UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 20-F

|(Mark One)                                  |                                                                                               
|------------------------------------------- | ----------------------------------------------------------------------------------------------
|o                                           | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|OR                                         
|ý                                           | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|For the fiscal year ended December 31, 2007
|OR                                         
|o                                           | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|OR                                         
|o                                           | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   

000-22828 Commission file number

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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)

David Sach, T: +352 27759 327    E: david.sach@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:NoneSecurities registered or to be registered pursuant to Section 12 (g) of the Act:NoneSecurities 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:

102,428,260 shares of Common Stock as of December 31, 2007

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 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
|------------------------- |  | ------------------- |  | -----------------------

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

Indicate by checkmark 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



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TABLE OF CONTENTS

|                                                |           |     |                                                                              | Page
|----------------------------------------------- | --------- | --- | ---------------------------------------------------------------------------- | ----
|FORWARD-LOOKING STATEMENTS                      |           | 3  
|PRESENTATION OF FINANCIAL AND OTHER INFORMATION |           | 4  
|PART I                                          |           | 5  
|                                                | ITEM 1.   |     | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        |     
|                                                | ITEM 2.   |     | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |     
|                                                | ITEM 3.   |     | KEY INFORMATION                                                              |     
|                                                | ITEM 4.   |     | INFORMATION ON THE COMPANY                                                   |     
|                                                | ITEM 4A.  |     | UNRESOLVED STAFF COMMENTS                                                    |     
|                                                | ITEM 5.   |     | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |     
|                                                | ITEM 6.   |     | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   |     
|                                                | ITEM 7.   |     | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            |     
|                                                | ITEM 8.   |     | FINANCIAL INFORMATION                                                        |     
|                                                | ITEM 9.   |     | THE OFFER AND LISTING                                                        |     
|                                                | ITEM 10.  |     | ADDITIONAL INFORMATION                                                       |     
|                                                | ITEM 11.  |     | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                    |     
|                                                | ITEM 12.  |     | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |     
|PART II                                         |           | 108
|                                                | ITEM 13.  |     | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |     
|                                                | ITEM 14.  |     | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |     
|                                                | ITEM 15.  |     | CONTROLS AND PROCEDURES                                                      |     
|                                                | ITEM 16A. |     | AUDIT COMMITTEE FINANCIAL EXPERT                                             |     
|                                                | ITEM 16B. |     | CODE OF ETHICS                                                               |     
|                                                | ITEM 16C. |     | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |     
|                                                | ITEM 16D. |     | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |     
|                                                | ITEM 16E. |     | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES        |     
|PART III                                        |           | 111
|                                                | ITEM 17.  |     | FINANCIAL STATEMENTS                                                         |     
|                                                | ITEM 18.  |     | FINANCIAL STATEMENTS                                                         |     
|                                                | ITEM 19.  |     | EXHIBITS                                                                     |     

2

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FORWARD-LOOKING STATEMENTS

Certain of the statements made in this document may be considered to be "forward-looking statements" as that term is 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 throughout the 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 the telecommunications' markets. Such forward-looking statements are not
guarantees of future performance and involve 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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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless the context otherwise requires, the term the "Company" refers only to Millicom International Cellular S.A., a stock corporation organized under the
laws of the Grand-Duchy of Luxembourg, and the term the "Group", "Millicom", "we", "us" or "our" refers to Millicom 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 Subscribers" refers to
100% of subscribers in the Group's subsidiaries and the Group's percentage ownership of subscribers in each joint venture. Persons, population and pops data for 2007, 2006 and 2005 have been extracted
from the "CIAThe World Factbook" for 2007 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 2007 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 as adopted by the European Union ("IFRS") and
subscriber figures represent the total number of mobile subscribers 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 Reporting filing.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable for Annual Reporting filing.

ITEM 3.    KEY INFORMATION

Selected Financial Information

The Group reports under International Financial Reporting Standards, as adopted by the European Union ("IFRS"), with no difference for the Group to IFRS as issued
by the International Accounting Standards Board.

The
following table sets forth summary financial data of the Group as of and for the years ended December 31, 2007, 2006, 2005, 2004, and 2003. The data are based upon the Group's
audited consolidated balance sheets as of December 31, 2007, 2006, 2005, 2004 and 2003 and audited consolidated statements of profit and loss 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,
|-------------------------------------------------------------------------- |  | -----------------------
|
|
|Profit and Loss Statement Data:                                            |  |                        
|Revenues                                                                   |  |                        
|Operating profit                                                           |  |                        
|Profit/(loss) for the period from continuing operations(1)                 |  |                        
|Net profit/(loss) attributable to equity holders for the period            |  |                        
|Basic earnings (loss) from continuing operations per common share          |  | $                      
|Basic earnings (loss) per common share                                     |  | $                      
|Weighted average number of shares in basic computation (in thousands)(2)   |  |                        
|Diluted earnings (loss) from continuing operations per common share        |  | $                      
|Diluted earnings (loss) per common share                                   |  | $                      
|Weighted average number of shares in diluted computation (in thousands)(2) |  |                        
|Dividends per share                                                        |  |                        

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|
|

|                                                      |  | As of December 31, | 
|----------------------------------------------------- |  | ------------------ | 
|
|
|Balance Sheet Data:                                   |  |                    | 
|Property, plant and equipment, net                    |  | 2,066,122          | 
|Intangible assets, net                                |  | 467,502            | 
|Financial assets at fair value through profit or loss |  |                   | 
|Investments in associates(3)                          |  | 11,234             | 
|Total assets                                          |  | 4,413,826          | 
|Current liabilities                                   |  | 2,002,269          | 
|Non-current liabilities                               |  | 1,043,221          | 
|Minority interest                                     |  | 80,429             | 
|Shareholders' equity/(deficit)                        |  | 1,287,907          | 

|
|

|                               |          | As of and for Year Ended December 31,
|------------------------------ | -------- | -------------------------------------
|
|Operating Data (unaudited)(4): |          |                                      
|Total Subscribers:             |          |                                      
|                               | Prepaid  |                                      
|                               | Postpaid |                                      
|Monthly churn (%)(5):          |          |                                      
|                               | Prepaid  |                                      
|                               | Postpaid |                                      

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RISK FACTORS

Risks Relating to our Business

Emerging Markets Risks

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

We offer mobile telephony services in 16 emerging markets in Central and South America, Africa and Asia. Many of the countries in which we operate are considered
to be emerging economies and, therefore, can be subject to greater political and economic risk than developed countries. The governments of these 16 countries differ widely with respect to type of
government, constitution, and stability. Many of these 16 countries lack mature legal and regulatory systems. Some of the countries in which we operate, particularly Chad and Sri Lanka, suffer from
political instability, civil unrest, or war-like actions by anti-government insurgent groups. These problems may continue or worsