the government promised to work toward integrating rebel soldiers and officials into the FARDC, national police, and national and
local political and administrative units. In November 2011 President Kabila was re-elected for a further five-year term although allegations of corruption and incompetence in
electoral proceedings led to sporadic social unrest and the declaration of the leader of the opposition as being the rightful president.



The economy of the Democratic Republic of the Congoa nation endowed with vast potential wealthis slowly
recovering from decades of decline.
Systemic corruption since independence in 1960 and conflict that began in May 1997 dramatically reduced national output and government revenue, increased external debt, and resulted in the deaths of
more than 5 million people from violence,

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famine,
and disease. Foreign businesses curtailed operations due to uncertainty about the outcome of the conflict, lack of infrastructure, and the difficult operating environment. Conditions began to
improve in late 2002 with the withdrawal of a large portion of the invading foreign troops. The transitional government reopened relations with international financial institutions and international
donors, and President Kabila began implementing reforms. Progress has been slow and the International Monetary Fund curtailed their program for the DRC at the end of March 2006 because of fiscal
overruns. Much economic activity still occurs in the informal sector, and is not reflected in GDP data. Renewed activity in the mining sector, the source of most export income, boosted Kinshasa's
fiscal position and GDP growth from 2006-2008, however, the government's review of mining contracts that began in 2006, combined with a fall in world market prices for the DRC's key
mineral exports temporarily weakened output in 2009, leading to a balance of payments crisis. The recovery in mineral prices beginning in mid 2009 boosted mineral exports, and emergency funds from the
IMF boosted foreign reserves. An uncertain legal framework, corruption, and lack of transparency in government policy are long-term problems for the mining sector and the economy as a
whole. The global recession cut economic growth in 2009 to less than half its 2008 level, but growth returned to 6-7% in 2010-2011. The DRC signed a Poverty Reduction and
Growth Facility with the IMF in 2009 and received $12 billion in multilateral and bilateral debt relief in 2010.



DRC's incumbent fixed line operator is the "Office Congolais des Postes et des Télécommunications"
(OCPT). It operates an outdated, poorly managed analogue fixed-line network of approximately 10,000 lines mainly concentrated in the capital city of Kinshasa. The Autorité
de Régulation de la Poste et des Télécommunications du Congo (ARPTC) is in charge of regulating the telecommunications sector. Legislation has been
prepared but not yet implemented which will formally end the OCPT's monopoly and allow for market liberalization. To date, the government has not developed a telecommunications policy. As the DRC
lacks the funds to invest in a modern fixed-line infrastructure, the country's mobile sector has been facing high demand in recent years. According to the Ministry of Telecommunications,
which is charged with the management of spectrum and licenses, 3G licenses are expected to be auctioned in 2012. Recently, the government has introduced a temporary minimum tariff to protect consumers
and national interests, which has led to Millicom's operation, Oasis S.P.R.L. (Oasis), significantly increasing its on-net tariff.

Oasis
is 100% owned by Millicom. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

In
November 1997 Oasis was awarded a 20-year license to operate a fixed-line network in DRC. An amendment to the license was signed in October 1999 which allows
the company to construct a nationwide GSM network. Oasis does not have a WiMAX license. Oasis also has an international gateway. As at December 31, 2011, Millicom's network in DRC comprised 774
cell sites (of which 204 are off), and covered 76% of the Kinshasa Bas-Congo Region population. In December 2010 an agreement was reached with Helios Towers DRC, in which 729 towers will
be sold to Helios DRC, as part of an outsourcing deal in which Helios DRC will manage the towers and provide related services to Oasis. By December 31, 2011 approximately 50% of the towers had
been transferred, and Millicom had acquired a 40% interest in Helios Towers DRC.

Three
operators (Starcel, Comcel and Afritel) were offering limited analogue and CDMA mobile services in DRC when Oasis entered the market with its GSM offering. These operators had
ceased to exist by the end of 2003. Initially Celtel Congo, owned by Kuwait based Zain (formerly MTC), was the only other GSM operator in the market, becoming the leading provider of mobile services
in DRC with coverage in almost 100 cities. In 2010, Zain was acquired by Airtel. In 2001, Congolese Wireless Networks (CWN) entered into a joint venture with South African mobile operator Vodacom,
creating a new operator, Vodacom Congo, which launched GSM services in DRC in April 2002 and extended its

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coverage
to a large number of cities. The fourth operator, CCT, jointly owned by Chinese telecom equipment provider ZTE (51%) and France Telecom which acquired a 49% stake from the government in 2011,
launched its GSM network in January 2002. Other GSM licenses were granted in 2008 to the following operators: Niletel (present in Sierra Leone), Hits Telecom (present in Tanzania and Equatorial
Guinea) and MTN.

Ghana

Population:

25 millionGDP real growth:

13.5%

(est. 2011)GDP per capita:

$3,100

(est. 2011)


On
March 6, 1957, Ghana (formerly the Gold Coast), became the first sub-Saharan country in colonial Africa to gain independence. The country's constitution was
temporarily suspended in 1981, following a series of alternating military and civilian governments. A new constitution, restoring multi-party politics, was approved in 1992 with Lt. Jerry Rawlings
being democratically voted into power for two consecutive four-year terms from 1992 to 2000. President Rawlings was, however, constitutionally prevented from running for a third term in
2000, thus allowing John Kufuor an opportunity to govern Ghana from 2000 through the end of his second term, in December 2008. In December 2008, Ghanaians again enjoyed a free and fair election,
voting President John Atta Mills as president from 2009 through to December 2012.



Ghana is well endowed with natural resources and agriculture accounts for roughly one-quarter of GDP and employs more than
half of the workforce, mainly small landholders. The services sector accounts for 50% of GDP. Gold and cocoa production and individual remittances are major sources of foreign exchange. Oil production
at Ghana's offshore Jubilee field began in December 2010 and is expected to boost economic growth. Estimated oil reserves have jumped to almost 700 million barrels. Ghana signed a Millennium
Challenge Corporation (MCC) Compact in 2006, which aims to assist in transforming Ghana's agricultural sector. Ghana opted for debt relief under the Heavily Indebted Poor Country (HIPC) program in
2002, and is also benefiting from the Multilateral Debt Relief Initiative that took effect in 2006. In 2009 Ghana signed a
three-year Poverty Reduction and Growth Facility with the IMF to improve macroeconomic stability, private sector competitiveness, human resource development, and good governance and civic
responsibility. Sound macro-economic management along with high prices for gold and cocoa helped sustain GDP growth in 2008-11.



Ghana has been at the forefront of Africa in liberalizing its telecommunications sector. In the early 1990s, the government recognized
that the industry was underdeveloped but had the potential to stimulate economic growth. Consequently, the government introduced several initiatives to liberalize the industry to pave the way for
competition and infrastructural improvement. The National Communications Authority (NCA) was established in 1996 to oversee the implementation of government regulations and to act as the primary
regulatory body for the industry.

Millicom
Ghana Company Limited (Millicom Ghana) is 100% owned by Millicom. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

Millicom
Ghana was the first mobile operator in Ghana, having commenced operations in 1992. Millicom Ghana introduced the concept of prepaid services in Ghana in 1998. Millicom Ghana's
GSM license authorizes it to provide mobile and local fixed wireless services. Although Millicom Ghana applied for a GSM license in 2000, it was not allowed to launch GSM services for approximately
two years until July 2002 when it launched its GSM operation, which led to an important growth in its

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customer
base. In December 2004, the NCA issued Millicom Ghana a formal GSM operating license that is valid for 15 years. Under this license, Millicom Ghana has 8 MHz of spectrum in the 900
band and has been granted an additional 10 MHz in the 1800 band. Millicom Ghana also acquired an International Gateway license in June 2005. This license is valid for 10 years. In March 2006,
Millicom Ghana introduced the tigo® brand and offered an array of Value-Added Services (VAS): General Packet Radio Services (GPRS), Wireless Application Protocol (WAP), Multimedia
Messaging Services (MMS), Caller Ring Back Tones (CRBT) and other interactive value-added services. Millicom Ghana acquired a 3G license in the last quarter of 2008, and rolled-out 3G
services in 2011. In January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement with Helios Towers Ghana, a direct subsidiary of Helios Towers Africa, for most of
its sites, almost all of which have been transferred to Helios Towers Ghana during 2010 and 2011. As at
December 31, 2011, Millicom's network in Ghana comprised 812 cell sites and covered 80% of the total population.

In
addition to Millicom Ghana, four other companies offer mobile services in the country: Expresso, MTN, Vodafone and Airtel. MTN, a South African mobile operator previously known as
Areeba, began operations in 1996 as the third operator and operates a nation-wide GSM 900/1800 MHz network. MTN currently has the largest network coverage in Ghana. Vodafone
operates a GSM 900/1800 MHz network it acquired from OneTouch, which entered the market in 2000 as the fourth operator when Millicom Ghana was applying for its GSM license. OneTouch was not allowed to
launch commercial operations until July 2002. Kasapa, majority owned by Hutchison Whampoa, entered the market as the second operator with an AMPS network in 1995 and now operates CDMA service with
limited coverage. Kasapa, formerly known as Celltel, was acquired in 2010 by Expresso, and is the smallest Mobile operator in Ghana. Westel, the national fixed line operator was bought by Zain during
2007 and in 2010 Zain was acquired by Airtel. Westel has both fixed and mobile license and started providing services in 2008. Glo, a Nigerian operator, which was due to launch in 2009 has not yet
launched.

Mauritius

Population:

1 millionGDP real growth:

4.0%

(est. 2011)GDP per capita:

$15,000

(est. 2011)


Mauritius'
government system is a Parliamentary Democracy. After almost four centuries under Dutch, French and British control, the country gained its independence in 1968. A stable
democracy with regular free elections, Mauritius has attracted considerable foreign investment and has earned one of Africa's highest per capita incomes. Sir Anerood Jugnauth has been president since
2003 and Navinchandra Ramgoolam of the Labor Party was elected prime minister in the July 2005 elections and was re-elected in May 2010 within a coalition of the Labor Party, the Militant
Socialist Movement and the Social Democrat Party. Stated priorities of the government are improvement of road infrastructures, the security of the people, education, and health and youth development.



Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income
diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been in the order of 5% to 6%. This remarkable achievement has been reflected in
more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. The economy rests on sugar, tourism, textiles and apparel, and
financial services, and is expanding into fish processing, information and communications technology, and hospitality and property development. Sugarcane is grown on about 90% of the cultivated land
area and accounts for 15% of export earnings. The government's development strategy centers on creating vertical and horizontal clusters of development in these

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sectors.
Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over
$1 billion. Mauritius, with its strong textile sector, has been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA). Mauritius' sound economic policies and prudent
banking practices helped to mitigate negative effects from the global financial crisis in 2008-09. GDP grew more than 4% per year in 2010-2011 and the country continues to
expand its trade and investment outreach around the globe.



The Information and Communication Technology Authority (ICTA) is the country's telecommunications regulator. Mauritius has the highest
mobile and fixed-line penetration rates in sub-Saharan Africa. The domestic telecommunications market is dominated by Mauritius Telecom.

Millicom
has a 50% equity interest in Emtel Limited (Emtel). The remaining 50% of the company is owned by a local partner, Currimjee Jeewanjee & Co. Ltd, a leading
diversified group in Mauritius. The two shareholders in Emtel jointly control the company. Millicom accounts for this operation as a joint venture, using the proportionate consolidation accounting
method.

Emtel
owns licenses for mobile services, international long-distance and internet services. Emtel was awarded a 10-year license in 1989, including a seven year
exclusivity period. Emtel's license was modified in November 2000 and is valid for a period of 15 years. Furthermore, Emtel obtained additional spectrum for UMTS/3G services in November 2004,
an international long-distance license in December 2003 (valid until 2018) and an internet service license in May 2004 (valid until 2019). Emtel acquired WiMAX spectrum in 2007 and has a
WiMAX network with 11 base stations. Implementation of the Telecommunications Directive (1 of 2008) to reduce interconnect tariffs to the state owned fixed-line infrastructure was
implemented in May 2008. Emtel operates a GSM network which is GPRS/EDGE enabled and a UMTS/3G/HSPA network. As at December 31, 2011, Millicom's network in Mauritius comprised 290 cell
sites and covered 92% of the total population.

Emtel
entered the market in 1989 as the first mobile operator in the country. Until 1996, Emtel enjoyed a sole provider position when Cellplus, owned by incumbent Mauritius Telecom,
entered the market as the second operator with the launch of a GSM network. As Emtel launched its GSM service offering in 1999, three years after its competitor, Emtel experienced a significant
decline in market share at the end of the 1990s. Emtel launched 3G services in Mauritius in November 2004, making it
the first mobile operator to offer such services in Africa. A third mobile operator, Mahanagar Telephone (Mauritius) Ltd., entered the market in December 2006 using CDMA technology. MTML, the
fourth operator has launched its services in the latter part of 2011.

Rwanda

Population:

11 millionGDP real growth:

7.0%

(est. 2011)GDP per capita:

$1,300

(est. 2011)


In
1959, three years before independence from Belgium, the majority ethnic group, the Hutus, overthrew the ruling Tutsi king. Over the next several years, thousands of Tutsis were
killed, and some 150,000 driven into exile in neighboring countries. The children of these exiles later formed a rebel group, the Rwandan Patriotic Front (RPF), and began a civil war in 1990. The war,
along with several political and economic upheavals, exacerbated ethnic tensions, culminating in April 1994 in the genocide of roughly 800,000 Tutsis and moderate Hutus. The Tutsi rebels defeated the
Hutu regime and ended the killing in July 1994, but approximately 2 million Hutu refugees, many fearing Tutsi retaliation, fled to neighboring Burundi, Tanzania, Uganda, and Democratic Republic
of Congo (at that time Zaire). Since then, most of the refugees have returned to Rwanda, but several thousand remained in the neighboring Democratic Republic of the Congo and formed an extremist
insurgency bent on

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retaking
Rwanda, much as the RPF tried in 1990. Rwanda held its first local elections in 1999 and its first post-genocide presidential and legislative elections in 2003. In 2009, Rwanda
staged a joint military operation with the Congolese Army in DRC to root out the Hutu extremist insurgency there and Kigali and Kinshasa restored diplomatic relations. Rwanda also joined the
Commonwealth in late 2009. During 2010 a second presidential election was completed and the incumbent Mr. Paul Kagame, was re-elected until 2017.



Rwanda is a poor rural country with about 90% of the population engaged in (mainly subsistence) agriculture and some mineral and
agro-processing. Tourism, minerals, coffee and tea are Rwanda's main sources of foreign exchange. Minerals exports declined 40% in 2009-10 due to the global economic downturn.
The 1994 genocide decimated Rwanda's fragile economic base, severely impoverished the population, particularly women, and temporarily stalled the country's ability to attract private and external
investment. However, Rwanda has made substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels. GDP has rebounded and inflation has been curbed. Nonetheless, a
significant percent of the population still live below the official poverty line... Despite Rwanda's fertile ecosystem, food production often does not keep pace with demand, requiring food imports.
Rwanda continues to receive substantial aid money and obtained IMF-World Bank Heavily Indebted Poor Country (HIPC) initiative debt relief in 2005-06, although these levels have
been impacted in 2010 with the global economic turndown. In recognition of Rwanda's successful management of its macro economy, in 2010, the IMF graduated Rwanda to a Policy Support Instrument (PSI).
Rwanda also received a Millennium Challenge Account Compact in 2008. Africa's most densely populated country is trying to overcome the limitations of its small, landlocked economy by leveraging
regional trade. Rwanda joined the East African Community and is aligning its budget, trade, and immigration policies with its regional partners. The government has embraced an expansionary fiscal
policy to reduce poverty by improving education, infrastructure, and foreign and domestic investment and pursuing market-oriented reforms, although energy shortages, instability in neighboring states,
and lack of adequate transportation linkages to other countries continue to handicap growth. The Rwandan government is seeking to become regional leader in information and communication technologies.
In 2010, Rwanda neared completion of the first modern Special Economic Zone (SEZ) in Kigali. The SEZ seeks to attract investment in all sectors, but specifically in agribusiness, information and
communications technologies, trade and logistics, mining, and construction. The global downturn hurt export demand and tourism, but economic growth is recovering, driven in large part by the services
sector, and inflation has been contained. On the back of this growth, government is gradually ending its fiscal stimulus policy while protecting aid to the poor. In 2011 rises in global food and fuel
prices increased inflation in Rwanda from 1% in January to more than 7% in October.



The enabling framework for the liberalization of the telecommunications sector was put in place by the current Telecommunications Law,
passed in 2001. The Telecommunications Law established RURA, the regulator, granting it the authority to regulate telecommunications and setting up a regulatory board to carry out that function.
Rwanda currently has three GSM licenses in force. The overall aim of the telecom reform policy was to increase universal affordable access to telecommunications in the interests of social and economic
development.

Tigo
Rwanda S.A. (Tigo Rwanda) is 87.5% owned by Millicom. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

In
late 2008, Millicom was successful in its tender against three other bidders for the third national mobile license in Rwanda. Millicom set up Tigo Rwanda and, after
roll-out of the network, services

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were
launched in December 2009. As at December 31, 2011, Millicom's network in Rwanda comprised 261 cell sites and covered 98% of the population.

A
privatization strategy for Rwandatel was adopted in 2003, in which the government committed to sell all of its shares in the operator. In order to promote competition in the
telecommunications sector, Rwandatel sold its 28% stake in MTN Rwandacell in 2004. As the main cellular provider, MTN Rwandacell currently has coverage in all of the provinces in Rwanda, covering more
than 90% of the country. The operator mainly supplies mobile services, but is now offering internet services via its general packet radio service (GPRS) and UMTS (3G) cell phone network. The operator
has also started to roll out wireless broadband data services using WiMax, and, with its new fixed-line license, has started offering fixed-line services. In 2011 Rwandatel's
license was revoked by the government after failing to comply with license obligations, and recently acquired by Bharti who will enter the market shortly.

Senegal

Population:

13 millionGDP real growth:

4.0%

(est. 2011)GDP per capita:

$1,900

(est. 2011)


Senegal's
government system is a Unitary Republic under multiparty democratic rule, having gained its independence in 1960. The political environment in the country passed a key
milestone when the opposition socialist party led by Abdoulaye Wade came to power in the 2000 presidential elections and was re-elected President in free and fair elections in February
2007 and results from the next presidential election which is taking place from February 2012 are currently unknown.



Senegal relies heavily on donor assistance. The country's key export industries are phosphate mining, fertilizer production, and
commercial fishing. The country is also working on iron ore and oil exploration projects. In January 1994, Senegal undertook a bold and ambitious economic reform program with the support of the
international donor community. Government price controls and subsidies have been steadily dismantled. After seeing its economy contract by 2.1% in 1993, Senegal made an important turnaround, thanks to
the reform program, with real growth in GDP averaging over 5% annually during 1995-2008. Annual inflation had been pushed down to the single digits. The country was adversely affected by
the global economic downturn in 2009 and GDP growth fell below 2%. As a member of the West African Economic and Monetary Union (WAEMU), Senegal is working toward greater regional integration with a
unified external tariff and a more stable monetary policy. High unemployment, however, continues to prompt illegal migrants to flee Senegal in search of better job opportunities in Europe. Under the
IMF's Highly Indebted Poor Countries (HIPC) debt relief program, Senegal benefited from eradication of two-thirds of its bilateral, multilateral, and private-sector debt. In 2007, Senegal
and the IMF agreed to a new, non-disbursing, Policy Support Initiative program which was completed in 2010. Senegal received its first disbursement from the $540 million Millennium
Challenge Account compact it signed in September 2009 for infrastructure and agriculture development. In 2010, the Senegalese people protested against frequent power cuts. The government pledged to
expand
capacity by 2012 and to promote renewable energy but until Senegal has more capacity, more protests are likely and economic activity will be hindered. During the year, bakers protested government
price controls on bread. Foreign investment in Senegal is constrained by Senegal's business environment, which has slipped in recent years, and by perceptions of corruption.

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In 2001 the government passed an updated Telecommunications Law aimed at bringing about further liberalization of the sector, mainly
through the establishment of a new regulatory authority, the "Agence de Régulation des Télécommunications" (ART). ART is responsible for licensing,
spectrum management, tariff approval, interconnection rates and frequency allocation. The law also paved the way for the opening of rural telephony to private investment as a means of achieving
universal service.

Sentel
GSM S.A. (Sentel) is 100% owned by Millicom. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

Sentel
launched its commercial operations in 1999 as the second mobile operator in the country and it was the first mobile operator to introduce GPRS services. As at
December 31, 2011, Millicom's network in Senegal comprised 619 cell sites and covered 73% of the total population.

Sentel
was awarded a 20-year concession to operate a nationwide network in July 1998. The concession is renewable every five years after the expiry of the original
concession, in 2018, subject to the approval of the Senegalese authorities and provided Sentel has complied with the terms of the concession. At the time of the grant of the concession, the Senegalese
government had announced certain amendments to the concession. No amendments to the concession have been implemented to date. The government that took office in 2000 repeatedly publicly questioned the
status and the validity of Sentel's concession. In August 2002, Millicom and the government entered into an agreement whereby they agreed to negotiate in good faith certain mutually acceptable new
conditions that would constitute an amendment of Sentel's 1998 concession. In 2008, the government again questioned the status and the validity of Sentel's concession. On November 11, 2008,
Millicom International Operations B.V. (MIO B.V.), a wholly owned Millicom subsidiary, and Sentel instigated arbitration proceedings with the International Center for the Settlement of
Investment Disputes (ICSID) against the Republic of Senegal under provisions of the Sentel license and international law. MIO B.V. and Sentel seek compensation for the purported expropriation
of the Senegal license and monetary
damages for breach of the license. During 2010 the government withdrew its case from the Senegalese courts, and a hearing at the ICSID occurred in December 2011 from which a ruling is expected mid
2012.

The
telecommunications sector in Senegal was reformed in 1985 with the creation of state owned Sonatel. The country made commitments under the World Trade Organization's Basic
Telecommunications Agreement to introduce a regulatory structure promoting competition by the end of 1997 and new legislation was adopted in 1996, providing for the opening up of Sonatel's capital to
private foreign and national partners and liberalization of some segments of the telecommunications market. Subsequently, France Télécom acquired a 33% stake in Sonatel
in 1997 and later increased the holding to 42.3%. Other shareholders include the Senegalese government (27.7%) and employees (10%), with the remaining shares being traded on the local stock exchange.
In 2010 Sonatel acquired a 3G license. In addition to Millicom's Sentel, the other mobile operators in Senegal include Sonatel, controlled by France Télécom, Expresso
controlled by Sudatel (services launched in January 2009) and Kirene.

Tanzania

Population:

43 millionGDP real growth:

6.1%

(est. 2011)GDP per capita:

$1,500

(est. 2011)


Tanzania's
system of government is a United Republic formed by the union in 1964 of Tanganyika and Zanzibar. President Jakaya Mrisho Kikwete came to power after winning democratic
elections held on December 14, 2005. One-party rule came to an end in 1995 with the first democratic elections held

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in
the country since the 1970s. Zanzibar's semi-autonomous status and popular opposition have led to two contentious elections since 1995, which the ruling party won despite international
observers' claims of voting irregularities. President Kikwete is continuing to carry out economic reforms that gained momentum during the two terms in office of the previous president, Benjamin Mkapa.
President Kikwete's government was re-elected in October 2010 in peaceful and uncontested results.



Tanzania is one of the world's poorest economies in terms of per capita income, however Tanzania averaged 7% GDP growth per year
between 2000 and 2008 on strong gold production and tourism. The economy depends heavily on agriculture, which accounts for more than 40% of GDP, provides 85% of exports, and employs about 80% of the
work force. The World Bank,
the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging economic infrastructure, including rail and port infrastructure that are important trade links for inland countries.
Recent banking reforms have helped increase private-sector growth and investment, and the government has increased spending on agriculture to 7% of its budget. Continued donor assistance and solid
macroeconomic policies supported a positive growth rate, despite the world recession. In 2008, Tanzania received the world's largest Millennium Challenge Compact grant, worth $698 million. Dar
es Salaam used fiscal stimulus and loosened monetary policy to ease the impact of the global recession. GDP growth in 2009-11 was a respectable 6% per year due to high gold prices
and increased production.



Tanzania was among the first African countries to liberalize its telecommunications sector, with all segments of the market except
fixed-line services now accessible to the private sector. In 1997, the government introduced its National Telecommunications Policy covering the period until 2020. Key goals of the policy
initiative are to increase tele-density, develop fixed-line service coverage of rural areas, facilitate investments by domestic and international companies and institutions,
and provide a regulatory framework to encourage private sector involvement and competition, with the goal to gradually divest the state's shareholding in the incumbent operator TTCL. The Tanzania
Communications Regulatory Authority (TCRA) was established in 2003 and is responsible for the allocation and management of radio spectrum in Tanzania.

Following
the buy-out of the non-controlling shareholder, Ultimate Communications Limited, in January 2006, Millicom owns 100% of MIC Tanzania Limited (MIC
Tanzania). Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

In
January 1994, MIC Tanzania was awarded a 15-year license to operate a nationwide mobile network and, in 2005 a new converged licensing framework which is technological
neutral was introduced in Tanzania, where by all operators were migrated to the new licensing regime. MIC Tanzania migrated to the new licensing regime in May 2007, three separate licenses for Network
Facilities Services, Network Services and Application Services were issued. These licenses are valid for 25 years, 25 years and 10 years (effective May 2012), respectively. MIC
Tanzania does not have a WiMAX license, as all spectrums have already been awarded. In December 2010, Millicom's operation in Tanzania signed a sale and lease-back agreement with Helios
Towers Tanzania, a direct subsidiary of Helios Towers Africa, for most of its sites, of which more than 700 have been transferred to Helios Towers Tanzania during 2011 and most of the remaining sites
are expected to be transferred in 2012. As at December 31, 2011, Millicom's network in Tanzania comprised 1,173 cell sites and covered 62% of the total population.

In
addition to Millicom's, there are 10 other licenses for mobile operators in Tanzania. Millicom's main competitors are Vodacom Tanzania (65% owned by Vodafone and 35% owned by its
local partner, it entered the market in August 2000 and has become the leading provider of mobile services

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in
Tanzania in terms of customers), Zain Celtel, purchased by Bharti Airtel in 2010, launched GSM services in the country in November 2001 and Zantel (jointly owned by the government of Zanzibar,
Emirate Telecommunication Company, Kintbury Investment of the Channel Islands and a local technology firm), introduced GSM services in Zanzibar and the islands of Unguja and Pemba in August 1999, and
entered the Tanzanian mainland in June 2005 through a national roaming agreement with Vodacom Tanzania). Other operators with less than 3% of market share include TTCL mobile, Bol and Dovotel.

DISCONTINUED AND DIVESTED OPERATIONS

In July 2011, Millicom's operation in Colombia signed a sale and lease-back agreement with a subsidiary of American Towers,
for most of their tower assets. Approximately 63% of the towers under this agreement have been sold in 2011 and the remaining towers are expected to be transferred in 2012. The carrying value of the
portion of the remaining towers that will not be leased back and any related liabilities have been classified respectively as assets held for sale and liabilities directly associated with assets held
for sale.

On
March 9, 2011 Millicom completed the sale of its Asian business segment with the sale of Laos.

On
August 20, 2010, to facilitate the integration of its various business lines and to create synergies, Millicom entered into agreements with its partners in Honduras and
Guatemala to align ownership of its Amnet and Navega businesses. As a result Millicom sold 45% of its Amnet operations in Guatemala to its partner in Guatemala. From this date Amnet Guatemala has been
accounted for as a joint venture and proportionately consolidated into the Millicom Group financial statements. Previously, the results of the Amnet Guatemala were fully consolidated. There was no
significant impact on profit and loss from the disposal.

In
January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement for most of its cell sites. The agreement marked Millicom's first outsourcing of passive
infrastructure and is consistent with Millicom's strategy of improving both our capital and operating efficiency by
focusing on our core activities. The Ghana agreement was followed by similar arrangements in December 2010 in Tanzania and DRC.

During
2009, Millicom completed the sale of its mobile operations in Sri Lanka (on October 16, 2009), Sierra Leone and Cambodia (respectively on November 25 and 26, 2009).
A total net gain of $289 million was recognized from the sale of these operations. Millicom's operations in Sri Lanka, Sierra Leone and Cambodia ceased to be consolidated from the date of sale.

OTHER

Property, Plant and Equipment

We own, or control through long-term leases or licenses, properties consisting of plant and equipment used to provide
mobile telephone services. In addition, we and our operating companies own, or control through finance leases, towers, properties used as administrative office buildings and other facilities. These
properties include land, interior office space, and space on existing structures of various types used to support equipment used to provide mobile telephone services. The leased properties are owned
by private individuals, corporations or municipal entities.

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Plant and equipment used to provide mobile telephone services consist of:



Insurance

We maintain the types and amounts of insurance which we believe to be customary in the industry and countries in which we operate and
in accordance with our risk management strategy. Annually, we review and analyze our worldwide insurance coverage needs with the assistance of an insurance broker. We have standardized our coverage
along the recommendations suggested by our insurance broker and have put in place group master insurance policies under which all our operations are covered. Certain local risks not covered under the
group master insurance policies or required by local regulations are covered through local insurance policies. We consider our insurance coverage to be adequate both as to risks and amounts for the
business we conduct.

ITEM 4A.    UNRESOLVED STAFF COMMENTS

On December 8, 2011, as part of its review of our Form 20-F filed for the year ended December 31,
2010, the SEC's Staff (the "Staff") commented on the accounting for the put option Millicom has granted to its minority partner in its Honduras operation, Celtel (as discussed in the Explanatory Note
on Restatement in Item 5). Pursuant to discussions with the Staff, our accountants and our audit committee, we have restated our financial statements for the financial year ended
December 31, 2010 in this Annual Report on From 20-F and the interim periods from July 1, 2010 through September 30, 2011, as described in the Explanatory Note on
Restatement in Item 5 hereof, to account for this put option as a financial liability measured at the present value of the redeemable amount. We announced this correction of the put option
accounting and its impacts on our financial statements in a press release on January 26, 2012, and we have included restated financial statements as of and for the year ended
December 31, 2010 in this Annual Report on Form 20-F to correct the misstatement. We expect that the Staff's comments will be resolved on the filing of this report; however,
we have not yet received confirmation from the Staff that they will have no further comments on our Form 20-F for the year ended December 31, 2010.

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ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion should be read in conjunction with, and is qualified in its entirety by reference to
our consolidated financial statements and the related notes thereto included in this report. The following discussion should be read in conjunction with "Presentation of Financial and Other
Information" and "Selected Consolidated Financial and Operating Data". Except for the historical information contained in this report, the discussions in this section contain forward looking
statements that involve risks and uncertainties. Actual results could differ materially from those discussed below. See "Forward Looking Statements".

Unless otherwise indicated, all financial data and discussions relating thereto in this discussion and analysis are based upon financial statements prepared in
accordance with IFRS.

Explanatory Note on Restatement

In this Annual Report on Form 20-F, Millicom International Cellular S.A. (together with its subsidiaries, the
"Company" or "Millicom"):



Background on the Restatement

As previously reported in the Company's press release furnished on Form 6-K filed with the United States Securities
and Exchange Commission ("SEC") on January 26, 2012, the board of directors of the Company, based on the recommendation of the audit committee and in consultation with management, concluded
that, because of a misstatement in the Company's previously issued financial statements for the year ended December 31, 2010, and for the quarters ending on September 30, 2010 to
September 30, 2011, the Company should restate its December 31, 2010 financial statements in this Annual Report on Form 20-F for the fiscal year ended
December 31, 2011. Accordingly, the Company has restated its financial statements for these periods.

The
restated financial statements as of and for the year ended December 31, 2010 correct the accounting treatment for the Honduras transaction in July 2010 as follows:

Recognition of a liability and corresponding reserve for the put option provided to our partner who holds a non-controlling interest in our Honduran operation.

Following reassessment of the accounting treatment of the put option provided to Millicom's partner who holds a 33.3%
non-controlling interest in our Honduran operation, Millicom determined that, as the put option could be exercised under certain change of control events which could be outside the control
of Millicom, the option meets the criteria under IAS 32 for recognition as a liability and corresponding equity reserve. Therefore, Millicom has retroactively recorded a liability for the put
option at July 1, 2010 of $737 million. As a result of the change in carrying value of the put option between July 1, 2010 and year end, the liability amounted to
$769 million at December 31, 2010, representing the redemption value of the option.

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Recognition of a loss on revaluation of the put option liability

Recognition for the period between July 1, 2010 to December 31, 2010 of a non operating expense of $32 million,
reflecting the change in value of the above mentioned put option liability.

Effects of Restatement

The following table sets forth the effects of the restatement on affected items within Millicom's previously reported Consolidated
Statements of Financial Position and Consolidated Income Statements. The adjustments necessary to correct the errors have no effect on reported assets or cash flows or guidance.

(in thousands of U.S. dollars, except per share data)



As of and for the Year
Ended December 31, 2010Consolidated Income Statements Data:Other non-operating income (expenses), net

As previously reported


(31,519
)Adjustment


(31,956
)As adjusted


(63,475
)Profit before taxes from continuing operations

As previously reported


1,870,163Adjustment


(31,956
)As adjusted


1,838,207Net profit for the period

As previously reported


1,652,233Adjustment


(31,956
)As adjusted


1,620,277Basic earnings per common share

As previously reported

$
15.27Adjustment

$
(0.30
)As adjusted

$
14.97Diluted earnings per common share

As previously reported

$
15.24Adjustment

$
(0.29
)As adjusted

$
14.95




(in thousands of U.S. dollars)



As of and for the Year
Ended December 31, 2010Consolidated Statements of Financial Position Data:Accumulated profits brought forward

As previously reported


1,134,354Adjustment


As adjusted


1,134,354Put option reserve

As previously reported


Adjustment


(769,378
)As adjusted


(769,378
)Total Equity

As previously reported


3,159,011Adjustment


(769,378
)As adjusted


2,389,633Total Current Liabilities

As previously reported


1,684,831Adjustment


769,378As adjusted


2,454,209


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The
adjustments made as a result of the restatement are disclosed in Note 4, Restatement of Previously Issued Financial Statements, of the Notes to the Consolidated Financial
Statements included in this Annual Report. To further review the effects of the misstatement and the restatement adjustment, see Part IItem 3Selected Financial
Information. For a description of the control deficiencies identified by management as a result of the reassessment, and management's remediation of those deficiencies, see
Part IIItem 15Controls and Procedures.

The
previously filed Annual Report on Form 20-F and quarterly reports on Form 6-K for the periods affected by the restatement have not been amended.
Accordingly, investors should apply caution on relying upon these previously released financial statements and any earnings releases or other communication relating to the affected information for
these periods. Quarterly reports for fiscal 2012 will include restated results for the corresponding interim periods of fiscal 2011. All amounts in this Annual Report on Form 20-F
affected by the restatement adjustments reflect such amounts as restated.

Operating Results

Millicom finalized the sale of its operation in Laos during 2011. Accordingly this operation has been classified as a discontinued
operation. The discussion below focuses on results from continuing operations.

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Years Ended December 31, 2011 and 2010

The following table sets forth certain income statements items for the periods indicated:

Year Ended December 31,

Impact on
Comparative Results
for Period2011

2010(1)
(As Restated)

Amount of
Variation

Percent
Change(in thousands of U.S. dollars, except percentages)Revenues


4,529,597


3,920,249


609,348


16
%Cost of sales


(1,564,401
)

(1,330,308
)

(234,093
)

18
%Gross profit


2,965,196


2,589,941


375,255


14
%Sales and marketing


(816,715
)

(737,691
)

(79,024
)

11
%General and administrative expenses


(839,423
)

(738,779
)

(100,644
)

14
%Other operating expenses


(95,737
)

(74,933
)

(20,804
)

28
%Other operating income


43,700


3,192


40,508


1269
%Operating profit


1,257,021


1,041,730


215,291


21
%Interest expense


(186,523
)

(214,810
)

28,287


(13
)%Interest and other financial income


14,576


14,748


(172
)

(1
)%Revaluation of previously held interests





1,060,014


(1,060,014
)

(100
)%Other non operating expenses, net


(4,290
)

(61,658
)

57,368


(93
)%Loss from associates


(9,591
)

(1,817
)

(7,774
)

428
%Profit before tax from continuing operations


1,071,193


1,838,207


(767,014
)

(42
)%Credit (charge) for taxes


18,347


(227,096
)

245,443


(108
)%Profit for the year from continuing operations


1,089,540


1,611,111


(521,571
)

(32
)%Profit from discontinued operations, net of tax


39,465


11,857


27,608


233
%Non-controlling interests


(204,490
)

(2,691
)

(201,799
)

7499
%Net profit for the year attributable to equity holders


924,515


1,620,277


(695,762
)

(43
)%


(1)Restated
to recognise the liability for the put option provided to our local partner in Honduras with respect to his 33% stake of our Honduras operation,
and the related change in the carrying value of the liability from July 1, 2010 to December 31, 2010. A more complete description of the restatement is provided in Note 4 of the
"Notes to the Consolidated Financial Statements".


We
derive our revenues mainly from the provision of communication, entertainment, solutions and information services such as monthly subscription fees, airtime usage fees, roaming fees,
interconnect fees, connection fees, broadband internet, fixed line telephony, VOIP, data transmission, cable television and other services and equipment sales.

Total
revenues increased by 16% for the year ended December 31, 2011 to $4,530 million from $3,920 million for the year ended December 31, 2010. Excluding the
effect of the movement in currencies, revenues increased by 10% year-on-year. Growth in revenue is impacted by growth in the

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number
of customers and increasingly, the type and number of value added services purchased by customers.

Mobile Customers

2011

2010

GrowthCentral America


14,626,434


13,484,996


8
%South America


11,154,612


10,139,252


10
%Africa


17,304,044


14,965,332


16
%Total


43,085,090


38,589,580


12
%


As
of December 31, 2011, our worldwide total mobile customer base increased by 12% to 43,085,090 from 38,589,580 as of December 31, 2010. Prepaid customers accounted for 93% or
40,098,896 of the total mobile customers.

Our
mobile attributable customer base increased to 39,630,804 customers as at December 31, 2011 from 35,514,947 customers as of December 31, 2010, also an increase of 12%.

Capital
expenditure over the last 12 months resulted in improvements in the quality of our networks and increased capacity and coverage which attracted additional customers.
Strengthening of the distribution network also helped drive customer growth and make our products more accessible. We are
further improving the volume and variety of products and services we provide to our customers, as well as the accessibility and availability of our products and services by using innovative
distribution channels and techniques. Future revenue growth is increasingly dependent on our ability to obtain a larger proportion of our customers' disposable income through providing additional VAS
and data services. Future customer growth is partly dependent on the level of capital expenditure invested in the business; on increased points of sale and on innovative product and service offerings
and continued focus on a competitive value proposition. We have continued to make progress in our asset productivity initiatives and have now completed the bulk of our previously announced tower
sharing initiatives.

In
Central America, Guatemala grew its mobile customer base by 13% year-on-year, El Salvador by 11% and Honduras by 1% year-on-year. In
South America, total mobile customers increased by 10% with Colombia, Bolivia and Paraguay showing increases of 13%, 12% and 5% respectively. Customer growth continued to be strong in Africa. The two
best performing markets in terms of net mobile customer additions were Chad, which grew by 33% year-on-year, and Tanzania, which grew by 22%
year-on-year, with strong growth also in Rwanda (117%). At the end of its second full year of operation Rwanda had close to 1.2 million customers.

Given
our leading market positions and the high level of penetration in our markets we are well poised to capitalize on opportunities in cross-selling and up-selling higher
value services to our existing customer base. Our focus is therefore directed toward optimizing our customer intake and retention of higher ARPU customers rather than net intake. Overall, we expect
customer intake to continue to be quite volatile, with variable factors including the macro environment, seasonality, competitor promotions, registration requirements (Ghana for instance) and our own
marketing activities.

Our
Cable business passes close to 1.4 million homes in Central America, and provides services to more than 550,000 households giving a penetration of 39% of homes passed.
Customers take on an average of 1.3 services each and our aim is to increase our customer take-up of services by investing in network upgrades so that they are bidirectional and both
broadband internet and cable TV can be accommodated.

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Total
homes passed and revenue generating units for our cable businesses for the years ended December 31, 2011 and 2010 were as follows:

2011

2010

GrowthHomes passed (in thousands)


1,373


1,332


3
%Revenue generating units (in thousands)


721


670


8
%


Revenues:Revenues for the years ended December 31, 2011 and 2010 by operating segment were as follows:

Revenue

2011

2010

GrowthUS$ '000

US$ '000Central America*


1,842,166


1,641,441


12
%South America


1,706,139


1,373,877


24
%Africa


981,292


904,931


8
%Total


4,529,597


3,920,249


16
%


*During
2011 we integrated our cable and mobile operations in Central America to generate synergies. As a consequence we now report both cable and mobile
operations together in the Central America segment. We have restated the segment data from 2010 to reflect the reclassification of the former cable segment.


Central AmericaRevenue increased by 12% in 2011 to $1,842 million from $1,641 million for the year ended December 31, 2010. We
remain focused on attracting higher quality customers in these more penetrated markets. Despite the tough economic environment in Central America, our cable business is demonstrating good growth while
maintaining a healthy margin, reflecting the attractive opportunity in cable broadband and television services. In our cable business, we have significantly increased the speed offered to our
broadband customers. Today around two thirds of broadband customers are enjoying speeds in excess of 1Mbps, compared to only one third two years ago.

Local
currency mobile ARPU for Central America was down 3% on last year. Across Central America, our customers have shown an increased appetite for promotions and offers built on price
as they seek to optimize the use of their disposable income.

South AmericaRevenue grew by 24% in 2011 to $1,706 million from $1,374 million for the year ended December 31, 2010. ARPU was
higher than in the previous year, reaching $13.4, reflecting our ongoing focus on mobile data and other VAS. The aggressive marketing of 3G services across the region and of Paquetigos (bundles of
minutes, SMS and Internet sold for use within a certain period of time) in Colombia and Paraguay has helped to increase ARPU.

AfricaRevenue grew by 8% in 2011 to $981 million from $905 million for the year ended December 31, 2010. ARPU for Africa in
dollar terms was 55 cents lower than in 2010 declining in 2011 due to market price pressures. In local currency, revenues were up 19% year-on-year. Recent market price
pressures could contribute to a higher consumption of services (MOUs or Minutes of Use) or to an increased penetration over time.

We
have now reached EBITDA breakeven in Rwanda, just two years since our launch. We will focus on retaining the right balance between growth and profitability in Rwanda as one new player
is expected to enter the market. In DRC, we experienced difficult trading conditions in Q4, as economic activity was negatively impacted during the election period. In Ghana and Senegal, the situation
remained challenging, but we have taken action in terms of pricing in Ghana and investment in the network in Senegal which we expect to yield results over time.

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Our
focus in 2012 will be investment in services, products, infrastructure and people as we see numerous growth opportunities in our markets including customer penetration, high value
customers, continued transition to 3G networks in certain countries and value added services, in particular mobile financial services.

Further
revenue growth will likely come from all of our operations as we continue to implement our quadruple "A" and innovation strategy, particularly in the countries where we heavily
promote data and new services. This strategy will continue to drive higher penetration rates and increased consumption (more MOU's and data allowances) in our markets. Our target is to stabilize ARPU
through the controlled erosion of voice ARPU and the development of value added services.

Our
business is no longer only about basic communication. We already provide a broad range of experiences to our customers from communication to entertainment and financial services. As
we invest to bring further innovative and affordable services to our customers, we have the ambition to continue delivering above sector average growth in revenues, cash flow generation and returns.

Cost of sales:Cost of sales increased by 18% for the year ended December 31, 2011 to $1,564 million from $1,330 million
for the
year ended December 31, 2010. The primary cost of sales incurred by us is in relation to the provision of telecommunication services relates to interconnection costs, roaming costs, leased
lines to connect the switches and main base stations, cost of handsets and terminals, and the depreciation of network equipment. The interconnection and roaming costs are directly related to revenues
and increased as a result of the growth in revenues described above. The cost of leased lines increased as we continued to expand our networks and depreciation increased due to the higher capital
expenditures on our networks. Gross profit margin slightly decreased from 66% for the year ended December 31, 2010 to 65% for the year ended December 31, 2011.

Future
gross margin percentages will be mostly affected by pricing, interconnect taxes, subsidy levels and the mix of revenues generated from voice, VAS and data traffic exclusively
within our networks and those between our networks and other networks. Calls made exclusively within our networks have a higher gross margin as we do not incur interconnect charges to access other
networks. Gross margins on mobile financial services are lower than on communication as we incentivise the distribution network to reach critical scale.

Sales and marketing:Sales and marketing expenses increased by 12% for the year ended December 31, 2011 to $817 million from
$738 million for the year ended December 31, 2010. Sales and marketing costs were comprised mainly of commissions to dealers for obtaining customers on our behalf and selling prepaid
reloads, handset subsidies, general advertising and promotion costs for tigo®, point of sales materials for the retail outlets, and staff costs. As a percentage of revenues, sales and
marketing expenses slightly decreased from 19% for the year ended December 31, 2010 to 18% for the year ended December 31, 2011.

Future
sales and marketing costs will be impacted by the expansion of the distribution network and launch of further innovative products and services which requires higher spending on
awareness point of sales materials as well as subsidy levels. We are pleased to see falling prices of 3G-enabled handsets and smartphones (50% reduction for entry-level terminals) which increases
affordability and access to the data category while reducing the cost of subsidies. We may decide however, to give subsidies to more customers.

General
and administrative expenses:    General and administrative expenses increased by 14% for the year ended December 31, 2011 to $839 million from
$739 million for the year ended December 31, 2010. This increase is mainly explained by expansion of networks, as well as products and services in our mobile operations, including an
increase in staffing levels to accommodate Millicom's growth and higher depreciation of fixed assets other than network equipment. The costs of stock compensation reduced compared with 2010, when
actual results exceeded expected for our 2008 Long Term Incentive

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Plan.
In addition there was an increase in legal and other costs during the year as a result of our delisting from NASDAQ, the license dispute in Senegal, the disposal of our operation in Laos and for
compliance work. As a percentage of revenues, general and administrative expenses remained stable at 19% for both the years ended December 31, 2010 and 2011.

We
continue to seek ways to further reduce our overall general and administrative cost base by identifying synergies to rationalize our support costs, such as sharing information, human
resources, best practices and technologies amongst the operating companies. We also look to centralize negotiations of our financings and of our supply contracts for network equipment and handsets.

In
January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement for most of its cell sites. The agreement marked Millicom's first outsourcing of passive
infrastructure and is consistent with Millicom's strategy of improving both our capital and operating efficiency by focusing on our core activities. In December 2010 further sale and leaseback
agreements were signed
for most of the cell sites in Tanzania and DRC, and in July 2011 for most of the cell sites of our operation in Colombia. These transactions are not pure financial deals but increase operating margins
as they offer the benefit of sharing assets and therefore reducing costs.

Other operating expenses:Other operating expenses increased by 28% for the year ended December 31, 2011 to $96 million from
$75 million for the year ended December 31, 2010. The costs related to the corporate staff and other group support functions has increased, and the necessity to oversee and support the
significant growth in the operating companies will contribute to increase other operating expenses. Our central costs are increasing as we strengthened our skills and competencies and with the
introduction of a new organisational structure in the course of 2012.

Other operating income:Other operating income increased mainly as a result of gain on sale of towers. In addition income of
$7 million
representing a portion of $15 million received for sale of exclusivity rights to tower monetarization projects in Africa was recorded. The remaining amount will be recognised over the
2-3 year periods of exclusivity.

Operating profit:Operating profit for the years ended December 31, 2011 and 2010 by segment was as follows:

Operating profit

2011

2010

GrowthUS$ '000

US$ '000Central America*


649,159


638,598


2
%South America


504,822


361,969


39
%Africa


216,865


147,737


47
%Unallocated


(113,825
)

(106,574
)

7
%Total


1,257,021


1,041,730


21
%




Operating profit margin

2011

2010

Change
in % ptsCentral America*


35
%

39
%

(4
)%South America


30
%

26
%

4
%Africa


22
%

16
%

6
%Total


28
%

27
%

1
%


*During
2011 we integrated our cable and mobile operations in Central America to generate synergies. As a consequence we now report both cable and mobile
operations together in the Central America segment. We have restated the segment data from 2010 to reflect the reclassification of the former cable segment.


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Operating margins in Central America decreased from 39% for the year ended December 31, 2010 to 35% for the year ended December 31, 2011, as we
increased subsidies to support data growth and a shift in revenue mix with less international incoming traffic and increased VAS.

In
the future, Millicom's operating profitability will depend on the ability to continue growing revenues while maintaining control of costs and capital expenditures. Additional
regulatory taxes and tariffs may also negatively impact our operating profitability. We expect the operating margin to decline marginally as we ramp up operating investment in data, entertainment and
solutions (including mobile financial services), and higher returns on invested capital on entertainment and solutions as these services are less capital intensive than voice. We focus more and more
return on invested capital as we enter into less capital intensive activities.

In
South America, despite a decline in EBITDA margin in 2011 we continued to invest in handsets subsidies to drive data growth further and operating profit margin increased by 4%. Also
contributing to the increase was a decline in depreciation and gains on disposal of assets (while we had a loss in 2010).

In
Africa, with the launch of 3G services in Rwanda, Ghana, Tanzania and a strong uptake in VAS, we were able to increase the operating margin of the African segment from 16% for the
year ended December 31, 2010, to 22% for the year ended December 31, 2011.

Interest expense:Interest expense for the year ended December 31, 2011 decreased by 13% to $187 million, from
$215 million for
the year ended December 31, 2010. In the fourth quarter of 2010, Millicom 10% Senior Notes were redeemed early on December 1, 2010 as part of the strategy to move debt to operational
levels. An early redemption penalty on the 10% Senior Notes and costs of raising finance in El Salvador in 2010 contributed to the higher interest expense in the 2010 year.

Interest and other income:Interest and other income for the year ended December 31, 2011 remained stable at $15 million
compared to
the year ended December 31, 2010.

Revaluation of previously held interests:On July 1, 2010 Millicom reached an agreement with its local partner in Honduras whereby
Millicom's
local partner granted Millicom an unconditional call option for the succeeding five years for his 33% stake in Telefonica Celular S.A de C.V ("Celtel"), Millicom's Honduran subsidiary and Millicom
granted a put option for the same duration to the local partner in the event of a change of control of Millicom. As a result of this agreement Millicom has the right to control Celtel, which has been
fully consolidated into the Millicom Group financial statements from July 1, 2010. In 2011 Millicom reassessed its accounting treatment for the put option and restated its 2010 financial
statements with initial recognition of a $737 million liability for the put option and a corresponding equity reserve, subsequently measured at $769 million at December 31, 2010
and $745 million at December 31, 2011.

In
addition Millicom acquired a further 6% of Navega S.A. DE CV ("Navega Honduras") (formerly Metrored S.A.). As a result of these transactions Millicom has the right to
control Navega Honduras. A gain of $1,060 million was recognized on revaluation of Millicom's previously held interests in Celtel and Navega Honduras in 2010. On March 13, 2009,
Millicom's joint venture in Guatemala completed the acquisition of the remaining 55% interest in Navega.com S.A. As a result, Millicom revalued at fair value its previously held 45% interest in
Navega (held by Millicom's joint venture in Guatemala) and its previously held 49% interest in Navega Honduras a subsidiary of Navega (held by Millicom's joint venture in Honduras), recognizing a gain
of $32 million in 2010.

Other non operating (expenses) income, net:Other non operating (expenses) income, was a net expense of $4 million for the year
ended
December 31, 2011 compared with a restated non operating expense of $62 million for the year ended December 31, 2010 which included $32 million of non

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operating
expense related to the change in carrying value of the Honduras put option liability between July 1, 2010 and December 31, 2010.

Charge for taxes:The net tax credit for the year ended December 31, 2011 increased to $18 million from a tax charge of
$227 million for the year ended December 31, 2010. A non-cash tax credit of $308 million was recorded from activation of net deferred tax assets of our Colombian
operation relating to expected utilization of tax loss carry-forwards until 2015 and other timing differences related mainly to property, plant and equipment and intangible assets.

As
a consequence, the Group's effective tax rate excluding the gain on the revaluation of previously held interests in 2010 decreased significantly from 28% in 2010 to (2%) in 2011. The
effective tax rate is also reducing as we see the benefit of our tax planning initiatives and the push down of debt to operating level. The rate is also lower due to two of our operations and the
Company either reducing losses or reaching a positive tax base.

Millicom
has an established transfer pricing policy whereby it charges both royalties on revenues as well as management fees and business support services to most of its affiliates.

In
the future, as the business of the operating companies grows, management fees and brand fees charged by Millicom to the operating companies are expected to increase. In addition, as
the Group's profit before tax increases, it will further reduce the impact of the net corporate expenses and interest on the Group's effective tax rate.

The
Group effective tax rate was also impacted by Guatemala which is taxed on revenues rather than profit before tax. Such situations could change and these operating companies could be
taxed on profits before tax in future years. This would impact the Group effective tax rate.

Net profit for the year attributable to equity holders of the Company:The net profit for the year ended December 31, 2011 was
$925 million compared to a restated net profit of $1,620 million for the year ended December 31, 2010. Profit from continuing operations decreased from $1,611 million as
restated
for the year ended December 31, 2010 to $1,090 million for the year ended December 31, 2011 for the reasons stated above. The profit from discontinued operations for the year
ended December 31, 2011 was $39 million comprising the operating profit and net gain on disposal of the operation in Laos (see notes 6 and 7 of the notes to the consolidated
financial statements) compared to a profit from discontinued operations for the year ended December 31, 2010 of $12 million.

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Years Ended December 31, 2010 and 2009

The following table sets forth certain income statements items for the periods indicated:

Year Ended December 31,

Impact on
Comparative Results
for Period2010(1)
(As Restated)

2009

Amount of
Variation

Percent
Change(in thousands of U.S. dollars, except percentages)Revenues


3,920,249


3,372,727


547,522


16
%Cost of sales


(1,330,308
)

(1,202,902
)

(127,406
)

11
%Gross profit


2,589,941


2,169,825


420,116


19
%Sales and marketing


(737,691
)

(647,009
)

(90,682
)

14
%General and administrative expenses


(738,779
)

(606,213
)

(132,566
)

22
%Other operating expenses


(74,933
)

(65,580
)

(9,353
)

14
%Other operating income


3,192





3,192


N/AOperating profit


1,041,730


851,023


190,707


22
%Interest expense


(214,810
)

(173,475
)

(41,335
)

24
%Interest and other financial income


14,748


11,573


3,175


27
%Revaluation of previously held interests


1,060,014


32,319


1,027,695


3180
%Other non operating expenses, net


(61,658
)

(32,181
)

(29,477
)

(92
)%Loss (profit) from associates


(1,817
)

2,329


(4,146
)

(178
)%Profit before tax from continuing operations


1,838,207


691,588


1,146,619


166
%Charge for taxes


(227,096
)

(187,998
)

(39,098
)

21
%Profit for the year from continuing operations


1,611,111


503,590


1,107,521


220
%Profit from discontinued operations, net of tax


11,857


300,342


(288,485
)

(96
)%Non-controlling interests


(2,691
)

46,856


(49,547
)

(106
)%Net profit for the year attributable to equity holders


1,620,277


850,788


769,489


90
%


(1)Restated
to recognise the liability for the put option provided to our local partner in Honduras for his 33% stake of our Honduras operation, and the
related change in the carrying value of the liability from July 1, 2010 to December 31, 2010. A more complete description of the restatement is provided in Note 4 of the "Notes to
the Consolidated Financial Statements".


We
earn revenue mainly from provision of telecommunications services such as monthly subscription fees, airtime usage fees, roaming fees, interconnect fees, connection fees for
subscription services, other services and equipment sales, and cable services such as broadband internet, fixed line telephony, VOIP, data transmission and cable television.

Total
revenues increased by 16% for the year ended December 31, 2010 to $3,920 million from $3,373 million for the year ended December 31, 2009. Excluding the
effect of the movement in currencies, revenues increased by 10.6% year-on-year. Growth in revenue is impacted by growth in the number of customers and increasingly, the type
and number of value added services purchased by customers.

Mobile Customers

2010

2009

GrowthCentral America


13,484,996


12,901,710


5
%South America


10,139,252


8,815,217


15
%Africa


14,965,332


12,203,177


23
%Total


38,589,580


33,920,104


14
%


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As
of December 31, 2010, our worldwide total mobile customer base increased by 14% to 38,589,580 from 33,920,104 as of December 31, 2009. Prepaid customers accounted for 93% or
36,123,812 of the total mobile customers.

Our
mobile attributable customer base increased to 35,514,947 customers as at December 31, 2010 from 29,715,765 customers as of December 31, 2009, an increase of 20%.

Capital
expenditure resulted in improvements in the quality of our networks and increased capacity and coverage which attracted additional customers. Expansion of the distribution
network also helped drive customer growth and consumption by increasing the number of points of sale where we sell our products, making the products more accessible. Future customer growth is partly
dependent on the level of capital expenditure invested in the business; increased points of sale; innovative product development and a competitive value proposition.

In
Central America, Guatemala grew its mobile customer base by 17% year-on-year, Honduras declined by 6% year-on-year and El Salvador by
2%. In South America, total mobile customers increased by 15% with Bolivia, Colombia and Paraguay showing increases of 19%, 15% and 13% respectively. Customer growth was particularly strong in Africa.
The two best performing markets in terms of net mobile customer additions were Chad, which grew by 41% year-on-year, and Tanzania, which grew by 13%
year-on-year, with strong growth also in DRC, 43%, and Ghana 14%. In Senegal, net mobile customers continue to increase by 13% year-on-year, despite the
dispute with the Senegalese government regarding the Sentel license (see note 32) and the launch of a new Mobile Virtual Network Operator (MNVO) in the third quarter of 2009. At the end of its
first full year of operation Rwanda had 550,000 customers.

We
see less and less relevance of the net customer intake as a proxy for future growth, given that Millicom sells more and more high-value services like 3G whose revenues are
much higher than for basic voice customers. Overall, we expect customer intake to continue to be quite volatile, with variable factors including the macro environment, seasonality, competitor
promotions and our own marketing activities.

Our
Cable business passes more than 1.3 million homes in Central America, and provides services to more than 500,000 households giving a penetration of 38% of homes passed.
Customers take on an average of 1.3 services each and our aim is to increase this take-up of services by our customers by investing in upgrades to our networks so that they are
bidirectional and both broadband internet and cable TV can be accommodated.

Total
homes passed and revenue generating units for our cable businesses for the years ended December 31, 2010 and 2009 were as follows:

2010

2009

GrowthHomes passed (in thousands)


1,332


1,287


3
%Revenue generating units (in thousands)


670


631


6
%


Revenues:Revenues for the years ended December 31, 2010 and 2009 by operating segment were as follows:

Revenue

2010

2009

GrowthUS$ '000

US$ '000Central America


1,415,933


1,314,760


8
%South America


1,373,877


1,075,914


28
%Africa


904,931


782,150


16
%Cable


225,508


199,903


13
%Total


3,920,249


3,372,727


16
%


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Central AmericaRevenue increased by 8% in 2010 to $1,416 million from $1,315 million for the year ended December 31, 2009.
Revenues in Central America are heavily impacted by remittances from the US.

Local
currency ARPU for Central America was up 1% on last year, recovering from significant declines in 2009 with Honduras showing the weakest trend. The main factor of the decline in
Honduras was the new tax on inbound international traffic introduced in July. A similar tax was introduced in El Salvador at the end of 2009 which had a similar impact. In addition, the interconnect
rate in El Salvador and Honduras was cut in the last quarter of 2009, with tariffs being reduced accordingly. Across Central America, our customers have shown an increased appetite for promotions and
offers built on price as they seek to optimize the use of their disposable income.

South AmericaRevenue grew by 28% in 2010 to $1,374 million from $1,076 million for the year ended December 31, 2009. ARPU was
higher than in the previous year, reaching $12.9, reflecting stronger local currencies year-on-year as well as an improving trend in local currency ARPU. The aggressive
marketing of 3G services across the region and of Paquetigos (bundles of minutes, SMS and Internet sold for use within a certain period of time) in Colombia and Paraguay has helped to increase ARPU.
ARPU declines have been reduced over the year and ARPU year-on-year even increased in the last three quarters of 2010.

AfricaRevenue grew by 16% in 2010 to $905 million from $782 million for the year ended December 31, 2009. ARPU for Africa in
dollar terms was 55 cents lower than in 2009 declining in 2010 due to market price pressures. In local currency, revenues were up 19% year-on-year. Recent market price
pressures could contribute to a higher consumption of services (MOUs or Minutes of Use) or to an increased penetration over time, although there has been no evidence of it lately in Africa.

CableRevenues in 2010 for Cable were $226 million. Despite the tough economic environment in Central America, our Cable business is
demonstrating good growth, reflecting the attractive opportunity in cable broadband and TV.

Our
focus in 2011 will be on increasing customer penetration and usage within our existing footprint especially with high value customers, continued transition to 3G networks in certain
countries and value added services.

Further
revenue growth will likely come from all of our operations as we continue to implement our triple "A" strategy, particularly in the countries where Tigo® was most
recently launched and as we heavily promote new services. This strategy will continue to drive higher penetration rates and even more consumption in our markets. Our target is to stabilize ARPU
through the controlled erosion of voice ARPU and the development of value added services.

In
addition, innovation continues to be a major focus of the Group as we seek to continue to grow revenues in maturing markets by developing additional products and services through
which we can gain a greater share of customers' disposable income. In the course of 2010, we increased the contribution to recurring revenues from value added services from 21% in the first quarter to
almost 25% in the fourth quarter. We expect innovation to be the most important driver of growth in the years ahead.

Cost of sales:Cost of sales increased by 11% for the year ended December 31, 2010 to $1,330 million from $1,203 million
for the
year ended December 31, 2009. The primary cost of sales incurred by us is in relation to the provision of telecommunication services relates to interconnection costs, roaming costs, leased
lines to connect the switches and main base stations, cost of handsets and terminals, and the depreciation of network equipment. The interconnection and roaming costs are directly related to revenues
and increased as a result of the growth in revenues described above. The cost of leased lines increased as we continued to expand our networks and depreciation increased due

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to
the higher capital expenditures on our networks. Gross profit margin slightly increased from 64% for the year ended December 31, 2009 to 66% for the year ended December 31, 2010.

Future
gross margin percentages will be impacted by the mix of revenues generated from calls, take up of VAS and data made exclusively within our networks and those between our networks
and other networks. Calls made exclusively within our networks have a higher gross margin because we do not incur interconnect charges to access other networks. Future gross profit margin will also be
impacted by the volume of telephones we sell as the gross margin is generally zero on telephones.

Sales and marketing:Sales and marketing expenses increased by 14% for the year ended December 31, 2010 to $738 million from
$647 million for the year ended December 31, 2009. Sales and marketing costs were comprised mainly of commissions to dealers for obtaining customers on our behalf and selling
prepaid reloads, handset subsidies, general advertising and promotion costs for tigo®, point of sales materials for the retail outlets, and staff costs. As a percentage of revenues, sales
and marketing expenses remained stable at 19% for both the years ended December 31, 2010 and 2009.

Future
sales and marketing costs will be impacted by the level of subsidies we give on handsets, the roll-out and promotion of new and existing VAS products as well as the
expansion of the distribution network requiring higher spending on brand awareness point of sales materials. The level of future sales and marketing spend will impact both revenues and operating
profits.

General and administrative expenses:General and administrative expenses increased by 22% for the year ended December 31, 2010 to
$739 million from $606 million for the year ended December 31, 2009. This increase is mainly explained by the increase in network maintenance costs to support the expansion in our
mobile operations, but also higher staff costs from more employees needed to manage the growth of Millicom's business. The costs of stock compensation increased due to the reassessment of the
likelihood to meet the targets of our 2008 Long Term Incentive Plan. In addition there was an increase in legal and other costs during the year as a result of the license dispute in Senegal, the
disposal of our operation in Laos and for compliance work. As a percentage of revenues, general and administrative expenses increased slightly from 18% for the year ended December 31, 2009 to
19% for the year ended December 31, 2010.

We
continue to seek ways to further reduce our overall general and administrative cost base by identifying synergies to rationalize our support costs, such as sharing information, human
resources, best practices and technologies amongst the operating companies. We also look to centralize negotiations of our financings and of our supply contracts for network equipment and handsets.

In
January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement for most of its cell sites. The agreement marks Millicom's first outsourcing of passive
infrastructure and is consistent with Millicom's strategy of improving both our capital and operating efficiency by focusing on our core activities. In December 2010 further sale and leaseback
agreements were signed for most of the cell sites in Tanzania and DRC. Millicom is continuing to explore similar opportunities in some other countries where we operate and we feel we can benefit from
the same efficiencies as in Ghana, Tanzania and DRC.

Other operating expenses:Other operating expenses increased by 14% for the year ended December 31, 2010 to $75 million from
$66 million for the year ended December 31, 2009. The costs related to the corporate staff and other group support functions has increased, and the necessity to oversee and support the
significant growth in the operating companies will contribute to increase other operating expenses.

Other operating income:Other operating income increased mainly as a result of gain on sale of towers.

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Operating profit:Operating profit for the years ended December 31, 2010 and 2009 by segment were as follows:

Operating profit

2010

2009

GrowthUS$ '000

US$ '000Central America


599,396


584,341


3
%South America


361,969


227,904


59
%Africa


147,737


84,582


75
%Cable


39,202


31,295


25
%Unallocated


(106,574
)

(77,099
)

38
%Total


1,041,730


851,023


22
%




Operating profit margin

2010

2009

Change
in % ptsCentral America


42
%

44
%

(2
)%South America


26
%

21
%

5
%Africa


16
%

11
%

5
%Cable


17
%

16
%

1
%Total


27
%

25
%

2
%


Operating
margin in Central America decreased from 44% for the year ended December 31, 2009 to 42% for the year ended December 31, 2010, reflecting the impact of increasing
taxes on calls in Honduras and El Salvador.

In
South America, we were able to improve our operating margins due to the improving performance of our Colombian operations where the margin improved from negative 7% in 2009 to
positive 5% for 2010. Operating margin for our South America operating segment overall increased from 21% for the year ended December 31, 2009 to 26% for the year ended December 31, 2010

In
Africa, increasing depreciation charges from Millicom's high capital expenditure in the region as it aggressively rolled out the triple "A" operating strategy for the region
negatively impacted operating margins. Nevertheless, this led to an increase in Africa operating profit margin from 11% for the year ended December 31, 2009, to 16% for the year ended
December 31, 2010. During 2009, Millicom's operation in the DRC moved equipment to focus on the two regions with the highest economic activity in the country until the economic circumstances in
the rest of the country improve.

The
Cable operating segment increased its operating margin to 17% for the year ended December 31, 2010 from 16% for the year ended December 31, 2009.

In
the future, Millicom's operating profitability will depend on the ability to continue growing revenues while maintaining control of costs and capital expenditures.

Interest expense:Interest expense for the year ended December 31, 2010 increased by 24% to $215 million for the year ended
December 31, 2010, from $173 million for the year ended December 31, 2009. In the fourth quarter of 2010, the 10% Senior Notes were redeemed early on December 1, 2010 as
part of the strategy to move debt to operational levels. An early redemption penalty on the 10% Senior Notes and costs of raising finance in El Salvador contributed to the overall increase in interest
expense compared with the 2009 year.

Interest and other income:Interest and other income for the year ended December 31, 2010 increased by 27% to $15 million
from
$12 million for the year ended December 31, 2009. A reduction in interest rates, together with lower cash balances during the year ended December 31, 2009 compared to the current
year, impacted the interest income.

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Revaluation of previously held interests:On July 1, 2010 Millicom reached an agreement with its local partner in Honduras whereby
Millicom's
local partner granted Millicom an unconditional call option for the next five years for his 33% stake in Telefonica Celular S.A de C.V ("Celtel"), its Honduran subsidiary and Millicom granted a put
option for the same duration to the local partner in the event of a change of control of Millicom. As a result of this agreement Millicom has the right to control Celtel, which has been fully
consolidated into the Millicom Group financial statements from July 1, 2010. In addition Millicom acquired a further 6% of Navega S.A. DE CV ("Navega Honduras") (formerly
Metrored S.A.). A gain of $1,060 million was recognized on revaluation of Millicom's previously held interests in Celtel and Navega Honduras. On March 13, 2009, Millicom's joint
venture in Guatemala completed the acquisition of the remaining 55% interest in Navega.com S.A. As a result, Millicom revalued at fair value its previously held 45% interest in Navega (held by
Millicom's joint venture in Guatemala) and its previously held 49% interest in Navega Honduras a subsidiary of Navega (held by Millicom's joint venture in Honduras), recognizing a gain of
$32 million.

Other non operating expenses, net:Other non operating expenses were a restated net expense of $62 million for the year ended
December 31, 2010. The increase, of $30 million, is primarily related to the change in carrying value of the liability for the put option provided to our local partner in Honduras.
Otherwise other non operating (expenses) income remained broadly consistent with the expense of $32 million for the year ended December 31, 2009 and mainly represents exchange losses and
fair value adjustments on hedges whereas in 2009 this represented exchange losses.

Charge for taxes:The net tax charge for the year ended December 31, 2010 increased to $227 million from $188 million for
the
year ended December 31, 2009. This increase was mainly due to the higher profit before tax excluding the gain on the revaluation of previously held interests which has no tax impact.

Millicom
has an established transfer pricing policy whereby it charges both royalties on revenues as well as management fees to most of its affiliates.

As
a consequence, the Group's effective tax rate excluding the gain on the revaluation of previously held interests decreased slightly from 29% in 2009 to 28% in 2010.

The
Group effective tax rate was also impacted by operating companies that are taxed on revenues rather than profit before tax. There is a risk that these situations could change and
that these operating companies could be taxed on profits before tax in future years. This would likely increase the Group effective tax rate.

Net profit for the year attributable to equity holders of the company:The net profit for the year ended December 31, 2010 was
$1,620 million as restated, compared to a net profit of $851 million for the year ended December 31, 2009. Profit from continuing operations increased from $504 million for
the year ended December 31, 2009 to $1,611 million as restated, for the year ended December 31, 2010 for the reasons stated above. The profit from discontinued operations for the
year ended December 31, 2010 was $12 million compared to a profit from discontinued operations for the year ended December 31, 2009 of $300 million (including a
$289 million net gain on disposals of Millicom's operations in Cambodia and Sri Lankasee notes 6 and 7).

Liquidity and Capital Resources

Overview

The Group manages its financing structure and cash flow requirements based on its overall strategy and objectives, deploying financial
and other resources related to those objectives.

The
Company is in a position to control its sources of funds to finance corporate level costs, dividend payments to shareholders, and share buyback programs. Sources of funds are cash
from

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operations,
internal and external financing as well as cash inflows from sales of operations. Funding decisions are made based upon a number of internal and external factors, including required
amounts and timing of outflows, internal and external availability of funds, cost of financing and other strategic objectives.

As
at December 31, 2011, $205 million, (2010: $288 million) of the Group' cash and cash equivalents balance is at holding company level in Luxembourg and a further
$14 million (2010: $74 million) in holding companies in countries subject to low or no withholding tax on repatriation to Luxembourg.

If
funds at foreign operating subsidiary level are repatriated, taxes on each type of repatriation and each country would need to be accrued and paid, where applicable.

We
believe that our funding and working capital are sufficient for our present requirements. Further discussion on financial related risks including liquidity is provided in
note 34 of the Notes to the Consolidated Financial Statements.

As
of December 31, 2011, Millicom's total consolidated outstanding debt and other financing was $2,438 million (2010: $2,352 million). These amounts represent the
consolidated indebtedness of our subsidiaries and joint ventures. No debt or other financing was held at the level of the Company.

We
seek to finance the costs of developing and expanding mobile operations mainly at operating level on a country-by-country basis. Operations are typically
financed initially by contributions from Millicom in the form of equity, shareholder loans and, in some cases, debt. In most of our operations we have replaced such equity and debt with third party
financing, which, after initial stages of an operating company's development, is non-recourse to Millicom whenever possible. Sources of financing at the operating company level have
included; vendor financing provided by equipment suppliers, project financing from commercial banks and international agencies such as the International Finance Corporation ("IFC"), PROPARCO, FMO, EKN
and the Overseas Private Investment Corporation ("OPIC") bank credit.

We
seek to obtain financing in local currency to limit the impact of currency fluctuations, although this is not always possible due either to absence of long term credit facilities, or
lack of commercially acceptable facilities.

Cash Upstreaming

Progressive improvement in operating and financial performance of our operations has enabled ongoing upstream of excess cash to the
Company. This is accomplished through a combination of dividends, royalties, business support services, technical service fees and shareholder loan repayments. For the year ended December 31,
2011, we upstreamed $912 million from 11 of the 15 countries in which we operate. This and previously upstreamed cash was used to partly fund payment of $494 million of dividends, to
fund purchase of $498 million of shares in a share buy-back program, and will be used for further investment and distributions to
shareholders or for external growth if appropriate. In 2010, we upstreamed $819 million from 8 of 14 main countries in which we operated. In 2009, we upstreamed $591 million from 9 of 14
main countries in which we operated.

Cash Flows

Years Ended December 31, 2011 and 2010

For the year ended December 31, 2011, cash provided by operating activities was $1,611 million, compared to
$1,372 million for the year ended December 31, 2010. The increase is mainly due to growth in profitability and tower monetarization activities as described in the preceding paragraphs.

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Cash
used by investing activities was $672 million for the year ended December 31, 2011, compared to $528 million for the year ended December 31, 2010. In the
year ended December 31, 2011 Millicom used $20 million for investments in associates and to acquire subsidiaries (see notes 5 and 6 of the notes to the consolidated financial
statements), compared to a use of $5 million for the year ended December 31, 2010. Millicom also used $700 million to purchase property, plant and equipment compared to
$597 million for the same period in 2010.

Cash
used by financing activities was $1,107 million for the year ended December 31, 2011, compared to $1,335 million for the year ended December 31, 2010. In
the year ended December 31, 2011, we returned $498 million to shareholders under a share buy-back program, $494 million in dividend distributions (extraordinary
dividend of $3.00 per share and ordinary dividend of $1.80 per share) and repaid debt of $792 million while raising funds of $703 million through new financing and $1 million
through the issuance of shares.

The
net cash inflow provided by discontinued operations was $53 million for the year ended December 31, 2011 (mainly related to the net proceeds from the sale of Millicom's
operations in Laos) compared to nil in 2010.

The
net cash outflow for the year ended December 31, 2011 was $142 million compared to an outflow of $488 million for the year ended December 31, 2010.
Millicom had closing cash and cash equivalents balances of $881 million as at December 31, 2011 compared to $1,023 million as at December 31, 2010.

Years Ended December 31, 2010 and 2009

For the year ended December 31, 2010, cash provided by operating activities was $1,372 million, compared to
$1,225 million for the year ended December 31, 2009. The increase is mainly due to the growth of the profitability, as described in the preceding paragraphs.

Cash
used by investing activities was $528 million for the year ended December 31, 2010, compared to $930 million for the year ended December 31, 2009. In the
year ended December 31, 2010 Millicom used $5 million in the acquisition of joint ventures and subsidiaries (see note 5), compared to a use of $53 million for the year
ended December 31, 2009. Millicom also used $597 million to purchase property, plant and equipment compared to $727 million for the same period in 2009.

Cash
used by financing activities was $1,335 million for the year ended December 31, 2010, compared to cash provided by financing activities of $124 million for the
year ended December 31, 2009. In the year ended December 31, 2010, we returned $300 million to shareholders under a share buy-back program, $788 million in
dividend distributions (extraordinary dividend of $4.60 per share and ordinary dividends $1.24 and $1.40 per share) and repaid debt of $1,398 million while raising funds of
$1,147 million through new financing and $3 million through the issuance of shares.

The
net cash inflow provided by discontinued operations was nil for the year ended December 31, 2010 compared to a net cash inflow of $417 million for the year ended
December 31, 2009 (mainly related to the net proceeds from the sale of Millicom's operations in Sri Lanka and Cambodia).

The
net cash outflow for the year ended December 31, 2010 was $488 million compared to an inflow of $837 million for the year ended December 31, 2009.
Millicom had closing cash and cash equivalents balances of $1,023 million as at December 31, 2010 compared to $1,511 million as at December 31, 2009.

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Investments, Acquisitions, Divestments and Capital Expenditures

Investments

Millicom will continue to invest in existing mobile operations where we believe we can generate attractive returns. We may also
increase our equity ownership in certain existing operations through opportunistic buy-outs of local partners. We may participate in consolidation within our markets through the careful
evaluation, selection and pursuit of strategic opportunities and we may enter into new markets in Latin America and Africa by acquiring existing operators. We may also expand our footprint through
acquisitions or greenfield projects in areas close to our existing businesses in our existing markets such as, for example, cable or content assets.

Acquisitions and acquisition option agreements

In 2011 Millicom acquired minor investments in businesses for consideration of $9 million.

On
July 1, 2010 Millicom reached agreement with its local partner in Honduras whereby Millicom's local partner granted Millicom an unconditional call option for the succeeding
five years for his 33% stake in Celtel, Millicom's Honduras operation, and Millicom granted a put option for the same duration to the local partner in the event of a change of control of Millicom. As
a result of this agreement Millicom has the right to control Celtel, which has been fully consolidated into the Millicom Group financial statements from July 1, 2010. Previously, the results of
the Honduras operations were proportionately consolidated.

A
liability representing the redemption value of the put option of $769 million was recorded in the restated Consolidated Statement of Financial Position at December 31,
2010 and a non operating expense of $32 million recorded in the restated Consolidated Statement of Income, representing the change in carrying value of the put option liability between
July 1, 2010 and December 31, 2010.

In
addition Millicom acquired a further 6% of Navega Honduras. As a result of this transactions Millicom has the right to control Navega Honduras and from August 20, 2010 Navega
Honduras has been fully consolidated into the Millicom Group financial statements. Previously, the Honduras operations were proportionately consolidated.

Millicom
revalued at fair value its previously held 66.7% interest in Celtel and 60.7% in Navega Honduras, recognizing a gain of $1,060 million. The fair values of Celtel and
Navega Honduras were determined based on a discounted cash flow calculation.

In
2009, Millicom's joint venture in Guatemala acquired the remaining non-controlling interest in Navega.com S.A. ("Navega") and Millicom acquired the remaining
non-controlling interest in its operation in Chad. Millicom's share of the Navega acquisition cost amounted to $49 million and Millicom's share of the net cash acquired amounted to
$10 million; net cash used for this acquisition therefore amounted to $39 million. The initial consideration for the remaining non-controlling interest in Chad amounted to
$8 million and was paid in cash. As certain conditions were met, two additional payments of $1 million each were made.

Divestments and shareholding alignments

In July 2011, Millicom's operation in Colombia signed a sale and lease-back agreement with a subsidiary of American Towers,
for most of their tower assets. Approximately 63% of the towers under this agreement have been sold in 2011 and the remaining towers are expected to be transferred in 2012. The carrying value of the
portion of the remaining towers that will not be leased back and any related liabilities have been classified respectively as assets held for sale and liabilities directly associated with assets held
for sale.

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On
March 9, 2011 Millicom completed the sale of its Asian business segment with the sale of Laos.

On
August 20, 2010, to facilitate the integration of its various business lines and to create synergies, Millicom entered into agreements with its partners in Honduras and
Guatemala to align ownership of its Amnet and Navega businesses. As a result Millicom sold 45% of its Amnet operations in Guatemala to its partner in Guatemala. From this date Amnet Guatemala has been
accounted for as a joint venture and proportionately consolidated into the Millicom Group financial statements. Previously, the results of the Amnet Guatemala were fully consolidated. There was no
significant impact on profit and loss from the disposal.

In
January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement for most of its cell sites. The agreement marked Millicom's first outsourcing of passive
infrastructure and is consistent with Millicom's strategy of improving both our capital and operating efficiency by focusing on our core activities. The Ghana agreement was followed by similar
arrangements in December 2010 in Tanzania and DRC.

During
2009, Millicom completed the sale of its mobile operations in Sri Lanka (on October 16, 2009), Sierra Leone and Cambodia (respectively on November 25 and 26, 2009).
A total net gain of $289 million was recognized from the sale of these operations. Millicom's operations in Sri Lanka, Sierra Leone and Cambodia ceased to be consolidated from the date of sale.

Capital Expenditures

Our capital expenditure on property, plant and equipment, licenses and other intangibles by operating segment (including discontinued
operations) for the years ended December 31, 2011, 2010, and 2009 was as follows:

2011

2010

2009US$  '000

US$  '000

US$  '000Central America*

222,031

208,105

175,307South America

323,932

244,499

163,045Africa

296,688

277,613

398,244Unallocated items and discontinued operations

5,866

16,713

79,964Total

848,517

746,930

816,560


*During
2011 we integrated our cable and mobile operations in Central America to generate synergies. As a consequence we now report both cable and mobile
operations together in the Central American segment. We have restated the segment data from 2009 to 2020 to reflect the reclassification of the former cable segment.


Capital
expenditure over the last 12 months resulted in acquisition of addition spectrum and improvements in the quality of our networks and increased capacity and coverage which
attracted additional customers.

In
2010 we incurred capital expenditures related to our new operation in Rwanda and the roll out of tigo® across the rest of our African operations in 2010.

Commitments to Purchase Network Equipment within One Year

As of December 31, 2011, we had commitments to purchase network equipment, land and buildings and other fixed assets with a
value of $370 million from a number of suppliers, of which $348 million was within one year and $22 million more than one year. We expect to meet these commitments from our
current cash balance and from cash generated from our operations.

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As
of December 31, 2010, we had commitments to purchase network equipment, land and buildings and other fixed assets with a value of $207 million from a number of
suppliers, of which $200 million was within one year and $7 million more than one year.

Financing

We finance our operations on a country-by-country basis aiming at locating debt at operational level to improve
our tax efficiency and to mitigate country risk. As our local operations become more established and local financial markets become more developed, we have been able to finance at the level of our
operations, increasingly in local currency on a non-recourse basis. As of December 31, 2011, 100% of our debt was at operational level, and 52% of this debt was denominated in local
currency.

Millicom's
total consolidated indebtedness as of December 31, 2011 was $2,438 million and our total consolidated net indebtedness (representing total consolidated
indebtedness after deduction of cash, cash equivalents, and pledged deposits) was $1,507 million. Our annual interest expense for the years ended December 31, 2011 and 2010 was
$187 million and $215 million, respectively.

10% Senior Notes

On November 30, 2010 Millicom repurchased the remaining outstanding 10% Senior Notes for $490 million representing
$459 million of principal, $23 million of interest to December 1, 2010 and $8 million early redemption penalty.

The
Notes were initially issued on November 24, 2003, in the aggregate principal amount of $550 million of which $90 million were repurchased in 2007. The Notes were
bearing interest at 10% per annum, payable semi-annually in arrears on June 1 and December 1, and were originally due on December 1, 2013.

Other Debt and Financing

Millicom's share of total other debt and financing analyzed by operation is as follows:

2011

2010US$  '000

US$  '000Colombia(i)

543,412

522,994El Salvador(ii)

436,679

435,279Honduras(iii)

258,383

207,277Tanzania(iv)

197,270

207,086Guatemala(v)

221,364

163,631Ghana(vi)

118,426

158,183Cable Central America(vii)

131,834

133,816Chad(viii)

107,767

107,227Paraguay(ix)

98,222

105,700Bolivia(x)

70,831

99,085DRC(xi)

96,343

94,151Other

157,747

117,607Total other debt and financing

2,438,278

2,352,036Of which:Due after more than 1 year

1,816,852

1,796,572Due within 1 year

621,426

555,464


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Other
significant individual financing facilities are described below:

(i)    Colombia

In
March 2008, Colombia Móvil S.A. E.S.P ("Colombia Móvil"), Millicom's operation in Colombia, entered into a COP391 billion, 5 year
facility with a club of Colombian banks. This facility bears interest at Deposits to Fixed Terms ("DTF") plus 4.5% and is 50% guaranteed by the Company. As at December 31, 2011,
$93 million (2010: $176 million) was outstanding on this facility.

Colombia
Móvil S.A. E.S.P. also had local currency loans from its non-controlling shareholders outstanding as at December 31, 2011 of
$264 million (2010: $308 million). These loans bear interest at DTF plus 4.15% and mature between 2014 and 2015.

In
addition, as at December 31, 2011 Colombia Móvil S.A. E.S.P. had $116 million (2010: $39 million) of other debt and financing, in US$ and
local currency as well as finance lease payables of $52 million relating to lease of tower space from ATC Infraco S.A.S.

(ii)   El Salvador

On
September 23, 2010, Telemóvil Finance Co. Ltd., a fully owned subsidiary of Millicom in the Cayman Islands issued $450 million aggregate
principal amount of 8% Senior Unsecured Guaranteed Notes (the "8% Senior Notes") due on October 1, 2017. The 8% Senior Notes were issued for $444 million representing 98.68% of the
aggregate principal amount. Distribution and other transaction fees of $9 million reduced the total proceeds from issuance to $435 million. The 8% Senior Notes have an 8% per annum
coupon with an 8.25% yield and are payable semi-annually in arrears on April 1 and October 1. The effective interest rate is 8.76%.

The
8% Senior Notes are general unsecured obligations of Telemóvil Finance Co. Ltd and rank equal in right of payment with all future unsecured and
unsubordinated obligations of Millicom. The 8% Senior Notes are guaranteed by Telemóvil El Salvador, S.A., a Millicom subsidiary.

Telemóvil
Finance Co. Ltd has options to partially or fully redeem the 8% Senior Notes as follows:



October 1, 2014


104
%October 1, 2015


102
%October 1, 2016


100
%




If
either Millicom, Telemóvil Finance Co. Ltd or Telemóvil El Salvador, S.A. experience a Change of Control Triggering Event, defined
as a rating decline resulting from a change in control, each holder will have the right to require repurchase of its notes at 101% of their principal amount plus accrued and unpaid interest and all
other amounts due, if any.

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In
September 2006, Telemóvil El Salvador S.A., Millicom's operation in El Salvador, entered into a $200 million 5 year loan. The loan was syndicated
amongst a group of local and international banks and was arranged by ABN AMRO, Citigroup and Standard Bank. The loan bears interest at $ LIBOR plus 1.75%. This loan was fully repaid in 2010.

In
December 2008, Telemóvil El Salvador S.A., entered into a $12 million 2 year loan with Banco Agrícola Comercial S.A. The loan
bears interest at $ LIBOR plus 6%. This loan was fully repaid in 2010.

In
December 2009, El Salvador entered into a 2 year loan with Scotiabank, bearing interest at $ LIBOR plus 5.0%. This loan was fully repaid in 2010.

(iii) Honduras

Telefonica
Celular S.A., Millicom's operation in Honduras, has facilities with several local and international banks maturing between 2012 and 2016. These facilities are in
dollars and in Lempiras and are unsecured. Interest rates are either fixed or variable, ranging as of December 31, 2011 between 4% and 11% (2010: between 6.25% and 16.5%). As at
December 31, 2011, the amount of outstanding debt under these facilities was $258 million.

(iv)  Tanzania

In
December 2008, Millicom Tanzania Limited, Millicom's operation in Tanzania entered into facilities totaling $228 million comprising of a five year local currency syndicated
tranche for TZS95 billion at the 180 days treasury Bill rate plus 3%, a seven year $116 million EKN guaranteed financing with 45% of the facility fixed at 4.1% and 55% of the
facility at $ LIBOR plus 0.665% and a seven year $40 million tranche with Proparco at $ LIBOR plus 2.5%. All tranches are 100% guaranteed by the Company. As at December 31, 2011, the
amount outstanding under these facilities was $155 million (2010: $200 million).

In
March 2007, Millicom Tanzania Limited entered into a 5 year Citi-Opic facility, bearing interest at a rate of $ LIBOR plus 2.5%, composed of a $17.4 million
$ Tranche and a Tranche in local currency up to the equivalent of $5 million. The outstanding US$ amount under these facilities as at December 31, 2011 amounted to $2 million
(2010: $7 million).

In
December 2010, the operation signed a sale and lease-back agreement with Helios Towers Tanzania, a direct subsidiary of Helios Towers Africa, for most of its cell sites,
to be transferred to Helios Towers in 2011 and 2012. As at December 31, 2011, $40 million was outstanding on the finance lease as part of the lease back agreement.

(v)   Guatemala

In
2011 Comcel and its sister companies Asesoria en Telecomunicaciones S.A. (Asertel), Distribuidora Central de Comunicaciones, S.A. (COCENSA), Distribuidora Internacional
de Comunicaciones, S.A. (INTERNACOM) and Distribuidora de Comunicaciones de Occidente, S.A. (COOCSA) entered into a $215 million syndicated loan with Citibank, Scotiabank, Banco
General, RBC and HSBC which was fully disbursed in 2011, Millicom's share of the facility at December 31, 2011 amounted to $118 million.

As
at December 31, 2011, Comcel had financing of $27 million (Millicom's share of outstanding debt) with Citibank bearing a fixed rate of 4.40% (2010: $28 million),
and $70 million with Bancolombia and Blue Tower maturing between 2012 and 2017 bearing a floating interest rate between 5.00% and 5.06% (2010: $71 million) and other financing with local
banks of the equivalent of $6 million (2010: nil).

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Comcel
also had another 5 year facility with IFC for $100 million, bearing interest at $ LIBOR plus 4.50%. This loan was fully repaid during 2011 (2010:
$64 million).

(vi)  Ghana

In
December 2007 Millicom (Ghana) Limited, Millicom's operation in Ghana, entered into a $60 million local 5 year Facility. The loan bears interest at $ LIBOR plus 2%. In
parallel a $80 million offshore 7 year DFI (Development Finance Institution) financing which bears interest at $ LIBOR plus 2.25% was arranged. As at December 31, 2011,
$72 million (2010: $102 million) was outstanding under these facilities.

In
December 2009 the operation entered into a 3.5 year $22 million Ericsson arranged financing with EKN and Nordea priced at $ LIBOR + 0.85% fully guaranteed
by the Company. As at December 31, 2011, $19 million was outstanding under this facility (2010: $15 million).

In
January 2010, the operation signed a sale and lease-back agreement with Helios Towers Ghana, a direct subsidiary of Helios Towers Africa, for most of its cell sites, to be
transferred to Helios Towers in 2010 and 2011. As at December 31, 2011, $27 million was outstanding on the finance lease as part of the lease back agreement (2010: $41 million).

(vii) Cable Central America

In
September 2009, Millicom Cable N.V., a subsidiary of the Company, refinanced with a 2 year, $250 million senior term loan facility fully guaranteed by the Company
with Standard Bank, RBS, Nordea, DnB Nor, and Morgan Stanley. This loan agreement is allocated to the 3 main Amnet
operating entities in Costa Rica, El Salvador, and Honduras. The loan bore interest for the first six months at $ LIBOR plus 4.5%, for months seven to twelve at $ LIBOR plus 4.75% and thereafter the
margin increases by an incremental 25 basis points per quarter.

During
the course of 2010 Millicom's cable businesses in Honduras and Costa Rica obtained financing under a $105 million 7 year club deal fixed rate facility with HSBC,
Bancocolombia and Citibank bearing interest at 6.7% in Costa Rica and a $30 million 7 year bilateral fixed rate financing from Banco Industrial bearing interest at 7% in Honduras. As at
December 31, 2011, $99 million was outstanding under the facility in Costa Rica (2010: $104 million) and $33 million for the facility in Honduras (2010:
$29 million).

(viii)  Chad

In
May and August 2007, Millicom's operation in Chad signed respectively a $31 million 5 year Facility with China Development Bank bearing interest at $ LIBOR +2% and a
Euro15 million 5 year Facility with Proparco bearing interest at Euribor +2%. As at December 31, 2011 $3 and $4 million respectively (2010: $13 and $8 million
respectively) were outstanding under these facilities, both guaranteed by the Company.

In
May 2009, Millicom Chad entered into a XAF6 billion 5 year Facility co-arranged by Societe Generale Cameroun and Financial Bank priced at a fixed interest
rate of 7%, fully guaranteed by the Company. At the same date, Millicom Chad signed a XAF21 billion 5 year Subordinated Facility with Societe Generale Tchad with interest at TIAO +1.85%
and guaranteed by Nordea. This guarantee is secured by a pledged deposit of $44 million by the Company (see note 19). As at December 31, 2011 $12 and $41 million
respectively were outstanding under these facilities (2010: $12 million and $43 million respectively).

In
December 2009 the operation signed a XAF9.25 billion 5 year fixed rate financing with the IFC bearing interest at 8%. This facility is guaranteed by Millicom. As at
December 31, 2011 the amount outstanding under this facility was $17 million (2010: $18 million).

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In
January 2010 the operation entered into a 3 year deferred payment agreement with Huawei for $50 million, guaranteed by Millicom and bearing interest at LIBOR +3.75%. As
at December 31, 2011 the amount outstanding under this agreement was $15 million (2010: $13 million).

In
July 2010, Millicom Chad signed a XAF 8 billion 5 year Facility co-arranged by Proparco and BICEC (Banque Internationale du Cameron pour l'Epargne et
Le Credit) at a fixed interest rate of 8%, guaranteed by Millicom. As at December 31, 2011 the amount outstanding under this facility was $15 million (2010: nil).

(ix)  Paraguay

In
July 2008, Telefonica Cellular Del Paraguay S.A. (Telecel), Millicom's operation in Paraguay entered into a $107 million, 8 year loan with the European Investment
Bank ("EIB"). The loan bears interest at rates between $ LIBOR plus 0.234% and $ LIBOR plus 0.667%. The outstanding amount as at December 31, 2011 was $95 million (2010:
$100 million). The EIB loan is guaranteed for commercial risks by a group of banks. The commission guarantee fee is 1.25% per annum.

In
addition as at December 31, 2011, Telecel had $3 million (2010: $6 million) of other debt and financing outstanding.

(x)   Bolivia

In
December 2007, Telefonica Celular de Bolivia SA ("Telecel Bolivia"), Millicom's operation in Bolivia, signed a financing agreement for $40 million with the Nederlandse
Financieringsmaatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as the Netherlands Development Finance Company. The A tranche of $20 million was provided directly by the FMO,
is repayable over 7 years and bears interest at $ LIBOR plus 2.25%. The B tranche of $20 million is provided equally by Nordea and Standard Bank, is repayable over 5 years and
bears interest at $ LIBOR plus 2%. Both tranches are guaranteed by the Company. As of December 31, 2011, $16 million of this financing agreement was outstanding (2010:
$25 million).

In
March 2008, Telecel Bolivia signed a 4 year and 9 months financing agreement for $30 million with International Finance Corporation. The loan bears interest at $
LIBOR plus 2% and is fully guaranteed by the Company. As of December 31, 2011, $8 million of this financing agreement was outstanding (2010: $17 million).

In
addition to the above, Telecel Bolivia had $46 million of other debt and financing outstanding as at December 31, 2011 (2010: $44 million). This additional debt
comprises 7 bilateral loans in local currency bearing a fixed rate ranging from 4.5% to 6.5% and maturing between December 2012 and December 2016.

During
2011 supplier financing from Huawei (at interest rates of $ LIBOR plus 2%) and FPLT amounting to $13 million was repaid.

(xi)  Democratic Republic of Congo

In
September 2006, Oasis S.P.R.L. ("Oasis"), Millicom's operation in the Democratic Republic of Congo, entered into a $106 million, 7 year loan from the China Development
Bank to finance equipment purchases from Huawei. The loan bears interest at $ LIBOR plus 2% and is repayable over 17 equal quarterly installments commencing in 2009. This financing is 100% guaranteed
by the Company. As of December 31, 2011, $35 million was outstanding under this facility (2010: $55 million).

In
September 2009, Oasis entered into a 7 year $80 million financing with the IFC guaranteed by Millicom and bearing interest at LIBOR +5%. As at December 31, 2011
the outstanding amount under this facility was $28 million (2010: $17 million).

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In
addition at December 31, 2011, Oasis had other debt and financing of $33 million (2010: $22 million), mainly consisting of $17 million of finance leases
related to towers and $16 million of vendor financing from Huawei, bearing interest at Libor + 3% and guaranteed by Millicom.

Guarantees

In the normal course of business, the Company has issued guarantees to secure certain obligations of some of its operations under bank
financing agreements. As of December 31, 2011, the Company has issued $718 million of guarantees (2010: $762 million). This represents the outstanding amount under the total
guarantees.

Pledged assets

The Group's share of total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit or
guarantees issued by the Company as at December 31, 2011 is $1,384 million (2010: $1,380 million). The assets pledged by the Group for these debts and financings at the same date
amount to $383 million (2010: $411 million).

Effect of Exchange Rate Fluctuations

Exchange rates for currencies of the countries in which our companies operate fluctuate in relation to the US$ and such fluctuations
may have a material adverse effect on our earnings, assets or cash flows when translating local currency into our US$ reporting currency. For each venture that reports its results in a currency other
than the US$, a decrease in the value of that currency against the US$ reduces our profits as well as our assets, our liabilities, and our future dividends. To the extent that our operations retain
earnings or distribute dividends in local currencies, the amount of US$ we receive is affected by exchange rate fluctuations of those currencies against the US$. In addition, exchange rates are
impacting Millicom's earnings and cash flows due to US$ denominated debt held at local operational level where local currency borrowing facilities are either not available or not obtainable under
commercially acceptable terms.

Trend Information

Innovation continues to be a major focus of the Group as we seek to continue growing revenues in maturing markets by developing
additional products and services through which we can gain a greater share of customers' disposable income. In the course of 2011, we increased the contribution to recurring revenues from value added
services from 25% in the first quarter to almost 29% in the fourth quarter. We expect innovation to be a key driver of growth in the years ahead mainly with 3G in the short to medium term and possibly
with mobile financial services in the long run.

We
have developed a number of non-traditional distribution channels in our operations to expand our market share and reduce our operating costs. However, a risk exists that
as new competitors enter our markets and price competition intensifies, our prepaid customers may move from one mobile operator to another. This also has the effect of driving prices down, thus
eroding profitability of mobile operators. In addition, there is the risk of additional taxes, especially in those countries that face budget constraints. We believe our strong service coverage,
branding, innovation,
increasing use of non-traditional distribution channels, competitive tariffs and brand strength will enable us to compete effectively in our markets.

Research and Development, Patents and Licenses

As we established an early presence in most of the markets in which we operate, we have been able to secure our licenses at relatively
low cost. Historically, we have been successful in renewing our maturing licenses, generally on terms similar to the original licenses, although we may not be able to

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do
so in the future. Where necessary, we enter into partnerships with prominent local business partners through companies over which we typically exercise management control.

We
do not engage in research and development activities and we do not own any patents.

Off-Balance Sheet and Other Arrangements

Millicom has a number of commitments and contingencies, as described in Note 32 to the consolidated financial statements.

Critical Accounting Policies

The consolidated financial statements as of December 31, 2011 are prepared in accordance with consolidation and accounting
policies consistent with those of previous financial years.

In
preparing the consolidated financial statements, management needs to make assumptions, estimates and judgments, which are often subjective and may be affected by changing
circumstances or changes in its analysis. Material changes in these assumptions, estimates and judgments have the potential to materially alter our results of operations. We have identified below
those of our accounting policies that we believe could potentially produce materially different results if we were to change our underlying assumptions, estimates and judgments. For a detailed
discussion of these and other accounting policies, see Note 2 of the "Notes to the Consolidated Financial Statements".

Basis of Consolidation

Entities over which we have control are fully consolidated. Entities over which we have joint control are consolidated using the
proportional method that combines our proportional share of assets, liabilities, income and expenses. The definition of control is the power to govern the financial and operating policies of an entity
so as to obtain benefits from it, and is based on criteria such as the ability to vote at shareholder and board of director level. The method of consolidation for each entity is based on management's
assessments as to whether they have full or joint control.

Functional and presentation currencies

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic
environment in which the entity operates ("the functional currency"). The functional currency of each subsidiary, joint venture and associates reflects the economic substance of the underlying events
and circumstances of these entities. The Company is located in Luxembourg and its subsidiaries, joint ventures and associates operate in countries with different currencies. The Group's consolidated
financial statements are presented in U.S. dollars (the "presentation currency"). The functional currency of the Company is the U.S. dollar because of the significant influence of the U.S. dollar on
its operations.

Goodwill

Goodwill represents the excess of cost of an acquisition over the Group's share in the fair value of identifiable assets less
liabilities and contingent liabilities of the acquired subsidiary, joint venture or associate at the date of the transaction. If the fair value of identifiable assets, liabilities or contingent
liabilities or the cost of the acquisition can only be determined
provisionally, then Millicom initially accounts for goodwill using provisional values. Within twelve months of the acquisition date, Millicom then recognizes any adjustments to the provisional values
once the fair value of the identifiable assets, liabilities and contingent liabilities and the cost of the acquisition have been finally determined. Adjustments to provisional fair values are made as
if the adjusted fair values had been recognized from the acquisition date. Goodwill on acquisition of subsidiaries and joint ventures is included in "intangible assets, net". Goodwill on acquisition
of associates is included in "investments in associates". Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Gains or losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold.

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Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment
losses on goodwill are not reversed.

For
the purpose of impairment testing, goodwill acquired in a business combination is, from acquisition date, allocated to each of the Group's cash-generating units or groups
of cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or
groups of units. Each unit or group of units to which the goodwill is allocated:



Impairment
is determined by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. Where
the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. Where goodwill forms
part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in this manner is measured based on the relative values of the
operation disposed and the portion of the cash-generating unit retained.

Trademarks and Customer bases

Trademarks and customer bases are recognized as intangible assets only when acquired in business combinations or in transactions
increasing ownership in joint ventures. Cost represents fair value as at the date of acquisition. Trademarks and customer bases have a finite useful life and are carried at cost less accumulated
amortization. Amortization is calculated using the straight-line method to allocate the cost of the trademarks and customer bases over their estimated useful lives. The estimated useful
life for trademarks and customer bases are based on the specifications of the market in which they exist. Trademarks and customer bases are recorded under the caption "Intangible assets, net".

Impairment of Non-Financial Assets

At each reporting date the Group assesses whether there is an indication that an asset may be impaired. If any such indication exists,
or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. The Group determines the recoverable amount based on the higher of its fair
value less cost to sell and its value in use, and is determined on an individual asset basis, unless the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Where no comparable market
information is available, the fair value less cost to sell is determined based on the estimated future cash flows discounted to their present value using a discount rate that reflects current market
conditions of the time value of money and the risk specific to the asset. In addition to the evaluation of possible impairment, the foregoing analysis also evaluates the appropriateness of the
expected useful lives of the assets. Impairment losses of continuing operations are recognized in the consolidated income statement in those expense categories consistent with the function of the
impaired asset.

An
assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. Other than for goodwill, a previously recognized impairment loss is

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reversed
if there has been a change in the estimate used to determine the asset's recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased
to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior
years. Such a reversal is recognized in profit or loss. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual
value, on a systematic basis over its remaining useful life.

Where
no comparable market information is available, management bases its view on recoverability primarily on cash flow forecasts. In addition to the evaluation of possible impairment to
the assets carrying value, the foregoing analysis also evaluates the appropriateness of the expected useful lives of the assets.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. If maturing more than 12 months after the end of the reporting period these are classified within non-current assets. Otherwise they are included in current assets.
Loans and receivables are carried at amortized cost using the effective interest method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or
impaired, as well as through the amortization process.

Financial instruments at fair value through profit or loss

Financial instruments at fair value through profit or loss are financial instruments held for trading. Their fair value is determined
by reference to quoted market prices at the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques. Such techniques include using
recent arm's length market transactions, reference
to the current market value of a substantially similar instrument, discounted cash flow analysis and option pricing models. A financial instrument is classified in this category if acquired
principally for the purpose of selling in the short-term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified
as current assets.

Financial Instruments that contain obligations to purchase own equity instruments

Contracts that contain obligations for the Company to purchase its own equity instruments for cash or other financial assets are
initially recorded as financial liabilities based on the present value of the redemption amounts with a corresponding reserve in equity. Subsequently the carrying value of the liability is remeasured
at the present value of the redemption amount with changes in carrying value recorded in other non-operating (expenses) income, net. If the contracts expire without delivery, the carrying
amounts of the financial liabilities are reclassified to equity.

Non-current assets (or disposal groups) held for sale and related liabilities

Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount
and fair value (less costs to sell if their carrying amount is expected to be recovered principally through a sale transaction rather than through continuing use). The liabilities of disposal groups
are classified as "Liabilities directly associated with assets held for sale".

Borrowings and transaction costs

Borrowings are initially recognized at fair value, net of directly attributable transaction costs. After initial recognition borrowings
are subsequently measured at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any discount or premium on

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acquisition
and any fees or costs that are an integral part of the effective interest rate. Any difference between the initial amount and the maturity amount is recognized in the consolidated income
statement over the period of the borrowing.

Borrowings
are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the statement of
financial position date.

Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, if it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects
some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the consolidated income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognized as interest expense.

Revenue Recognition

Revenue comprises the fair value of consideration received or receivable for the sale of goods and services, net of value added tax,
rebates and discounts and after eliminating sales within the Group.

Revenue
is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognized:

These
recurring revenues consist of monthly subscription fees, airtime usage fees, interconnection fees, roaming fees and fees from other telecommunications services such as data
services, short message services and other value added services. Recurring revenues are recognized on an accrual basis, i.e. as the related services are rendered. Unbilled revenues for airtime
usage and subscription fees resulting from services provided from the billing cycle date to the end of each month are estimated and recorded.

Subscription
products and services are deferred and amortized over the estimated life of the customer relationship. Related costs are also deferred, to the extent of the revenues
deferred, and amortized over the estimated life of the customer relationship. The estimated life of the customer relationship is calculated based on the percentage of historical disconnections for the
same type of customer.

Where
customers purchase a specified amount of airtime in advance, revenues are recognized as credit is used. Unutilized airtime is carried in the statement of financial position and is
included in deferred revenue within "other current liabilities".

Revenues
from value added content services such as video messaging, ringtones, games etc., are recognised net of payments to the providers of these services when the providers are
responsible for the contents and for determining the price paid by the customer and, as such, the Group is considered to be acting in substance as an agent only. Where the Group is responsible for the
content and determines the price paid by the customer the revenue is recognised gross.

Revenues
from the sale of handsets and accessories on a stand-alone basis without multiple deliverables) are recognized when the significant risks and rewards of ownership of handsets
and accessories have been passed to the buyer.

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Revenue
arrangements with multiple deliverables ("Bundled Offers" such as equipment and services sold together) are divided into separate units of accounting if the deliverables in the
arrangement meet certain criteria. The arrangement consideration is then allocated among the separate units of accounting based on their relative fair values or using the residual method. Revenue is
then recognized separately for each unit of accounting.

Share based Compensation

Up until May 2006, share options were granted to Directors, management and key employees. The fair value of the equity instruments
granted in exchange for the services received was recognized as an expense over the vesting periods which ended in 2010. The total amount to be expensed over the vesting period was determined by
reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example profitability and sales growth targets). Non market vesting
conditions were included in assumptions about the number of options that were expected to vest. At each statement of financial position date, the Group revised its estimate of the number of options
that were expected to vest. It recognized the impact of the revision of original estimates in the consolidated income statement, with a corresponding adjustment to equity. The dilutive effect of
outstanding options is reflected as additional share dilution in the computation of earnings per share.

Subsequent
to May 2006, share awards have been granted to the Directors, management and key employees.

The
cost of these equity transactions was recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions were fulfilled,
ending on the date on which the relevant employee becomes fully entitled to the award (the vesting date). The cumulative expense recognized for equity settled transactions at each reporting date until
the vesting date reflect the extent to which vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest.

No
expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Such awards are treated as vesting irrespective
of whether or not the market conditions are satisfied, provided that all other performance conditions are satisfied. Where the terms of an equity settled award are modified, as a minimum an expense is
recognized as if the terms had not been modified. In addition, an expense is recognized for any modification which increases the total fair value of the share based payment arrangement, or is
otherwise beneficial to the employee as measured at the date of modification.

Deferred tax

Deferred income tax is provided using the liability method and calculated from temporary differences at the statement of financial
position date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences,
except where the deferred tax liability arises from the
initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting, nor taxable, profit or
loss.

Deferred
income tax assets are recognized for all deductible temporary differences and carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary difference and the carry-forward of unused tax credits and unused tax losses can be utilized, except where the deferred tax
assets relate to deductible temporary differences from initial recognition of an asset or liability in a transaction that is not a business combination, and, at the time of the transaction, affects
neither accounting, nor taxable, profit or loss.

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The
carrying amount of deferred income tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to utilize the deferred income tax asset. Unrecognized deferred income tax assets are reassessed at each statement of financial position date and are recognized to the extent
it is probable that future taxable profit will enable the deferred tax asset to be recovered.

Deferred
income tax assets and liabilities are measured at the tax rate expected to apply in the year when the assets are realized or liabilities settled, based on tax rates and tax laws
that have been enacted or substantively enacted at the statement of financial position date. Income tax relating to items recognized directly in equity is recognized in equity and not in the
consolidated income statement. Deferred tax assets and deferred tax liabilities are offset where legally enforceable set off rights exist and the deferred taxes relate to the same taxable entity and
the same taxation authority.

Discontinued operations

Revenues and expenses associated with discontinued operations are presented in a separate line on the consolidated income statement.
Comparative figures in the consolidated income statement representing the discontinued operations are also reclassified to a separate line. Discontinued operations are those with identifiable
operations and cash flows (for both operating and management purposes) and represent a major line of business or geographic unit which has been disposed of, or is available for sale.

Recent Accounting Developments

IFRS Developments

The consolidated financial statements as of December 31, 2011 are prepared in accordance with consolidation and accounting
policies consistent with those of the previous financial years.

There
are no IFRS's or IFRIC interpretations that are effective for the first time for the financial year beginning January 1, 2011 that would be expected to have a material
impact on the Group.

The
following standards, amendments and interpretations issued are not effective for the financial year beginning January 1, 2011 and have not been early adopted.



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There
are no other IFRS's or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

Tabular Disclosure of Contractual Obligations

Contractual Obligations

The Group has various contractual obligations to make future payments, including debt agreements, a contractual obligation for a put
option, payables for license fees and lease obligations.

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The
following table summarizes our obligations under these contracts due by period as of December 31, 2011.

Within
1 year

Within
2 - 5 years

After
5 years

Total(in thousands of U.S. dollars)Debt (after unamortized financing fees)


621,426


1,173,904


642,948


2,438,278Put option


745,145








745,145Future interest commitments


135,667


342,098


26,484


504,249Finance leases


36,507


153,212


263,303


453,022Operating leases


62,480


157,843


18,587


238,910Capital expenditure


348,016


22,409





370,425Total


1,949,241


1,849,466


951,322


4,750,029


The
following table summarizes our obligations under these contracts due by period as of December 31, 2010.

Within
1 year

Within
2 - 5 years

After
5 years

Total(in thousands of U.S. dollars)Debt (after unamortized financing fees)


555,464


1,162,320


634,252


2,352,036Put option


769,378








769,378Future interest commitments


145,664


346,193


26,109


517,966Finance leases


6,874


33,438


79,430


119,742Operating leases


63,375


235,195


143,390


441,960Capital expenditure


199,628


7,212





206,840Total


1,740,383


1,784,358


883,181


4,407,922


ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Board of Directors

Directors

Millicom's directors are as follows:

Name

Position

Independent

Year first
Elected

Date of
Expiration
of TermMr. Allen Sangines-Krause(i)(iv)

Chairman

Yes


2008


May 2012Mr. Hans Holger Albrecht

Member

Yes


2010


May 2012Ms. Mia Brunell Livfors(iv)

Member

No


2007


May 2012Ms. Donna Cordner

Member

Yes


2004


May 2012Mr. Paul Donovan

Member

Yes


2009


May 2012Mr. Omari Issa

Member

Yes


2010


May 2012Mr. Daniel Johannesson(ii)

Member

Yes


2003


May 2011Mr. Michel Massart(ii)

Member

Yes


2003


May 2011Mr. Kim Ignatius(iii)

Member

Yes


2011


May 2012


(i)Appointed
as Chairman on May 25, 2010.(ii)Up
to May 31, 2011(iii)From
May 31, 2011(iv)Not
independent from major shareholders (Kinnevik Investment AB)


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Mr. Allen Sangines-Krause (born 1959)Chairman, Non-executive Director, Chairman of the Compensation Committee and Member of the Nominations
Committee.Mr. Sangines-Krause was elected to the Board of Millicom in May 2008 and appointed as Chairman in May 2010. He worked for Goldman Sachs between
1993 and 2007, working in a variety of senior positions from Chief Operating Officer for Latin America based in Mexico City and New York and most recently as Managing Director out of London. Prior to
joining Goldman Sachs, Mr. Sangines-Krause was with Casa de Bolsa Inverlat, in Mexico, and before that he was a Founding Partner of Fidem, S.C., a Mexican investment bank, which was acquired by
Casa de Bolsa Inverlat in 1991. Mr. Sangines-Krause currently sits on the Board of Investment AB Kinnevik and is Chairman of Rasaland, a real estate investment fund. He is a member of the
Council of the Graduate School of Arts and Sciences of Harvard University.

Mr. Hans-Holger Albrecht (born 1963)Non-executive Director and Member of the Compensation
Committee.Mr. Albrecht was elected to the Board of Millicom in May 2010 and is President and CEO of Modern Times Group MTG AB, a position he has held since
2000. During this period, MTG's broadcasting operations have expanded strongly from its core Nordic and Baltic regions to become one of the leading commercial broadcasters in Europe. Before joining
MTG in 1997, Mr Albrecht worked for Daimler-Benz and for the Luxembourg-based media group CLT, where he was responsible for all television activities and for
business development in Germany and Eastern Europe. Mr. Albrecht is co-Chairman of CTC Media Inc, the largest commercial television broadcaster in Russia, in which MTG has a 38.9%
stake, and a member of the Board of the International Emmy Association in New York. He was born in Brussels, Belgium and studied at the University of Freiburg in Germany, at Yale University in the
USA, and at the University of Bochum, Germany, where he received a Master of Law degree.

Ms. Mia Brunell Livfors (born 1965)Non-executive Director and Member of the Compensation Committee and Chairman of the CSR
Committee.Ms. Brunell Livfors was elected to the Board of Millicom in May 2007. From August 2006, Ms. Brunell Livfors has been Chief Executive
Officer of Investment AB Kinnevik ("Kinnevik"), a Swedish public company managing a portfolio of long-term investments in a number of public companies such as Millicom. Ms. Brunell
Livfors joined Kinnevik owned company Modern Times Group MTG AB in 1992, and was appointed Chief Financial Officer in 2001. As Chief Financial Officer, Ms. Brunell played a central role in
MTG's development. Currently, Ms. Brunell Livfors is a member of the Board of Directors of Korsnäs AB, Tele2 AB, CDON AB, Metro International S.A., Transcom
WorldWide S.A., Modern Times Group (MTG) and Hennes & Mauritz AB (H&M).

Ms. Donna Cordner (born 1956)Non-executive Director and Member of the Audit Committee and CSR
Committee.Ms. Cordner was elected to the Board of Millicom in May 2004. She was formerly a Managing Director and Global Head of Telecommunications and
Media Structured Finance at Citigroup. She has also held senior management positions at Société Générale and ABN Amro Bank N.V. in
the U.S. and Europe, including as Director of ABN's Latin American Telecommunications Project Finance and Advisory Group. Until July 2005, Ms. Cordner was the Chief Executive Officer of HOFKAM
Limited, which is the largest rural microfinance company in Uganda, and continues to advise HOFKAM as a consultant. She was named Executive Vice President of Corporate Finance and Treasury for Tele2AB
effective March 2007 and was Market Area Director and Chief Executive Officer for Russia between March 2008 and July 2009.

Mr. Paul Donovan (born 1958)Non-executive Director, Member of the Audit Committee.Mr. Donovan was elected to
the Board of Millicom in May 2009. He was appointed director and Chief Executive Officer of Eircom on 1 July 2009 and before that, Mr. Donovan was Chief Executive, EMAPA Region for the
Vodafone Group until 2008. Mr. Donovan's background includes a decade in fast moving consumer goods before he moved into the technology sector, principally with BT and Vodafone. His career with
Vodafone started 11 years ago and for the last six years, he has overseen

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Vodafone's
operations in subsidiaries in Eastern Europe, Middle East and Asia Pacific. Africa, the US, India and China were added to his remit in 2006. As part of his role, he sat on the boards of
numerous subsidiaries and joint ventures during this period. He holds a BA (with Honors) from University College, London and an MBA from the Bradford University Management Centre with a specialization
in Finance and Business Policy. Mr. Donovan is an Executive Director of Eircom Group Limited, Eircom Ltd, and Valentia Communications.

Mr. Omari Issa (born 1947)Non-executive Director and Member of the Audit Committee.Mr. Issa was elected to
the Board of Millicom in May 2010 and is the CEO of Investment Climate Facility for Africa. He is a Tanzanian citizen who is responsible for managing the ICF's seven year program to improve Africa's
investment climate and remove barriers to growth. Mr. Issa has extensive business experience in the public and private sectors, having worked in both Africa and abroad. He has firsthand
experience of the realities of doing business in Africa, having previously worked as Executive Director and Chief Operating Officer of Celtel International, where he played an instrumental role in
managing the company's growth and expansion across the continent. Prior to working at Celtel, Mr Issa spent fourteen years with the IFC and six years with the World Bank. He has a Bachelor of
Science (Honours) from The Polytechnic of Central London, and an MBA from Columbia University, New York.

Mr. Kim Ignatius (born 1956)Non-executive Director and Chairman of the Audit Committee.Mr. Ignatius was
elected to the Board of Millicom in May 2011. He is the CFO of Sanoma Corporation, the European media group, which he joined in 2008. Previously, Mr Ignatius was EVP and CFO of TeliaSonera AB
between 2003 and 2008 and EVP and CFO of Sonera Oyj between 2000 and 2002. Before joining Sonera, Mr. Ignatius was Group CFO and a member of the Executive Board of Tamro Oyj, a leading
pharmaceutical distributor listed on the Helsinki Stock Exchange, between 1997 and 2000. From 1984 to 1996 he worked for Amer Group in a variety of finance and general management roles in both North
America and Europe. He started his career with Oy Hanke-Palsbo Ab and Fruehauf Corporation in a series of finance roles. Mr. Ignatius graduated with a B.Sc Economics from the Aalto University
School of Economics in Helsinki.

Board Practices

On May 30, 2011, Millicom voluntarily delisted its ordinary shares from NASDAQ in the United States and consolidated the listing
of its shares onto one single exchange, NASDAQ OMX Stockholm. The Company maintains the current listing of its shares as Swedish
Depository Receipts ("SDRs") on NASDAQ OMX Stockholm, which became Millicom's primary listing effective on June 3 2011. As at the end of 2011, 93% of total shares are in the form of SDR's.
Ordinary shares are still traded OTC in the US.

With
the primary listing in Stockholm, Millicom intends to deregister under US rules when it is eligible to do so, and will continue to be subject to NASDAQ OMX Stockholm's listing rules
and reporting requirements and the high standards of corporate governance prevalent in Sweden. The Company has been bound by the Swedish Code of Corporate Governance (the "Code") as from 30 May
2011. Before that date, Millicom applied the corporate governance rules of the NASDAQ Stock Market in the US.

Millicom's
Board of Directors has developed and continuously evaluates its work procedures in line with the corporate governance rules of NASDAQ in the US, and since May 30, 2011
the Swedish Code, regarding reporting, disclosure and other requirements applicable to listed companies. The Board's work procedures also take into account the requirements of the US Sarbanes-Oxley
Act of 2002 to the extent it applies to the Company.

The
Board has adopted work procedures to divide the work between the Board and the President and Chief Executive Officer ("the CEO"). The Chairman has discussions with each member of the

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Board
regarding the work procedures and the evaluation of the Board work. The other members of the Board evaluate the performance of the Chairman each year. The Board also evaluates yearly the
performance of the CEO. The main task of the Board committees (Audit, Nomination, Compensation and CSR) is to work on behalf of the Board within their respective areas of responsibility. From time to
time, the Board delegates authority to an "ad hoc" committee so that it may resolve a specific matter on its own without having to go before the full Board for approval.

The
Board of Directors has adopted a corporate policy manual, Millicom's central reference for all matters relating to its corporate governance policy. Regional policies that are more
stringent or detailed than those set out in the corporate policy manual are adopted as necessary. The Company's Code of Ethics is a part of the corporate policy manual. All senior managers and members
of the Board of Directors must sign a statement acknowledging that they have read, understood and will comply with the Code of Ethics.

In
2011, the Board had 5 meetings in person and 3 by telephone.

The
work of the Board is divided between the Board and its principal committees:



Audit Committee.Millicom's directors have established an Audit Committee that convenes at least four times a year, comprising four
directors,
Mr. Ignatius (Chairman and financial expert) from May 31, 2011 (replacing Mr. Michel Massart who was the Chairman and financial expert until May 31, 2011),
Mr. Donovan, Mr. Issa and Ms. Cordner. This committee has responsibility for planning and reviewing the financial reporting process together with the preparation of the annual and
quarterly financial reports and accounts and the involvement of external auditors in that process. The Audit Committee focuses particularly on compliance with legal requirements (including compliance
with Sarbanes Oxley Act), accounting standards, independence of external auditors, audit fees, the internal audit function, the fraud risk assessment, risk management and ensuring that an effective
system of internal financial controls exists. The ultimate responsibility for reviewing and approving Millicom's annual report and accounts remains with the Board. The Audit Committee met 9 times
during 2011 and Millicom's external auditors participated in each such meeting.

Compensation Committee.Millicom's Compensation Committee is chaired by Mr. Sangines-Krause who replaced Mr. Johannesson on
May 31, 2011. The two other members of the committee are Mr. Albrecht and Ms. Brunell Livfors. Ms. Brunell became a member of the Committee after the Annual Meeting of
Shareholders on May 29, 2007 and Mr. Albrecht became a member after the Annual Meeting of Shareholders on May 2011 replacing Mr. Donovan. Ms. Brunell Livfors is a
non-independent director and Mr. Albrecht is an independent director.

The
Compensation Committee reviews and makes recommendations to the Board regarding the compensation of the Chief Executive Officer, reviews the compensation of the other senior
executives and oversees management succession planning. Millicom's share options program terminated in May 2006 and was replaced by grants of restricted shares to management under
Long-Term Incentive Plans. The grants of restricted shares to management under these plans are determined by the Committee and approved by the Board.

CSR Committee.Millicom's directors have established a Corporate Social Responsibility (CSR) Committee that convenes at least two times
a year,
comprising two directors, Ms. Brunell Livfors

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(Chairman)
and Ms. Cordner. This committee has responsibility for overseeing and making recommendations to the Board regarding the management of CSR.

Nominations Committee.From January 1, 2011 until May 31, 2011 Millicom's Nominations Committee was chaired by
Mr. Johannesson.
The two other members were Mr. Albrecht and Mr. Sangines Krause.

On
May 31, 2011, for the purpose of being compliant with the Swedish Code of Corporate Governance, the Shareholders decided on a new procedure to appoint the members of the
Nomination Committee, in substance as follows:

A
Nomination Committee of major shareholders in Millicom was formed during October 2011 in consultation with the larger shareholders of the Company as per September 30, 2011 and
in accordance with the resolution of the 2011 Annual General Meeting. The Nomination Committee should consist of at least three members, with a majority representing the larger shareholders of the
Company. The Nomination Committee is comprised of Cristina Stenbeck, on behalf of Investment AB Kinnevik, Kerstin Stenberg on behalf of Swedbank Robur funds and Allen Sangines-Krause in his capacity
as Chairman of the Board of Directors in Millicom. (Mr. Allen Sangines Krause is also a member of the Board of Investment AB Kinnevik.)

The
Nomination Committee is responsible for preparing proposals for the election of Directors of the Board, Chairman of the Board and auditor, in the case that an auditor should be
elected, and their remuneration as well as a proposal on the Chairman of the Annual General Meeting.

Corporate Policy Manual.The Board has adopted a Corporate Policy Manual, which is Millicom's central reference for all matters
relating to its
corporate governance policy and other policies in the areas of ethics, accounting, human resources, etc. Regional policies that are more stringent or detailed than those set out in the Millicom
Corporate Policy Manual are adopted as necessary. The Code of Ethics is a part of the Millicom Corporate Policy Manual. The Company's directors, senior executives and Group employees receive the Code
of Ethics upon joining Millicom and must acknowledge that they have read, understood and will comply with the Code of Ethics.

Directors' Service Agreements.None of Millicom's directors have entered into service agreements with Millicom or any of its
subsidiaries providing
for benefits upon termination of their respective directorships.

Remuneration of Directors

The remuneration of the members of the Board of Directors of the Company (the "Board") comprises an annual fee. Between May 2006 and
May 2010 Directors' remuneration also included share based compensation (restricted shares) and until May 2006 Directors were issued share options. Director remuneration is proposed by the Nominations
Committee and approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

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The
remuneration charge for the Board for the years ended December 31, 2011, 2010 and 2009 was as follows:

Other members
of the boardChairmanTotalNo. of shares
and share
options



No. of shares
and share
options

US$ '000US$ '000

US$ '0002011Fees





203





697


900Total





203





697


9002010Fees





77





444


521Share based compensation:(i)Restricted shares(ii)


1,007


82


4,270


350


432Total





159





794


9532009Fees





106





584


690Share based compensation:(i)Restricted shares(ii)


1,441


81


5,111


287


368Total





187





871


1,058


(i)See
note 24 of the notes to the consolidated financial statements.(ii)Restricted
shares cannot be sold for one year from date of issue.


The
number of shares and share options beneficially owned by the Directors as at December 31, 2011 and 2010 was as follows:

Chairman

Other
members of
the Board

Total2011Shares


2,318


19,560


21,878Share options





10,000


10,0002010Shares


2,318


73,158


75,476Share options





35,000


35,000


Shareholdings and Stock Options at December 31, 2011

Number of
shares held

Number of shares over
which options are heldMr. Allen Sangines-Krause


2,318


Mr. Kim Ignatius





Mr. Hans Holger Albrecht


610


Ms. Mia Brunell Livfors


2,359


Ms. Donna Cordner


14,625


10,000Mr. Paul Donovan


1,356


Mr. Omari Issa


610





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Director Remuneration

2011
US$ '000

2010(1)
US$ '000

2009(1)
US$ '000Mr. Allen Sangines-Krause


203


159


119Mr. Kim Ignatius


142





Mr. Hans Holger Albrecht


99


96


Ms. Mia Brunell Livfors


99


105


132Ms. Donna Cordner


119


115


119Mr. Paul Donovan


119


124


146Mr. Omari Issa


119


115


Mr. Daniel Johannesson (former director)





105


209Mr. Michel Massart (former director)





134


174Mr. Kent Atkinson (former director)








159Total


900


953


1,058


(1)Includes
cash and share based compensation. Cash compensation converted from Euros to USD at average exchange rates for each year.


Senior Management and Employees

Senior Executive Team

Name

PositionMikael Grahne

President and Chief Executive Officer (CEO)François-Xavier Roger

Chief Financial Officer (CFO)Mario Zanotti

COO Categories and Global SourcingRegis Romero

COO Global MarketsJo Leclère

Chief HR Officer


Mikael Grahne,(born 1953)President and Chief Executive Officer.Mikael Grahne was
appointed Chief Executive Officer in March 2009; he joined Millicom in February 2002 as the Chief Operating Officer, having previously been President of Seagram Latin America. Prior to joining
Seagram, he was the regional president of a division of the EMEA region at PepsiCo and held various senior management positions with Procter & Gamble. Mr. Grahne has an MBA from the
Swedish School of Economics in Helsinki, Finland.

François-Xavier Roger, (born 1962)Chief Financial Officer.François-Xavier Roger joined Millicom in
September 2008 from Groupe Danone where he served as Vice-President Corporate Finance since 2006 and previously as Chief Financial Officer for Danone Asia from 2000 to 2005. Prior to this,
he worked at Sanofi Aventis and at Hoechst Marion Roussel (now Sanofi) where he held finance positions for Hoechst in Asia, Africa and Latin America. He majored in Marketing for his MBA at The Ohio
State University and has a Master's degree in Major Accounting from Audencia Business School in France.

Mario Zanotti,(born 1962)Chief of Latin America (COO Categories and Global Sourcing from January
2012).Mario Zanotti was appointed Chief of Latin America in 2008 having previously been Head of Central America since 2002 having joined Millicom in 1992 as a
General Manager of Telecel in Paraguay. In 1998 he became Managing Director of Tele2 Italy and in 2000 he was appointed Chief Executive Officer of YXK Systems. Before joining Millicom he worked as an
electrical engineer at the Itaipu Hydroelectric Power Plant and later as Chief Engineer of the biggest electrical contractor company in Paraguay. He has a degree in Electrical Engineering from the
Pontificia Universidade
Catolica in Porto Alegre, Brazil and an MBA from INCAE and the Universidad Catolica de Asuncion, Paraguay.

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Regis Romero,(born 1971)Chief of Africa (COO Global Markets from January 2012).Regis
Romero was appointed Chief of Africa in 2008. He has been with Millicom since 1998, previously as Commercial Manager in Bolivia, then as Chief Operating Officer in Paraguay and as Co-Head
of Africa since 2006. Prior to joining Millicom, Mr. Romero worked as investment consultant for Interamerican Development Bank in Paraguay. He has a Bachelors' degree in Business Administration
from National University, California, United States of America. He also holds a Master's degree in Business Management from EDAN in Asuncion, Paraguay.

Jo Leclère, (born 1966)Chief HR Officer.Jo Leclère was appointed Chief HR Officer of Millicom in 2011. He
joined Millicom in February 2009 as Head of Reward & Performance, having previously been VP Operations Europe at NorthgateArinso, a global HR consulting and outsourcing provider. Prior to this
position, he was HR Services Director at PricewaterhouseCoopers. He holds a master's degree in Law, a postgraduate degree in Tax and a bachelor's degree in Economics.

Remuneration of Officers

The remuneration of the Officers of the Company ("Officers") comprises an annual base salary, an annual bonus, share based
compensation, social security contributions, pension contributions and other benefits. The bonus and share based compensation plans are based on actual performance (including individual and Group
performance). Share based compensation is granted once a year by the Compensation Committee of the Board. Since 2006, the annual base salary and other benefits of the Chief Executive Officer ("CEO")
are proposed by the Compensation Committee and approved by the Board and the annual base salary and other benefits of the Chief Financial Officer ("CFO") and Chief Operating Officers ("COO's") were
proposed by the CEO and approved by the Compensation Committee.

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The
remuneration charge for the Officers for the years ended December 31, 2011, 2010 and 2009 was as follows:

Current
Chief
Executive
Officer

Former
Chief
Executive
Officer

Chief
Financial
OfficerUS$ '000

US$ '000

US$ '0002011Base salary


1,323





676Bonus


1,915





798Pension


406





105Other benefits


158





71Total


3,802





1,650Share based compensation:(i)Shares issued/charge under long term incentive plans(ii)


2,862





1,2672010Base salary


1,261





614Bonus


1,823





624Pension


385





112Other benefits


178





74Total


3,647





1,424Share based compensation:(i)Shares issued/charge under long term incentive plans(ii)


2,874





1,243Charge for share options


5





2009Base salary


1,380


2,349


625Bonus


1,988


1,388


503Other benefits


142





Total


3,510


3,737


1,128Share based compensation:(i)Shares issued/charge under long term incentive plans(ii)


1,598


(2,829
)(iii)

129Charge for share options


16


10





(i)See
note 24.(ii)Share
awards of 34,937 and 14,814 were granted in 2011 under the 2011 LTIPs to the CEO and CFO. Share awards of 41,628 and 19,891 were granted in 2010
under the 2010 LTIPs to the CEO and CFO. Share awards of 35,011 and 13,323 were granted under the 2009 LTIPs to the CEO and CFO.(iii)Reversal
for non-vested shares of the former CEO, Marc Beuls.


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The
number of shares and unvested share awards beneficially owned by the senior management as at December 31, 2011 and 2010 was as follows:

Chief
Executive
Officer

Chief
Financial
Officer

Total2011Shares


666,193


7,800


673,993Share awards not vested


105,063


45,228


150,2912010Shares


648,647


905


649,552Share awards not vested


99,431


37,720


137,151


Severance Payments

If the employment of Millicom's senior executives is terminated, severance of up to 12 months salary is potentially payable.

Employees

The average number of permanent employees during the years ended December 31, 2011, 2010 and 2009 was as follows:

2011

2010

2009Continuing operations


6,526


6,109


5,937Discontinued operations


128


237


1,852Total average number of permanent employees


6,654


6,346


7,789


Long-term incentive plans



Long term incentive awards for 2008 ("2008 LTIPs") were approved by Millicom's Board of Directors on December 4, 2007. The
awards consisted of a performance shares plan and a matching share award plan. Shares granted under the performance share plan vested at the end of a three year period, on meeting a performance
condition related to Millicom's "earnings per share"
("EPS"). The achievement of a certain level of this condition, measured at the end of the three year period, resulted in the vesting of a specific percentage of shares to each employee in the plan.

The
matching share award plan requires employees to invest in shares of the Company in order to be eligible for matching shares. Shares awarded under this plan vested at the end of a
three year period, on meeting market conditions that are based on the "total shareholder return" ("TSR") of Millicom's shares compared to the TSR of a peer group of companies during the
three-year period of the plan. A fair value per share was determined and applied to the total potential number of matching shares and was expensed over the vesting period.

In
2011, 148,585 shares were issued under the 2008 performance shares plan and 28,795 shares issued under the matching share award plan.

The
total charge for the 2008 LTIPs of $25 million was recorded over the service period including $20 million in 2010 when conditions connected to the plan previously not
expected to be met, were fulfilled (2008 to 2010).

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Long term incentive awards for 2009 ("2009 LTIPs") were approved by Millicom's Board of Directors on June 16, 2009. The 2009
LTIPs consist of a deferred share awards plan and a performance shares plan.

Shares
granted under the deferred plan are based on past performance and vested 16.5% on each of January 1, 2010 and January 1, 2011 and 67% on January 1, 2012.

Shares
granted under the performance plan vest at the end of a three year period, 50% subject to a market condition that is based on the TSR of Millicom compared to the TSR a peer group
of companies during the three-year period of the plan, and 50% subject to a performance condition, based on EPS. A fair value per share subject to the market condition was determined and
applied to the total potential number of performance shares, to be expensed over the vesting period.

In
2011, 3,804 shares were issued under the 2009 performance shares plan and 26,023 shares issued under the deferred share plan.

The
total charge for the 2009 LTIPs of $11 million was recorded over the service period (2009 to 2011).



Long term incentive awards for 2010 ("2010 LTIPs") were approved by Millicom's Board of Directors on November 27, 2009. The 2010
LTIPs consist of a deferred share awards plan and a performance shares plan, the mechanisms of which are the same as the 2009 LTIPs.

In
2011, 706 shares were issued under the 2010 performance shares plan and 25,243 shares issued under the deferred share plan.

The
total charge for the 2010 LTIPs was estimated as of December 31, 2011 at $15 million, and is being recorded over the service period (2010 to 2012).



Long term incentive awards for 2011 ("2011 LTIPs") were approved by Millicom's Board of Directors on February 1, 2011. The 2011
LTIPs consist of a deferred share awards plan and a performance shares plan, the mechanisms of which are the same as the 2009 LTIPs.

Shares
granted under the deferred share awards plan are based on past performance and vest 16.5% on each of January 1, 2012 and January 1, 2013 and 67% on January 1,
2014.

Shares
granted under the performance plan vest at the end of the three year period, subject to performance conditions, 50% based on Return on Capital Investment (ROIC) and 50% based on
EPS. Prior to September 2011, the vesting conditions were 50% based on EPS and 50% on a market condition that was based on the ranking of the TSR of Millicom compared to the FTSE Global
Telecoms Index adjusted to add three peer companies ("Adjusted Global Telecoms Index"). As this index was discontinued during 2011, the Compensation Committee approved the replacement of this
condition with the ROIC condition. As a result the total estimated charge of the 2011 LTIPs increased from $19 million to $20 million.

In
2011, no shares were issued under either the deferred share awards plan or the performance shares plan.

The
total charge for the 2011 LTIPs was estimated as of December 31, 2011 at $20 million, and is being recorded over the service period (2011 to 2013).

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The
number of share awards expected to vest under the long term incentive plans is as follows:

Performance
shares 2011

Deferred
share awards
2011

Performance
shares 2010

Deferred
share awards
2010

Performance
shares 2009

Deferred
share awards
2009Plan share awards


105,643


145,687


81,862


153,960


124,254


172,352Share awards granted(i)


2,935


3,800


6,771


12,043


9,875


10,677Revision for actual and expected forfeitures


(12,947
)

(19,130
)

(17,425
)

(26,612
)

(21,127
)

(36,501
)Revision for expectations in respect of performance conditions

















Shares issued








(706
)

(25,243
)

(4,416
)

(53,337
)Share awards expected to vest


95,631


130,357


70,502


114,148


108,586


93,191


(i)Additional
shares granted including consideration for the impact of the special dividend paid in 2011 (see note 29)


Options

The market price of the Company's shares as at December 31, 2011 was the SEK equivalent of $100.20 (2010: $95.60).

Options outstanding

Options exercisableRange of exercise price $

Weighted
average
exercise price

Number
outstanding at
December 31, 2011

Weighted
average
exercise price

Number
exercisable at
December 31, 201120.56


20.56


35,000


20.56


35,00025.05 - 29.75


26.93


33,332


26.93


33,33231.88 - 35.91


35.16


66,664


35.16


66,66420.56 - 35.91


29.34


134,996


29.34


134,996


Share
options outstanding at the end of the year have the following expiry date and exercise prices:

Date issued

Number of options
outstanding as at
December 31, 2011

Exercise price $

Terms of optionMay 1996, May 1997, May 1998, May 2000 and May 2004


99,996


25.05 - 35.91

Exercisable immediately. Options have an indefinite life.May 2005


35,000


20.56

Exercisable immediately. Options have a twenty year life.


ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Principal Shareholders

The table below sets out certain information known to Millicom as at February 15, 2012, unless indicated otherwise, with respect
to beneficial ownership of Millicom common share, par value $1.50 each, by:



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Shareholder

Amount of Shares

PercentageInvestment AB Kinnevik


37,835,438


36
%Stenbeck Family


874,542


1
%


Except
as otherwise indicated, the holders listed above have sole voting and investment power with respect to all shares beneficially owned by them. The holders listed above have the
same voting rights as all other holders of Millicom common stock. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares as of a given date
which such person or group of persons has the right to acquire within 60 days after such date. For purposes of computing the percentage of outstanding shares held by each person, or group of
persons, named above on a given date, any security which such person or persons has the right to acquire within 60 days after such date (including shares which may be acquired upon exercise of
vested portions of share options) is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

Related Party Transactions

The Company conducts transactions with its principal shareholder, Investment AB Kinnevik ("Kinnevik") and subsidiaries, and with tower
companies in which it holds a direct or indirect equity interest in Ghana, DRC, Tanzania and Colombia. Transactions with related parties are conducted on normal commercial terms and conditions. There
are no loans made by Millicom to or for the benefit of these related parties.



The Company's principal shareholder is Kinnevik. Kinnevik is a Swedish holding company with interests in the telecommunications, media,
publishing, paper industries and financial services. As of December 31, 2011 Kinnevik owned approximately 36% (2010: 35%) of the issued shares of Millicom. During 2011 and 2010, Kinnevik did
not purchase any Millicom shares.

During
2011 and 2010 the Company purchased services from Kinnevik subsidiaries including fraud detection, procurement and professional services.



The Group acquired a 40% equity investment in the associate company Helios Towers Ghana in 2010 and in the associate companies Helios
Towers DRC, Helios Towers Tanzania and American Towers Colombia in 2011 ("Tower companies"). The Company sold and leases back a portion of its tower assets in each of these countries and receives
related tower operation and management services (see note 7). The Group has future lease commitments in respect of the Tower companies (see note 32).

The
following transactions were conducted with related parties:

2011

2010

2009US$ '000

US$ '000

US$ '000Purchases of goods and services (Kinnevik)


5,958


4,000


1,000Lease of towers and related services (Associates)


21,864


8,738


Gain on sale of towers (Associates)


54,419


7,521


Total


82,241


20,259


1,000


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As at December 31, the Company had the following balances with related parties:

2011

2010US$ '000

US$ '000PayablesFinance lease payables


126,823


41,253Other accounts payable


10,077


637Total


136,900


41,890Receivables from sale of towers


76,677





ITEM 8.    FINANCIAL INFORMATION

Financial Statements and Other Information

We file our financial statements under Item 18.

Legal Proceedings

Millicom is a party to various litigation or arbitration matters in almost each jurisdiction in which we operate, but in management's
opinion these matters will not, either singly or taken together, have a material negative impact on our financial position or operations.

Dividend Policy and Share Buyback Program(s)

Holders of Millicom common shares are entitled to receive dividends proportionately when, as and if declared by the Company's Board of
Directors, subject to Luxembourg legal reserve requirements and approval of shareholders at general meetings. Millicom paid its first cash dividend to its shareholders in 2008. In the past, Millicom
retained any earnings for use in the operation and expansion of its business.

On
February 8, 2012 Millicom announced that the Board will propose to the May 29, 2012 Annual General Meeting of the Shareholders (AGM) a policy of paying an annual
dividend of not less than 30% of annual normalized net profit, subject to a minimum annual dividend of $2.00 per share. Previously and since November 30, 2009 when the policy was initial
proposed, the policy was to pay not less than 25% of annual net income, subject to a minimum annual dividend of $1.20 per share. On the same day Millicom announced that the Board would propose to the
AGM a dividend distribution of $2.40 per share to be paid out of Millicom's profits for the year ended December 31, 2011, subject to the Board's approval of the 2011 Consolidated Financial
Statements of the Group (see note 29 of the notes to the consolidated financial statements).

On
the same day, Millicom announced that the Board had approved a new share buyback program to return an amount of $300 million to shareholders in 2012.

On
December 2, 2011 an extraordinary dividend of $3.00 per share to be paid out of Millicom's profits for the year ended December 31, 2010 was approved at an Extraordinary
General Meeting and distributed in December 2011 (see note 29 of the notes to the consolidated financial statements).

On
May 31, 2011 a dividend distribution of $1.80 per share to be paid out of Millicom's profits for the year ended December 31, 2010 was approved by the shareholders at the
Annual General Meeting and distributed in June 2011 (see note 29 of the notes to the consolidated financial statements).

On
February 9, 2011 Millicom announced that the Board had approved a new share buyback program to return an amount of up to $300 million to shareholders by the end of May
2011.

On
May 25, 2010 an ordinary dividend of $1.40 per share and a special dividend of $4.60 per share to be paid out of Millicom's profits for the year ended December 31, 2009
were approved by the

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shareholders
and distributed in May 2010 (see note 29). On the same date a share buyback program of $300 million was approved by the shareholders. This program was completed before the
end of 2010 with 3.3 million shares bought at an average price of $92.21 in open market purchase on NASDAQ.

Significant Changes

No significant adverse change has occurred since the date of the consolidated financial statements.

ITEM 9.    THE OFFER AND LISTING

The principal trading market of Millicom common stock is the NASDAQ OMX Stockholm. The Company's shares are also traded over the
counter (OTC) in the United States of America ("US").

As
announced on April 19, 2011, Millicom delisted its ordinary shares from NASDAQ in the US at the end of May 2011 and consolidated the listing of its shares in the form of
Swedish Depository Receipts (SDRs) on NASDAQ OMX in Stockholm as from June 3, 2011. On May 20, 2011, Millicom filed a Form 25 with the U.S. Securities and Exchange Commission
relating to voluntary delisting of its ordinary shares from NASDAQ in the US. The last day of trading of Millicom ordinary shares on NASDAQ in the U.S. was May 27, 2011. We intend to terminate
the registration of our common shares under the Exchange Act once the applicable conditions are met. The Company has thereby maintained the current listing of its shares as Swedish Depository Receipts
("SDRs") on NASDAQ OMX Stockholm, which has become Millicom's primary listing.

On
February 16, 2004, an Extraordinary General Meeting of Millicom passed a resolution approving a stock split of the issued shares of Millicom by exchanging one existing ordinary
share with a par value of $6.00 for four new ordinary shares with a par value of $1.50 each, which became effective on February 20, 2004.

All
figures presented are based upon the market price for Millicom shares on NASDAQ in the US until May 2011 and subsequently the US$ equivalent of Millicom's SEK denominated SDR's on
NASDAQ OMX in Stockholm, and a par value of $1.50 per share.

High

LowYear ended December 31, 2007

$
127.40

$
60.21Year ended December 31, 2008

$
122.97

$
24.75Year ended December 31, 2009

$
79.19

$
31.50First Quarter 2010

$
90.51

$
68.06Second Quarter 2010

$
94.29

$
75.31Third Quarter 2010

$
102.72

$
80.02Fourth Quarter 2010

$
101.57

$
86.53Year ended December 31, 2010

$
102.72

$
68.06First Quarter 2011

$
98.94

$
97.25Second Quarter 2011

$
117.00

$
93.80Third Quarter 2011

$
121.00

$
91.50September 2011

$
113.80

$
91.50October 2011

$
115.00

$
94.00November 2011

$
114.03

$
97.01December 2011

$
109.00

$
98.50Fourth Quarter 2011

$
115.00

$
94.00Year ended December 31, 2011

$
121.00

$
84.19January 2012

$
104.89

$
98.30February 2012

$
113.50

$
98.01


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On
March 1, 2012, the closing market price for Millicom SDRs on NASDAQ OMX Stockholm was the SEK equivalent of $111.32. Since mid November 2011, the average trading volume in the
US is close to 5% of the total trading volume of Millicom shares.

NASDAQ Corporate Governance Exemption

The NASDAQ Stock Market granted an exemption to Millicom with respect to the quorum requirement under Rule 4350(f), which
requires each issuer to provide for a quorum specified in its by-laws for any meeting of the holders of common stock, which may not be less than 331/3% of the outstanding
shares of the company's common voting stock. Our articles of association do not provide any quorum requirement that is generally applicable to general meetings of our shareholders. This absence of a
quorum requirement is in accordance with Luxembourg law and generally accepted business practice in Luxembourg.

ITEM 10.    ADDITIONAL INFORMATION

Articles of Association

Registration and Object

Millicom International Cellular S.A. is a public liability company
(société anonyme) governed by the Luxembourg law of August 10, 1915 on Commercial Companies (as amended),
incorporated on June 16, 1992, and registered with the Luxembourg Trade and Companies' Register (Registre du Commerce et des Sociétés de
Luxembourg) under number B 40.630.

The
articles of incorporation of Millicom define its purpose as follows: "... to engage in all transactions pertaining directly or indirectly to the acquisition and holding of
participating interests, in any form whatsoever, in any Luxembourg or foreign business enterprise, including but not limited to, the administration, management, control and development of any such
enterprise".

Directors

Restrictions on votingIf a director has a personal material interest in a proposal, arrangement or contract to be decided by Millicom, the articles
of incorporation provide that the validity of the decision of Millicom is not affected by a conflict of interest existing with respect to a director. However, any such personal interest must be
disclosed to the board of directors ahead of the vote and the relevant director may not vote on the relevant issue. Such conflict of interest must be reported to the next general meeting of
shareholders.

Compensation and nominationThe decision on annual remuneration of directors
("tantièmes") is reserved by the articles of incorporation to the general meeting of shareholders. Directors are therefore prevented from
voting on their own compensation. However, directors may vote on the number of shares they may be allotted under any share based compensation scheme.

The
Nominations Committee makes recommendations for the election of directors to the AGM. At the AGM, shareholders may vote for or against the directors proposed or may elect different
directors. The Nominations Committee reviews and recommends the directors' fees which are approved by the shareholders at the AGM.

Borrowing powersThe directors generally have unrestricted borrowing powers on behalf of and for the benefit of Millicom.

Age limitThere is no age limit for being a director of Millicom. Directors could be elected for a maximum period of six years, but Millicom decided
to elect them annually.

Share ownership requirementsDirectors need not be shareholders in Millicom.

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Shares

Rights attached to the sharesMillicom has only one class of shares, common shares, and each share entitles its holder
to:



Redemption of sharesThe articles of incorporation provide for the possibility and set out the terms for the repurchase by Millicom of its own shares,
which repurchase is at Millicom's discretion.

Sinking fundsMillicom shares are not subject to any sinking fund.

Liability for further capital callsAll of the issued shares in Millicom's capital are required to be fully paid up. Accordingly, none of Millicom's
shareholders are liable for further capital calls.

Principal shareholder restrictionsThere are no provisions in the articles of incorporation that discriminate against any existing or prospective
holder of Millicom's shares as a result of such shareholder owning a substantial number of shares.

Changes to Shareholder's Rights

In order to change the rights attached to the shares of Millicom, a general meeting of shareholders must be duly convened and held
before a Luxembourg notary, as under Luxembourg law such change requires an amendment of the articles of incorporation. A quorum of presence of at least 50% of the shares present or represented is
required at a meeting held after the first convening notice and any decision must be taken by a majority of two thirds of the shares present or represented at the general meeting. Any change to the
obligations attached to shares may be adopted only with the unanimous consent of all shareholders.

Shareholders' Meetings

General meetings of shareholders are convened by convening notice published in the Luxembourg Official Gazette and in a Luxembourg
newspaper. According to article 18 of the articles of incorporation of Millicom, the board of directors determines in the convening notice the formalities to be observed by each shareholder for
admission to the AGM. An AGM must be convened every year on the date provided for in the articles of incorporation, which is the last Tuesday in May each year. The 2011 AGM will take place in
Luxembourg on May 29, 2012 at 10:00 a.m (Central European Time). Other meetings can be convened as necessary.

Limitation on Securities Ownership

There are no limitations imposed under Luxembourg law or the articles of incorporation on the rights of non-resident or
foreign entities to own shares of Millicom or to hold or exercise voting rights on shares of Millicom.

Change of Control

There are no provisions in the articles of incorporation of Millicom that would have the effect of delaying, deferring or preventing a
change in control of Millicom and that would operate only with respect to a merger, acquisition or corporate restructuring involving Millicom, or any of its subsidiaries.

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Luxembourg
laws impose the mandatory disclosure of an important participation in Millicom and any change in such participation.

Disclosure of Shareholder Ownership

There are no provisions in Millicom's articles of incorporation according to which Millicom shareholders must disclose to Millicom
their reaching of a certain ownership threshold. As required by the Luxembourg law on transparency obligations of January 11, 2008 (the "Transparency Law"), any person who acquires or disposes
of shares in Millicom's capital must notify Millicom's board of directors of the proportion of shares held by the relevant person as a result of the acquisition or disposal, where that proportion
reaches, exceeds or falls below the thresholds referred to in the Transparency Law. As per the Transparency Law, the above also applies to the mere entitlement to acquire or to dispose of, or to
exercise, voting rights in any of the cases referred to in the Transparency Law. As per the Articles of Association, the requirements of the Transparency Law also apply where the mentioned proportion
reaches, exceeds or falls below a threshold of 3%.

Material Contracts

8% Senior Notes

On September 23, 2010, Telemóvil Finance Co. Ltd., a fully owned subsidiary of Millicom in the
Cayman Islands issued $450 million aggregate principal amount of 8% Senior Unsecured Guaranteed Notes (the "8% Senior Notes") due on October 1, 2017. The 8% Senior Notes were issued for
$444 million representing 98.68% of the aggregate principal amount. Distribution and other transaction fees of $9 million reduced the total proceeds from issuance to $435 million.
The 8% Senior Notes have an 8% per annum coupon with an 8.25% yield and bear interest at 8% per annum, payable semi-annually in arrears on April

The
8% Senior Notes are general unsecured obligations of Telemóvil Finance Co. Ltd. and rank equal in right of payment with all future unsecured and
unsubordinated obligations of Millicom. The 8% Senior Notes are guaranteed by Telemóvil El Salvador, S.A., a Millicom subsidiary.

Telemóvil
Finance Co. Ltd has options to partially or fully redeem the 8% Senior Notes as follows:



October 1, 2014


104
%October 1, 2015


102
%October 1, 2016


100
%




If
either Millicom or Telemóvil Finance Co. Ltd or Telemóvil El Salvador S.A. experience a Change of Control Triggering Event, defined
as a rating decline resulting from a change in control, each holder will have the right to require Millicom to repurchase its notes at 101% of their principal amount plus accrued and unpaid interest
and all other amounts due, if any.

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Exchange Controls

There are no governmental laws, decrees, regulations or other legislation of Luxembourg that may
affect:



Luxembourg Taxation

The following paragraphs describe very generally the tax laws of Luxembourg as they apply to shareholders in the Company, which is a
Luxembourg corporation. The following is intended merely as a general summary of the principal Luxembourg tax consequences of the holding and disposition of Millicom common stock and should be treated
with the appropriate caution. This summary does not purport to be a complete analysis of all material tax considerations that may be relevant to a holder or prospective holder of shares in the
Company. This summary also does not take into account the specific circumstances of particular shareholders. The following is not intended as a substitute for professional tax advice that takes into
account the particular circumstances relevant to a specific shareholder. Accordingly, shareholders should consult their own professional advisors on the possible tax consequences of holding or
disposing of Millicom common stock, under the laws of Luxembourg as well as their countries of citizenship, residence or domicile.

This
summary is based on the laws, regulations and applicable tax treaties as in effect in Luxembourg on the date hereof, all of which are subject to change, possibly with retroactive
effect.

As
used herein, a "Luxembourg Individual Holder" means an individual resident in Luxembourg who is subject to personal income tax("impôt sur le
revenu")on his or her worldwide income from Luxembourg and foreign sources, and a "Luxembourg Corporate Holder" means a company resident in Luxembourg subject to corporate
income tax("impôt sur le revenu des collectivités")on its worldwide income from Luxembourg and foreign sources.
Companies whose registered office and/or principal place of management are in Luxembourg are considered resident companies. Luxembourg Individual Holders and Luxembourg Corporate Holders are
collectively referred to as "Luxembourg Holders". A "Non-Luxembourg Holder" means any shareholder in the Company's shares other than a Luxembourg Holder. A "Non-Luxembourg
Individual Holder" refers to an individual shareholder in the Company's shares that is not a Luxembourg Individual Holder, while a "Non-Luxembourg Corporate Holder" refers to a corporation
that is not a Luxembourg Corporate Holder holding shares in the Company.

Luxembourg withholding tax on distributions

Dividends distributed by the Company will in principle be subject to a withholding tax at a rate of 15% of the gross dividend.

Non-Luxembourg Holders

Under the Luxembourg domestic tax law (Article 147 of the Luxembourg Income Tax Law, hereafter: "ITL"), dividends
distributed by the Company to a qualifying Non-Luxembourg Holder should be exempt from withholding tax provided that, at the date the dividend is placed at the disposal of the
Non-Luxembourg Holder, the latter holds or commits to hold for an uninterrupted period of at least 12 months a direct participation of at least 10% in the Company's share capital or
of an acquisition price of at least EUR 1,200,000. A qualifying Non-Luxembourg holder is (i) an entity covered by article 2 of the amended Council Directive (90/435/EEC) of
July 23, 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member

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States
(the "EU Parent Subsidiary Directive") or its Luxembourg permanent establishment, (ii) a fully taxable company resident in a State which concluded a double tax treaty with Luxembourg,
under the condition that the company is subject to a tax corresponding to Luxembourg corporate income tax ("CIT"), or its Luxembourg permanent establishment, (iii) a taxable share capital
company resident in Switzerland without benefitting from an exemption or (iv) a share capital or cooperative company resident in a State that is part of the European Economic Area other than a
Member State of the European Union, provided that the company is subject to a tax corresponding to Luxembourg CIT, or its Luxembourg permanent establishment.

The
participation through an entity which is transparent for Luxembourg income tax purposes is to be considered as direct participation in proportion to the fraction held in the equity
of such entity.

Furthermore,
if the conditions for the above exemption are not fulfilled, Non-Luxembourg Holders, provided they are resident in a country with which Luxembourg has concluded
a treaty for the avoidance of double taxation, may be entitled to claim
treaty relief under the conditions and subject to the limitations set forth in the relevant treaty. For example, the United States of America (hereafter "US") and Luxembourg are each a party to the
convention between the US and the Grand Duchy of Luxembourg with respect to taxes on income and capital (the "US Treaty") for the purpose of avoiding double taxation. Article 10 (2) of
the US Treaty provides that dividends, as defined in the US Treaty, may also be taxed in the contracting State of which the company paying the dividends is a resident (e.g. Luxembourg), but if
the beneficial owner of the dividends is a company resident of the other contracting State (e.g. US) and if certain other conditions of the US Treaty are met, the tax so charged shall not
exceed 5 percent or the dividend shall not be taxable in Luxembourg. Otherwise, the tax so charged shall not exceed 15 percent of the gross amount of the dividends. Please note that a
resident of a contracting State shall in principle be entitled to the benefits of the US Treaty only if it is a "qualified resident" as defined in Article 24 of the US Treaty.

Luxembourg Holders

Under the Luxembourg domestic tax law (Article 147 ITL), dividends distributed by the Company to a qualifying Luxembourg
Corporate Holder should be exempt from withholding tax provided that, at the date the dividend is placed at the disposal of the Luxembourg holder, the latter holds or commits to hold for an
uninterrupted period of at least 12 months a direct participation of at least 10% in the Company's share capital or of an acquisition price of at least EUR 1,200,000. A qualifying Luxembourg
Corporate Holder is, inter alia, (i) a Luxembourg entity covered by article 2 of the EU Parent Subsidiary Directive or (ii) a Luxembourg resident fully taxable share capital
company not listed in the appendix of paragraph (10) of article 166 ITL. If such exemption from Luxembourg withholding tax on dividends does not apply, a Luxembourg Corporate Holder
should be entitled either to a tax credit or to a tax refund.

Dividends
distributed by the Company to a Luxembourg Individual Holder are subject to a 15% withholding tax of the gross dividend. However, a Luxembourg Individual Holder may be entitled
either to a tax credit or to a tax refund.

Luxembourg income tax on dividends and capital gains

Luxembourg Corporate Holders

For Luxembourg Corporate Holders, under Luxembourg domestic tax law, dividends distributed by the Company and gains realized on the
sale of shares in the Company are, in principle, subject to Luxembourg CIT and municipal business tax ("MBT"). In addition a surcharge of 5% on the CIT is payable to the employment fund. The combined
rate (including the contribution to the employment fund) will range between 28.80% and 34.05% depending on the municipality where the Luxembourg Corporate Holder is established (each of the
percentages is based on the 2012 MBT rates). Dividends

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can,
however, benefit either from a full exemption if the conditions of Article 166 ITL are met or from a 50% exemption (Article 115 (15a) ITL). Capital gains realized by Luxembourg
Corporate Holders are exempt if the conditions of the Grand Ducal Decree of December 21, 2001 (as amended) are fulfilled.

According
to Article 166 ITL dividends distributed by the Company to a qualifying Luxembourg Corporate Holder should be exempt from CIT and MBT provided that, at the date the
dividend is placed at the disposal of the Luxembourg Corporate Holder, the latter holds or commits to hold for an uninterrupted period of at least 12 months a direct participation of at least
10% in the Company or of an acquisition price of at least EUR 1,200,000. According to the Grand-Ducal Decree of December 21, 2001, capital gains realized by a qualifying Luxembourg Corporate
Holder should be exempt from CIT and MBT provided that, at the date the capital gain is realized, the Luxembourg corporate holder has been holding or commits to hold for an uninterrupted period of at
least 12 months a direct participation of at least 10% in the Company or of an acquisition price of at least EUR 6,000,000.

A
qualifying Luxembourg corporate holder is (i) a Luxembourg resident fully taxable entity that has one of the legal forms listed in the appendix to paragraph (10) of
article 166 ITL or (ii) a Luxembourg resident fully taxable share capital company not listed in the appendix of paragraph (10) of article 166 ITL.

The
participation through an entity which is transparent for Luxembourg income tax purposes is to be considered as direct participation in proportion to the fraction held in the equity
of such entity.

Expenses,
including interest expenses and in certain cases impairments, in direct economic relation with the shareholding held by the Luxembourg Corporate Holder should not be deductible
for income tax
purposes up to the amount of any exempt dividend derived during the same financial year. Expenses exceeding the amount of the exempt dividend received from such shareholding during the same financial
year should remain deductible for income tax purposes.

Capital
gains realized upon the disposal of shares in the Company should remain taxable for an amount corresponding to the sum of the expenses related to the shareholding and impairments
recorded on the shareholding that reduced the taxable basis of the Luxembourg Corporate Holder in the year of disposal or in previous financial years.

Luxembourg Individual Holders

For Luxembourg Individual Holders, dividends distributed by the Company and gains realized on the sale of shares in the Company are, in
principle, subject to Luxembourg Income Tax at the applicable progressive income tax rates (marginal tax rate is 39% excluding surcharge, depending on annual income, of 4% or 6% on income tax payable
to the employment fund). In addition, a 1.4% dependence insurance contribution is due. Dividends should benefit from a 50% exemption (Article 115 (15a) ITL). Capital gains on shares
owned by Luxembourg Individual Holders on their private wealth will, in principle, only be taxable, if the shares are sold within six months after their acquisition or if the holder together with
his/her spouse, life partner or under age children holds a direct or indirect participation exceeding 10% of the Company's share capital at the date of the sale or during the 5 years preceding
the date of the sale.

Non-Luxembourg Corporate Holders

For Non-Luxembourg Corporate Holders, having a permanent establishment in Luxembourg to which the Company's shares are
allocated, dividends distributed by the Company and gains realized on the sale of shares in the Company are subject to CIT and MBT. Under the domestic law (Article 166 ITL), dividends
distributed by the Company to the Luxembourg permanent establishment of a qualifying Non-Luxembourg Corporate Holder should be exempt from CIT and MBT provided that, at the date the
dividend is placed at the disposal of the Non-Luxembourg Corporate Holder, the latter

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holds
or commits to hold for an uninterrupted period of at least 12 months a direct participation of at least 10% in the Company or of an acquisition price of at least EUR 1,200,000. According
to the conditions of the Grand Ducal Decree of December 21, 2001, as amended, capital gains realized by the Luxembourg permanent establishment of a qualifying Non-Luxembourg
Corporate Holder on the disposal of the shares in the Company should be exempt from CIT and MBT provided that, at the date the capital gain is realized , the Non-Luxembourg Corporate
Holder has been holding or commits to hold for an uninterrupted period of at least 12 months a direct participation of at least 10% in the Company or of an acquisition price of at least EUR
6,000,000. A qualifying Non-Luxembourg Corporate Holder is (i) an entity that is resident in another European Union (EU) state and that is covered by Article 2 of the EU
Parent Subsidiary Directive or (ii) a share capital or cooperative company that is resident in a State other than a Member State of the European Union, which is part of the European Economic
Area Agreement or (iii) a share capital company resident in a state with which Luxembourg has entered into a double tax treaty. The participation through an entity that is transparent for
Luxembourg income tax purposes is to be considered as direct participation in proportion to the fraction held in the capital of such tax transparent entity.

Furthermore,
the permanent establishment of a Non-Luxembourg Corporate Holder may under certain conditions benefit from a 50% exemption on dividends received if the
conditions of Article 166 ITL are not met.

Expenses,
including interest expenses and in certain cases, impairments, in direct economic relation with the shareholding held by the permanent establishment of the
Non-Luxembourg Corporate Holder should not be deductible for income tax purposes up to the amount of any exempt dividends derived during the same financial year. Expenses exceeding the
amount of the exempt dividend received from such shareholding during the same financial year should remain deductible for income tax purposes.

Capital
gains realized upon the disposal of shares in the Company should remain taxable for an amount corresponding to the sum of the expenses related to the shareholding and impairments
recorded on the shareholding that reduced the taxable basis of the permanent establishment of the Non-Luxembourg Corporate Holder in the year of disposal or in previous financial years.

In
the case where no double tax treaty applies, dividends distributed by the Company to Non-Luxembourg Corporate Holders, who do not have a Luxembourg permanent establishment
to which the shares in the Company are attributed, are taxable in Luxembourg. The 15% withholding tax should in this case become a final Luxembourg tax. In case of a double tax treaty concluded by
Luxembourg with the country of residence of the Non-Luxembourg Corporate Holder, such treaty may contain specific rules as regards the taxation of the dividends and in
many cases Luxembourg has the right to levy a withholding tax on dividends (at different rates with a maximum rate of 15%).

Capital
gains realized by a Non-Luxembourg Corporate Holder on shares not attributed to a Luxembourg permanent establishment will only be taxable in Luxembourg if the
Non-Luxembourg Corporate Holder holds at the date of the sale or during the 5 years preceding the date of the sale a direct or indirect participation exceeding 10% of the Company's
share capital and either the disposal of the Company's shares happens within a period of six months from the acquisition of the shares or the Non-Luxembourg Corporate Holder has been a
Luxembourg taxpayer during more than 15 years and became a non-resident taxpayer less than five years before the realization of the capital gain. A double tax treaty (if any) may
allocate the taxation right regarding the capital gains to the country of residence of the Non-Luxembourg Corporate Holder.

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Non-Luxembourg Individual Holders

Capital gains on the shares owned by a Non-Luxembourg Individual Holder that does not have a permanent establishment in
Luxembourg will, in principle, only be taxable in Luxembourg if the Non-Luxembourg Individual Holder together with his/her spouse, life partner or under age children holds a direct or
indirect participation exceeding 10% of the Company's share capital at the date of the sale or during the 5 years preceding the date of the sale and either the disposal of the Company's shares
happens within a period of six months from the acquisition of the shares or the Non-Luxembourg Individual Holder has been a Luxembourg taxpayer during more than 15 years and became
a non-resident taxpayer less than five years before the realization of the capital gain. A double tax treaty (if any) may allocate the taxation right regarding the capital gains
exclusively to the country of residence of the Non-Luxembourg Individual Holder.

In
the case where no double tax treaty applies, dividends distributed by the Company to Non-Luxembourg Individual Holders are subject to Luxembourg income tax. The 15%
withholding tax should in this case become the final Luxembourg tax. In case of a double tax treaty concluded by Luxembourg with the country of residence of the Non-Luxembourg Individual
Holder, such treaty may contain specific rules as regards the taxation of the dividends and in
many cases Luxembourg has the right to levy the 15% withholding tax on dividends. The Non-Luxembourg Individual Holder may, under certain conditions, opt to be taxed as a Luxembourg
resident.

For
Non-Luxembourg Individual Holders, having a permanent establishment in Luxembourg to which the Company's shares are allocated, dividends distributed by the Company and
gains realized on the sale of shares in the Company are normally subject to Luxembourg income tax at the applicable progressive rate. Dividends may, however, benefit from a 50% exemption.

Luxembourg Net Wealth Tax

Luxembourg imposes an annual Net Wealth Tax (hereafter: "NWT") of 0.5% on the adjusted net asset value of corporate taxpayers as of
January 1st. The net asset value will be reduced by the value of substantial participations (as defined in § 60 of the NWT law). As from the year 2006 NWT has been abolished
for resident and non-resident individuals. In general Luxembourg resident companies subject to NWT are taxed on their worldwide net wealth (unless a double tax treaty provides for an
exemption). Luxembourg non-resident companies subject to NWT are only taxable on their Luxembourg wealth.

Luxembourg inheritance and gift tax

Luxembourg inheritance tax may be levied if shares in the Company will be transferred upon the death of an inhabitant of Luxembourg.

Luxembourg
gift tax may be levied in case of gifts of the Company's shares which are made in Luxembourg.

U.S. Federal Income Tax Considerations

The following is a discussion of certain material U.S. federal income tax consequences of owning and disposing of Millicom shares and
SDRs by the U.S. Holders described below, but it does not purport to be a comprehensive description of all the tax considerations that may
be relevant to a particular person's decision to hold Millicom shares or SDRs. This discussion does not address taxes other than income taxes, and does not address any state, local and
non-U.S. tax consequences. The discussion applies only to U.S. Holders who hold shares or SDRs as capital assets for U.S. federal income tax purposes, and it does not address special
classes of holders, such as:



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If
an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds shares or SDRs, the U.S. federal income tax treatment of a partner will
generally depend on the status of the partner and the activities of the partnership. Partnerships holding shares or SDRs and partners in such partnerships should consult their tax advisors as to the
particular U.S. federal income tax consequences of holding and disposing of the shares or SDRs.

This
discussion is based on the Internal Revenue Code of 1986, as amended, administrative pronouncements, judicial decisions and final, temporary and proposed U.S. Treasury regulations,
as well as the Treaty, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. It is also based in part on our understanding of the deposit arrangement for SDRs,
based on discussions with Swedish counsel of Millicom, and assumes that each obligation under the deposit agreement will be performed in accordance with its terms. Prospective investors should consult
their own tax advisors concerning the U.S. federal, state, local and non-U.S. tax consequences of purchasing, owning and disposing of shares or SDRs in their particular circumstances,
including their eligibility for the benefits under the Treaty.

As
used herein, a "U.S. Holder" is a beneficial owner of shares or SDRs who is eligible for the benefits of the Treaty and who is, for U.S. federal income tax purposes: (i) a
citizen or resident of the United States; (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political
subdivision thereof; or (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

In
general, a U.S. Holder who owns SDRs will be treated as the owner of the underlying shares represented by those SDRs for U.S. federal income tax purposes. Accordingly, no gain or loss
will be recognized if a U.S. Holder exchanges SDRs for the underlying shares represented by those SDRs.

This
discussion assumes that Millicom was not, and will not become, a passive foreign investment company ("PFIC"), as described below.

Taxation of Distributions

Distributions received by a U.S. Holder on shares or SDRs, including the amount of any Luxembourg taxes withheld, other than certain pro ratadistributions of shares to all shareholders, will

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constitute
foreign source dividend income to the extent paid out of the Company's current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Because the Company
does not maintain calculations of its earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be treated as dividends. A dividend will generally
be included in a U.S. Holder's income on the date of the U.S. Holder's or, in the case of SDRs, the Swedish Depositary's receipt of the dividend. The amount of the dividend a U.S. Holder will be
required to include in income will equal the U.S. dollar value of the Euro dividend, calculated by reference to the exchange rate in effect on the date the payment is received, regardless of whether
the payment is converted into U.S. dollars on the date of receipt. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize
foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the amount of the dividend is not converted into U.S. dollars on the date of
receipt. If a U.S. Holder realizes gain or loss on a sale or other disposition of Euros, it will be U.S. source ordinary income or loss. Corporate U.S. Holders will not be entitled to claim the
dividends received deduction with respect to dividends paid by the Company. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders in taxable years
beginning before January 1, 2013 may be taxable at a maximum rate of 15%. Non-corporate U.S. Holders should consult their tax advisors regarding the availability of the reduced rate
on dividends.

Luxembourg
income taxes withheld from payments of dividends on shares or SDRs (at a rate not exceeding the rate provided by the Treaty) will be creditable against a U.S. Holder's U.S.
federal income tax liability, subject to applicable restrictions and limitations that may vary depending upon the
holder's circumstances. Such tax will not be creditable to the extent refundable under Luxembourg domestic law. Instead of claiming a credit, a U.S. Holder may elect to deduct such Luxembourg taxes in
computing its taxable income, subject to generally applicable limitations. The limitation of foreign taxes eligible for credit is calculated separately with respect to specific classes of income. The
rules governing foreign tax credits are complex. Therefore, U.S. Holders should consult their own tax advisors regarding the availability of foreign tax credits in their particular circumstances.

Sale and Other Disposition of Shares or SDRs

A U.S. Holder will generally recognize capital gain or loss on the sale or other disposition of shares or SDRs, which will be
long-term capital gain or loss if the holder's holding period in its shares or SDRs exceeds one year. The amount of the U.S. Holder's gain or loss will be equal to the difference between
the amount realized on the sale or other disposition and such holder's tax basis in the shares or SDRs (each as determined in U.S. dollars). Any gain or loss will generally be U.S. source gain or loss
for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

Passive Foreign Investment Company Considerations

Millicom believes that it was not a PFIC for U.S. federal income tax purposes for its 2011 taxable year. In general, a
non-U.S. company will be considered a PFIC for U.S. federal income tax purposes for any taxable year in which (i) 75% or more of its gross income consists of passive income (such as
dividends, interest, rents and royalties) or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. As
PFIC status depends upon the composition of our income and assets and the market value of our assets (including, among other things, any equity investments in less than 25%-owned entities) from time
to time, there can be no assurance that Millicom will not be considered a PFIC for any taxable year. In particular, the market value of our assets may be determined in large part by reference to the
market price of our SDRs, which is likely to fluctuate.

If
the Company were to be treated as a PFIC for any taxable year during which a U.S. Holder held shares or SDRs, certain adverse U.S. federal income tax rules would apply on a sale or
other

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disposition
(including certain pledges) of shares or SDRs by the U.S. Holder. In general, under those rules, gain recognized by the U.S. Holder on a sale or other disposition of shares or SDRs would
be allocated ratably over the U.S. Holder's holding period for the shares or SDRs. The amounts allocated to the taxable year of the sale or other disposition and to any year before Millicom became a
PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that
taxable year, and an interest charge would be imposed on the resulting tax liability allocated to each such taxable year. Further, the same rule would apply to any distribution in respect of shares or
SDRs in excess of 125% of the average of the annual distributions on shares or SDRs received by the U.S. Holder during the preceding three years or the U.S. Holder's holding period, whichever is
shorter. Certain elections may be available that would result in alternative treatments (such as a mark-to-market treatment) of the shares or SDRs. U.S. Holders should consult
their tax advisors to determine whether any such elections would be available and, if so, what the consequences of the alternative treatments would be in those holders' particular circumstances.

For
any year in which Millicom is a PFIC, each U.S. Holder would be required to file an information statement regarding such U.S. Holder's ownership interest in Millicom. In addition, if
Millicom were to be treated as a PFIC in a taxable year in which it pays a dividend, or the prior taxable year, the 15% dividend rate discussed above with respect to dividends received by certain
non-corporate U.S. Holders would not apply.

Information Reporting, Backup Withholding and other Disclosure

Payment of dividends and sales proceeds that are made within the United States or through certain U.S. related financial intermediaries
generally are subject to information reporting, and may be subject to backup withholding, unless the U.S. Holder is a corporation or other exempt recipient or, in the case of backup withholding, the
U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. The amount of any backup withholding from a payment to a U.S. Holder will be
allowed as a credit against the holder's U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the Internal Revenue
Service.

Certain
U.S. Holders who are individuals may be required to report information relating to their ownership of securities issued by non-U.S. companies, generally on
Form 8938, subject to exceptions (including an exception for securities held through U.S. financial institutions). U.S. Holders should consult their tax advisers regarding their reporting
obligations with respect to the shares or SDRs.

Documents on Display

It is possible to read and copy documents referred to in this annual report on Form 20-F that have been filed with
the Securities and Exchange Commission at the Securities and Exchange Commission's public reference room located at 450 Fifth Street, NW, Washington D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges.

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Terms, conditions and risk management policies

Millicom is regularly performing risk management assessments and reviews to identify its major risks and to take the necessary steps to
mitigate such risks. A risk management committee has been set up by management for that purpose as well as a central risk officer and risk officers in all countries and global functions. Risks are
identified, assessed, reviewed, and revised on an ongoing basis and reported to the audit committee at least quarterly. Risk action plans have been developed and

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implemented
within each operation and supported centrally by global support functions. Risks are dynamically mapped based on likelihood and magnitude (impact on the Group).

Exposure
to interest rate and foreign currency risk arises in the normal course of Millicom's business. The Group analyses each of these risks individually as well as on an
interconnected basis and defines strategies to manage the economic impact on the Group's performance in line with its financial risk management policy. Some of Millicom's risk management strategies
may include the use of derivatives. Millicom's policy prohibits the use of such derivatives in the context of speculative trading.

The
principal market risks to which we are exposed are cash repatriation, interest rate risk and foreign currency exchange risk.

Cash repatriation

Millicom is repatriating cash from its operations in the form of dividends, royalties and management fees as well as repayment of
shareholders' loans, so as to recover the initial costs invested in the countries where it operates and so as to remunerate its shareholders for the risk taken through investment in emerging
countries. While Millicom has not experienced any issues in repatriating funds to date, the repatriation of funds has yet to be tested in all countries. Some governments could potentially block such
repatriations, or the countries where Millicom operates may not be in a position to provide the necessary hard currencies as a consequence of deficits with their balance of payments.

Interest rate risk

Interest rate risk generally arises on borrowings. Borrowings issued at floating rates expose the Group to cash flow interest rate
risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's exposure to risk of changes in market interest rates relates to both of the above. To manage the
risk, the Group's policy is to maintain a combination of fixed and floating rate debt with an objective for the debt to be equally distributed between fixed and variable rates. The Group actively
monitors borrowings to ensure compliance with this policy and applies a dynamic interest rate hedging approach whereby the target mix between fixed and floating rate debt is reviewed periodically. The
purpose of Millicom's policy is to achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business
strategy. At December 31, 2011, approximately 51% of the Group's borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates under interest rate
swaps (2010: 36%).

In
January 2010 Millicom entered into an interest rate swap (see note 34) to hedge the interest rate risk of the floating rate debt in three different countries (Tanzania, DRC and
Ghana). The interest rate swap was issued in January 2010 on a notional amount of $100 million, with maturity in January 2013.

In
November 2010 Millicom entered into interest rate swaps to hedge the interest rate risks on floating rate debts in Honduras and Costa Rica. The interest rate swap in Honduras was
issued for a nominal amount of $30 million, with maturity in October 2015, and in Costa Rica for a nominal amount of $105 million with maturity in 2017.

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The
table below summarizes, as at December 31, 2011, our fixed rate debt and floating rate debt:

Amounts due within1 year

1 - 2 years

2 - 3 years

3 - 4 years

4 - 5 years

>5 years

Total(in thousands of U.S. Dollars, except percentages)Fixed rate


261,840


118,930


134,273


97,007


45,742


584,489


1,242,281Weighted average nominal interest rate


4.37
%

6.02
%

6.13
%

5.66
%

6.02
%

8.85
%

6.98
%Floating rate


359,586


194,066


191,260


193,967


198,659


58,459


1,195,997Weighted average nominal interest rate


5.31
%

5.50
%

4.75
%

6.27
%

5.98
%

2.17
%

5.37
%Total


621,426


312,996


325,533


290,974


244,401


642,948


2,438,278Weighted average nominal interest rate


4.91
%

5.70
%

5.32
%

6.06
%

5.99
%

5.19
%

6.97
%


The
table below summarizes our fixed rate debt and floating rate debt as at December 31, 2010:

Amounts due within1 year

1 - 2 years

2 - 3 years

3 - 4 years

4 - 5 years

>5 years

Total(in thousands of U.S. Dollars, except percentages)Fixed rate


69,761


36,361


60,987


64,885


70,409


549,062


851,465Weighted average nominal interest rate


5.69
%

6.19
%

6.35
%

5.89
%

6.66
%

8.81
%

7.87
%Floating rate


485,703


334,637


193,167


246,496


155,378


85,190


1,500,571Weighted average nominal interest rate


7.25
%

6.25
%

6.39
%

6.29
%

6.70
%

4.55
%

6.55
%Total


555,464


370,998


254,154


311,381


225,787


634,252


2,352,036Weighted average nominal interest rate


7.05
%

6.25
%

6.38
%

6.20
%

6.69
%

8.25
%

7.03
%


A
one hundred basis point fall or rise in market interest rates for all currencies in which the group had borrowings at December 31, 2011, would increase or reduce profit before
tax from continuing operations for the year by approximately $12 million (2010: $15 million).

Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures where the Group
operates. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.

Millicom
seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities denominated in foreign currencies. In some cases, Millicom
may borrow in US dollars because it is either advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or because US dollar denominated borrowing is the only
long-term funding source available to a joint venture or subsidiary. In these circumstances, Millicom may enter forward currency swaps or accept the remaining currency risk associated with
financing its joint ventures and subsidiaries, principally because of the relatively high cost of forward cover, when available, in the currencies in which the Group operates.

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The following table summarizes debt denominated in US$ and other currencies at December 31, 2011 and 2010.

2011

2010US$ '000

US$ '000Total US$


1,605,850


1,571,757Colombia


504,337


522,994Chad


86,411


72,754Tanzania


34,584


56,659Bolivia


46,305


43,878Ghana


18,670


40,565Guatemala


11,249


20,552Other


130,872


22,877Total non-US$ currencies


832,428


780,279Total


2,438,278


2,352,036


The
table below summarizes our forward currency swaps as at December 31, 2011:

Amounts due within1 year

1 - 2 years

2 - 3 years

3 - 4 years

4 - 5 years

>5 years

TotalReceive US$ pay Colombian Pesos (thousands of US$)


41,250


42,500














83,750Contract amount (millions of Colombian Pesos)


94,256


102,266














196,522Average contractual exchange rate (in Colombian Pesos)


2,285


2,406














ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

ITEM 12A.    DEBT SECURITIES

Not applicable.

ITEM 12B.    WARRANTS AND RIGHTS

Not applicable.

ITEM 12C.    OTHER SECURITIES

Not applicable.

ITEM 12D.    AMERICAN DEPOSITARY SHARES

General

Millicom does not have American Depositary Receipts or American Depositary Shares, and is voluntarily providing disclosure regarding
its Swedish Depositary Receipts ("SDRs"), which are described in more detail below.

SDRs
are issuable by Skandinaviska Enskilda Banken AB (publ) pursuant to the Swedish Deposit Agreement, dated December 16, 2011 as Swedish depositary (the "Swedish Depositary"),
entered into by and between Millicom and the Swedish Depositary (previously by Carnegie Investment Bank AB pursuant to the Swedish Deposit Agreement, dated March 5, 2004). Each SDR represents
one Millicom common share ("Millicom Shares"). The SDRs are registered in the book-entry registration system of

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Euroclear
Sweden A.B. ("Euroclear Sweden"), in accordance with the Swedish Act on Account Keeping of Financial Instruments (Sw. lagen (1998: 1479) om kontoföring av finansiella
instrument). So long as the SDRs are eligible for book-entry registration with Euroclear Sweden, the SDRs will be represented by registration in accounts at Euroclear Sweden ("Euroclear
Sweden Accounts") and no holder of SDRs shall be entitled to receive physical certificates representing the SDRs. The ownership of SDRs is shown on the register maintained by Euroclear Sweden (the
"Euroclear Sweden Register"). Holdings of SDRs are registered in the Euroclear Sweden Accounts of the beneficial owners of the SDRs (the "Owners") or their nominees. Ownership of SDRs registered in
the name of a nominee is shown in the records of the nominee. The SDRs are listed on the Large segment of the OMX Equities CCP list of Stockholmsbörsen in Stockholm, Sweden.

Deposit and Withdrawal of Shares

The Swedish Depositary has agreed, subject to the terms and conditions of the Swedish Deposit Agreement, that upon delivery of Millicom
Shares to the Swedish Depositary or its custodian, the Swedish Depositary will instruct Euroclear Sweden to credit the relevant Euroclear Sweden Account with the appropriate number and series of SDRs.
Prior to any such deposit, the person depositing shares shall deliver to the Swedish Depositary: (i) written instructions specifying the name, address and Euroclear Sweden Account number in
which the SDRs are to be registered; (ii) payment of fees of the Swedish Depositary, taxes and other governmental charges payable in connection with such deposit; and (iii) all such
other information and documents as may be required in order to comply with applicable laws.

Subject
to applicable provisions of law and decisions of governmental authorities, an owner of SDRs may surrender its interest in SDRs to the Swedish Depositary and withdraw the number
and class of Millicom Shares then represented by such SDRs from the SDR deposit facility. Upon payment of the Swedish Depositary's fees for the surrender of the SDRs, the owner of such SDRs will be
registered in the Company's share register for the number and class of Millicom Shares represented by such SDRs at the relevant time. Such registration in the Company's share register will take place
as soon as practicable following the registration of the surrender of SDRs in the Euroclear Sweden Register.

Maintenance of Records

Euroclear Sweden maintains records of all SDRs transferred, pledged, deposited, surrendered and cancelled pursuant to the Swedish
Deposit Agreement in accordance with the provisions of an agreement between the Swedish Depositary and Euroclear Sweden and of the Swedish Act on Account Keeping of Financial Instruments.

Record Date

The Swedish Depositary shall, in consultation with Millicom and the Swedish Depositary, fix a date ("record date") for determining
which holders of SDRs are to be entitled to receive dividends in cash or other property, participate in and vote at shareholders' meetings, receive shares in connection with bonus issues, subscribe
for shares or other securities in new issues and to exercise any other rights of shareholders in Millicom. It is the intention of Millicom and the Swedish Depositary that such record date will be the
same date as the record date applied by Millicom in relation to the holders of Millicom Shares.

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Dividends, Bonus Issues, New Issues of Shares and Other Distributions

Dividends

Any dividends paid on Millicom Shares will be paid to owners of SDRs, or to their respective nominees, in Euro or Swedish kronor (SEK).
Following consultation with Millicom and with Euroclear Sweden, the Swedish Depositary shall fix a date for the payment of the relevant dividend to the Owners ("payment date"). Before the dividend is
paid, the Swedish Depositary shall convert the dividend received from Millicom into Euro or Swedish kronor. Such conversion shall take place at the market exchange rate applicable not earlier than ten
business days and not later than five business days before the payment date by means of the Swedish Depositary entering into a future contract to expire on the payment date, or if earlier, the date on
which the dividend is paid to Euroclear Sweden for onward distribution to the owners of the SDRs.

Euroclear
Sweden shall pay dividends to the owners of SDRs, or to their respective nominees, entitled thereto in accordance with the rules and regulations applied by Euroclear Sweden
from time to time.

Payment
of dividends to the owners of SDRs, or to their respective nominees, shall be made without any deduction for expenses, fees, or equivalent items that are attributable to
Millicom, the Swedish Depositary or Euroclear Sweden, with the exception of such withholding tax levied in Luxembourg for dividend payments to other countries or of preliminary tax or other taxes that
may be levied in accordance with Swedish, Luxembourg or other applicable legislation.

If
the Swedish Depositary receives dividends in any form other than in cash, the Swedish Depositary shallafter consultation with the Companydecide how such
dividends are to be distributed to the owners of SDRs entitled thereto. This means that the Swedish Depositary is entitled to sell the received property. The net proceeds arising from such realization
shall be distributed to the owners of SDRs entitled thereto. In the event that Millicom, the Swedish Depositary or
Euroclear Sweden is required to withhold, and does withhold, any taxes from such distribution, the amount distributed to the owners shall be reduced accordingly.

If
holders of Millicom Shares have the right to choose between cash dividends or other property and if it is not practically feasible for the owners of SDRs to be granted the same
choice, the Swedish Depositary is entitled, on behalf of the owners of SDRs, to request that such dividend be paid in the form of cash.

Bonus Issues, Splits and Reverse Splits of Shares

The Swedish Depositary shall, as soon as possible, receive shares resulting from bonus issues and effect splits or reverse splits of
shares. Registrations in the owners' Euroclear Sweden Accounts corresponding to bonus issues, splits or reverse splits of shares shall be undertaken by Euroclear Sweden.

New Issue of Shares

If we decide to issue new shares, debt instruments or other rights, the Swedish Depositary shall, directly or through Euroclear Sweden,
inform the owners of SDRs thereof of the principal terms for the new issue. An application form shall be attached to the information under which form the owners of SDRs can instruct the Swedish
Depositary to subscribe for new shares, debt instruments or other rights (as the case may be) on his or her behalf. When the Swedish Depositary, pursuant to the instructions of an owner of SDRs, has
subscribed for and received new shares, debt instruments or other rights, the corresponding registrations in the owner's Euroclear Sweden Account will be made as soon as possible.

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If
the owner of SDRs does not instruct the Swedish Depositary to exercise any of the rights referred to above, the Swedish Depositary shall be authorized to dispose of such rights on
behalf of the owner, and pay the remuneration received, to him or her less any incurred costs and applicable taxes.

In
the event that an owner of SDRs beneficially holds an uneven number of rights which do not carry entitlement to a whole number of bonus shares or to participate in a new issue for
whole rights, the Swedish Depositary shall be authorized to sell such rights and pay the remuneration received, to the owner less any incurred costs and applicable taxes.

Shareholders' Meetings and Voting of Deposited Shares

Pursuant to the Swedish Deposit Agreement, owners of SDRs are entitled to vote for the Millicom Shares represented by such SDRs at
shareholders' meetings. The Swedish Depositary shall, in consultation with Millicom, make arrangements so that depository receipt holders receive notice for general meeting of shareholders. A notice
for a general meeting of shareholders shall be provided for dissemination to at least two established news agencies and at least three national daily newspapers. The notice shall contain:
(i) such information as is contained in such notice of meeting; and (ii) instructions as to what measures must be taken by an owner of SDRs to allow him or her to attend the
shareholders' meeting. The Swedish Depositary shall, in reasonable time before the meeting, ensure that it executes proxy forms in favor of each owner of SDRs who has indicated to the Swedish
Depository his or her intention to attend the shareholders' meeting. Such proxy forms shall be submitted to Millicom along with the names of the owners of SDRs for which proxies have been issued.

Distribution of Information to SDR Owners

The Swedish Depositary shall, directly or through Euroclear Sweden and in the manner stipulated below, provide the owners of SDRs with
all the information which the Swedish Depositary receives from the Company in the Swedish Depositary's capacity as registered shareholder. However, the Swedish Depositary shall always send such
information by mail to owners of SDRs who request such information, at the address of each such owner included in the Euroclear Sweden Register.

The
Swedish Depositary shall ensure that notices to the owners of SDRs are distributed by mail. Except where a written notice must be mailed to the shareholders in accordance with the
rules applicable to Swedish Euroclear Sweden Companies (Sw. avstämningsbolag), the Swedish Depositary may, as an alternative to mailing the notice, publish the notice in one of
Stockholm's daily newspapers.

Amendment and Termination

The Swedish Depositary shall be entitled to amend the Swedish Deposit Agreement insofar as such amendments are required by Swedish or
any other applicable legislation, decisions by public authorities or changes in the rules and regulations of Euroclear Sweden. Any provisions of the Swedish Deposit Agreement may be amended by
agreement between Millicom and the Swedish Depositary if such action is in any other respect appropriate or necessary for practical reasons and the owners' rights are in not adversely affected in any
material respect.

If
(i) a decision is taken to de-list the SDRs from the O-list of Stockholmsbörsen or any other corresponding market place, (ii) a
decision is taken by Millicom to no longer maintain the SDR facility under the Swedish Deposit Agreement, or (iii) the Company has failed to fulfill payment of expenses and fees under the
Swedish Deposit Agreement for more than 30 days, the Swedish Depositary is entitled to terminate deposits made under the Swedish Deposit Agreement by mailing notice of such termination to the
owners of the SDRs. The Swedish Deposit Agreement will continue in full force and effect for a period of six months after the date such notices have been sent to the owners of SDRs.

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Charges of Swedish Depositary

Millicom has agreed to pay the fees and expenses of the Swedish Depositary and Euroclear Sweden in accordance with the terms of the
Swedish Deposit Agreement.

Fees and Expenses Payable by Owners of SDRs

Owners of SDRs must pay all applicable taxes and governmental charges and all fees and costs in connection with the deposit, withdrawal
and delivery of Millicom Shares in accordance with the Swedish Deposit Agreement. The current fee for the deposit of Millicom Shares for the issue of SDRs and withdrawal of Millicom Shares after
cancellation of SDRs is SEK 2,000 per
deposit/withdrawal and is payable by the person making such deposit or withdrawal. Such fees may be amended by the Swedish Depositary from time to time.

Fees and Expenses Payable by the Depositary

There are no payments from the depositary to Millicom.

Limitation of Liability

Except as set forth below, the Swedish Depositary is liable for all damages incurred by the owner of SDRs resulting from the Swedish
Depositary's negligence in performing its obligations under the Swedish Deposit Agreement. The Swedish Depositary is not liable for any indirect losses or damage.

The
Swedish Depositary is not liable for any loss or damage resulting from changes in Swedish or non-Swedish laws, the intervention of a Swedish or a non-Swedish
public authority, acts of war, acts of terrorism, strikes, boycotts, lockouts, blockades or other similar circumstances. The reservation in respect of strikes, boycotts, lockouts or blockades applies
even if the Swedish Depositary itself takes such measures or is subject to such measures. Where the Swedish Depositary or Millicom is prevented from effecting payments or taking other measures due to
the circumstances outside its control, the measures in question may be postponed until the obstacle has been removed.

Governing Law

The Swedish Deposit Agreement is governed by Swedish law.

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PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15.    CONTROLS AND PROCEDURES

Restatement of previously issued financial statements

As previously reported in the Company's press release, furnished on Form 6-K to the SEC on January 26, 2012,
the board of directors of the Company, based on the recommendation of the audit committee and in consultation with management, concluded that the Company's previously issued financial statements for
the year ended December 31, 2010, and for each of the quarters ended on September 30, 2010 to September 30, 2011, should be restated in order to reflect a revised accounting
treatment of the put option provided to its local Honduras partner in a July 1, 2010 transaction. Accordingly, the Company has restated its previously issued financial statements for these
periods.

The
effects of the restatement on our previously issued financial statements are more fully discussed in Note 4, Restatement of Previously Issued Financial Statements, of the
Notes to the Consolidated Financial Statements included in this Annual Report. To further review the effects of the accounting error identified and the restatement adjustment, see
Part IItem 3Selected Financial Information and Part IItem 5Operating and Financial Review and Prospects included in this
Annual Report.

As
a result of this restatement, the Group's management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Group's control procedures in respect
of the accounting for the put option granted to its local Honduras partner in 2010 were not effective as of December 31, 2010, constituting a material weakness in the Group's internal control
over financial reporting as of December 31, 2010 and rendering the Group's disclosure controls and procedures ineffective as of December 31, 2010.

As
described further below, during 2010, Millicom management began a process to enhance the Group's internal control over financial reporting. Management completed the implementation of
these enhancements during 2011 and believes that these enhancements have remedied the material weakness identified to have existed as of December 31, 2010.

Disclosure Controls and Procedures

As of December 31, 2011, the Company, under the supervision and with the participation of the Group's management, including the
Chief Executive Officer and the Chief Financial Officer, performed an evaluation of the effectiveness of the Group's disclosure controls and procedures. The Group's disclosure controls and procedures
are designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to the Group's management to allow timely decisions regarding required
disclosures. The Group's management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable assurance
regarding management's control objectives. Based on this evaluation, the Group's Chief Executive Officer and the Chief Financial Officer concluded that as of December 31, 2011 the Group's
disclosure controls and procedures are effective at the reasonable assurance level for recording, processing, summarizing and reporting the information the Group is required to disclose in

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the
reports it files under the Exchange Act within the time periods specified in the SEC's rules and forms.

Management's annual report on internal control over financial reporting

The Group's management has performed an assessment of the Group's internal control over financial reporting which can be found on
page F-2 of the financial statements filed with this Annual Report on Form 20-F.

Attestation report of the registered public accounting firm

The registered public accounting firm that audited the Group's financial statements in this annual report issued an attestation report
on the Group's internal control over financial reporting. The "Report of Independent Registered Public Accounting Firm" can be found on page F-3 of the financial statements filed
with this Annual Report.

Changes in internal control over financial reporting

During 2010, the Group's management began a process to enhance the Group's internal control over financial reporting. Management
completed the implementation of these enhancements during 2011. The enhancements included:



Management
believes that these enhancements have remedied the material weakness identified to have existed as of December 31, 2010.

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors appointed Kim Ignatius as its Audit Committee financial expert. Mr. Ignatius is an independent financial
expert as such term is defined under the NASDAQ National Market listing requirements.

ITEM 16B.    CODE OF ETHICS

Millicom has adopted a Code of Ethics applicable to all Millicom's employees and to Directors. The text of this code is available free
of charge upon written request addressed to: General Counsel, Millicom International Cellular S.A., 15 rue Leon Laval, L-3372 Leudelange, Grand-Duchy of Luxembourg, fax: +352 27 759
353.

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ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table summarizes the aggregate amounts paid to Millicom's auditors for the years ended December 31, 2011 and 2010.

2011

2010US$ '000

US$ '000Audit fees


3,623


4,237Audit related fees


152


604Tax fees


97


All other fees


58


55Total


3,930


4,896


Audit
related services consist principally of consultations related to financial accounting and reporting standards, including making recommendations to management regarding internal
controls and the issuance of certifications of loan covenant compliance required by Millicom's debt agreements. Tax services consist principally of tax planning services and tax compliance services.
All other fees are for services not included in the other categories. 100% of the audit related, tax and other fees for 2011 and 2010 were approved by the audit committee.

Audit Committee Pre-approval Policies

The policies and procedures provide that no non-audit services above $10,000 individually and to a maximum of 5% of the
annual budgeted audit fees can be
rendered by Millicom's auditors without the prior consent of the Audit Committee. Such services require subsequent ratification by the Audit Committee.

ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

Purchases during the years ended December 31, 2011 and 2010 are summarized in the following tables.

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Table of Contents

The
following open market purchase of securities were made during the 2011 year in US$ on the NASDAQ and OTC markets in the US, and in SEK on the NASDAQ OMX in Sweden.

Purchases of Equity Securities in 2011Period

(a) Total number
of Shares
Purchased

(b) Average
Price Paid
per Share

(c) Total Number of
Shares Purchased as
Part of the PlanMonth #4
Apr 1 to Apr 30


350,173

$
107.59


350,173Month #5
May 1 to May 31


1,220,745

$
107.19


1,220,745Month #6
Jun 1 to Jun 30


21,957

$
104.52


21,957Month #7
Jul 1 to Jul 31


125,321

$
119.66


125,321Month #8
Aug 1 to Aug 31


1,006,989

$
108.45


1,006,989Month #9
Sept 1 to Sept 30


681,162

$
107.24


681,162Month #10
Oct 1 to Oct 31


137,285

$
108.52


137,285Month #11
Nov 1 to Nov 30


620,516

$
104.27


620,516Month #12
Dec 1 to Dec 31


482,093

$
104.10


482,093Total


4,646,241

$
107.15


4,646,241


These
purchases were made under an $800 million share buyback plan for the 2011 year that was announced on April 19, 2011, and subsequently revised to
$500 million in Q4 2011 as a result of the decision to pay an extraordinary dividend in Q4 2011. No further shares can be purchased under the plan after December 31, 2011.

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The
following open market purchases of equity securities were made during the 2010 year in US$ on the NASDAQ market.

Purchases of Equity Securities in 2010Period

(a) Total number
of Shares
Purchased

(b) Average
Price Paid
per Share

(c) Total Number of
Shares Purchased as
Part of the Plan

(d) Maximum Number
of Shares that may yet
be purchased under
the PlanMonth #5
May 1 to May 31


86,400

$
81.75


86,400


Month #7
Jul 1 to Jul 31


145,300

$
91.72


145,300


Month #8
Aug 1 to Aug 31


538,649

$
92.26


538,649


Month #9
Sept 1 to Sept 30


356,000

$
97.18


356,000


Month #10
Oct 1 to Oct 31


317,317

$
94.33


317,317


Month #11
Nov 1 to Nov 30


1,317,050

$
92.17


1,317,050


Month #12
Dec 1 to Dec 31


492,791

$
89.29


492,791


Total


3,253,507

$
92.21


3,253,507





A
$300 million share buyback plan was announced on April 15, 2010 and approved by the shareholders at the May 25, 2010 Annual General Meeting. The buyback was
completed on December 10, 2010.

ITEM 16F.    CHANGE IN CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G.    SIGNIFICANT DIFFERENCES IN CORPORATE GOVERNANCE PRACTICES

On May 30, 2011, Millicom voluntarily delisted its ordinary shares from NASDAQ in the United States and consolidated the listing
of its shares onto one single exchange, NASDAQ OMX Stockholm. With the primary listing in Stockholm, Millicom is subject to NASDAQ OMX Stockholm's listing rules and reporting requirements and the high
standards of corporate governance prevalent in Sweden. The Company has been bound by the Swedish Code of Corporate Governance (the "Code") as from 30 May 2011. Before that date, Millicom
applied the corporate governance rules of the NASDAQ Stock Market in the US.

For
the purpose of being compliant with the Swedish Code of Corporate Governance, the Shareholders decided at the Annual General Meeting on May 31, 2011 on a new procedure to
appoint the members of the Nomination Committee. A Nomination Committee of major shareholders in Millicom was formed during October 2011 in consultation with the larger shareholders of the Company as
per 30 September 2011 and in accordance with the resolution of the 2011 Annual General Meeting. The Nomination Committee should consist of at least three members, with a majority representing
the larger shareholders of the Company.

ITEM 16H.    MINE SAFETY DISCLOSURE

Not applicable.

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PART III

ITEM 17.    FINANCIAL STATEMENTS

Not applicable.

ITEM 18.    FINANCIAL STATEMENTS

See pages F-1 through F-92.

ITEM 19.    EXHIBITS

1.1

Articles of Association of Millicom International Cellular S.A.2.1

Indenture, dated January 7, 2005 between Millicom International Cellular S.A. and The Bank of New York, as Trustee.*2.2

Indenture, dated as of November 24, 2003 between Millicom International Cellular S.A. and The Bank of New York, as Trustee, as amended (incorporated by reference to Exhibits 4.1 and 4.3 of the Company's
registration statement on Form F-4 (File No. 333-112948) filed on February 19, 2004 and January 31, 2005, respectively).**3.1

Custodian Agreement dated as of 16 December, 2011 between Millicom International Cellular S.A. and Skandinaviska Enskilda Banken AB, as Custodian of the Swedish Depository Receipts.12.1

Certification of Mikael Grahne required by Securities Exchange Act of 1934, as amended ("Exchange Act"), Rule 13a 14(a).12.2

Certification of François-Xavier Roger required by Exchange Act Rule 13a 14(a).13.1

Certification of Mikael Grahne required by Exchange Act Rule 13a 14(b).13.2

Certification of François-Xavier Roger required by Exchange Act Rule 13a 14(b).15.1

Consent of PricewaterhouseCoopers S.à r.l.


*Previously
filed with the Securities and Exchange Commission with the Company's Form 20 F filed on May 2, 2005 and incorporated herein by
reference.**Previously
filed with the Securities and Exchange Commission with the Company's Form 20 F filed on April 30, 2004 and herein
incorporated by reference.


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SIGNATURES

Under the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:
March 1, 2012

MILLICOMINTERNATIONALCELLULARS.A.By:

/s/ MIKAEL GRAHNEName:

Mikael GrahneTitle:

Chief Executive OfficerBy:

/s/ FRANÇOIS-XAVIER ROGERName:

François-Xavier RogerTitle:

Chief Financial Officer


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Table of Contents

INDEX TO FINANCIAL STATEMENTS

Audited Consolidated Financial Statements of Millicom and its Subsidiaries for the Years Ended December 31, 2011, 2010 and 2009



Management's Report on Internal Control Over Financial Reporting


F-2Report of Independent Registered Public Accounting Firm


F-3Consolidated Income Statements for the years ended December 31, 2011, 2010,
and 2009


F-5Consolidated Statements of Comprehensive Income for the years ended
December 31, 2011, 2010, and 2009


F-6Consolidated Statements of Financial Position as of December 31, 2011 and
2010


F-7Consolidated Statements of Cash Flows for the years ended December 31, 2011,
 2010, and 2009


F-9Consolidated Statements of Changes in Equity for the years ended December 31, 2011, 2010, and 2009


F-10Notes to the Consolidated Financial Statements


F-12


F-1

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Table of Contents

Management's Report on Internal Control over Financial Reporting

The management of Millicom International Cellular S.A. is responsible for establishing and maintaining adequate internal control
over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the
European Union.

Because
of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.

Management
has assessed the effectiveness of Millicom International Cellular S.A. internal control over financial reporting as of December 31, 2011. In making its
assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal ControlIntegrated Framework. Management
concluded that based on its
assessment, Millicom International Cellular S.A. internal control over financial reporting was effective as of December 31, 2011.

PricewaterhouseCoopers
S.à.r.l has issued an unqualified report on our 2011 financial statements as a result of the audit and also has issued an unqualified report on our
internal control over financial reporting which is attached hereto.

Dated: March 1, 2012

By:

/s/ MIKAEL GRAHNEName:

Mikael GrahneTitle:

Chief Executive OfficerBy:

/s/ FRANÇOIS-XAVIER ROGERName:

François-Xavier RogerTitle:

Chief Financial Officer


F-2

---



Table of Contents

LOGO

Report of Independent Registered Public Accounting Firm

To
the Shareholders of
Millicom International Cellular S.A.

In
our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of income, comprehensive income, cash flows and changes in equity
present fairly, in all material respects, the financial position of Millicom International Cellular S.A. (the "Company") and its subsidiaries and joint ventures (together the "MIC Group") at
31 December 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended 31 December 2011 in conformity with International
Financial Reporting Standards as issued by the International Accounting Standards Board and in conformity with International Financial Reporting Standards as adopted by the European Union. Also in our
opinion, the MIC Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2011, based on criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these consolidated financial
statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in "Management's
Report on Internal Control Over Financial Reporting" appearing on page F-2 of the accompanying consolidated financial statements. Our responsibility is to express opinions on these
consolidated financial statements and on the MIC Group's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As
discussed in Note 4 to the consolidated financial statements, the Company has restated its 2010 consolidated financial statements to correct a misstatement.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

F-3

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Table of Contents

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers S.à r.l.

Luxembourg, March 1, 2012Réviseur d'entreprises agréé


PricewaterhouseCoopers S.à r.l., 400 Route d'Esch, B.P. 1443, L-1014 Luxembourg
T: +352 494848 1, F:+352 494848 2900, www.pwc.lu

Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n°95992)
R.C.S. Luxembourg B 65 477Capital social EUR 516 950TVA LU17564447

F-4

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Table of Contents

Millicom International Cellular S.A.        Consolidated income statements  for the years ended December 31, 2011, 2010 and 2009

Notes

2011

2010
(As Restated)(i)

2009US$ '000

US$ '000

US$ '000Revenues


10


4,529,597


3,920,249


3,372,727Cost of sales





(1,564,401
)

(1,330,308
)

(1,202,902
)Gross profit





2,965,196


2,589,941


2,169,825Sales and marketing





(816,715
)

(737,691
)

(647,009
)General and administrative expenses





(839,423
)

(738,779
)

(606,213
)Other operating expenses





(95,737
)

(74,933
)

(65,580
)Other operating income





43,700


3,192


Operating profit


10,11


1,257,021


1,041,730


851,023Interest expense





(186,523
)

(214,810
)

(173,475
)Interest and other financial income





14,576


14,748


11,573Revaluation of previously held interests


5





1,060,014


32,319Other non operating expenses, net


13


(4,290
)

(61,658
)

(32,181
)(Loss) profit from associates


18


(9,591
)

(1,817
)

2,329Profit before tax from continuing operations





1,071,193


1,838,207


691,588Credit (charge) for taxes


14


18,347


(227,096
)

(187,998
)Profit for the year from continuing operations





1,089,540


1,611,111


503,590Profit for the year from discontinued operations, net of tax


7


39,465


11,857


300,342Net profit for the year





1,129,005


1,622,968


803,932Attributable to:Equity holders of the company





924,515


1,620,277


850,788Non-controlling interest





204,490


2,691


(46,856
)Earnings per share for the year


15(expressed in US$ per common share)Basic earnings per sharefrom continuing operations attributable to equity holders





8.50


14.89


5.09from discontinued operations attributable to equity holders





0.37


0.08


2.75for the year attributable to equity holders





8.87


14.97


7.84Diluted earnings per sharefrom continuing operations attributable to equity holders





8.49


14.87


5.08from discontinued operations attributable to equity holders





0.37


0.08


2.74for the year attributable to equity holders





8.86


14.95


7.82


(i)Restatementsee
note 4




The accompanying notes are an integral part of these consolidated financial statements.

F-5

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Table of Contents

Millicom International Cellular S.A.        Consolidated statements of comprehensive income  for the years ended December 31, 2011, 2010 and 2009

2011

2010
(As Restated)(i)

2009US$ '000

US$ '000

US$ '000Net profit for the year


1,129,005


1,622,968


803,932Other comprehensive income:Exchange differences on translating foreign operations


(46,698
)

(5,785
)

(14,529
)Cash flow hedges


(3,262
)

(1,700
)

Total comprehensive income for the year


1,079,045


1,615,483


789,403Attributable to:Equity holders of the Company


881,694


1,617,487


837,124Non-controlling interests


197,351


(2,004
)

(47,721
)


(i)Restatementsee
note 4




The accompanying notes are an integral part of these consolidated financial statements.

F-6

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Table of Contents

Millicom International Cellular S.A.        Consolidated statements of financial position  as at December 31, 2011 and 2010

Notes

2011

2010
(As Restated)(i)US$ '000

US$ '000ASSETSNon-Current AssetsIntangible assets, net


16


2,170,353


2,282,845Property, plant and equipment, net


17


2,865,117


2,767,667Investments in associates


18


62,984


18,120Pledged deposits


19,27


49,371


49,963Deferred taxation


14


316,966


23,959Other non-current assets





37,359


17,754Total Non-Current Assets





5,502,150


5,160,308Current AssetsInventories





74,593


62,132Trade receivables, net


20


276,944


253,258Amounts due from non controlling interests and joint ventures





158,782


99,497Prepayments and accrued income





119,362


89,477Current income tax assets





23,645


10,748Supplier advances for capital expenditure





32,324


36,189Other current assets


21


146,615


75,311Cash and cash equivalents(ii)


22


881,279


1,023,487Total Current Assets





1,713,544


1,650,099Assets held for sale


7


66,252


184,710TOTAL ASSETS





7,281,946


6,995,117


(i)Restatementsee
note 4(ii)Including
$20 million of restricted cash at December 31, 2011




The accompanying notes are an integral part of these consolidated financial statements.

F-7

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Table of Contents

Millicom International Cellular S.A.

Consolidated statements of financial position
as at December 31, 2011 and 2010 (Continued)

Notes

2011

2010
(As Restated)(i)US$ '000

US$ '000EQUITY AND LIABILITIESEQUITYShare capital and premium


23


662,527


681,559Treasury shares


23


(378,359
)

(300,000
)Put option reserve


25


(737,422
)

(737,422
)Other reserves


26


(103,492
)

(54,685
)Retained profits





1,886,615


1,134,354Profit for the year attributable to equity holders





924,515


1,620,277Parents ownership interests





2,254,384


2,344,083Non-controlling interests





191,170


45,550TOTAL EQUITY





2,445,554


2,389,633LIABILITIESNon-current LiabilitiesDebt and financing


27


1,816,852


1,796,572Derivative financial instruments


35


8,016


18,250Provisions and other non-current liabilities


28


113,613


79,767Deferred taxation


14


199,066


195,919Total non-current liabilities





2,137,547


2,090,508Current LiabilitiesDebt and financing


27


621,426


555,464Put option liability


28


745,145


769,378Payables and accruals for capital expenditure





333,551


278,063Other trade payables





224,089


202,707Amounts due to joint venture partners





92,677


97,919Accrued interest and other expenses





263,747


228,360Current income tax liabilities





105,217


79,861Provisions and other current liabilities


28


303,335


242,457Total current liabilities





2,689,187


2,454,209Liabilities directly associated with assets held for sale


7


9,658


60,767TOTAL LIABILITIES





4,836,392


4,605,484TOTAL EQUITY AND LIABILITIES





7,281,946


6,995,117


(i)Restatementsee
note 4




The accompanying notes are an integral part of these consolidated financial statements.

F-8

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Table of Contents

Millicom International Cellular S.A.        Consolidated statements of cash flows  for the years ended December 31, 2011, 2010 and 2009

Notes

2011

2010
(As Restated)(i)

2009US$ '000

US$ '000

US$ '000Profit before tax from continuing operations





1,071,193


1,838,207


691,588Adjustments for non-operating items:Interest expense





186,523


214,810


173,475Interest and other financial income





(14,576
)

(14,748
)

(11,573
)Revaluation of previously held interests








(1,060,014
)

(32,319
)Loss (profit) from associates





9,591


1,817


(2,329
)Other non operating expenses, net





4,290


61,658


32,181Adjustments for non-cash items:Depreciation and amortization


10,11,16,17


738,980


676,986


611,435Loss (gain) on disposal and impairment of assets


10,11


(21,785
)

16,257


7,246Share-based compensation


24


17,264


30,718


10,1751,991,480


1,765,691


1,479,879Decrease (increase) in trade receivables, prepayments and other current assets





(56,668
)

(31,282
)

73,380Decrease (increase) in inventories





(13,143
)

(12,606
)

8,812Increase (decrease) in trade and other payables





84,350


44,773


(4,669
)Changes to working capital





14,539


885


77,523Interest expense paid





(141,138
)

(170,604
)

(148,038
)Interest received





14,647


14,639


11,316Taxes paid





(268,071
)

(238,723
)

(195,851
)Net cash provided by operating activities





1,611,457


1,371,888


1,224,829Cash flows from investing activities:Acquisition of subsidiaries, JV, associates, net of cash acquired


5


(20,369
)

(5,284
)

(53,086
)Proceeds from disposal of subsidiaries, joint ventures and associates





1,000


5,335


Purchase of intangible assets and license renewals


16


(56,473
)

(26,238
)

(46,004
)Purchase of property, plant and equipment


17


(699,681
)

(596,900
)

(726,565
)Proceeds from sale of property, plant and equipment





126,832


36,617


3,708Disposal (purchase) of pledged deposits





8,683


2,462


(45,652
)Disposal (purchase) of time deposits





2,837


46,953


(50,061
)Cash (used) provided by other investing activities





(35,307
)

9,334


(12,275
)Net cash used by investing activities





(672,478
)

(527,721
)

(929,935
)Cash flows from financing activities:Proceeds from issuance of shares





1,319


3,276


2,856Purchase of treasury shares





(498,274
)

(300,000
)

Proceeds from issuance of debt and other financing


27


703,073


1,147,585


627,872Repayment of debt and financing


27


(791,940
)

(1,396,997
)

(506,588
)Advance payments to non controlling interests





(27,542
)




Payment of dividends





(493,909
)

(788,526
)

Net cash (used) provided by financing activities





(1,107,273
)

(1,334,662
)

124,140Cash provided by discontinued operations


7


53,102





416,755Exchange gains (losses) on cash and cash equivalents





(27,016
)

2,820


1,178Net increase (decrease) in cash and cash equivalents





(142,208
)

(487,675
)

836,967Cash and cash equivalents at the beginning of the year





1,023,487


1,511,162


674,195Cash and cash equivalents at the end of the year





881,279


1,023,487


1,511,162


(i)Restatementsee
note 4




The accompanying notes are an integral part of these consolidated financial statements.

F-9

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Table of Contents



Millicom International Cellular S.A.

Consolidated statements of changes in equity
for the years ended December 31, 2011, 2010 and 2009

Attributable to equity holdersNumber of
shares
held by
the GroupNumber of
shares

Share
Capital(i)

Share
Premium(i)

Treasury
shares

Retained
profits(ii)

Put option
reserve(iv)

Other
reserves(v)

Total
Parent's
interests

Non-
controlling
interests(vi)

Total
equity'000

'000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Balance as of January 1, 2009


108,297





162,446


480,098





1,082,548





(47,174
)

1,677,918


(25,841
)

1,652,077Profit for the year

















850,788








850,788


(46,856
)

803,932Currency translation differences























(13,664
)

(13,664
)

(865
)

(14,529
)Total comprehensive income for the year

















850,788





(13,664
)

837,124


(47,721
)

789,403Transfer to legal reserve

















(880
)




880








Dividends(vii)

















(134,747
)







(134,747
)




(134,747
)Shares issued via the exercise of share options


139





208


3,536











(888
)

2,856





2,856Share-based compensation(iii)























9,807


9,807





9,807Directors' shares(iii)(viii)


7





10


358














368





368Issuance of shares2006, 2007 and 2009 LTIPs(iii)


205





307


13,584











(13,891
)







Acquisition of non-controlling interests in Chad(ix)

















(9,523
)







(9,523
)

(111
)

(9,634
)Balance as of December 31, 2009


108,648





162,971


497,576





1,788,186





(64,930
)

2,383,803


(73,673
)

2,310,130For the year ended December 31, 2010(x)Profit for the year(x)

















1,620,277








1,620,277


2,691


1,622,968Cash flow hedge























(1,700
)

(1,700
)




(1,700
)Currency translation differences























(1,090
)

(1,090
)

(4,695
)

(5,785
)Total comprehensive income for the year(x)

















1,620,277





(2,790
)

1,617,487


(2,004
)

1,615,483Transfer to legal reserve

















(53
)




53








Dividends(vii)

















(653,779
)







(653,779
)




(653,779
)Purchase of treasury shares





(3,254
)







(300,000
)










(300,000
)




(300,000
)Shares issued via the exercise of share options


145





218


3,874











(816
)

3,276





3,276Share-based compensation(iii)























30,286


30,286





30,286Directors' shares(iii)(viii)


5





8


424














432





432Issuance of shares2007, 2008, 2009 and 2010 LTIPs(iii)


255





381


16,107











(16,488
)







Change in scope of consolidation(ix)





























130,843


130,843Dividend to non-controlling shareholders





























(9,616
)

(9,616
)Put option of non-controlling interest(iv)(x)




















(737,422
)




(737,422
)




(737,422
)Balance as of December 31, 2010 (As Restated)(x)


109,053


(3,254
)

163,578


517,981


(300,000
)

2,754,631


(737,422
)

(54,685
)

2,344,083


45,550


2,389,633




The accompanying notes are an integral part of these consolidated financial statements.

F-10

---



Table of Contents

Millicom International Cellular S.A.

Consolidated statements of changes in equity
for the years ended December 31, 2011, 2010 and 2009 (Continued)

Attributable to equity holdersNumber of
shares
held by
the GroupNumber of
shares

Share
Capital(i)

Share
Premium(i)

Treasury
Shares

Retained
profits(ii)

Put option
reserve(iv)

Other
reserves(v)

Total
Parent's
interests

Non-
controlling
interests(vi)

Total
equity'000

'000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Balance as of January 1, 2011


109,053


(3,254
)

163,578


517,981


(300,000
)

2,754,631


(737,422
)

(54,685
)

2,344,083


45,550


2,389,633Profit for the year

















924,515








924,515


204,490


1,129,005Cash flow hedge reserve movement























(3,015
)

(3,015
)

(247
)

(3,262
)Currency translation differences























(39,806
)

(39,806
)

(6,892
)

(46,698
)Total comprehensive income for the year

















924,515





(42,821
)

881,694


197,351


1,079,045Transfer to legal reserve

















(61
)




61








Dividends(vii)

















(493,909
)







(493,909
)




(493,909
)Purchase of treasury shares





(4,646
)







(498,274
)










(498,274
)




(498,274
)Cancellation of treasury shares


(4,200
)

4,200


(6,300
)

(20,070
)

401,415


(375,045
)













Shares issued via the exercise of stock options


40


6


59


1,184


592


(435
)




(81
)

1,319





1,319Share-based compensation(iii)























17,264


17,264





17,264Issuance of shares under the LTIPs(iii)


46


187


70


6,025


17,908


(773
)




(23,230
)







Sale of Amnet Honduras to non-controlling interests

















2,207








2,207


11,974


14,181Disposal of Laos





























(6,493
)

(6,493
)Dividend to non-controlling shareholders





























(57,212
)

(57,212
)Balance as of December 31, 2011


104,939


(3,507
)

157,407


505,120


(378,359
)

2,811,130


(737,422
)

(103,492
)

2,254,384


191,170


2,445,554


(i)Share
Capital and Share Premiumsee note 23.(ii)Retained
Profitsincludes profit for the year attributable to equity holders, of which $94 million (2010: $60 million; 2009:
$46 million) are undistributable to equity holders.(iii)Share
based compensationsee note 24.(iv)Put
option reservesee note 25.(v)Other
reservessee note 26.(vi)Non-controlling
interestsas at January 1, and December 31, 2009, non controlling interest was negative as the
non-controlling shareholders of Colombia Móvil S.A. ESP have a binding obligation to cover their share of the losses of this entity.(vii)Dividendssee
note 29.(viii)Directors
sharessee note 30.(ix)Change
of scope of consolidationsee note 5.(x)Restatementsee
note 4.




The accompanying notes are an integral part of these consolidated financial statements.

F-11

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Table of Contents

Millicom International Cellular S.A.        Notes to the consolidated financial statements  as of December 31, 2011, 2010 and 2009

1. CORPORATE INFORMATION

Millicom International Cellular S.A. (the "Company"), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the "Group"
or "Millicom") is a global group providing communications, information, entertainment, solutions and financial services in emerging markets. We operate various combinations of mobile and fixed
telephony, cable and broadband businesses in 15 countries in Central America, South America and Africa. The Group was formed in December 1990 when Investment AB Kinnevik ("Kinnevik"), formerly named
Industriförvaltnings AB Kinnevik, a company established in Sweden, and Millicom Incorporated ("Millicom Inc."), a corporation established in the United States of America,
contributed their respective interests in international mobile telephony joint ventures to form the Group.

Millicom
operates its mobile businesses in El Salvador, Guatemala and Honduras in Central America; in Bolivia, Colombia and Paraguay in South America; in Chad, the Democratic Republic of
Congo, Ghana, Mauritius, Rwanda, Senegal and Tanzania in Africa. Millicom's operations in Laos were sold in March 2011, in Sierra Leone and Cambodia in November 2009; and in Sri Lanka in October 2009
(see notes 6, 7).

In
2008, Millicom acquired 100% of Amnet Telecommunications Holding Limited, a provider of broadband and cable television services in Costa Rica, Honduras and El Salvador, of fixed
telephony in El Salvador and Honduras, and of corporate data services in the above countries as well as Guatemala and Nicaragua. In addition, in December 2008, Millicom was successful in the tender
for the third national mobile license in Rwanda. Services in Rwanda were launched in early December 2009.

The
Company's shares are traded on the Stockholm stock exchange under the symbol MIC and over the counter in the US under the symbol MICC. The Company has its registered office at 15,
Rue Léon Laval, L-3372, Leudelange, Grand Duchy of Luxembourg and is registered with the Luxembourg Register of Commerce under the number RCS B 40 630.

The
Board of Directors ("Board") approved these consolidated financial statements on March 1, 2012. The approval of the consolidated financial statements will be submitted for
ratification by the shareholders at the Annual General Meeting on May 29, 2012.

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES

2.1   Basis of preparation

The consolidated financial statements of the Group are presented in US dollars and all values are rounded to the nearest thousand (US$ '000) except when otherwise
indicated. The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets and liabilities that have been measured at fair value.

In
accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, the
consolidated financial statements for the year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union
("IFRS").

As
of December 31, 2011, International Financial Reporting Standards as adopted by the European Union are similar to those published by the International Accounting Standards
Board ("IASB"), except for IAS 39Financial Instruments that has been partially adopted by the European

F-12

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Union
and for new standards and interpretations not yet endorsed but effective in future periods. Since the provisions that have not been adopted by the European Union are not applicable to the Group,
the consolidated financial statements comply with both International Financial Reporting Standards as issued by the IASB and as adopted by the European Union.

The
preparation of financial statements in conformity with IFRS requires management to exercise its judgment in the process of applying the Group's accounting policies. It also requires
the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions,
actual results may ultimately differ from these estimates. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.

2.2   Consolidation

The consolidated financial statements of the Group are comprised of the financial statements of the Company and its subsidiaries and joint ventures as at
December 31 each year. The financial statements of the subsidiaries and joint ventures are prepared for the same reporting year as the Company, using consistent accounting policies.

All
intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group transactions are eliminated.

The
acquisition method of accounting is used to account for acquisitions where there is a change in control. The cost of an acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of
the Group's share of the
identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in
the income statement (see accounting policy for Goodwill). All acquisition related costs are expensed.

Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and
operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.

F-13

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Non-controlling interests

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. Gains or
losses on disposals to non-controlling interests are recorded in equity. For purchases from non-controlling interests, the difference between any consideration paid and the
relevant share acquired of the carrying value of net assets of the subsidiary is also recorded in equity. Non-controlling interest is measured at the proportionate interest in the net
assets of the subsidiary.

Joint ventures

Millicom determines the existence of joint control by reference to joint venture agreements, articles of association, structures and
voting protocols of the Boards of Directors of those ventures.

Entities
that are jointly controlled are consolidated in the financial statements using the proportionate method which includes the Group's share of the assets, liabilities, income and
expenses of the joint ventures.

The
Group recognizes the portion of gains or losses on the sale of assets to joint ventures that are attributable to other parties in the joint venture. The Group does not recognize its
share of profits or losses from purchase of assets by the Group from a joint venture until it resells the assets to a third party. However, if a loss on a transaction provides evidence of a reduction
in the net realizable value of current assets or an impairment loss, the loss is recognized immediately.

Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights.

Investments
in associates are accounted for using the equity method of accounting and are initially recognized at cost. The Group's investment in associates includes goodwill (net of any
accumulated impairment loss) identified on acquisition.

The
Group's share of post-acquisition profits or losses of associates is recognized in the consolidated income statement, and its share of post-acquisition
movements in reserves is recognized in reserves. Cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an
associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless the Group has incurred obligations or made
payments on behalf of the associates.

Unrealized
gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the
Group. Dilution gains and losses arising in investments in associates are recognized in the income statement.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.3   Foreign currency translation

Functional and presentation currencies

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic
environment in which the entity operates ("the functional currency"). The functional currency of each subsidiary, joint venture and associate reflects the economic substance of the underlying events
and circumstances of these entities. The Company is located in Luxembourg and its subsidiaries, joint ventures and associates operate in different currencies. The Group's consolidated financial
statements are presented in U.S. dollars (the "presentation currency"). The functional currency of the Company is the U.S. dollar because of the significant influence of the U.S. dollar on its
operations.

Transactions and balances

Transactions denominated in a currency other than the functional currency are translated into the functional currency using exchange
rates prevailing on transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions, and on translation of monetary assets and liabilities denominated in
currencies other than the functional currency at year-end exchange rates, are recognized in the consolidated income statement, except when deferred in equity as qualifying cash flow, or
net investment hedges.

Translation
differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognized in the consolidated income
statement as part of fair value gain or loss. Translation differences on non-monetary financial assets such as investments classified as available for sale are included in fair value
reserve in equity.

Translation into presentation currency

The results and financial position of all Group entities (none of which operate in an economy with a hyperinflationary functional
currency) with functional currency other than the US dollar presentation currency are translated into the presentation currency as follows:



On
consolidation, exchange differences arising from the translation of net investments in foreign operations, and of borrowing and other currency instruments designated as hedges of such
investments, are taken to equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognized in the consolidated income statement as part of gain or loss on
sale.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Goodwill
and fair value adjustments arising on acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The
following table presents relevant currency translation rates to the U.S. dollar as of December 31, 2011 and 2010 and average rates for the year ended December 31, 2011.

Country

Currency

2011
Average rate

2011
Year-end rate

2010
Year-end rateBolivia

Boliviano


6.95


6.91


6.99Chad and Senegal

CFA Franc


471.65


506.98


489.70Colombia

Peso


1,858.95


1,942.70


1,918.75Costa Rica

Costa Rican Colon


507.32


511.84


512.97Ghana

Cedi


1.54


1.64


1.49Guatemala

Quetzal


7.81


7.81


8.02Honduras

Lempira


18.91


19.12


18.90Luxembourg

Euro


0.72


0.77


0.75Mauritius

Rupee


28.81


29.33


30.45Nicaragua

Gold Cordoba


22.42


22.97


21.88Paraguay

Guarani


4,226.12


4,478.00


4,645.00Rwanda

Rwandese Franc


600.29


604.14


594.00Sweden

Krona


6.45


6.88


6.72Tanzania

Shilling


1,576.83


1,578.15


1,459.50UAE (Dubai)

Dirham


3.67


3.67


3.67


The
effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the cash flow statement in order to reconcile cash and cash equivalents
at the beginning and end of the year. Millicom's functional currency in both El Salvador and DRC is the US$.

2.4   Segment Reporting

Operating segments are reported in a manner consistent with internal reporting to the Chief Operating Decision-Maker ("CODM"). The CODM, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.

2.5   Property, plant and equipment

Items of property, plant and equipment are stated at historical cost, less accumulated depreciation and accumulated impairment. Historical cost includes
expenditure that is directly attributable to acquisition of items. The carrying amount of replaced parts is derecognized. Repairs and maintenance are charged to the income statement in the financial
period in which they are incurred.

Depreciation
is calculated using the straight-line method over the shorter of the estimated useful life of the asset and the remaining life of the license associated with the
assets, unless the renewal of the license is contractually possible.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Estimated
useful lives are:

Buildings

40 years or lease period, if lowerNetworks (including civil works)

5 to 15 yearsOther

2 to 7 years


The
carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The
assets' residual value and useful life is reviewed, and adjusted if appropriate, at each statement of financial position date. An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated recoverable amount.

Construction
in progress consists of the cost of assets, labor and other direct costs associated with property, plant and equipment being constructed by the Group. Once the assets become
operational, the related costs are transferred from construction in progress to the appropriate asset category and start to be depreciated.

Subsequent
costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably. All repairs and maintenance are charged to the income statement in the financial period in which they are incurred.

A
liability for the present value of the cost to remove an asset on both owned and leased sites is recognized when a present obligation for the removal is established. The corresponding
cost of the obligation is included in the cost of the asset and depreciated over the useful life of the asset.

Borrowing
costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset when it is probable that such
costs will result in future economic benefits for the Group and the costs can be measured reliably.

2.6   Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is measured at
fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally
generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is charged to the income statement in the year in which expenditure is incurred.

Intangible
assets with finite useful lives are amortized over their estimated useful economic lives using the straight-line method and assessed for impairment whenever there
is an indication that the intangible asset may be impaired. The amortization period and the amortization method for intangible assets with finite useful lives are reviewed at least at each financial
year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the assets are accounted for by changing the amortization
period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the consolidated income statement in
the expense category consistent with the function of the intangible assets.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Goodwill

Goodwill represents the excess of cost of an acquisition, over the Group's share in the fair value of identifiable assets less
liabilities and contingent liabilities of the acquired subsidiary, joint venture or associate at the date of the transaction. If the fair value of identifiable assets, liabilities or contingent
liabilities or the cost of the acquisition can only be determined provisionally, then Millicom initially accounts for goodwill using provisional values. Within twelve months of the acquisition date,
Millicom then recognizes any adjustments to the provisional values once the fair value of the identifiable assets, liabilities and contingent liabilities and the cost of the acquisition have been
finally determined. Adjustments to provisional fair values are made as if the adjusted fair values had been recognized from the acquisition date. Goodwill on acquisition of subsidiaries and joint
ventures is included in "intangible assets, net". Goodwill on acquisition of associates is included in "investments in associates". Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill
is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses on goodwill are
not reversed.

For
the purpose of impairment testing, goodwill acquired in a business combination is, from acquisition date, allocated to each of the Group's cash generating units or groups of
cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or
groups of units. Each unit or group of units to which the goodwill is allocated:



Impairment
is determined by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates. Where
the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognized. Where goodwill forms
part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed of in this manner is measured based on the relative values of the
operation disposed and the portion of the cash-generating unit retained.

Licenses

Licenses are shown at either historical cost or, if acquired in a business combination, at fair value at the date of acquisition.
Licenses have a finite useful life and are carried at cost less accumulated amortization and any accumulated impairment losses. Amortization is calculated using the straight-line method to
allocate the cost of the licenses over their estimated useful lives.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

The terms of licenses, which have been awarded for various periods, are subject to periodic review for, amongst other things, rate setting, frequency allocation and technical standards.
Licenses are initially measured at cost and are amortized from the date the network is available for use on a straight-line basis over the license period. Licenses held, subject to certain
conditions, are usually renewable and generally non-exclusive. When estimating useful lives of licenses, renewal periods are not usually included.

Trademarks and customer bases

Trademarks and customer bases are recognized as intangible assets only when acquired or gained in a business combination. Their cost
represents fair value at the date of acquisition. Trademarks and customer bases have finite useful lives and are carried at cost less accumulated amortization. Amortization is calculated using the
straight-line method to allocate the cost of the trademarks and customer bases over their estimated useful lives. The estimated useful lives for trademarks and customer bases are based on
specific characteristics of the market in which they exist. Trademarks and customer bases are included in "Intangible assets, net".

Estimated
useful lives are:

Trademarks

1 to 10 yearsCustomer bases

4 to 9 years


2.7   Impairment of non-financial assets

At each reporting date the Group assesses whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment
testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. The Group determines the recoverable amount based on the higher of its fair value less cost to sell,
and its value in use, for individual assets, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Where no comparable market information is available, the fair value less cost
to sell is determined based on the estimated future cash flows discounted to their present value using a discount rate that reflects current market conditions for the time value of money and risks
specific to the asset. In addition to evaluation of possible impairment to the assets carrying value, the foregoing analysis also evaluates the appropriateness of the expected useful lives of the
assets. Impairment losses of continuing operations are recognized in the consolidated income statement in those expense categories consistent with the function of the impaired asset.

At
each reporting date an assessment is made as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. Other than for goodwill, a previously recognized impairment loss is reversed if there has been a change in the estimate used to determine the
asset's recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss. After such a
reversal, the depreciation charge is adjusted

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

in
future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

2.8   Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in
current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified within non-current assets. Loans and receivables are carried at
amortized cost using the effective interest method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or impaired, as well as through the
amortization process.

2.9   Financial instruments at fair value through profit or loss

Financial instruments at fair value through profit or loss are financial instruments held for trading. Their fair value is determined by reference to quoted
market prices on the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length
market transactions, reference to the current market value of a substantially similar instrument, discounted cash flow analysis and option pricing models. A financial instrument is classified in this
category if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are
classified as current assets.

2.10 Financial Instruments that contain obligations to purchase own equity instruments

Contracts that contain obligations for the Company to purchase its own equity instruments for cash or other financial assets are initially recorded as financial
liabilities based on the present value of the redemption amounts with a corresponding reserve in equity. Subsequently the carrying value of the liability is remeasured at the present value of the
redemption amount with changes in carrying value recorded in other non-operating (expenses) income, net. If the contracts expire without delivery, the carrying amounts of the financial liabilities are
reclassified to equity.

2.11 Non-current assets (or disposal groups) held for sale and related liabilities

Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount and fair value (less costs
to sell if their carrying amount is expected to be recovered principally through a sale transaction rather than through continuing use). Liabilities of disposal groups are classified as "Liabilities
directly associated with assets held for sale".

2.12 Inventories

Inventories (which mainly consist of mobile telephone handsets and related accessories) are stated at the lower of cost and net realizable value. Cost is
determined using the first-in, first-out (FIFO) method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

F-20

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.13 Trade receivables

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for
impairment. A provision for impairment is recorded when there is objective evidence that the Group will not be able to collect amounts due according to the original terms of receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are indicators of impairment. The amount of
the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The provision is recognized in the
consolidated income statement within "Cost of sales".

2.14 Deposits

Time deposits

Cash deposits with banks with maturities of more than 3 months that generally earn interest at market rates are classified as
time deposits.

Pledged deposits

Pledged deposits represent contracted cash deposits with banks that are held as security for debts at corporate or operational entity
level. Millicom is unable to access these funds until either the relevant debt is repaid or alternative security is arranged with the lender.

2.15 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three
months or less.

2.16 Impairment of financial assets

The Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or group of financial assets is
impaired. Impairment losses are recognized in the consolidated income statement.

2.17 Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.

Where
any Group company purchases the Company's share capital, the consideration paid including any directly attributable incremental costs is shown under "Treasury shares" and deducted
from equity attributable to the Company's equity holder until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of
any directly attributable incremental costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.18 Borrowings

Borrowings are initially recognized at fair value, net of directly attributable transaction costs. After initial recognition borrowings are subsequently measured
at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part
of the effective interest rate. Any difference between the initial amount and the maturity amount is recognized in the consolidated income statement over the period of the borrowing.

Borrowings
are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the statement of
financial position date.

2.19 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the
fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Finance
leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair
value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Where a finance lease results from a sale and leaseback transaction,
any excess of sales proceeds over the carrying amount of the assets is deferred and amortized over the lease term.

Capitalized
leased assets are depreciated over the shorter of the estimated useful lives of the assets, or the lease term if there is no reasonable certainty that the Group will obtain
ownership by the end of the lease term.

Operating
lease payments are recognized as expenses in the consolidated income statement on a straight-line basis over the lease term.

2.20 Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, if it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision
to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
where appropriate, risks specific to the liability. Where discounting is used, increases in the provision due to the passage of time are recognized as interest expenses.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.21 Trade payables

Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method where the effect of the
passage of time is material.

2.22 Revenue recognition

Revenue comprises the fair value of consideration received or receivable for the sale of goods and services, net of value added tax, rebates and discounts and
after eliminating intra-group sales.

Revenue
is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognized.

These
recurring revenues consist of monthly subscription fees, airtime usage fees, interconnection fees, roaming fees and fees from other telecommunications services such as data
services, short message services and other value added services. Recurring revenues are recognized on an accrual basis, i.e. as the related services are rendered. Unbilled revenues for airtime
usage and subscription fees resulting from services provided from the billing cycle date to the end of each month are estimated and recorded.

Subscription
products and services are deferred and amortized over the estimated life of the customer relationship. Related costs are also deferred, to the extent of the revenues
deferred, and amortized over the estimated life of the customer relationship. The estimated life of the customer relationship is calculated based on historical disconnection percentage for the same
type of customer.

Where
customers purchase a specified amount of airtime in advance, revenue is recognized as credit is used. Unutilized airtime is carried in the statement of financial position as
deferred revenue within "other current liabilities".

Revenues
from value added content services such as video messaging, ringtones, games etc., are recognised net of payments to the providers of these services if the providers are
responsible for content and determining the price paid by the customer. For such services the Group is considered to be acting in substance as an agent. Where the Group is responsible for the content
and determines the price paid by the customer then the revenue is recognised gross.

Revenues
from the sale of handsets and accessories on a stand-alone basis (without multiple deliverables) are recognized when the significant risks and rewards of ownership of handsets
and accessories have been passed to the buyer.

Revenue
arrangements with multiple deliverables ("Bundled Offers" such as equipment and services sold together) are divided into separate units of accounting if the deliverables in the
arrangement meet certain criteria. The arrangement consideration is then allocated among the separate units of accounting based on their relative fair values or on the residual method. Revenue is then
recognized separately for each unit of accounting.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.23 Cost of sales

The primary cost of sales incurred by the Group in relation to the provision of telecommunication services relate to interconnection costs, roaming costs, rental
of leased lines, costs of handsets and other accessories sold, and royalties. Cost of sales is recorded on an accrual basis.

Cost
of sales also includes depreciation and any impairment of network equipment and trade receivables.

2.24 Customer acquisition costs

Specific customer acquisition costs, including dealer commissions and handset subsidies, are charged to sales and marketing when the customer is activated.

2.25 Employee benefits

Pension obligations

Pension obligations can result from either a defined contribution plan or a defined benefit plan.

A
defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity No further payment obligations exist once the contributions have been
paid. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in future payments
is available.

A
defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit pension plans define an amount of pension benefit that an employee will
receive on retirement,
usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of the defined benefit pension plan
is the present value of the defined benefit obligation at the statement of financial position date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or
losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using an appropriate discount rate based on maturities of the related pension liability. The Group does not have any defined benefit pension plans.

Share based compensation

Share awards are granted to management and key employees.

The
cost of equity-settled transactions is recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled,
ending on the date on which the relevant employee becomes fully entitled to the award (the vesting date). The cumulative expense recognized for equity-settled transactions at each reporting date until
the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest.

No
expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vested irrespective of
whether or not the

F-24

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

market
conditions are satisfied, provided that all other performance conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the
terms had not been modified. In addition, an expense is recognized for any modification that increases the total fair value of the share based payment arrangement, or is otherwise beneficial to the
employee as measured at the date of modification.

2.26 Taxation

Current tax

Current tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rate and tax laws used to compute the amount are those enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred income tax is provided using the liability method and calculated from temporary differences at the statement of financial
position date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences,
except where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither accounting, nor taxable, profit or loss.

Deferred
income tax assets are recognized for all deductible temporary differences and carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary difference and the carry-forward of unused tax credits and unused tax losses can be utilized, except where the deferred tax
assets relate to deductible temporary differences from initial recognition of an asset or liability in a transaction that is not a business combination, and, at the time of the transaction, affects
neither accounting, nor taxable, profit or loss.

The
carrying amount of deferred income tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to utilize the deferred income tax asset. Unrecognized deferred income tax assets are reassessed at each statement of financial position date and are recognized to the extent
it is probable that future taxable profit will enable the deferred tax asset to be recovered.

Deferred
income tax assets and liabilities are measured at the tax rate expected to apply in the year when the assets are realized or liabilities settled, based on tax rates and tax laws
that have been enacted or substantively enacted at the statement of financial position date. Income tax relating to items recognized directly in equity is recognized in equity and not in the
consolidated income
statement. Deferred tax assets and deferred tax liabilities are offset where legally enforceable set off rights exist and the deferred taxes relate to the same taxable entity and the same taxation
authority.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.27 Discontinued operations

Revenues and expenses associated with discontinued operations are presented in a separate line in the consolidated income statement. Comparative figures in the
consolidated income statement representing the discontinued operations are reclassified to the separate line. Discontinued operations are those with identifiable operations and cash flows (for both
operating and management purposes) and represent a major line of business or geographic unit which has been disposed of or is available for sale.

2.28 Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair
value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group
designates certain derivatives as either:



For
transactions designated and qualifying for hedge accounting, at the inception of the transaction, the Group documents the relationship between hedging instruments and hedged items,
as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The
fair values of derivative instruments used for hedging purposes are disclosed in note 35. Movements in the hedging reserve are recognized as other comprehensive income. The
full fair value of a hedging derivative is classified as a non-current asset or liability when the period to maturity of the hedged item is more than 12 months and as a current asset or
liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability when the remaining period to maturity of the
hedged item is less than 12 months.

The
Group does not have either fair value or net investment hedges.

The
effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss
relating to any ineffective portion is recognized immediately in the income statement within 'other non operating (expenses) income, net'.

Amounts
accumulated in equity are reclassified to the income statement in the periods when the hedged item affects profit or loss.

When
a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in
equity and is

F-26

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

recognized
when the forecast transaction is ultimately recognized in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
equity is immediately transferred to the income statement within 'other non operating (expenses) income, net'.

2.29 Changes in accounting policies

The consolidated financial statements as of December 31, 2011 are prepared in accordance with consolidation and accounting policies consistent with those
of the previous financial years.

There
are no IFRS's or IFRIC interpretations that are effective for the first time for the financial year beginning January 1, 2011 that have a material impact on the Group.

The
following standards, amendments and interpretations issued are not effective for the financial year beginning January 1, 2011 and have not been early adopted.



F-27

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)



There
are no other IFRS's or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

Contingent liabilities

Contingent liabilities are potential liabilities that arise from past events whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of Millicom. Provisions for liabilities are recorded when a loss is considered probable and can be reasonably
estimated. The determination of whether or not a provision should be recorded for any potential liabilities is based on management's judgment.

Estimates

Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. Because of inherent uncertainties in this evaluation process, actual results may be different from originally estimated amounts. In
addition, significant estimates are involved in the determination of impairments, provisions related to taxes and litigation risks. These estimates are subject to change as new information becomes
available and may significantly affect future operating results.

F-28

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (Continued)

Accounting for property, plant and equipment, and intangible assets involves the use of estimates for determining fair values at acquisition dates, particularly in the case of such
assets acquired in a business combination. Furthermore, the expected useful lives of these assets must be estimated. The determination of fair values of assets and liabilities, as well as of useful
lives of the assets is based on management judgment.

Deferred
tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant
management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax
planning strategies (see note 14).

For
our critical accounting estimates reference is made to the relevant individual notes to these consolidated financial statements, more specifically
note 5Acquisition of subsidiaries, joint ventures and non-controlling interests; note 7Discontinued operations and assets held for sale;
note 14Taxes; note 16Intangible assets, note 17Property, plant and equipment, note 20Trade receivables,
note 24Share-based compensation (relating to long-term incentive plans); note 28Other noncurrent and current provisions and liabilities (relating to
the put option); note 32Commitments and contingencies; and note 35Financial instruments.

4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

As previously reported in the Company's press release furnished on Form 6-K filed with the United States Securities and Exchange Commission ("SEC") on
January 26, 2012, the board of directors of the Company, based on the recommendation of the audit committee and in consultation with management, concluded that, because of a misstatement in the
Company's previously issued financial statements for the year ended December 31, 2010, and for the quarters ending on September 30, 2010 to September 30, 2011, the Company should
restate its December 31, 2010 financial statements in this Annual Report on Form 20-F for the fiscal year ended December 31, 2011. Accordingly, the Company has
restated its financial statements for these periods.

The
restated financial statements as of and for the year ended December 31, 2010 correct the accounting treatment for the Honduras transaction in July 2010 as follows:

Recognition of a liability and corresponding reserve for the put option provided to our partner who holds a non-controlling interest in our Honduran operation.

Following reassessment of the accounting treatment of the put option provided to Millicom's partner who holds a 33.3%
non-controlling interest in our Honduran operation, Millicom determined that, as the put option could be exercised under certain change of control events which could be outside the control
of Millicom, the option meets the criteria under IAS 32 for recognition as a liability and corresponding equity reserve. Therefore, Millicom has retroactively recorded a liability for the put
option at July 1, 2010 of $737 million. As a result of the change in carrying value of the put option between July 1, 2010 and year end, the liability amounted to
$769 million at December 31, 2010, representing the redemption value of the option.

F-29

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Continued)

Recognition of a loss on revaluation of the put option liability

Recognition for the period between July 1, 2010 to December 31, 2010 of a non operating expense of $32 million,
reflecting the change in value of the above mentioned put option liability.

Effects of Restatement

The following table sets forth the effects of the restatement on affected items within Millicom's previously reported Consolidated
Statements of Financial Position and Consolidated Income Statements. The adjustments necessary to correct the errors have no effect on reported assets or cash flows or guidance.

(in thousands of U.S. dollars, except per share data)



As of
and for the
Year Ended
December 31,
2010Consolidated Income Statements Data:Other non-operating income (expenses), net (including loss from associates)

As previously reported


(31,519
)Adjustment


(31,956
)As adjusted


(63,475
)Profit before taxes from continuing operations

As previously reported


1,870,163Adjustment


(31,956
)As adjusted


1,838,207Net profit for the period

As previously reported


1,652,233Adjustment


(31,956
)As adjusted


1,620,277Basic earnings per common share

As previously reported

$
15.27Adjustment

$
(0.30
)As adjusted

$
14.97Diluted earnings per common share

As previously reported

$
15.24Adjustment

$
(0.29
)As adjusted

$
14.95


F-30

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Continued)



(in thousands of U.S. dollars)



As of
and for the
Year Ended
December 31,
2010Consolidated Statements of Financial Position Data:Accumulated profits brought forward

As previously reported


1,134,354Adjustment


As adjusted


1,134,354Put option reserve

As previously reported


Adjustment


(769,378
)As adjusted


(769,378
)Total Equity

As previously reported


3,159,011Adjustment


(769,378
)As adjusted


2,389,633Total Current Liabilities

As previously reported


1,684,831Adjustment


769,378As adjusted


2,454,209


5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS

Year ended December 31, 2011

In 2011 Millicom acquired minor investments in businesses for consideration of $9 million. As at December 31, 2011, an
agreement entered into on August 20, 2010 to increase Millicom's ownership in Navega El Salvador from 55% to 100% remains subject to regulatory approval.

Year ended December 31, 2010

In 2010, Millicom gained control over Telefonica Cellular S.A. DE CV, its mobile phone operation in Honduras, and acquired
control of Navega S.A. DE CV, its cable operation in Honduras.

Telefonica Cellular S.A. DE CV

On July 1, 2010 Millicom reached agreement with its local partner in Honduras whereby Millicom's local partner granted Millicom
an unconditional call option for the next five years for his 33% stake in Telefonica Cellular S.A. DE CV ("Celtel") and as consideration, Millicom granted a put option for the same duration to
the local partner (see notes 28 and 35). The put option can only be exercised in case of a change of control of Millicom International Cellular S.A. or Millicom's subsidiary that holds
the shares in Celtel (except if the change of control is in favor of Investment AB Kinnevik, the current largest shareholder of Millicom, or management of Millicom).

Prior
to entering into the agreement, Millicom was dependent on the consent of its local partner for strategic decisions related to it Honduran operation, as the shareholders agreement
required a vote of 75% of the shares to authorize and approve significant financial and operating policies of Celtel.

F-31

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

The
call option allows Millicom, unconditionally at any time during the five year period from July 1, 2010 to exercise its right to acquire the 33% stake (and voting rights) of our local
partner at a price which Millicom believes represents the strategic value of the asset. The call option therefore conferred to Millicom control over Celtel through its ability to influence and
exercise the power to govern the financial and operating policies (develop the future business in Honduras).

Accordingly,
Celtel has been fully consolidated into the Millicom Group financial statements from July 1, 2010. Previously, the Honduras operations were proportionately
consolidated.

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2010. The
recognized amounts of identified assets acquired and liabilities assumed as of July 1, 2010 were as follows:

Fair value
(100%)

Previously
held
interests
(66.7%)US$ '000

US$ '000Intangible assets, net(i)

435,174

22,602Other investments

20,653

13,769Property, plant and equipment, net

339,082

226,055Trade receivables

13,876

9,251Prepayments and accrued income

6,681

4,454Other current assets

34,485

22,990Cash and cash equivalents

24,654

16,436874,605

315,557Other non-current liabilities(ii)

264,590

100,492Current debt and other financing

74,943

49,962Trade payables

6,117

4,078Accrued interests and other expenses

12,756

8,504Current income tax liabilities

17,465

11,643Other current liabilities

51,890

35,871427,761

210,550Non-controlling interests

147,121Fair value of the net assets acquired and contingent liabilities

299,723Goodwill arising on change of control

854,572Previously held interests in Celtel

(105,007
)Revaluation of the previously held interests in Celtel

1,049,288


(i)Intangible
assets not previously recognized are trademarks for an amount of $40 million, with estimated useful life of 10 years, customers'
list for an amount of $335 million, with estimated useful life of 8-9 years, and telecommunications license for an amount of $21 million, with estimated useful life of
11 years.(ii)Deferred
tax liabilities related to differences between the tax base and the fair value of the identifiable assets acquired amount to $114 million.


F-32

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

The
goodwill, which is not expected to be tax deductible, is attributable to the profitability potential of Celtel and the synergies expected to arise. The fair value of the customers'
list was ascertained using the discounted excess earnings method, the fair value of the trademark was ascertained using the relief from royalty approach, and the fair value of the telecommunications
license against comparable transactions.

The
change of control contributed revenues of $100 million and net profit of $1,049 million (including the gain on revaluation of the previously held interest) for the
period from acquisition to December 31, 2010. If the change of control had occurred on January 1, 2010, unaudited pro forma Group revenues from continuing operations for the year ended
December 31, 2010 would have been $4,018 million, and
the unaudited pro forma net profit from continuing operations for the same period, as restated, would have been $1,633 million. These amounts have been calculated using the Group accounting
policies.

Millicom
revalued at fair value its previously held 66.7% interest in Celtel recognizing a gain of $1,049 million, recorded under the caption "Revaluation of previously held
interests". The fair value of the previously held interests was determined based on discounted cash flows. The cash flow projections used (adjusted operating profit margins, income tax, working
capital and capital expenditure) were estimated by management covering 6 years. Cash flows beyond this period were extrapolated using a perpetual growth rate of 2%. The valuation was determined
using a discount rate of 14.3%.

Navega S.A. DE CV

As part of a regional shareholding alignment agreement with its local partner in Honduras, on August 20, 2010 Millicom reached
agreement with its local partner in Honduras whereby Millicom acquired a further 6% of Navega S.A. DE CV ("Navega Honduras") (formerly Metrored S.A.). As a result of this agreement
Millicom has the right to control Navega Honduras, which has been fully consolidated into the Millicom Group financial statements from August 20, 2010. Previously, the results of Navega
Honduras were proportionately consolidated. The agreement is expected to facilitate further integration of the cable business and to create synergies.

F-33

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2010 and
recognized the following amounts:

Fair value
100%

Previously
held
interests
60.72%US$ '000

US$ '000Intangible assets, net

19,563

11,879Property, plant and equipment, net

22,875

13,890Other non-current assets

180

109Trade receivables

1,988

1,207Prepayments and accrued income

40

25Other current assets

482

293Cash and cash equivalents

3,050

1,85248,178

29,255Other non-current liabilities

3,178

1,930Current debt and other financing

1,152

699Trade payables

357

217Accrued interests and other expenses

1,135

689Current income tax liabilities

1,035

628Other current liabilities

2,211

1,3439,068

5,506Non controlling interests

13,037Fair value of the net assets acquired and contingent liabilities

26,073Goodwill arising on change of control

13,866Previously held interests in Navega Honduras

(23,748
)Revaluation of the previously held interests in Navega Honduras

10,726Cost of change of control

5,465


The
goodwill, which is not expected to be tax deductible, is attributable to the profitability potential of Navega Honduras and the synergies expected to arise. The fair value of the
customers' list was ascertained using the discounted excess earnings method, and the fair value of the trademark was ascertained using the relief from royalty approach.

Navega
Honduras contributed revenues of $1 million and net profit of $20 million (including gain on revaluation) for the period from acquisition to December 31,
2010. If the acquisition had occurred on January 1, 2010, unaudited pro forma Group revenues from continuing operations for the year ended December 31, 2010 would have been
$3,924 million, and the unaudited pro forma net profit from continuing operations for the same period, as restated, would have been $1,612 million. These amounts have been calculated
using the Group accounting policies.

Millicom
revalued at fair value its previously held 60% interest in Navega Honduras recognizing a gain of $11 million, recorded under the caption "Revaluation of previously held
interests".

F-34

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Year ended December 31, 2009

In 2009, Millicom's joint venture in Guatemala acquired the remaining non-controlling interest in Navega.com S.A.
and Millicom acquired the remaining non-controlling interest in its operation in Chad.

Navega.com S.A.

On March 13, 2009, Millicom's joint venture in Guatemala completed the acquisition of the remaining 55% interest in
Navega.com S.A. ("Navega Guatemala"). Millicom's share of the acquisition cost of the remaining 55% interest in Navega Guatemala amounted to $49 million and Millicom's share of the cash
acquired amounted to $10 million; net cash used for this acquisition therefore amounted to $39 million.

F-35

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2009. Millicom's
share of the fair value of the identifiable assets and liabilities acquired was as follows:

Fair value

Previously
held interestsUS$ '000

US$ '000Intangible assets, net(i)


51,442


8,988Property, plant and equipment, net


34,205


18,995Other non-current assets


122


87Trade receivables


3,196


1,739Prepayments and accrued income


13


8Current income tax assets


16


7Other current assets(ii)


2,400


353Cash and cash equivalents


10,656


5,070102,050


35,247Other non-current liabilities(iii)


3,437


Current debt and other financing


10,953


5,546Trade payables


7,241


4,611Accrued interests and other expenses


557


286Current income tax liabilities


2,872


1,899Other current liabilities(ii)


16,589


5,96141,649


18,303Fair value of the net assets acquired and contingent liabilities


60,401Goodwill arising on acquisition


38,203Previously held interests in Navega Guatemala and Metrored


(16,944
)Revaluation of the previously held interests in Navega Guatemala and Metrored


(32,319
)Acquisition cost


49,341


(i)Intangible
assets not previously recognized are trademarks for an amount of $2 million (Millicom's share: $1 million), with estimated useful
life of 8 years, and customers' list for an amount of $62 million (Millicom's share: $35 million), with estimated useful life of 9 years.(ii)Contingent
liabilities relating to tax and other contingencies on acquisition of $6 million (Millicom's share: $3 million) were booked within
"Other current liabilities". The former shareholders placed $3 million in escrow to partly cover these contingencies. Therefore a corresponding financial asset of $3 million (Millicom's
share: $2 million) has been recorded within "Other current assets".(iii)Deferred
tax liabilities, related to the differences between the tax base and the fair value of the identifiable assets acquired amount to
$6 million (Millicom's share: $3 million).


F-36

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

5. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

The
goodwill, which is not expected to be tax deductible, is attributable to the profitability potential of the acquired business and the synergies expected to arise from the Group's
acquisition of Navega. The fair value of the customer bases was ascertained using the discounted excess earnings method and the fair value of the trademark was ascertained using the relief from
royalty approach.

The
acquired business contributed revenues of $21 million and net profit of $12 million for the period from acquisition to December 31, 2009. If the acquisition had
occurred on January 1, 2009, unaudited pro forma Group revenues from continuing operations for the year ended December 31, 2009 would have been $3,378 million, and the unaudited
pro forma net profit from continuing operations for the same period would have been $507 million. These amounts have been calculated using the Group accounting policies.

In
2009 Millicom early adopted IFRS 3R and applied it to this acquisition (see note 2). As a result, Millicom revalued at fair value its previously held 45% interest in
Navega (held by Millicom's joint venture in Guatemala) and its previously held 49% interest in Metrored S.A. ("Metrored"), a subsidiary of Navega (held by Millicom's joint venture in Honduras),
recognizing a gain of $32 million, recorded under the caption "Revaluation of previously held interests".

Millicom Tchad S.A.

On March 4, 2009, Millicom completed the acquisition of the remaining 12.5% non-controlling interests in its
operation in Chad. The initial consideration amounted to $8 million and was paid in cash. As certain conditions were met, two additional payments of $1 million each were made.

In
2009 Millicom early adopted IAS 27R and applied it to this acquisition. As a result, the purchase of the non-controlling interest in Chad was treated as an equity
transaction. The difference between the acquisition cost and the carrying value of the existing non-controlling interest at the date of the transaction resulted in a decrease in Millicom
shareholders' equity of $10 million.

Other minor investments

In 2009, Millicom acquired other minor investments for a cash consideration of $6 million.

6. DISPOSALS OF SUBSIDIARIES AND JOINT VENTURES

Year ended December 31, 2011

Millicom Lao Co Ltd

On September 16, 2009 Millicom announced that it signed an agreement for the sale of its 74.1% holding in Millicom
Lao Co. Ltd., its Laos operation, to VimpelCom for approximately $65 million in total cash proceeds, payable on completion. The transaction valued the entire Laos operation at an
enterprise value of approximately $102 million.

On
March 9, 2011 Millicom completed the transaction and received proceeds (net of transaction costs and taxes) from the sale of $53 million, realizing a gain on sale of
$37 million. From that date the Laos operation is no longer included in the consolidated financial statements of the Group.

F-37

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

6. DISPOSALS OF SUBSIDIARIES AND JOINT VENTURES (Continued)

Amnet Honduras

As part of a regional shareholding alignment agreement with its local partner in Honduras, on March 21, 2011, Millicom reduced
its shareholding in Amnet Honduras from 100% to 66.7%, realizing a gain on sale of $2.2 million, which is recorded in equity as gain on sale to non-controlling interests. The
proceeds from the sale amount to $16.5 million, of which $1 million was received in March 2011, while $4 million will be received each year for the next three years (in March
2012, March 2013 and March 2014) and the remaining $3.5 million will be received in March 2015.

Year ended December 31, 2010

As part of the regional shareholding alignment agreement with its local partner in Guatemala, on August 20, 2010, Millicom
disposed of 45% of its interest in Newcom Guatemala ("Amnet Guatemala"). From that date Amnet Guatemala has been accounted for as a joint venture and proportionately consolidated into the Millicom
Group financial statements. Previously, the results of the Amnet Guatemala were fully consolidated. There was no significant impact on profit and loss from the disposal.

Year ended December 31, 2009

On October 16, November 25 and November 26, 2009 respectively, Millicom completed the sale of its operations in
Sri Lanka, Sierra Leone and Cambodia, for total proceeds of respectively $155 million, $1 million and $353 million realizing a total net gain of $289 million. Total
transaction costs amounted to $11 million. Total cash disposed amounted to $30 million.

7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Discontinued operations

The results of discontinued operations for the years ended December 31, 2011, 2010 and 2009 are presented below:

2011

2010

2009US$ '000

US$ '000

US$ '000Revenues


6,134


29,625


218,874Operating expenses(i)


(3,378
)

(17,086
)

(193,038
)Operating profit


2,756


12,539


25,836Non-operating income (expenses), net


509


271


(10,500
)Profit before tax


3,265


12,810


15,336Tax charge


(305
)

(953
)

(3,854
)Gain from disposal, net


36,505





288,860Net profit for the year


39,465


11,857


300,342


(i)In
2009, an impairment of $11 million was booked to align the carrying value of Millicom's operation in Sierra Leone to its estimated fair value less
cost to sell.


F-38

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

The
cash (used) provided by discontinued operations for the years ended December 31, 2011, 2010 and 2009 is presented below:

2011

2010

2009US$ '000

US$ '000

US$ '000Net cash provided by operating activities





11,105


29,906Net cash used by investing activities





(16,089
)

(62,795
)Net cash (used) provided by financing activities





5,597


(8,270
)Exchange (loss) gain on cash and cash equivalents





234


(158
)Transfer of cash to assets held for sale





(847
)

(19,099
)Proceeds from the sale of discontinued operations


53,102





477,171Cash provided (used) by discontinued operations


53,102





416,755


The
following table gives details of non cash investing and financing activities of discontinued operations for the years ended December 31, 2011, 2010 and 2009:

2011

2010

2009US$ '000

US$ '000

US$ '000Investing activitiesAcquisition of property, plant and equipment








(873
)Financing activitiesVendor financing and finance leases








873


Asian businesses

In May 2009, Millicom decided to dispose of its businesses in Cambodia, Laos and Sri Lanka and, as a result, in accordance with
IFRS 5, these operations were classified as discontinued operations. Millicom's operations in Sri Lanka and Cambodia were sold respectively on October 16 and November 26, 2009 and
its operation in Laos sold on March 9, 2011. Millicom's businesses in Cambodia, Laos and Sri Lanka previously represented the entire operating segment "Asia".

Assets held for sale

At December 31, 2011 Millicom had assets held for sale amounting to $66 million representing towers sold but yet to be
transferred to associates in Ghana, Tanzania, the Democratic Republic of Congo and Colombia. The assets and directly associated liabilities (asset retirement obligations) of $10 million that
are part of these sales but are not leased back by Millicom have been reclassified respectively as assets held for sale and liabilities directly associated with assets held for sale, as completion of
their sale is highly probable. The part of the towers which are leased back are capitalized and classified under the caption "Property, plant & equipment, net" in the statement of financial
position as at December 31, 2011.

F-39

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

The
major classes of assets and liabilities classified as held for sale as at December 31, 2011, and 2010 are as follows:

2011

2010US$ '000

US$ '000AssetsProperty, plant and equipment, net


66,252


171,473Trade receivables, net





6,044Inventories





477Other assets





4,402Cash and cash equivalents





2,314Assets held for sale


66,252


184,710LiabilitiesNon-current debt and other financing





13,322Other non-current liabilities


9,658


13,992Current debt and other financing





5,662Trade payables





4,278Other current liabilities





23,513Liabilities directly associated with assets held for sale


9,658


60,767Net assets directly associated with the disposal group


56,594


123,943


Ghana

In January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement with Helios Towers Ghana, a direct
subsidiary of Helios Towers Africa, for most of its tower assets. Under the agreement, Millicom Ghana sold the tower assets to Helios Towers Ghana for a total consideration of $30 million cash
and a 40% stake in Helios Towers Ghana, and leased back a dedicated portion of each tower on which to locate its network equipment.

By
December 31, 2011 approximately 97% of the towers had been transferred. The remaining towers are expected to be transferred in 2012. The carrying value of the portion of the
remaining towers that will not be leased back has been classified as assets held for sale as at December 31, 2011 and amounted to $1 million (December 31, 2010:
$6 million).

The
gain on sale represents the difference between the proceeds received and the net book value of the towers sold, as adjusted to eliminate Millicom's equity stake in Helios Towers
Ghana. A portion of
the gain, representing the portion of towers leased back is deferred and recognised over the term of the lease. The net gain realized for the year ended December 31, 2011 was $5 million
(2010: $5 million).

The
fair value of the towers was derived by using the estimated replacement cost of the towers adjusted by an amount for wear and tear taking into consideration the average age of the
towers. The fair value of the assets sold was $70 million and the acquired 40% interest in Helios Towers Ghana is accounted for as an investment in associate (see note 18).

Millicom
is leasing back a portion representing 40% of the towers sold for a period of 12 years (with options to renew for four further periods of five years each). The 40%
portion of towers being

F-40

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

leased
back represents the dedicated part of each tower on which Millicom's equipment is located and is derived from the average current technical capacity of the towers. This part of each of the
towers is being accounted for as a finance lease. Rights to use the land on which the towers are located are accounted for as operating leases, and costs of services for the towers are treated as
operating expenses.

Annual
payments under the finance lease agreement depend on the timing of transfer of towers to Helios Towers Ghana, but amount to approximately $11 million per annum once all
towers are transferred.

Tanzania

In December 2010, Millicom's operation in Tanzania signed a sale and lease-back agreement with Helios Towers Tanzania, a
direct subsidiary of Helios Towers Africa, for most of its tower assets. Under the agreement, Millicom Tanzania has agreed to sell the tower assets to Helios Towers Tanzania for a total consideration
of $81 million cash and a 40% stake in Helios Towers Tanzania, and will lease back a dedicated portion of each tower on which to locate its network equipment.

By
December 31, 2011, approximately 70% of the towers had been transferred. The remaining towers are expected to be transferred in 2012. The carrying value of the portion of the
remaining towers that
will not be leased back has been classified as assets held for sale as at December 31, 2011 and amounted to $22 million (December 31, 2010: $52 million). At
December 31, 2011, liabilities directly related to these assets held for sale amounted to $3 million. (December 31, 2010: $6 million).

The
gain on sale represents the difference between the proceeds received and the net book value of the towers sold, as adjusted to eliminate Millicom's equity stake in Helios Towers
Tanzania. A portion of the gain, representing the portion of towers leased back is deferred and recognised over the term of the lease. The net gain realized for the year ended December 31, 2011
was $13 million (2010: nil).

The
fair value of the assets was derived by using the estimated replacement cost of the towers adjusted by an amount for wear and tear taking into consideration the average age of the
towers. The fair value of the assets sold was $131 million and the acquired 40% interest in Helios Towers Tanzania is accounted for as an investment in associate (see note 18).

Millicom
will lease back 40% of the towers sold for a period of 12 years (with options to renew for four further periods of five years each). The 40% portion of towers to be
leased back represents the dedicated part of each tower on which Millicom's equipment is located and is derived from the average current technical capacity of the towers. This part of each of the
towers is accounted for as a finance lease. Rights to use the land on which the towers are located will be accounted for as operating leases, and costs of services for the towers are treated as
operating expenses.

Annual
payments under the finance lease agreement depend on the timing of transfer of towers to Helios Towers Tanzania, but amount to approximately $10 million per annum once all
towers are transferred.

F-41

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

The Democratic Republic of Congo ("DRC")

In December 2010, Millicom's operation in DRC signed a sale and lease-back agreement with Helios Towers DRC, a direct
subsidiary of Helios Towers Africa, for most of its tower assets. Under the agreement, Millicom DRC has agreed to sell the towers to Helios Towers DRC for a total consideration of $41.5 million
cash and a 40% stake in Helios Towers DRC, and will lease back a dedicated portion of most of the towers on which to locate its network equipment.

By
December 31, 2011, approximately 50% of the towers had been transferred. The remaining towers are expected to be transferred in 2012. The carrying value of the portion of the
remaining towers that will not be leased back has been classified as assets held for sale as at December 31, 2011 and amounted to $29 million (December 31, 2010:
$55 million). At December 31, 2011, liabilities directly related to these assets held for sale amounted to $2 million. (December 31, 2010: $5 million).

The
gain on sale represents the difference between the proceeds received and the net book value of the towers sold, as adjusted to eliminate Millicom's equity stake in Helios Towers DRC.
A portion of the gain, representing the portion of towers leased back is deferred and recognised over the term of the lease. The net gain realized for the year ended December 31, 2011 was
$3 million (2010: nil).

Millicom
will lease back a portion representing 40% of most of the towers sold for a period of 12 years (with options to renew for four further periods of five years each). The
40% portion of towers to be leased back represents the dedicated part of each tower on which Millicom's equipment is located and is derived from the average current technical capacity of the towers.
This part of each of the towers is accounted for as a finance lease. Rights to use the land on which the towers are located are accounted for as operating leases, and costs of services for the towers
are treated as operating expenses.

Annual
payments under the finance lease agreement depend on the timing of transfer of towers to Helios Towers DRC, but amount to approximately $13 million per annum once all
towers are transferred.

Colombia

In July 2011, Millicom's operation in Colombia signed a sale and lease-back agreement with American Towers International
Inc, for most of its tower assets.

Under
the agreement, Colombia Móvil has agreed to sell those tower assets to a fully owned subsidiary of American Towers in Colombia (ATC Infraco S.A.S) for total
consideration of $182 million cash and an option for Millicom to acquire in cash a 40% stake in the holding company that owns that subsidiary (ATC Colombia BV), and will lease back a
dedicated portion of each tower on which to locate its network equipment.

By
December, 2011, approximately 63% of the towers had been transferred. The remaining towers are expected to be transferred in 2012. The carrying value of the portion of the remaining
towers that will not be leased back has been classified as assets held for sale as at December 31, 2011 and amounted to $14 million. At December 31, 2011, liabilities directly
related to these assets held for sale amounted to $4 million.

F-42

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

The
gain on sale represents the difference between the proceeds and the net book value of the towers sold, as adjusted to eliminate Millicom's equity stake in ATC Colombia BV. A
portion of the gain, representing the portion of towers leased back is deferred and recognised over the term of the lease. The net gain realized for the year ended December 31, 2011 was
$12 million.

Millicom
will lease back 50% of the towers sold for a period of 12 years (with options to renew for four further periods of five years each). The 50% portion of towers to be
leased back represents the dedicated part of each tower on which Millicom's equipment is located and is derived from the average current technical capacity of the towers. This part of each of the
towers is accounted for as a finance lease. Rights to use the land on which the towers are located are accounted for as operating leases, and costs of services for the towers are treated as operating
expenses.

Annual
payments under the finance lease agreement depend on the timing of transfer of towers to ATC Infraco S.A.S., but amount to approximately $19 million per annum once
all towers are transferred.

The
option to acquire a 40% interest in ATC Infraco ("ATC Infraco Option") was exercised by Millicom in December 2011 for cash consideration of $7 million. The option price is set
at a value that has been derived from the value of the tower assets that are transferred to ATC Infraco.

Millicom
has provided Colombia Móvil's other shareholders with an unconditional option to acquire an interest in ATC Infraco up to half of the interest held or to be held
by Millicom. The option expires on July 18, 2013. At December 31, 2011 the fair value of the option granted by Millicom is not significant.

Through
a Millicom subsidiary, Millicom also has an unconditional option to acquire a minority equity interest of up to 40% in ATC Sitios de Colombia S.A.S., an already
established tower subsidiary of American Towers International Inc. The option to acquire an interest of up to 40% in ATC Sitios ("ATC Sitios Option") may be exercised until December 21,
2012. The option price is the equivalent of the amount invested by American Tower in ATC Sitios as adjusted for any return on capital invested by American Tower. At December 31, 2011 the fair
value of the option granted to Millicom is not significant.

Millicom
has provided Colombia Móvil's other shareholders with an unconditional option to acquire an interest in ATC Sitios up to half of the interest held or to be held
by Millicom. The option expires on July 18, 2013. At December 31, 2011 the fair value of the option granted by Millicom is not significant.

F-43

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

8. SUBSIDIARIES

The Group has the following significant subsidiaries, which are consolidated:

Name of the company

Country

Holding
December 31,
2011

Holding
December 31,
2010% of ownership
interest

% of ownership
interestCentral AmericaTelemovil El Salvador S.A.

El Salvador

100.0

100.0Cable El Salvador S.A. de C.V.

El Salvador

100.0

100.0Telefonica Celular S.A.

Honduras

66.7

66.7Navega S.A. DE CV (formerly Metrored S.A) (see note 5).

Honduras

66.7

66.7Cable Costa Rica S.A.

Costa Rica

100.0

100.0South AmericaTelefonica Celular de Bolivia S.A.

Bolivia

100.0

100.0Telefonica Celular del Paraguay S.A.

Paraguay

100.0

100.0Colombia Movil S.A. E.S.P.

Colombia

50.0 + 1 share

50.0 + 1 shareAfricaMillicom Ghana Company Limited

Ghana

100.0

100.0Sentel GSM S.A.

Senegal

100.0

100.0MIC Tanzania Limited

Tanzania

100.0

100.0Oasis S.P.R.L.

Democratic Republic of Congo

100.0

100.0Millicom Tchad S.A. (see note 5)

Chad

100.0

100.0Millicom Mauritius Limited

Mauritius

100.0

100.0Millicom Rwanda Limited

Rwanda

87.5

87.5UnallocatedMillicom International Operations S.A.

Luxembourg

100.0

100.0Millicom International Operations B.V.

Netherlands

100.0

100.0MIC Latin America B.V.

Netherlands

100.0

100.0Millicom Africa B.V.

Netherlands

100.0

100.0Millicom Holding B.V.

Netherlands

100.0

100.0Millicom Ireland Limited

Ireland

100.0

100.0


9. INTERESTS IN JOINT VENTURES

The Group has the following significant joint venture companies, which are proportionally consolidated:

Name of the company

Country

Holding
December 31,
2011

Holding
December 31,
2010% of ownership
interest

% of ownership
interestCentral AmericaComunicaciones Celulares S.A.

Guatemala

55.0

55.0Navega.com S.A. (see note 5)

Guatemala

55.0

55.0AfricaEmtel Limited

Mauritius

50.0

50.0


F-44

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

9. INTERESTS IN JOINT VENTURES (Continued)

The
share of assets and liabilities of the jointly controlled entities at December 31, 2011 and 2010, which are included in the consolidated financial statements, are as follows:

2011

2010US$ '000

US$ '000Current assets

235,092

199,147Non-current assets

419,371

386,703Total assets

654,463

585,850Current liabilities

205,848

159,616Non-current liabilities

174,823

145,664Total liabilities

380,671

305,280


The
share of revenues and operating expenses of the jointly controlled entities for the years ended December 31, 2011, 2010, and 2009, which are included in the consolidated
income statements from continuing operations, are as follows:

2011

2010

2009US$ '000

US$ '000

US$ '000Revenues

650,300

799,305

947,600Total operating expenses

(364,992
)
(413,461
)
(503,298
)Operating profit

285,308

385,844

444,302


10. SEGMENT INFORMATION

Management has determined the operating and reportable segments based on the reports that are used by the Chief Operating Decision Maker ("CODM") to make strategic and operational
decisions.

Management
considers the Group from both a business and a geographic perspective. The Group operates in the business of communication, information, entertainment, mobile financial
services and solutions, and provides these services through mobile telephony and cable (including broadband, television and fixed telephony). The Group's risks and rates of return for its operations
are affected predominantly by the fact that it operates in different geographical regions. The businesses are organized and managed according to the selected geographical regions, which represent the
basis for evaluation of past performance and for making decisions about the future allocation of resources.

The
Group has businesses in three regions: Central America, South America and Africa.

Product
and service offerings have converged to business categories to be more customer-centric, and less focused on the medium in which the product and service offerings are provided
(i.e. through mobile devices vs. cables). Accordingly, management and operation of the Central America cable business has been integrated with our mobile operations. As a result of these
changes, execution of global strategies and reporting to the Chief Operating Decision-Maker are no longer separated between mobile operations and cable operations. Comparative segment information for
Central America has been restated to include the Cable business, which was previously reported as a separate segment.

F-45

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

10. SEGMENT INFORMATION (Continued)

The
following tables present revenues, operating profit (loss) and other segment information for the years ended December 31, 2011, 2010 and 2009:

December 31, 2011

Central
America

South
America

Africa

Unallocated
items

Total
continuing
operations

Discontinued
operations
(note 7)

Inter-
company
elimination

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Revenues

1,842,166

1,706,139

981,292



4,529,597

6,134



4,535,731Operating profit (loss)

649,159

504,822

216,865

(113,825
)
1,257,021

2,756



1,259,777Add back:Depreciation and amortization

303,272

230,936

203,948

824

738,980

1,539



740,519Loss (gain) of disposal and impairment

5,453

(9,913
)
(17,325
)


(21,785
)




(21,785
)Share based compensation







17,264

17,264





17,264Corporate costs







95,737

95,737





95,737Adjusted operating profit (loss)(i)

957,884

725,845

403,488



2,087,217

4,295



2,091,512Additions to:Property, plant and equipment

(220,455
)
(294,628
)
(287,736
)
(434
)
(803,253
)
(20
)


(803,273
)Intangible assets

(1,576
)
(29,304
)
(8,952
)
(5,412
)
(45,244
)




(45,244
)Capital expenditure

(222,031
)
(323,932
)
(296,688
)
(5,846
)
(848,497
)
(20
)


(848,517
)Taxes paid

(146,245
)
(77,355
)
(13,528
)
(30,943
)
(268,071
)Changes in working capital

(66,743
)
14,613

92,061

(25,392
)
14,539Other movements

18,239

85,747

77,857

36,721

218,564Operating free cash flow(ii)

541,104

424,918

263,190

(25,460
)
1,203,752Total Assets(iii)

4,073,905

2,008,584

1,629,896

830,071

8,542,456



(1,260,510
)
7,281,946Total Liabilities

1,673,356

1,388,516

1,704,743

926,596

5,693,211



(856,819
)
4,836,392


(i)Adjusted
operating profit is used by the management to monitor the segmental performance and for capital management (see note 34).(ii)Operating
free cash flow by segment includes vendor financing of capital equipment as a cash transaction.(iii)Segment
assets include goodwill and other intangibles.


F-46

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

10. SEGMENT INFORMATION (Continued)

December 31, 2010
(As restated)(iv)

Central
America(v)

South
America

Africa

Unallocated
items

Total
continuing
operations

Discontinued
operations
(note 7)

Inter-
company
elimination

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Revenues

1,641,441

1,373,877

904,931



3,920,249

29,625



3,949,874Operating profit (loss)

638,598

361,969

147,737

(106,574
)
1,041,730

12,539



1,054,269Add back:Depreciation and amortization

250,144

223,186

202,733

923

676,986





676,986Loss (gain) of disposal and impairment

4,099

4,590

7,568



16,257





16,257Share based compensation







30,718

30,718





30,718Corporate costs







74,933

74,933





74,933Adjusted operating profit (loss)(i)

892,841

589,745

358,038



1,840,624

12,539



1,853,163Additions to:Property, plant and equipment

(187,157
)
(216,408
)
(273,689
)
(17
)
(677,271
)
(16,223
)


(693,494
)Intangible assets

(20,948
)
(28,091
)
(3,924
)
(473
)
(53,436
)




(53,436
)Capital expenditure

(208,105
)
(244,499
)
(277,613
)
(490
)
(730,707
)
(16,223
)


(746,930
)Taxes paid

(139,139
)
(62,240
)
(9,291
)
(28,053
)
(238,723
)Changes in working capital

34,024

(31,333
)
(27,776
)
25,970

885Other movements

6,978

60,061

101,603

(24,456
)
144,186Operating free cash flow(ii)

586,599

311,734

144,961

(27,029
)
1,016,265Total Assets(iii)

3,617,802

1,503,621

1,600,307

650,677

7,372,407

71,878

(449,168
)
6,995,117Total Liabilities

2,319,733

1,257,708

1,630,201

803,332

6,010,974

47,518

(1,453,008
)
4,605,484


(i)Adjusted
operating profit is used by the management to monitor the segmental performance and for capital management (see note 34).(ii)Operating
free cash flow by segment includes vendor financing of capital equipment as a cash transaction.(iii)Segment
assets include goodwill and other intangibles.(iv)Restatementsee
note 4.(v)Includes
cable which in 2010 was reported as a separate segment which has now been integrated with mobile operations.


F-47

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

10. SEGMENT INFORMATION (Continued)

December 31, 2009

Central
America

South
America

Africa

Unallocated
items

Total
continuing
operations

Discontinued
operations
(note 7)

Inter-
company
elimination

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Revenues

1,514,663

1,075,914

782,150



3,372,727

218,874



3,591,601Operating profit (loss)

615,636

227,904

84,582

(77,099
)
851,023

314,696



1,165,719Add back:Depreciation and amortization

205,052

208,469

196,832

1,082

611,435

34,842



646,277Loss (gain) of disposal and impairment

1,361

2,222

3,401

262

7,246

(277,665
)


(270,419
)Share based compensation







10,175

10,175





10,175Corporate costs







65,580

65,580





65,580Adjusted operating profit (loss)(i)

822,049

438,595

284,815



1,545,459

71,873



1,617,332Additions to:Property, plant and equipment

(152,222
)
(143,556
)
(395,352
)
(246
)
(691,376
)
(79,072
)


(770,448
)Intangible assets

(23,085
)
(19,489
)
(2,892
)
(646
)
(46,112
)




(46,112
)Capital expenditure

(175,307
)
(163,045
)
(398,244
)
(892
)
(737,488
)
(79,072
)


(816,560
)Taxes paid

(115,414
)
(54,423
)
(6,654
)
(19,359
)
(195,850
)Changes in working capital

(53,407
)
39,978

55,631

239

42,441Other movements

1,763

1,927

18



3,708Operating free cash flow(ii)

479,684

263,032

(64,434
)
(20,012
)
658,270Total Assets(iii)

2,132,331

1,370,202

1,586,488

732,667

5,821,688

411,939

(242,609
)
5,991,018Total Liabilities

1,257,957

1,141,956

1,594,662

470,781

4,465,356

242,625

(1,027,093
)
3,680,888


(i)Adjusted
operating profit is the measure used by the management to monitor the segmental performance and for capital management (see note 34).(ii)Operating
free cash flow by segment includes vendor financing of capital equipment as a cash transaction.(iii)Segment
assets include goodwill and other intangibles.


Revenues from continuing operations for the years ended December 31, 2011, 2010 and 2009 analyzed by country are as follows:

2011

2010

2009US$ '000

US$ '000

US$ '000Colombia

756,211

612,111

444,899Honduras

673,022

532,068

436,435Guatemala

646,679

570,827

517,555Paraguay

593,382

462,537

387,964El Salvador

413,712

453,503

493,298Other

1,446,591

1,289,203

1,092,576Total

4,529,597

3,920,249

3,372,727


F-48

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

10. SEGMENT INFORMATION (Continued)

Non-current
assets (intangible assets and property, plant and equipment) as at December 31, 2011 and 2010 analyzed by country are as follows:

2011

2010US$ '000

US$ '000Colombia

596,498

604,723Honduras

1,669,030

1,762,865Guatemala

392,349

348,682Paraguay

255,577

223,840El Salvador

437,879

482,623Other

1,684,137

1,627,779Total

5,035,470

5,050,512


11. ANALYSIS OF OPERATING PROFIT

The Group's operating income and expenses from continuing operations analyzed by nature of expense is as follows:

2011

2010

2009US$ '000

US$ '000

US$ '000Revenues


4,529,597


3,920,249


3,372,727Cost of rendering telecommunication services


(1,006,951
)

(809,669
)

(716,269
)Depreciation and amortization (notes 10, 16 and 17)


(738,980
)

(676,986
)

(611,435
)Dealer commissions


(398,467
)

(354,608
)

(300,487
)Employee related costs (note 12)


(299,151
)

(294,045
)

(249,757
)Sites and network maintenance


(208,340
)

(175,971
)

(151,816
)Advertising and promotion


(126,522
)

(119,675
)

(122,986
)Phone subsidies


(138,578
)

(124,448
)

(108,714
)External services


(154,621
)

(110,344
)

(81,537
)Operating lease expense (note 32)


(96,376
)

(82,929
)

(72,749
)Billing and payments


(33,373
)

(27,831
)

(21,005
)Gain (loss) on disposal and impairment of assets, net (note 10 and 17)


21,785


(16,257
)

(7,246
)Other income


43,700


3,192


Other expenses


(136,702
)

(88,948
)

(77,703
)Operating profit


1,257,021


1,041,730


851,023


F-49

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

11. ANALYSIS OF OPERATING PROFIT (Continued)

The following table summarizes the aggregate amounts paid to Millicom's auditors for the years ended December 31, 2011, 2010 and 2009.

2011

2010

2009US$ '000

US$ '000

US$ '000Audit Fees


3,623


4,237


4,179Audit Related Fees


152


604


115Tax Fees


97





61All Other Fees


58


55


71Total


3,930


4,896


4,426


Audit
related services consist principally of consultations related to financial accounting and reporting standards, including making recommendations to management regarding internal
controls and the issuance of certifications of loan covenant compliance required by Millicom's debt agreements. Tax services consist principally of tax planning services and tax compliance services.
All other fees are for services not included in the other categories. 100% of the audit related, tax and other fees for 2011 and 2010 were approved by the audit committee.

12. EMPLOYEE RELATED COSTS

Employee related costs are comprised of the following:

2011

2010

2009US$ '000

US$ '000

US$ '000Wages and salaries


(209,180
)

(196,318
)

(183,220
)Social security


(23,613
)

(21,094
)

(20,105
)Share based compensation (see note 24)


(17,264
)

(30,718
)

(10,175
)Other employee related costs(i)


(49,094
)

(45,915
)

(36,257
)Total


(299,151
)

(294,045
)

(249,757
)


(i)Includes
pension costs and other benefits. There are no defined benefit pension plans.


The
average number of permanent employees during the years ended December 31, 2011, 2010 and 2009 was as follows:

2011

2010

2009Continuing operations


6,526


6,109


5,937Discontinued operations


128


237


1,852Total average number of permanent employees


6,654


6,346


7,789


F-50

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

13. OTHER NON-OPERATING (EXPENSES) INCOME, NET

The Group's other non-operating (expenses) income, net is comprised of the following:

2011

2010
(As restated)(i)

2009US$ '000

US$ '000

US$ '000Change in carrying value of put option(i)


24,233


(31,956
)

Change in fair value of derivatives


(2,472
)

(14,597
)

Other exchange (losses), net


(26,051
)

(15,105
)

(32,181
)Other non operating (expenses) income, net


(4,290
)

(61,658
)

(32,181
)


(i)Restatementsee
note 4


14. TAXES

Group taxes mainly comprise income taxes of subsidiaries and joint ventures. As a Luxembourg commercial company, the Company is subject to all taxes applicable to a Luxembourg
Société Anonyme. Due to losses incurred and brought forward, no taxes based on Luxembourg-only income have been computed for 2011, 2010 and 2009.

The
effective tax rate on continuing operations is (2%) (2010: 12%, 2009: 27%). Currently Millicom operations are in jurisdictions with income tax rates of 10% to 40% (2010 and 2009: 10%
to 40%).

The
reconciliation between the weighted average statutory tax rate and the effective average tax rate is as follows:

2011

2010

2009%

%

%Weighted average statutory tax rate(i)


24


23


23Recognition of previously unrecorded tax losses


(29
)




Unrecognized current year tax losses(ii)


1


7


9Non taxable income and non deductible expenses, net


1





(1
)Taxes based on revenue


(6
)

(7
)

(8
)Income taxes at other than statutory tax rates


4


2


3Withholding taxes on transfers between operating and non operating entities


3


3


3Non-taxable gain arising from revaluation of previously held interests





(16
)

(2
)Effective tax rate


(2
)

12


27


(i)The
weighted average statutory tax rate has been determined by dividing the aggregate statutory tax charge of each subsidiary and joint venture, which was
obtained by applying the statutory tax rate to the profit or loss before tax, by the aggregate profit before tax excluding the impact of the revaluation of Honduras in 2010 (see note 5).


F-51

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

14. TAXES (Continued)

(ii)Unrecognized
current year tax losses mainly consist of tax losses at the Company level and tax losses recorded in the Group's operations in the Democratic
Republic of Congo and Rwanda (2010: DRC, Rwanda and Colombia; 2009: DRC and Colombia).


The
credit (charge) for income taxes from continuing operations is shown in the following table and recognizes that revenue and expense items may affect the financial statements and tax
returns in different periods (temporary differences):

2011

2010

2009US$ '000

US$ '000

US$ '000Current income tax credit (charge)


(278,502
)

(223,077
)

(201,230
)Net deferred income tax benefit (expense)


296,849


(4,019
)

13,232Credit / (charge) for taxes


18,347


(227,096
)

(187,998
)


The
tax effects of significant items comprising the Group's net deferred income tax asset and liability as of December 31, 2011 and 2010 are as follows:

Consolidated balance
sheets

Consolidated income
statements2011

2010

2011

2010

2009US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Loss carry-forwards


182,562





182,562


(5,877
)

(1,945
)Provision for doubtful debtors


9,124


4,206


4,918


602


408Temporary differences between book and tax basis of intangible assets and property, plant and equipment


4,993


(45,456
)

50,449


(2,398
)

(2,411
)Deferred tax liabilities recognized as part of the acquisition of Celtel (see note 5)


(94,390
)

(105,392
)

11,002


8,460


Deferred tax liabilities recognized as part of the acquisition of Amnet (see note 5)


(19,413
)

(25,805
)

6,392


6,237


9,485Deferred tax liabilities recognized as part of the acquisition of Navega (see note 5)


(2,358
)

(3,126
)

768


936


540Other temporary and translation differences


37,382


3,613


40,758


(11,979
)

7,155Deferred tax benefit (expense)








296,849


(4,019
)

13,232Deferred tax assets (liabilities), net


117,900


(171,960
)Reflected in the statements of financial position as:Deferred tax assets


316,966


23,959Deferred tax liabilities


(199,066
)

(195,919
)


Deferred
income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes.

No
deferred tax liability was recognized in respect of $3,352 million (2010: $3,659 million) of unremitted earnings of subsidiaries and joint ventures, because the Group
was in a position to control the timing of the reversal of the temporary differences and it was unlikely that such differences would

F-52

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

14. TAXES (Continued)

reverse
in a foreseeable future. Furthermore, it was not practicable to estimate the amount of unrecognized deferred tax liabilities in respect of these unremitted earnings.

During
2011, a tax credit of $308 million was recognized in our Colombian operation relating to expected utilization of tax loss carry-forwards and other temporary differences
related mainly to property, plant and equipment and intangible assets. The expected utilisation of tax loss carryforwards was based on an assessment by management that sufficient taxable profit will
be available to allow the benefit of the deferred tax asset to be utilised.

Unrecognized
net operating losses and other tax loss carry-forwards relating to continuing operations amounted to $169 million as at December 31, 2011 (2010:
$775 million, 2009: $885 million) with expiry periods of between 1 and 5 years. In addition the Company has unrecognized net operating losses of $1,742 million (2010:
$1,833 million) which do not expire.

15. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding
during the year.

Diluted
earnings per share are calculated by dividing the net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of dilutive potential shares.

The
following reflects the net profit and share data used in the basic and diluted earnings per share computations:

2011

2010
(As restated)(i)

2009US$ '000

US$ '000

US$ '000BasicNet profit attributable to equity holders from continuing operations


885,815


1,611,491


551,390Net profit attributable to equity holders from discontinued operations


38,700


8,786


298,858Net profit attributable to equity holders to determine the basic earnings per share


924,515


1,620,277


850,788DilutedNet profit attributable to equity holders from continuing operations


885,815


1,611,491


551,390Net profit attributable to equity holders from continuing operations used to determine the diluted earnings per share


885,815


1,611,491


551,390Net profit attributable to equity holders from discontinued operations


38,700


8,786


298,858Net profit attributable to equity holders to determine the diluted earnings per share


924,515


1,620,277


850,788


F-53

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

15. EARNINGS PER SHARE (Continued)



2011

2010

2009'000

'000

'000Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share


104,196


108,219


108,527Effect of dilution:Potential incremental shares as a result of share options


105


177


223Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of dilution


104,301


108,396


108,750


(i)Restatementsee
note 4


To
calculate earnings per share amounts for the discontinued operations, the weighted average number of shares for both basic and diluted amounts is as per the table above.

16. INTANGIBLE ASSETS

The movements in intangible assets in 2011 were as follows:

Goodwill

Licenses

Other(ii)

TotalUS$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


1,427,825


238,196


616,824


2,282,845Change in the composition of the Group (see note 5)








4,603


4,603Additions (see note 10)





12,609


32,635


45,244Amortization charge(i)





(34,634
)

(105,882
)

(140,516
)Transfers





3,342


(3,342
)

Other movements





(614
)

(498
)

(1,112
)Exchange rate movements


(12,966
)

(5,719
)

(2,026
)

(20,711
)Closing balance, net


1,414,859


213,180


542,314


2,170,353As at December 31, 2011Cost or valuation


1,414,859


408,872


865,465


2,689,196Accumulated amortization





(195,692
)

(323,151
)

(518,843
)Net


1,414,859


213,180


542,314


2,170,353


(i)The
amortization charge for Licenses and Other is recorded under the caption "General and administrative expenses".(ii)The
caption "Other" includes mainly those intangible assets identified in business combination (i.e. customers' lists and trademarks).


F-54

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

16. INTANGIBLE ASSETS (Continued)

The
movements in intangible assets in 2010 were as follows:

Goodwill

Licenses

Other(ii)

TotalUS$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


547,986


218,510


278,341


1,044,837Change in the composition of the Group (see note 5)


869,559


30,519


383,837


1,283,915Additions (see note 10)





26,190


27,246


53,436Amortization charge(i)





(39,353
)

(78,801
)

(118,154
)Transfers





1,751


(1,751
)

Other movements





(80
)

(2,167
)

(2,247
)Exchange rate movements


10,280


659


10,119


21,058Closing balance, net


1,427,825


238,196


616,824


2,282,845As at December 31, 2010Cost or valuation


1,427,825


401,306


839,112


2,668,243Accumulated amortization





(163,110
)

(222,288
)

(385,398
)Net


1,427,825


238,196


616,824


2,282,845


(i)The
amortization charge for Licenses and Other is recorded under the caption "General and administrative expenses".(ii)The
caption "Other" includes mainly those intangible assets identified in business combination (i.e. customers' lists and trademarks).


The
following table provides details of cash used for additions to intangible assets:

2011

2010

2009US$ '000

US$ '000

US$ '000Additions


45,244


53,436


46,112Subtotal


45,244


53,436


46,112Change in suppliers advances


(165
)

160


Change in capex accruals and payables


11,394


(27,358
)

(108
)Cash used from continuing operations for additions from intangible assets


56,473


26,238


46,004


Impairment test of goodwill

As at December 31, 2011, management tested all goodwill for impairment. The Group determines whether goodwill is impaired at
least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit (or group of cash-generating units) to which the goodwill is
allocated.

F-55

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

16. INTANGIBLE ASSETS (Continued)

The recoverable amount of a cash-generating unit ("CGU") or group of CGUs is determined based on discounted cash flows. The cash flow projections used (adjusted operating
profit margins, income tax, working capital, capital expenditure and license renewal cost) are extracted from financial budgets approved by management and the Board covering a period of three years
apart from our new business in Rwanda where six years has been used (2010: eight years). The planning horizon reflects industry practice in the countries where the Group operates. Cash flows beyond
this period are
extrapolated using a perpetual growth rate of 2% (2010: 2%). No impairment losses were recorded on goodwill for the years ended December 31, 2011, 2010 and 2009.

As
part of the impairment tests, sensitivity analysis was performed on the key assumptions from which it was determined that sufficient margin exists from realistic changes to the
assumptions that would have resulted in impairment.

The
recoverable amounts have been determined for the cash generating units based on the following discount rates for the years ended December 31, 2011 and 2010:

Discount rate after tax2011

2010Central America


8.2% - 12.7%


9.9% - 14.3%South America


8.0% - 11.2%


9.5% - 15.9%Africa


8.9% - 14.6%


8.8% - 14.6%


The
allocation of goodwill to cash generating units, net of exchange rate movements, is shown below:

2011

2010US$ '000

US$ '000Millicom's operations in:Honduras (see note 5)


925,834


936,895El Salvador


184,956


184,956Costa Rica


137,945


137,638Colombia


52,283


52,283Guatemala


35,574


34,339Senegal


34,008


35,209Other


44,259


46,505Total Goodwill


1,414,859


1,427,825


F-56

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

17. PROPERTY, PLANT AND EQUIPMENT

Movements in tangible assets in 2011 were as follows:

Network
equipment(iv)

Land and
Buildings

Construction
in Progress

Other(i)

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


2,395,597


53,725


206,808


111,537


2,767,667Change in the composition of the Group (note 5)(iii)


2,175





3,102


209


5,486Additions (including sale and leaseback)


127,279


8,845


720,659


21,841


878,624Impairments and net disposals


(99,038
)

(369
)

(6,661
)

(2,525
)

(108,593
)Depreciation charge(ii)


(549,938
)

(3,317
)




(45,209
)

(598,464
)Asset retirement obligations


4,776


100








4,876Transfers


629,985


11,749


(685,219
)

43,485


Transfer to assets held for sale (see note 7)


(56,142
)










(56,142
)Exchange rate movements


(26,917
)

(1,310
)

1,694


(1,804
)

(28,337
)Closing balance at December 31, 2011


2,427,777


69,423


240,383


127,534


2,865,117Cost or valuation


4,557,220


84,879


240,383


344,537


5,227,019Accumulated depreciation


(2,129,443
)

(15,456
)




(217,003
)

(2,361,902
)Net


2,427,777


69,423


240,383


127,534


2,865,117


(i)The
caption "Other" mainly includes office equipment and motor vehicles.(ii)The
depreciation charge for network equipment is recorded under the caption "Cost of sales" and the depreciation charge for Land and Buildings and Other is
recorded under the caption "General and administrative expenses".(iii)The
change in the composition of the Group corresponded to other minor investments.(iv)The
net carrying amount of network equipment under finance leases at December 31, 2011, mainly comprising towers, was $133 million.


F-57

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

17. PROPERTY, PLANT AND EQUIPMENT (Continued)

Movements
in tangible assets in 2010 were as follows:

Network
equipment(iv)

Land and
Buildings

Construction
in Progress

Other(i)

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


2,352,954


81,215


152,234


124,238


2,710,641Change in the composition of the Group (note 5)(iii)


118,923


2,165


3,431


5,330


129,849Additions


54,906


417


600,625


21,323


677,271Impairments and net disposals


(48,038
)

(263
)

(2,034
)

(2,560
)

(52,895
)Depreciation charge(ii)(v)


(508,339
)

(3,062
)




(47,431
)

(558,832
)Asset retirement obligations


(17,176
)

493








(16,683
)Transfers


560,413


(26,870
)

(545,093
)

11,550


Transfer to assets held for sale (see note 7)


(106,174
)










(106,174
)Exchange rate movements


(11,872
)

(370
)

(2,355
)

(913
)

(15,510
)Closing Balance at December 31, 2010


2,395,597


53,725


206,808


111,537


2,767,667Cost or valuation


4,165,165


65,868


206,808


303,781


4,741,622Accumulated depreciation


(1,769,568
)

(12,143
)




(192,244
)

(1,973,955
)Net


2,395,597


53,725


206,808


111,537


2,767,667


(i)The
caption "Other" mainly includes office equipment and motor vehicles.(ii)The
depreciation charge for network equipment is recorded under the caption "Cost of sales" and the depreciation charge for Land and Buildings and Other is
recorded under the caption "General and administrative expenses".(iii)The
change in the composition of the Group corresponded to the acquisition of Honduras, Navega and other minor investments.(iv)The
net carrying amount of network equipment under finance leases at December 31, 2010, mainly comprising towers, was $41 million.(v)From
January 1, 2010 the estimated useful life of network towers and civil works was changed from 10 to 15 years.


Borrowing
costs capitalized for the year ended December 31, 2011 were not significant (2010: not signifcant).

F-58

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

17. PROPERTY, PLANT AND EQUIPMENT (Continued)

The
following table provides details of cash used for the purchase of property, plant and equipment:

2011

2010

2009US$ '000

US$ '000

US$ '000Additions


803,273


693,494


770,448Additions from discontinued operations


(20
)

(16,223
)

(79,072
)Subtotal


803,253


677,271


691,376Change in suppliers advances


(2,639
)

(12,072
)

(77,539
)Change in capex accruals and payables


(63,004
)

22,480


162,421Vendor financing and finance leases (see note 31)


(37,929
)

(90,779
)

(45,399
)Capitalized interests








(4,294
)Cash used from continuing operations for purchase of property, plant and equipment


699,681


596,900


726,565


18. INVESTMENTS IN ASSOCIATES

As at December 31, 2011 Millicom's investment in associates amounted to $63 million representing 40% interests in Helios Towers Tanzania, Helios Towers DRC and ATC
Colombia B.V. acquired during the year, and Helios Towers Ghana (see note 7) (2010: including $17 million representing a 40% interest in Helios Towers Ghana).

19. NON-CURRENT PLEDGED DEPOSITS

As at December 31, 2011, non-current pledged deposits amounted to $49 million (2010: $50 million) and mainly related to security over financing of
Millicom's operation in Chad (see note 27).

20. TRADE RECEIVABLES, NET

2011

2010US$ '000

US$ '000Gross trade receivables


348,870


304,999Less: provisions for impairment of receivables


(71,926
)

(51,741
)Trade receivables, net


276,944


253,258


The
nominal value less impairment of trade receivables is assumed to approximate their fair values (see note 35).

F-59

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

20. TRADE RECEIVABLES, NET (Continued)

As
at December 31, 2011 and 2010, the ageing analysis of trade receivables is as follows:

Past due (net of impairments)TotalNeither past
due nor
impaired



30 - 90 days<30 days

>90 days

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '0002011Telecom operators


73,381


30,670


20,914


792


125,757Own customers


70,568


14,558


13,298


2,996


101,420Others


34,126


9,337


6,071


233


49,767Total


178,075


54,565


40,283


4,021


276,944




Past due (net of impairments)TotalNeither past
due nor
impaired



30 - 90 days<30 days

>90 days

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '0002010Telecom operators


68,929


30,244


38,340


28


137,541Own customers


50,339


16,088


6,510


337


73,274Others


33,508


4,997


3,938





42,443Total


152,776


51,329


48,788


365


253,258


21. OTHER CURRENT ASSETS

Other current assets are comprised as follows:

2011

2010US$ '000

US$ '000Value added tax receivables


11,402


9,319Pledged deposits


297


7,261Escrow accounts (see note 28)


3,972


11,730Related party receivables


76,677


Other


54,267


47,001Total other current assets


146,615


75,311


22. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised as follows:

2011

2010US$ '000

US$ '000Cash and cash equivalents in U.S. dollars


509,882


571,158Cash and cash equivalents in other currencies


351,744


452,329Restricted cash


19,653


Total cash and cash equivalents


881,279


1,023,487


Cash
balances are diversified among leading international banks and in domestic banks within the countries where we operate.

F-60

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

23. SHARE CAPITAL

Share capital and share premium

The authorized share capital of the Company totals 133,333,200 registered shares (2010: 133,333,200). As at December 31,
2011, the total subscribed and fully paid-in share capital and premium was $663 million (2010: $682 million) consisting of 104,939,217 (2010: 109,053,120) registered
common shares at a par value of $1.50 (2010: $1.50) each.

The
following table summarizes movements in issued share capital for the years ended December 31, 2011 and 2010:

2011

2010Number of
shares

Number of
sharesIssued share capital as of January 1


109,053,120


108,648,325Exercise of share options(i)


39,622


145,305Shares to employees and directors(i)


46,475


259,490Total issuance of shares during the year


86,097


404,795Cancellation of shares during the year


(4,200,000
)

Issued share capital as of December 31


104,939,217


109,053,120


(i)In
addition, 6,179 of share options and 186,681 of restricted shares were issued from treasury shares during 2011


The
Company re-purchased 4,646,241 shares for $498 million under a share buy-back program in 2011 (2010: 3,253,507 shares for $300 million).

The
Company reduced its issued share capital by $6 million in 2011, by way of cancellation of 4.2 million shares having a par value of $1.50 each, previously held as
treasury shares.

24. SHARE BASED COMPENSATION

Share options

Until May 30, 2006, share options were granted to directors, senior executives, officers and selected employees. The exercise
price of the granted options was equal to or higher than the market price of the shares on the date of grant. The options were conditional on the employee or director completing one to five years
service (the vesting period). The options were exercisable starting from one year to five years from the grant date. The options have a contractual option term of six years from the grant date for
employees and of twenty years for directors (amended in 2005). Share options grants for Directors prior to 2005 had an indefinite life. Shares issued when share options are exercised have the same
rights as common shares.

F-61

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

24. SHARE BASED COMPENSATION (Continued)

The following table summarizes information about share options outstanding and exercisable at December 31, 2011. The market price of the Company's shares as at December 31,
2011 was the SEK equivalent of $100.20 (2010: $95.60).

Options outstanding

Options exercisableRange of exercise price $

Weighted
average
exercise price

Number
outstanding at
December 31,
2011

Weighted
average
exercise price

Number
exercisable at
December 31,
201120.56


20.56


35,000


20.56


35,00025.05 - 29.75


26.93


33,332


26.93


33,33231.88 - 35.91


35.16


66,664


35.16


66,66420.56 - 35.91


29.34


134,996


29.34


134,996


Share
options outstanding at the end of the year have the following expiry dates, exercise prices and terms:

Date issued

Number of options
outstanding as at
December 31, 2011

Exercise price $

TermsMay 1996, May 1997, May 1998, May 2000 and May 2004


99,996


25.05 - 35.91

Exercisable immediately. Options have an indefinite life.May 2005


35,000


20.56

Exercisable immediately. Options have a twenty year life.


The
following table summarizes the Company's share options as of December 31, 2011, 2010 and 2009, and changes during the years then ended:

2011

2010

2009Average exercise
price in $ per
share

Number of
options

Average exercise
price in $ per
share

Number of
options

Average exercise
price in $ per
share

Number of optionsOutstanding at beginning of year


29.06


183,797


26.21


329,788


24.23


494,120Expired/forfeited


20.56


(3,000
)

25.05


(686
)

18.73


(25,108
)Exercised


28.80


(45,801
)

22.58


(145,305
)

20.53


(139,224
)Outstanding at end of year


29.34


134,996


29.06


183,797


26.21


329,788Exercisable at end of year


29.34


134,996


29.06


183,797


28.20


243,946


In
May 2006 at the Annual General Meeting, it was agreed to accelerate the vesting period for share options held by the directors from three years to one year to correspond to the
directors' one-year term in office. It was also agreed to change the term of the share options so that they no longer expire when a director is no longer a member of the Board. In
addition, the directors entered into an agreement with Millicom, whereby if Millicom is subject to a change of control the directors' share options will vest immediately and the restricted shares will
become unrestricted upon the change of control.

F-62

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

24. SHARE BASED COMPENSATION (Continued)

Restricted share grants

Starting on May 30, 2006, the grant of options was replaced by the grant of restricted shares whereby these shares cannot be
sold or transferred for 12 months. No grants of restricted shares were made in 2011.

Grants
to directors in 2010 were as follows:

Number of
shares

Share price at
date of grant

2010
Expense(US$ '000)Directors


5,277

$
81.91


432


Compensation
expense for the total number of shares awarded in 2010 to Directors was measured on the grant dates using Millicom's closing share price as quoted on the NASDAQ National
Market on those dates.

Long-term incentive plans



Long term incentive awards for 2008 ("2008 LTIPs") were approved by Millicom's Board of Directors on December 4, 2007. The
awards consisted of a performance shares plan and a matching share award plan. Shares granted under the performance share plan vested at the end of a three year period, on meeting a performance
condition related to Millicom's "earnings per share" ("EPS"). The achievement of a certain level of this condition, measured at the end of the three year period, resulted in the vesting of a specific
percentage of shares to each employee in the plan.

The
matching share award plan requires employees to invest in shares of the Company in order to be eligible for matching shares. Shares awarded under this plan vested at the end of a
three year period, on meeting market conditions that are based on the "total shareholder return" ("TSR") of Millicom's shares compared to the TSR of a peer group of companies during the
three-year period of the plan. A fair value per share was determined and applied to the total potential number of matching shares and was expensed over the vesting period.

In
2011, 148,585 shares were issued under the 2008 performance shares plan and 28,795 shares issued under the matching share award plan. There are no more shares to be issued under the
2008 LTIPs.

The
total charge for the 2008 LTIPs of $25 million was recorded over the service period including $20 million in 2010 when conditions connected to the plans previously not
expected to be met, were fulfilled (2008 to 2010).



Long term incentive awards for 2009 ("2009 LTIPs") were approved by Millicom's Board of Directors on June 16, 2009. The 2009
LTIPs consist of a deferred share awards plan and a performance shares plan.

F-63

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

24. SHARE BASED COMPENSATION (Continued)

Shares
granted under the deferred plan are based on past performance and vested 16.5% on each of January 1, 2010 and January 1, 2011 and 67% on January 1, 2012.

Shares
granted under the performance plan vest at the end of a three year period, 50% subject to a market condition that is based on the TSR of Millicom compared to the TSR a peer group
of companies during the three-year period of the plan, and 50% subject to a performance condition, based on EPS. A fair value per share subject to the market condition was determined and
applied to the total potential number of performance shares, to be expensed over the vesting period.

In
2011, 3,804 shares were issued under the 2009 performance shares plan and 26,023 shares issued under the deferred share plan.

The
total charge for the 2009 LTIPs of $11 million was recorded over the service period (2009 to 2011).



Long term incentive awards for 2010 ("2010 LTIPs") were approved by Millicom's Board of Directors on November 27, 2009. The 2010
LTIPs consist of a deferred share awards plan and a performance shares plan, the mechanisms of which are the same as the 2009 LTIPs.

In
2011, 706 shares were issued under the 2010 performance shares plan and 25,243 shares issued under the deferred share plan.

The
total charge for the 2010 LTIPs was estimated as of December 31, 2011 at $15 million, and is being recorded over the service period (2010 to 2012).



Long term incentive awards for 2011 ("2011 LTIPs") were approved by Millicom's Board of Directors on February 1, 2011. The 2011
LTIPs consist of a deferred share awards plan and a performance shares plan, the mechanisms of which are the same as the 2009 LTIPs.

Shares
granted under the deferred share awards plan are based on past performance and vest 16.5% on each of January 1, 2012 and January 1, 2013 and 67% on January 1,
2014.

Shares
granted under the performance plan vest at the end of the three year period, subject to performance conditions, 50% based on Return on Capital Investment (ROIC) and 50% based on
EPS. Prior to September 2011, the vesting conditions were 50% based on EPS and 50% on a market condition that was based on the ranking of the TSR of Millicom compared to the FTSE Global Telecoms Index
adjusted to add three peer companies ("Adjusted Global Telecoms Index"). As this index was discontinued during 2011, the Compensation Committee approved the replacement of this condition with the ROIC
condition. As a result the total estimated charge of the 2011 LTIPs increased from $19 million to $ 20 million.

In
2011, no shares were issued under either the deferred share awards plan or the performance shares plan.

The
total charge for the 2011 LTIPs was estimated as of December 31, 2011 at $20 million, and is being recorded over the service period (2011 to 2013).

F-64

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

24. SHARE BASED COMPENSATION (Continued)

The
number of share awards expected to vest under the long term incentive plans is as follows:

Performance
shares 2011

Deferred
share awards
2011

Performance
shares 2010

Deferred
share awards
2010

Performance
shares 2009

Deferred
share awards
2009Plan share awards


105,643


145,687


81,862


153,960


124,254


172,352Share awards granted(i)


2,935


3,800


6,771


12,043


9,875


10,677Revision for actual and expected forfeitures


(12,947
)

(19,130
)

(17,425
)

(26,612
)

(21,127
)

(36,501
)Revision for expectations in respect of performance conditions

















Shares issued








(706
)

(25,243
)

(4,416
)

(53,337
)Share awards expected to vest


95,631


130,357


70,502


114,148


108,586


93,191


(i)Additional
shares granted including consideration for the impact of the special dividends paid in 2011 and 2010 (see note 29)


Total share based compensation expense

Total share-based compensation for years ended December 31, 2011, 2010 and 2009 was as follows:

2011

2010

2009US$ '000

US$ '000

US$ '000Share options



7

(46
)Restricted share grants



432

3682006 LTIPs





(530
)2007 LTIPs



97

5,1422008 LTIPs



20,467

1672009 LTIPs

3,330

3,461

5,0742010 LTIPs

5,289

6,254

2011 LTIPs

8,645



Total share-based compensation expense

17,264

30,718

10,175


25. PUT OPTION RESERVE

On July 1, 2010, in exchange for an unconditional 5 year call option, the Company granted to its non-controlling interest in our operation in Honduras a
5 year conditional put option over his 33.3% shareholding. A put option reserve in the amount of $737 million was recognised representing the present value of the redemption price of the
put option at that date.

F-65

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

26. OTHER RESERVES

Legal
reserve

Equity-settled
transaction
reserve

Hedge
reserve

Currency
translation
reserve

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000As at January 1, 2009


15,365


30,726





(93,265
)

(47,174
)Transfer from retained profits


880











880Shares issued via the exercise of share options





(888
)







(888
)Share based compensation





9,807








9,807Issuance of shares2006, 2007 and 2009 LTIPs





(13,891
)







(13,891
)Currency translation movement











(13,664
)

(13,664
)As at December 31, 2009


16,245


25,754





(106,929
)

(64,930
)Transfer from retained profits


53











53Shares issued via the exercise of share options





(816
)







(816
)Share based compensation





30,286








30,286Issuance of shares2007, 2008, 2009 and 2010 LTIPs





(16,488
)







(16,488
)Cash flow hedge reserve movement








(1,700
)




(1,700
)Currency translation movement











(1,090
)

(1,090
)As at December 31, 2010


16,298


38,736


(1,700
)

(108,019
)

(54,685
)Transfer from retained profits


61











61Shares issued via the exercise of share options





(81
)







(81
)Share based compensation





17,264








17,264Issuance of shares2008, 2009, 2010 and 2011 LTIPs





(23,230
)







(23,230
)Cash flow hedge reserve movement








(3,015
)




(3,015
)Currency translation movement











(39,806
)

(39,806
)As at December 31, 2011


16,359


32,689


(4,715
)

(147,825
)

(103,492
)


Legal reserve

On an annual basis, if the Company reports a net profit for the year on a non-consolidated basis, Luxembourg law requires
appropriation of an amount equal to at least 5% of the annual net profit to a legal reserve until such reserve equals 10% of the issued share capital. This reserve is not available for dividend
distribution.

At
the Company's Annual General Meeting in May 2011, the shareholders voted to transfer $61 thousand from retained profits to the legal reserve (May 2010: $53 thousand).

Equity-settled transaction reserve

The cost of share options and LTIPs is recognized as an increase in the equity-settled transaction reserve over the period in which the
performance and/or service conditions are rendered. When the options are subsequently exercised their cost is transferred from the equity-settled transaction reserve to the share premium. The reserve
will be transferred to the share capital and share premium when the shares under the different LTIPs vest and are issued.

F-66

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

26. OTHER RESERVES (Continued)

Currency translation reserve

For the purposes of consolidating joint ventures, associates and subsidiaries with functional currencies other than U.S. dollars, their
statements of financial position are translated to U.S. dollars using the closing exchange rate. Income statements accounts are translated to U.S. dollars at the average exchange rates during the
year. The currency translation reserve includes foreign exchange gains and losses arising from the translation of financial statements.

27. BORROWINGS

Borrowings due after more than one year:

2011

2010US$ '000

US$ '000Debt and financing:8% Senior Notes


436,679


435,279Bank financing


1,411,340


1,477,680Non-controlling shareholders


264,427


308,162Vendor financing


42,911


49,211Finance leases


137,764


41,235Total non-current other debt and financing


2,293,121


2,311,567Less: portion payable within one year


(476,269
)

(514,995
)Total other debt and financing due after more than one year


1,816,852


1,796,572


Borrowings
due within one year:

2011

2010US$ '000

US$ '000Debt and financing:Bank financing


121,134


36,876Vendor financing


6,462


3,593Finance leases


17,561


Total current other debt and financing


145,157


40,469Portion of non-current debt payable within one year


476,269


514,995Total other debt and financing due within one year


621,426


555,464


F-67

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

The following table provides details of net debt change for the years 2011, 2010 and 2009:

2011

2010

2009US$ '000

US$ '000

US$ '000Net debt at the beginning of the year


1,268,219


722,935


1,483,831Cash itemsProceeds from issuance of debt and other financing


703,073


1,147,585


627,872Repayment of debt and other financing


(791,940
)

(1,396,997
)

(506,588
)Net (increase) decrease in cash and cash equivalents


142,208


487,675


(836,967
)(Purchase) disposal of time deposits


2,837


46,953


(50,061
)(Purchase) disposal of pledged deposits


8,683


2,462


(45,652
)Non-cash itemsVendor financing and finance leases (see note 31)


37,929


90,779


45,399Interest accretion


47,507


31,825


20,908Debt acquired in acquisition of subsidiaries








25,962Other


108,483


77,249


(95,637
)Exchange movement on debt and other financing


(19,937
)

57,753


53,868Net debt at the end of the year


1,507,062


1,268,219


722,935


Net
debt includes interest bearing loans and borrowings, less cash and cash equivalents and pledged and time deposits related to bank borrowings.

10% Senior Notes

On September 9, 2010, Millicom announced early and fully redemption of its 10% Senior Notes. The 10% Senior Notes were
repurchased on November 30, 2010 for $490 million representing $459 million of principal, $23 million of interest to December 1, 2010 and $8 million early
redemption penalty.

These
notes were initially issued in aggregate principal amount of $550 million on November 24, 2003, due on December 1, 2013, of which $90 million were
repurchased in 2007. The 10% Senior Notes were bearing interest at 10% per annum, payable semi-annually in arrears on June 1 and December 1.

F-68

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

Other Debt and Financing

Millicom's share of total other debt and financing analyzed by operation is as follows:

2011

2010US$ '000

US$ '000Colombia(i)


543,412


522,994El Salvador(ii)


436,679


435,279Honduras(iii)


258,383


207,277Tanzania(iv)


197,270


207,086Guatemala(v)


221,364


163,631Ghana(vi)


118,426


158,183Cable Central America(vii)


131,834


133,816Chad(viii)


107,767


107,227Paraguay(ix)


98,222


105,700Bolivia(x)


70,831


99,085DRC(xi)


96,343


94,151Other


157,747


117,607Total other debt and financing


2,438,278


2,352,036Of which:Due after more than 1 year


1,816,852


1,796,572Due within 1 year


621,426


555,464


Significant
individual financing facilities are described below:

In
March 2008, Colombia Móvil S.A. E.S.P ("Colombia Móvil"), Millicom's operation in Colombia, entered into a COP391 billion, 5 year
facility with a club of Colombian banks. This facility bears interest at Deposits to Fixed Terms ("DTF") plus 4.5% and is 50% guaranteed by the Company. As at December 31, 2011,
$93 million (2010: $176 million) was outstanding on this facility.

Colombia
Móvil S.A. E.S.P. also had local currency loans from its non-controlling shareholders outstanding as at December 31, 2011 of
$264 million (2010: $308 million). These loans bear interest at DTF plus 4.15% and mature between 2014 and 2015.

In
addition, as at December 31, 2011 Colombia Móvil S.A. E.S.P. had $116 million (2010: $39 million) of other debt and financing, in US$ and
local currency as well as finance lease payables of $52 million relating to lease of tower space from ATC Sitios Infraco S.A.S.

On
September 23, 2010, Telemóvil Finance Co. Ltd., a fully owned subsidiary of Millicom in the Cayman Islands issued $450 million aggregate
principal amount of 8% Senior Unsecured Guaranteed Notes (the "8% Senior Notes") due on October 1, 2017. The 8% Senior Notes were issued for $444 million representing 98.68% of the
aggregate principal amount. Distribution and other transaction fees of $9 million reduced the total proceeds from issuance to $435 million. The 8% Senior Notes have

F-69

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

an
8% per annum coupon with an 8.25% yield and are payable semi-annually in arrears on April 1 and October 1. The effective interest rate is 8.76%.

The
8% Senior Notes are general unsecured obligations of Telemóvil Finance Co. Ltd and rank equal in right of payment with all future unsecured and
unsubordinated obligations of Millicom. The 8% Senior Notes are guaranteed by Telemóvil El Salvador, S.A., a Millicom subsidiary.

Telemóvil
Finance Co. Ltd has options to partially or fully redeem the 8% Senior Notes as follows:



October 1, 2014


104
%October 1, 2015


102
%October 1, 2016


100
%




If
either Millicom, Telemóvil Finance Co. Ltd or Telemóvil El Salvador, S.A. experience a Change of Control Triggering Event, defined
as a rating decline resulting from a change in control, each holder will have the right to require repurchase of its notes at 101% of their principal amount plus accrued and unpaid interest and all
other amounts due, if any.

In
September 2006, Telemóvil El Salvador S.A., Millicom's operation in El Salvador, entered into a $200 million 5 year loan. The loan was syndicated
amongst a group of local and international banks and was arranged by ABN AMRO, Citigroup and Standard Bank. The loan bears interest at $ LIBOR plus 1.75%. This loan was fully repaid in 2010.

In
December 2008, Telemóvil El Salvador S.A., entered into a $12 million 2 year loan with Banco Agrícola Comercial S.A. The loan
bears interest at $ LIBOR plus 6%. This loan was fully repaid in 2010.

In
December 2009, El Salvador entered into a 2 year loan with Scotiabank, bearing interest at $ LIBOR plus 5.0%. This loan was fully repaid in 2010.

Telefonica
Celular S.A., Millicom's operation in Honduras, has facilities with several local and international banks maturing between 2012 and 2016. These facilities are in
dollars and in Lempiras and are unsecured. Interest rates are either fixed or variable, ranging as of December 31, 2011 between 4% and 11% (2010: between 6.25% and 16.5%). As at
December 31, 2011, the amount of outstanding debt under these facilities was $258 million.

F-70

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

In
December 2008, Millicom Tanzania Limited, Millicom's operation in Tanzania entered into facilities totaling $228 million comprising of a five year local currency syndicated
tranche for TZS95 billion at the 180 days treasury Bill rate plus 3%, a seven year $116 million EKN guaranteed financing with 45% of the facility fixed at 4.1% and 55% of the
facility at $ LIBOR plus 0.665% and a seven year $40 million tranche with Proparco at $ LIBOR plus 2.5%. All tranches are 100% guaranteed by the Company. As at December 31, 2011, the
amount outstanding under these facilities was $155 million (2010: $200 million).

In
March 2007, Millicom Tanzania Limited entered into a 5 year Citi-Opic facility, bearing interest at a rate of $ LIBOR plus 2.5%, composed of a
$17.4 million $ Tranche and a Tranche in local currency up to the equivalent of $5 million. The outstanding US$ amount under these facilities as at December 31, 2011 amounted to
$2 million (2010: $7 million).

In
December 2010, the operation signed a sale and lease-back agreement with Helios Towers Tanzania, a direct subsidiary of Helios Towers Africa, for most of its cell sites,
to be transferred to Helios Towers in 2011 and 2012. As at December 31, 2011, $40 million was outstanding on the finance lease as part of the lease back agreement.

In
2011 Comcel and its sister companies Asesoria en Telecomunicaciones S.A. (Asertel), Distribuidora Central de Comunicaciones, S.A. (COCENSA), Distribuidora
Internacional de Comunicaciones, S.A. (INTERNACOM) and Distribuidora de Comunicaciones de Occidente, S.A. (COOCSA) entered into a $215 million syndicated loan with Citibank,
Scotiabank, Banco General, RBC and HSBC which was fully disbursed in 2011, Millicom's share of the facility at December 31, 2011 amounted to $118 million.

As
at December 31, 2011, Comcel had financing of $27 million (Millicom's share of outstanding debt) with Citibank bearing a fixed rate of 4.40% (2010: $28 million),
and $70 million with Bancolombia and Blue Tower maturing between 2012 and 2017 bearing a floating interest rate between 5.00% and 5.06% (2010: $71 million) and other financing with local
banks of the equivalent of $6 million (2010: nil).

Comcel
also had another 5 year facility with IFC for $100 million, bearing interest at $ LIBOR plus 4.50%. This loan was fully repaid during 2011 (2010: $64
million).

In
December 2007 Millicom (Ghana) Limited, Millicom's operation in Ghana, entered into a $60 million local 5 year Facility. The loan bears interest at $ LIBOR plus
2%. In parallel a $80 million offshore 7 year DFI (Development Finance Institution) financing which bears interest at $ LIBOR plus 2.25% was arranged. As at December 31, 2011,
$72 million (2010: $102 million) was outstanding under these facilities.

In
December 2009 the operation entered into a 3.5 year $22 million Ericsson arranged financing with EKN and Nordea priced at $ LIBOR + 0.85% fully
guaranteed by the Company. As at December 31, 2011, $19 million was outstanding under this facility (2010: $15 million).

F-71

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

In
January 2010, the operation signed a sale and lease-back agreement with Helios Towers Ghana, a direct subsidiary of Helios Towers Africa, for most of its cell sites, to be
transferred to Helios Towers in 2010 and 2011. As at December 31, 2011, $27 million was outstanding on the finance lease as part of the lease back agreement (2010: $41 million).

In
September 2009, Millicom Cable N.V., a subsidiary of the Company, refinanced with a 2 year, $250 million senior term loan facility fully guaranteed by the Company
with Standard Bank, RBS, Nordea, DnB Nor, and Morgan Stanley. This loan agreement is allocated to the 3 main Amnet operating entities in Costa Rica, El Salvador, and Honduras. The loan bore interest
for the first six months at $ LIBOR plus 4.5%, for months seven to twelve at $ LIBOR plus 4.75% and thereafter the margin increases by an incremental 25 basis points per quarter.

During
the course of 2010 Millicom's cable businesses in Honduras and Costa Rica obtained financing under a $105 million 7 year club deal fixed rate facility with HSBC,
Bancocolombia and Citibank bearing interest at 6.7% in Costa Rica and a $30 million 7 year bilateral fixed rate financing from Banco Industrial bearing interest at 7% in Honduras. As at
December 31, 2011, $99 million was outstanding under the facility in Costa Rica (2010: $104 million) and $33 million for the facility in Honduras (2010:
$29 million).

In
May and August 2007, Millicom's operation in Chad signed respectively a $31 million 5 year Facility with China Development Bank bearing interest at $ LIBOR +2%
and a Euro15 million 5 year Facility with Proparco bearing interest at Euribor +2%. As at December 31, 2011 $3 and $4 million respectively (2010: $13 and
$8 million respectively) were outstanding under these facilities, both guaranteed by the Company.

In
May 2009, Millicom Chad entered into a XAF6 billion 5 year Facility co-arranged by Societe Generale Cameroun and Financial Bank priced at a fixed interest
rate of 7%, fully guaranteed by the Company. At the same date, Millicom Chad signed a XAF21 billion 5 year Subordinated Facility with Societe Generale Tchad with interest at TIAO +1.85%
and guaranteed by Nordea. This guarantee is secured by a pledged deposit of $44 million by the Company (see note 19). As at December 31, 2011 $12 and $41 million
respectively were outstanding under these facilities (2010: $12 million and $43 million respectively).

In
December 2009 the operation signed a XAF9.25 billion 5 year fixed rate financing with the IFC bearing interest at 8%. This facility is guaranteed by Millicom. As at
December 31, 2011 the amount outstanding under this facility was $17 million (2010: $18 million).

In
January 2010 the operation entered into a 3 year deferred payment agreement with Huawei for $50 million, guaranteed by Millicom and bearing interest at LIBOR +3.75%. As
at December 31, 2011 the amount outstanding under this agreement was $15 million (2010: $13 million).

In
July 2010, Millicom Chad signed a XAF 8 billion 5 year Facility co-arranged by Proparco and BICEC (Banque Internationale du Cameron pour l'Epargne et
Le Credit) at a fixed interest rate of 8%, guaranteed by Millicom. As at December 31, 2011 the amount outstanding under this facility was $15 million (2010: nil).

F-72

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

In
July 2008, Telefonica Cellular Del Paraguay S.A. (Telecel), Millicom's operation in Paraguay entered into a $107 million, 8 year loan with the European Investment
Bank ("EIB"). The loan bears interest at rates between $ LIBOR plus 0.234% and $ LIBOR plus 0.667%. The outstanding amount as at December 31, 2011 was $95 million
(2010: $100 million). The EIB loan is guaranteed for commercial risks by a group of banks. The commission guarantee fee is 1.25% per annum.

In
addition as at December 31, 2011, Telecel had $3 million (2010: $6 million) of other debt and financing outstanding.

In
December 2007, Telefonica Celular de Bolivia SA ("Telecel Bolivia"), Millicom's operation in Bolivia, signed a financing agreement for $40 million with the Nederlandse
Financieringsmaatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as the Netherlands Development Finance Company. The A tranche of $20 million was provided directly by the FMO,
is repayable over 7 years and bears interest at $ LIBOR plus 2.25%. The B tranche of $20 million is provided equally by Nordea and Standard Bank, is repayable over 5 years
and bears interest at $ LIBOR plus 2%. Both tranches are guaranteed by the
Company. As of December 31, 2011, $16 million of this financing agreement was outstanding (2010: $25 million).

In
March 2008, Telecel Bolivia signed a 4 year and 9 months financing agreement for $30 million with International Finance Corporation. The loan bears interest at
$ LIBOR plus 2% and is fully guaranteed by the Company. As of December 31, 2011, $8 million of this financing agreement was outstanding (2010: $17 million).

In
addition to the above, Telecel Bolivia had $46 million of other debt and financing outstanding as at December 31, 2011 (2010: $44 million). This additional debt
comprises 7 bilateral loans in local currency bearing a fixed rate ranging from 4.5% to 6.5% and maturing between December 2012 and December 2016.

During
2011 supplier financing from Huawei (at interest rates of $ LIBOR plus 2%) and FPLT amounting to $13 million was repaid.

In
September 2006, Oasis S.P.R.L. ("Oasis"), Millicom's operation in the Democratic Republic of Congo, entered into a $106 million, 7 year loan from the China Development
Bank to finance equipment purchases from Huawei. The loan bears interest at $ LIBOR plus 2% and is repayable over 17 equal quarterly installments commencing in 2009. This financing is 100%
guaranteed by the Company. As of December 31, 2011, $35 million was outstanding under this facility (2010: $55 million).

In
September 2009, Oasis entered into a 7 year $80 million financing with the IFC guaranteed by Millicom and bearing interest at LIBOR +5%. As at December 31, 2011
the outstanding amount under this facility was $28 million (2010: $17 million).

In
addition at December 31, 2011, Oasis had other debt and financing of $33 million (2010: $22 million), mainly consisting of $17 million of finance leases
related to towers and $16 million of vendor financing from Huawei, bearing interest at Libor + 3% and guaranteed by Millicom.

F-73

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

Fair value of financial liabilities

Borrowings are recorded at amortized cost. The fair value of borrowings as at December 31, 2011 and 2010 is as follows:

2011

2010US$ '000

US$ '000Other debt and financing


2,262,974


2,246,644Fair value of total debt


2,262,974


2,246,644


When
the quoted price of the borrowings in an active market is not available, the fair value of the borrowings is calculated by discounting the expected future cash flows at market
interest rates.

The
nominal value of the other financial liabilities is assumed to approximate their fair values (see note 35).

Guarantees

In the normal course of business, Millicom has issued guarantees to secure some of the obligations of some of its operations under bank
and supplier financing agreements. The tables below describe the outstanding amount under the guarantees and the remaining terms of the guarantees as of December 31, 2011 and 2010. Amounts
covered by bank guarantees are recorded in the consolidated statements of financial position under the caption "Other debt and financing" and amounts covered by supplier guarantees are recorded under
the caption "Trade payables" or "Other debt and financing" depending on the underlying terms and conditions.

As of December 31, 2011

Bank and other financing guarantees(i)Terms

Outstanding
exposure

Maximum
exposureUS$ '000

US$ '0000 - 1 year


29,522


105,0881 - 3 years


230,855


383,1243 - 5 years


271,995


354,565More than 5 years


186,065


225,210Total


718,437


1,067,987


F-74

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

27. BORROWINGS (Continued)

As of December 31, 2010

Bank and other financing
guarantees(i)Terms

Outstanding
exposure

Maximum
exposureUS$ '000

US$ '0000 - 1 year





6,2001 - 3 years


360,084


472,2313 - 5 years


220,079


293,424More than 5 years


182,165


265,710Total(ii)


762,328


1,037,565


(i)The
guarantee ensures payment by the guarantor of outstanding amounts of the underlying loans in the case of non-payment by the obligor.(ii)Including
discontinued operations.


Pledged assets

The Group's share of total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit or
guarantees issued by the Company as at December 31, 2011 is $1,384 million (2010: $1,380 million). The assets pledged by the Group for these debts and financings at the same date
amount to $383 million (2010: $411 million) of which $335 million (2010: $360 million) were pledged over property, plant and equipment.

28. OTHER NON-CURRENT AND CURRENT PROVISIONS AND LIABILITIES

Provisions and other non-current liabilities are comprised as follows:

2011

2010US$ '000

US$ '000Non-current legal provisions (note 32)


5,658


6,416Long-term portion of asset retirement obligations


51,223


61,473Long-term portion of deferred income on tower deals


50,914


7,864Other


5,818


4,014Total


113,613


79,767


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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

28. OTHER NON-CURRENT AND CURRENT PROVISIONS AND LIABILITIES (Continued)

Provisions
and other current liabilities are comprised as follows:

2011

2010
(As Restated)US$ '000

US$ '000Put option(i)


745,145


769,378Deferred revenues


133,326


111,169Customer deposits


22,171


12,242Current legal provisions (note 32)


1,738


2,314Other tax payables


69,799


87,541Current provisions(ii)


15,147


21,067Derivative financial instruments


14,884


Customer and distributor cash balances (Tigo cash)


19,152


2,044Other


27,118


6,080Total


1,048,480


1,011,835


(i)Restatementsee
note 4(ii)Includes
tax and other contingencies for $4 million (2010: $12 million) that were assumed as part of the Amnet and Navega acquisitions. The
former shareholders of Amnet and Navega placed in escrow $35 million and $3 million respectively to cover these contingencies. Therefore a corresponding financial asset of
$4 million (2010: $12 million) has been recorded within "Other current assets".


Put option

On July 1 2010, Millicom reached an agreement with its local partner in Honduras whereby Millicom's local partner granted
Millicom an unconditional call option for a duration of five years for his 33% stake in Celtel, the Honduran operation (see notes 5 and 35). At the same time, and as consideration for the call
option, Millicom granted a put option for the same duration to its local partner. The put option can only be exercised in cases of a change of control of Millicom International Cellular S.A. or
Millicom's subsidiary that holds the shares in Celtel (except if the change of control is in favor of Investment AB Kinnevik, the current largest shareholder of Millicom, or management of Millicom).

A
change of control event may occur at Millicom level which is beyond the control of Millicom. Such an event would trigger the ability of our local partner to exercise his put option at
his discretion. Therefore, the put option is a financial liability as defined in IAS 32 and Millicom has recorded a current liability for the present value of the redemption price of the put
option of $745 million at December 31, 2011 (2010: $769 million).

The
redemption price of the put option is based on a multiple of the EBITDA of Celtel. The multiple is based on a change of control transaction multiple of Millicom. Management estimated
the change of control transaction multiple of Millicom from a trading multiple of Millicom and adding a control premium (based upon comparable transactions from the industry).

F-76

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

29. DIVIDENDS

On December 2, 2011 an extraordinary dividend of $3.00 per share from Millicom's retained profits as at December 31, 2010 was approved at an Extraordinary General Meeting
and distributed in December 2011.

On
May 31, 2011 a dividend distribution of $1.80 per share from Millicom's retained profits as at December 31, 2010 was approved by the shareholders at the Annual General
Meeting and distributed in June 2011.

On
May 25, 2010 an ordinary dividend of $1.40 per share and a special dividend of $4.60 per share from Millicom's retained profits as at December 31, 2009 were approved by
the shareholders and distributed in June 2010.

30. DIRECTORS' AND OFFICERS' REMUNERATION

Directors

The remuneration of the members of the Board of Directors of the Company comprises an annual fee. Between May 2006 and May 2010 the
Directors remuneration also included share based compensation (restricted shares) and until May 2006 Directors were issued share options. Director remuneration is proposed by the Nominations Committee
and approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

The
remuneration charge for the Board for the years ended December 31, 2011, 2010 and 2009 was as follows:

Other members of
the boardChairmanTotalNo. of shares

US$ '000

No. of shares

US$ '000US$ '0002011Fees





203





697


900Total





203





697


9002010Fees





77





444


521Share based compensation:(i)Restricted shares(ii)


1,007


82


4,270


350


432Total





159





794


9532009Fees





106





584


690Share based compensation:(i)Restricted shares(ii)


1,441


81


5,111


287


368Total





187





871


1,058


(i)See
note 24.(ii)Restricted
shares cannot be sold for one year from date of issue.


F-77

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

30. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

The
number of shares and share options beneficially owned by the Directors as at December 31, 2011 and 2010 was as follows:

Chairman

Other
members of
the Board

Total2011Shares


2,318


19,560


21,878Share options





10,000


10,0002010Shares


2,318


73,158


75,476Share options





35,000


35,000


Officers

The remuneration of the Officers of the Company ("Officers") comprises an annual base salary, an annual bonus, share based
compensation, social security contributions, pension contributions and other benefits. The bonus and share based compensation plans are based on actual performance (including individual and Group
performance). Up until May 2006, the Officers
were issued share options. Subsequent to May 2006, the Officers were issued restricted shares. Share based compensation is granted once a year by the Compensation Committee of the Board. Since 2006,
the annual base salary and other benefits of the Chief Executive Officer ("CEO") are proposed by the Compensation Committee and approved by the Board and the annual base salary and other benefits of
the Chief Financial Officer ("CFO") and Chief Operating Officers ("COOs") are set by the CEO and approved by the Board.

On
March 2, 2009, Millicom announced that the Board appointed Mikael Grahne, who has been the COO of Millicom since February 2002, to succeed Marc Beuls as President and CEO.

F-78

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

30. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

The
remuneration charge for the Officers for the years ended December 31, 2011, 2010 and 2009 was as follows:

Current
Chief
Executive
Officer

Former
Chief
Executive
Officer

Current
Chief
Financial
OfficerUS$ '000

US$ '000

US$ '0002011Base salary


1,323





676Bonus


1,915





798Pension


406





105Other benefits


158





71Total


3,802





1,650Share based compensation:(i)Shares issued/charge under long term incentive plans(ii)


2,862





1,2672010Base salary


1,261





614Bonus


1,823





624Pension


385





112Other benefits


178





74Total


3,647





1,424Share based compensation:(i)Shares issued/charge under long term incentive plans(ii)


2,874





1,243Charge for share options


5





2009Base salary


1,380


2,349


625Bonus


1,988


1,388


503Other benefits


142





Total


3,510


3,737


1,128Share based compensation:(i)Shares issued/charge under long term incentive plans(ii)


1,598


(2,829)
(iii)

129Charge for share options


16


10





(i)See
note 24.(ii)Share
awards of 34,937 and 14,814 were granted in 2011 under the 2011 LTIPs to the CEO and CFO. Share awards of 41,628 and 19,891 were granted in 2010
under the 2010 LTIPs to the CEO and CFO. Share awards of 35,011 and 13,323 were granted under the 2009 LTIPs to the CEO and CFO.(iii)Reversal
for non-vested shares of the former CEO, Marc Beuls.


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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

30. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

The
number of shares and unvested share awards beneficially owned by senior management as at December 31, 2011 and 2010 was as follows:

Chief
Executive
Officer

Chief
Financial
Officer

Total2011Shares


666,193


7,800


673,993Share awards not vested


105,063


45,228


150,2912010Shares


648,647


905


649,552Share awards not vested


99,431


37,720


137,151


Severance payments

If employment of the executives is terminated by Millicom, severance payment of up to 12 months salary is payable.

31. NON-CASH INVESTING AND FINANCING ACTIVITIES

The following table gives details of non-cash investing and financing activities for continuing operations for the years ended December 31, 2011, 2010 and 2009.

2011

2010

2009US$ '000

US$ '000

US$ '000Investing activitiesAcquisition of property, plant and equipment (see note 17)


(37,929
)

(90,779
)

(45,399
)Asset retirement obligations (see note 17)


(4,876
)

16,683


(24,209
)Financing activitiesVendor financing and finance leases (see note 17)


37,929


90,779


45,399Share based compensation (see note 24)


17,264


30,718


10,175


32. COMMITMENTS AND CONTINGENCIES

Operational environment

Millicom has operations in emerging markets, namely Latin America and Africa, where the regulatory, political, technological and
economic environments are evolving. As a result, there are uncertainties that may affect future operations, the ability to conduct business, foreign exchange transactions and debt repayments and which
may impact upon agreements with other parties. In the normal course of business, Millicom faces uncertainties regarding taxation, interconnect, license renewal and tariff arrangements, which can have
a significant impact on the long-term economic viability of its operations.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

32. COMMITMENTS AND CONTINGENCIES (Continued)

Litigation

The Company and its operations are contingently liable with respect to lawsuits and other matters that arise in the normal course of
business. As of December 31, 2011, the total amount of claims against Millicom's operations was $127 million (December 31, 2010: $143 million) of which $1 million
(December 31, 2010: $6 million) relate to joint ventures. As at December 31, 2011,
$7 million (December 31, 2010: $9 million) has been provided for these claims in the consolidated statement of financial position. Management is of the opinion that while it is
impossible to ascertain the ultimate legal and financial liability with respect to these claims, the ultimate outcome of these contingencies is not anticipated to have a material effect on the Group's
financial position and operations.

Sentel GSM S.A. ("Sentel") license

The Sentel license to provide mobile telephony services in the Republic of Senegal has been challenged by the Senegalese authorities.
As of today, Sentel continues to provide telephony services to its customers and effectively remains in control of the business. However, the government of the Republic of Senegal published on
November 12, 2008 a decree dated as of 2001 that purports to revoke Sentel's license.

Sentel's
twenty year license was granted in 1998 by a prior administration, before the enactment in 2002 of the Senegal Telecommunications Act. Although the current Senegalese government
has, since 2002, acknowledged the validity of the Sentel license, it has also requested that Sentel renegotiate the terms of the license. Sentel has indicated its willingness to negotiate only certain
enhancements to the license and data services and the extension of the duration of the license.

On
November 11, 2008 Millicom International Operations B.V. (MIO B.V.), a wholly owned Millicom subsidiary and Sentel instigated arbitration proceedings with the
International Center for the Settlement of Investment Disputes (ICSID) against the Republic of Senegal under provisions of the Sentel license and international law. MIO B.V. and Sentel seek
compensation for the purported expropriation of the Senegal license and monetary damages for breach of the license.

On
the same day, the Republic of Senegal instigated court proceedings in the Republic of Senegal against Millicom and Sentel and sought court approval for the revocation of Sentel's
license and sought damages against Sentel and Millicom.

In
July 2010, the ICSID panel ruled that it has jurisdiction over the claims brought by Sentel and MIO B.V., overruling the objections to ICSID's jurisdiction made by the Republic
of Senegal. On November 10, 2010, the Republic of Senegal withdrew its action against Sentel and Millicom in the court proceedings in Senegal. A hearing on the merits of the case was held in
December 2011, and a final decision on the case is expected in 2012.

Due
to the nature of the dispute, the status of the process for arbitration proceedings, a lack of qualitative information from which to assess possible outcomes, and a lack of financial
information,
significant uncertainties exist as to the financial impact (if any) of the dispute. The uncertainties are such that, at the date of filing of these consolidated financial statements, it is not
practicable to include a reasonable and accurate assessment of the possible financial effect of this dispute.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

32. COMMITMENTS AND CONTINGENCIES (Continued)

Lease commitments



The Group has the following annual operating lease commitments as of December 31, 2011 and 2010.

2011

2010US$ '000

US$ '000Operating lease commitmentsWithin: one year


62,480


63,375Between: one to five years


157,843


235,195After: five years


18,587


143,390Total


238,910


441,960


Operating
leases comprise mainly of lease agreements relating to land and buildings. The operating lease terms and conditions reflect normal market conditions. Total operating lease
expense from continuing operations was $96 million in 2011 (2010: $83 million, 2009: $73 millionsee note 11).



The Group's future minimum payments on finance leases were $453 million at December 31, 2011 (2010: $120 million)
and mainly comprised leased towers in Ghana, Tanzania, DRC and Colombia under 12 year leases (see note 17). Other financial leases are not material and mainly consist of lease agreements
relating to vehicles used by the Group.

The
Group has the following finance lease commitments as of December 31, 2011 and 2010.

2011

2010US$ '000

US$ '000Finance lease commitmentsWithin: one year


36,507


6,874Between: one to five years


153,212


33,438After: five years


263,303


79,430Total


453,022


119,742


Capital commitments

As of December 31, 2011 the Company and its subsidiaries and joint ventures have fixed commitments to purchase network
equipment, land and buildings and other fixed assets for a value of $370 million (2010: $207 million), of which $46 million (2010: $19 million) relate to joint ventures, from a
number of suppliers.

In
addition, Millicom is committed to supporting Colombia Móvil S.A., its operation in Colombia, through loans and warranties. The maximum commitment is
$264 million and remains until the time the total support from Millicom equals the support from the founding shareholders of Colombia Móvil S.A.

F-82

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

32. COMMITMENTS AND CONTINGENCIES (Continued)

Contingent assets

Due to late delivery by suppliers of network equipment in various operations, Millicom is entitled to compensation. This compensation
is in the form of discount vouchers on future purchases of network equipment. The amount of vouchers received but not recognized as they had not yet been used as at December 31, 2011 was
$0.2 million (2010: $1 million).

Dividends

The ability of the Company to make dividend payments is subject to, among other things, the terms of indebtedness, legal restrictions
and the ability to repatriate funds from Millicom's various operations. As at December 31, 2011, $94 million (December 31, 2010: $60 million) of Millicom's retained profits
represent statutory reserves and are undistributable to owners of the Company.

Foreign currency forward contracts

As of December 31, 2011, the Group held foreign currency forward contracts to sell Colombian Pesos in exchange for United States
Dollars for a nominal amount of $84 million (2010: $84 million). Net exchange losses on these forward contracts for the year were $2 million (2010: $15 million).

Ownership agreements with non-controlling shareholders

As of December 31, 2010 the agreement with the non-controlling shareholder to increase Millicom's ownership of its
cable businesses in El Salvador from 55% to 100% was pending regulatory approval.

33. RELATED PARTY TRANSACTIONS

The Company conducts transactions with its principal shareholder, Investment AB Kinnevik ("Kinnevik") and subsidiaries, and with tower companies in which it holds a direct or indirect
equity interest in Ghana, DRC, Tanzania and Colombia. Transactions with related parties are conducted on normal commercial terms and conditions.



The Company's principal shareholder is Kinnevik. Kinnevik is a Swedish holding company with interests in the telecommunications, media,
publishing, paper industries and financial services. As of December 31, 2011 and 2010, Kinnevik owned approximately 36% of Millicom. During 2011 and 2010, Kinnevik did not purchase any Millicom
shares. There are no loans made by Millicom to or for the benefit of these related parties.

During
2011 and 2010 the Company purchased services from Kinnevik subsidiaries including fraud detection, procurement and professional services.



The Group acquired a 40% equity investment in the associate company Helios Towers Ghana in 2010 and in the associate companies Helios
Towers DRC, Helios Towers Tanzania and ATC

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

33. RELATED PARTY TRANSACTIONS (Continued)

Colombia B.V.
in 2011 ("Tower companies"). Millicom sold and leased back a portion of its tower assets in each of these countries and received related tower operation and management services
(see note 7). The Group has future lease commitments in respect of the Tower companies (see note 32).

The
following transactions were conducted with related parties:

2011

2010

2009US$ '000

US$ '000

US$ '000Purchases of goods and services (Kinnevik)


5,958


4,000


1,000Lease of towers and related services (Associates)


21,864


8,738


Gain on sale of towers (Associates)


54,419


7,521


Total


82,241


20,259


1,000


As
at December 31, the Company had the following balances with related parties:

2011

2010US$ '000

US$ '000PayablesFinance lease payables


126,823


41,253Other accounts payable


10,077


637Total


136,900


41,890Receivables from sale of towers


76,677





34. FINANCIAL RISK MANAGEMENT

Terms, conditions and risk management policies

Exposure to interest rate, foreign currency, non-repatriation, liquidity and credit risks arise in the normal course of
Millicom's business. The Group analyses each of these risks individually as well as on an interconnected basis and defines and implements strategies to manage the economic impact on the Group's
performance in line with its financial risk management policy. Millicom's risk management strategies may include the use of derivatives. Millicom's policy prohibits the use of such derivatives in the
context of speculative trading.

Interest rate risk

Interest rate risk generally arises on borrowings. Borrowings issued at floating rates expose the Group to cash flow interest rate
risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's exposure to risk of changes in market interest rates relates to both of the above. To manage the
risk, the Group's policy is to maintain a combination of fixed and floating rate debt with target for the debt to be equally distributed between fixed and variable rates. The Group actively monitors
borrowings against target and applies a dynamic interest rate hedging approach. The target mix between fixed and floating rate debt is reviewed periodically. The purpose of Millicom's policy is to
achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business strategy. At December 31,
2011,

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

34. FINANCIAL RISK MANAGEMENT (Continued)

approximately
51% of the Group's borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates under interest rate swaps (2010: 36%).

To
comply with internal policies, in January 2010 Millicom entered into an interest rate swap to hedge the interest rate risk of the floating rate debt in three different countries
(Tanzania, DRC and Ghana). The interest rate swap was issued in January 2010 for a nominal amount of $100 million, with maturity January 2013.

In
2010 Millicom entered into interest rate swaps to hedge the interest rate risks on floating rate debts in Honduras and Costa Rica. The interest rate swap in Honduras was issued for a
nominal amount of $30 million, with maturity in 2015, and in Costa Rica for a nominal amount of $105 million with maturity in 2017.

The
table below summarizes, as at December 31, 2011, our fixed rate debt and floating rate debt:

Amounts due within1 year

1 - 2 years

2 - 3 years

3 - 4 years

4 - 5 years

>5 years

Total(in thousands of U.S. Dollars, except percentages)Fixed rate


261,840


118,930


134,273


97,007


45,742


584,489


1,242,281Weighted average nominal interest rate


4.37
%

6.02
%

6.13
%

5.66
%

6.02
%

8.85
%

6.98
%Floating rate


359,586


194,066


191,260


193,967


198,659


58,459


1,195,997Weighted average nominal interest rate


5.31
%

5.50
%

4.75
%

6.27
%

5.98
%

2.17
%

5.37
%Total


621,426


312,996


325,533


290,974


244,401


642,948


2,438,278Weighted average nominal interest rate


4.91
%

5.70
%

5.32
%

6.06
%

5.99
%

5.19
%

6.97
%


The table below summarizes, as at December 31, 2010, our fixed rate debt and floating rate debt:

Amounts due within1 year

1 - 2 years

2 - 3 years

3 - 4 years

4 - 5 years

>5 years

Total(in thousands of U.S. Dollars, except percentages)Fixed rate


69,761


36,361


60,987


64,885


70,409


549,062


851,465Weighted average nominal interest rate


5.69
%

6.19
%

6.35
%

5.89
%

6.66
%

8.81
%

7.87
%Floating rate


485,703


334,637


193,167


246,496


155,378


85,190


1,500,571Weighted average nominal interest rate


7.25
%

6.25
%

6.39
%

6.29
%

6.70
%

4.55
%

6.55
%Total


555,464


370,998


254,154


311,381


225,787


634,252


2,352,036Weighted average nominal interest rate


7.05
%

6.25
%

6.38
%

6.20
%

6.69
%

8.25
%

7.03
%


A one hundred basis point fall or rise in market interest rates for all currencies in which the Group had borrowings at December 31, 2011,
would increase or reduce profit before tax from continuing operations for the year by approximately $12 million (2010: $15 million).

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

34. FINANCIAL RISK MANAGEMENT (Continued)

Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures where the Group
operates. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.

Millicom
seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities denominated in foreign currencies. In some cases, Millicom
may borrow in US dollars where it is either commercially more advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or where US dollar denominated borrowing is the
only funding source available to a joint venture or subsidiary. In these circumstances, Millicom accepts the remaining currency risk associated with financing its joint ventures and subsidiaries,
principally because of the relatively high cost of forward cover, when available, in the currencies in which the Group operates.

The
following table summarizes debt denominated in US$ and other currencies at December 31, 2011 and 2010.

2011

2010US$ '000

US$ '000Total US$


1,605,850


1,571,757Colombia


504,337


522,994Chad


86,411


72,754Tanzania


34,584


56,659Bolivia


46,305


43,878Ghana


18,670


40,565Guatemala


11,249


20,552Other


130,872


22,877Total non-US$ currencies


832,428


780,279Total


2,438,278


2,352,036


At
December 31, 2011, if the US$ had weakened/strengthened by 10% against the other functional currencies of our operations and all other variables held constant, then profit
before tax from continuing operations would have increased/decreased by $112 million and $137 million respectively (2010: $105 million and $129 million respectively). This
increase/decrease in profit before tax would have mainly been as a result of the conversion of the results of our operations with functional currencies other than the US dollar.

Non-repatriation risk

Most of the operations in which we have interests receive substantially all of their revenues in the currency of the countries in which
they operate. We derive substantially all of our revenues through funds generated by our local operations and, therefore, we rely on their ability to transfer funds to the Company.

Although
there are foreign exchange controls in some of the countries in which our mobile telephone companies operate, none of these countries currently significantly restrict the
ability of these operations to pay interest, dividends, technical service fees, royalties or repay loans by exporting cash,

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

34. FINANCIAL RISK MANAGEMENT (Continued)

instruments
of credit or securities in foreign currencies. However, existing foreign exchange controls may be strengthened in countries where we operate, or foreign exchange controls may be introduced
in countries where we operate that do not currently impose such restrictions, in which case, the Company's ability to receive funds from the operations will subsequently be restricted, which would
impact our ability to pay dividends to our shareholders.

In
addition, in some countries, it may be difficult to convert large amounts of local currency into foreign currency because of limited foreign exchange markets. The practical effects of
this are time delays in accumulating significant amounts of foreign currency and exchange risk, which could have an adverse effect on the Group's results of operations.

Credit and Counterparty risk

Financial instruments that potentially subject the Group to credit risk are primarily cash and cash equivalents, pledged deposits,
letters of credit, trade receivables, amounts due from joint venture partners, supplier advances and other current assets and derivatives. Counterparties to agreements relating to the Group's cash and
cash equivalents, pledged deposits and letters of credit are significant financial institutions with investment grade ratings. Management does not believe there are significant risks of
non-performance by these counterparties. Management has taken steps to diversify its banking partners. We are also managing the allocation of deposits across banks so that the Group's
counterparty risk with a given bank stays within limits which have been set based on each banks credit rating. This way we are avoiding any significant exposure to a specific party.

A
large portion of turnover comprises prepaid airtime. For customers for whom telecom services are not prepaid, the Group follows risk control procedures to assess the credit quality of
the customer, taking into account its financial position, past experience and other factors.

Accounts
receivable are mainly derived from balances due from other telecom operators. Credit risk of other telecom operators is limited due to the regulatory nature of the telecom
industry, in which licenses are normally only issued to credit worthy companies. The Group maintains a provision for impairment of trade receivables based upon expected collectability of all trade
receivables.

As
the Group has a large number of internationally dispersed customers, there is no significant concentration of credit risk with respect to trade receivables.

Liquidity risk

Liquidity risk is defined as the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities. The Group has incurred significant indebtedness but also has significant cash balances. Millicom evaluates its ability to meet its obligations on an ongoing basis using a recurring
liquidity planning tool. This tool considers the operating net cash
flows generated from its operations and the future cash needs for borrowing and interest payments and capital and operating expenditures required in maintaining and developing local business.

F-87

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

34. FINANCIAL RISK MANAGEMENT (Continued)

The Group manages its liquidity risk through use of bank overdrafts, bank loans, vendor financing, Export Credit Agencies and Development Finance Institutions ("DFI") loans, bonds and
finance leases. Millicom believes that there is sufficient liquidity available in our markets to meet ongoing liquidity needs. Additionally, Millicom is able to arrange offshore funding through the
use of Export Credit Agency guarantees and DFIs (IFC, PROPARCO, DEG and FMO), who have been established specifically to finance development in our markets. Millicom is diversifying its financing with
commercial banks representing about 51% of its gross financing, Bonds 18%, Development Finance
Institutions 12%, partners 11%, financial leases 6% and suppliers 2%. The Group is therefore not dependent on a few sources of financing but is relying on various financing opportunities.

The
tables below summarize the maturity profile of the Group's net financial liabilities at December 31, 2011 and 2010.

Year ended 31 December 2011

Less than
1 year

1 to 5 years

>5 years

TotalUS$ '000

US$ '000

US$ '000

US$ '000Total borrowings (see note 27)


(621,426
)

(1,173,904
)

(642,948
)

(2,438,278
)Cash and cash equivalent


881,279








881,279Time deposit


269








269Pledged deposit (relating to bank borrowings)


297


49,371





49,668Net cash (debt)


260,419


(1,124,533
)

(642,948
)

(1,507,062
)Future interest commitments(ii)


(135,667
)

(342,098
)

(26,484
)

(504,249
)Trade payables (excluding accruals)


(340,684
)







(340,684
)Derivative financial instruments


(14,884
)

(8,016
)




(22,900
)Put option


(745,145
)







(745,145
)Other financial liabilities (including accruals)


(861,831
)







(861,831
)Trade receivables


276,944








276,944Other financial assets


334,181


37,359





371,540Net financial asset (liability)


(1,226,667
)

(1,437,288
)

(669,432
)

(3,333,387
)


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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

34. FINANCIAL RISK MANAGEMENT (Continued)



Year ended 31 December 2010 (As Restated)(i)

Less than
1 year

1 to 5 years

>5 years

TotalUS$ '000

US$ '000

US$ '000

US$ '000Total borrowings (see note 27)


(555,464
)

(1,162,320
)

(634,252
)

(2,352,036
)Cash and cash equivalent


1,023,487








1,023,487Time deposit


3,106








3,106Pledged deposit (relating to bank borrowings)


7,261


49,963


0


57,224Net cash (debt)


478,390


(1,112,357
)

(634,252
)

(1,268,219
)Future interest commitments(ii)


(145,664
)

(346,193
)

(26,109
)

(517,966
)Trade payables (excluding accruals)


(315,058
)







(315,058
)Derivative financial instruments





(18,250
)




(18,250
)Put option


(769,378
)







(769,378
)Other financial liabilities (including accruals)


(734,448
)







(734,448
)Trade receivables


253,258








253,258Other financial assets


200,630


17,754





218,384Net financial asset (liability)


(1,032,270
)

(1,459,046
)

(660,361
)

(3,151,677
)


(i)Restatementsee
note 4(ii)Includes
unamortized difference between carrying amount and nominal amount of debts.


Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital
ratios in order to support its business and maximize shareholder value.

The
Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may make dividend
payments to shareholders, return capital to shareholders or issue new shares. Millicom is rated by one independent rating agency, namely Moody's, which upgraded Millicom's rating by one notch to Ba1,
which is just one notch below investment grade. The Group monitors capital using primarily a net debt to adjusted operating profit ratio, as well as a set of other indicators.

2011

2010US$ '000

US$ '000Net debt


1,507,062


1,268,219Adjusted operating profit (see note 10)


2,087,217


1,840,624




Ratio

RatioNet debt to adjusted operating profit ratio


0.7


0.7


The
Group reviews it gearing ratio (net debt divided by total capital plus net debt) periodically. Net debt includes interest bearing loans and borrowings, less cash and cash equivalents
and pledged

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

34. FINANCIAL RISK MANAGEMENT (Continued)

deposits
related to bank borrowings. Capital represents equity attributable to the equity holders of the parent.

2011

2010
(As Restated)(i)US$ '000

US$ '000Net debt


1,507,062


1,268,219Equity


2,445,554


2,389,633Net debt and equity


3,952,616


3,657,852Gearing ratio


38
%

35
%


(i)Restatementsee
note 4


35. FINANCIAL INSTRUMENTS

The fair value of Millicom's financial instruments is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. The fair value of all financial assets and all financial liabilities except debt and financing approximate their carrying value largely due to the short-term
maturities of these instruments. The fair values of all debt and financing have been estimated by the Group based on discounted future cash flows at market interest rates.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

35. FINANCIAL INSTRUMENTS (Continued)

The
following table shows the carrying and fair values of financial instruments as at December 31, 2011 and 2010:

Carrying value

Fair value2011

2010
(As Restated)(i)

2011

2010
(As Restated)(i)US$ '000

US$ '000

US$ '000

US$ '000FINANCIAL ASSETSLoans and receivablesPledged deposits


49,371


49,963


49,371


49,963Other non-current assets


37,359


17,754


37,359


17,754Trade receivables, net


276,944


253,258


276,944


253,258Amounts due from non-controlling interests and JV partners


158,782


99,497


158,782


99,497Prepayments and accrued income


119,362


89,477


119,362


89,477Other current assets


146,615


75,311


146,615


75,311Cash and cash equivalents


881,279


1,023,487


881,279


1,023,487Total


1,669,712


1,608,747


1,669,712


1,608,747Current


1,582,982


1,541,030


1,582,982


1,541,030Non-current


86,730


67,717


86,730


67,717FINANCIAL LIABILITIESDebt and financing (see note 27)


2,438,278


2,352,036


2,262,974


2,246,644Trade payables


224,089


202,707


224,089


202,707Payables and accruals for capital expenditure


333,551


278,063


333,551


278,063Derivative financial instruments


22,900


18,250


22,900


18,250Put option


745,145


769,378





Amounts due to non-controlling interests and JV partners


92,677


97,919


92,677


97,919Accrued interest and other expenses


263,747


228,360


263,747


228,360Other liabilities


74,259


24,380


74,259


24,380Total


4,194,646


3,971,093


3,274,197


3,096,323Current


2,363,960


2,152,257


1,618,816


1,382,879Non-current


1,830,686


1,818,836


1,655,381


1,713,444


(i)Restatementsee
note 4


Call option and put option related to Telefonica Cellular S.A. DE CV (Celtel)

As described in note 5, on July 1, 2010 Millicom reached agreement with its local partner in Honduras whereby Millicom's
local partner granted Millicom an unconditional call option for the next five years for his 33% stake in Telefonica Celtel and as consideration, Millicom granted a conditional put option for the same
duration to the local partner.

The
put option can only be exercised in cases of a change of control of Millicom International Cellular S.A. or Millicom's subsidiary that holds the shares in Celtel (except if
the change of control is in favour of Investment AB Kinnevik, the current largest shareholder of Millicom, or management of

F-91

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2011, 2010 and 2009 (Continued)

35. FINANCIAL INSTRUMENTS (Continued)

Millicom).
Millicom believe that a change of control transaction that triggers the local partner's right to exercise his put is currently highly unlikely to happen during the term of the put option
and have therefore determined the fair value of the put option to be immaterial at both December 31, 2010 and 2011.

The
call option price is a fixed multiple of the EBITDA of Celtel in the year the option is exercised. As the fixed multiple exceeded the fair value multiples (based on comparable
transactions and including a control premium) at December 31, 2011 and 2010, and as there were no expectations that the Honduran market characteristics would significantly change over the term
of the call option, Millicom determined the fair value of the call option to be immaterial at both December 31, 2011 and 2010.

Fair value measurement hierarchy

Effective January 1, 2009, Millicom adopted the amendment to IFRS 7 for financial instruments that are measured in the
Statement of Financial Position at fair value, which requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:



Derivative
financial instruments are measured with reference to Level 2, except for the call options in Colombia (see note 7) and the call and put options in Honduras (see
note 5 and note 28) which are measured with reference to level 3. The Honduras put option liability is carried at the present value of the redemption amount and is therefore
excluded from the fair value hierarchy. No other financial instruments are measured at fair value.

36. SUBSEQUENT EVENTS

Dividend

On February 8, 2012 Millicom announced that the Board will propose to the Annual General Meeting of the Shareholders a dividend
distribution of $2.40 per share to be paid out of Millicom's profits for the year ended December 31, 2011 subject to the Board's approval of the 2011 Consolidated Financial Statements of the
Group.

On
February 8, 2012 Millicom announced that the Board has approved a share buyback program of up to $300 million for the 2012 year.

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Table of Contents

Shareholder information

Corporate and registered officeMillicom International Cellular SA
15 Rue Léon Laval
L-3372 Leudelange
Grand-Duchy of Luxembourg
Tel: +352 27 759 101
Fax: +352 27 759 359
RCB 40630 Luxembourg

Investor RelationsJustine DimovicTel:+352 691 750479
Emily HuntTel:+44 7779 018539

Visit MIC's homepage athttp://www.millicom.com

Financial Calendar

April 18,
2012
First quarter results

July 18,
2012
Second quarter results

October 17,
2012
Third quarter results

February
2013
Full year results 2012

F-93

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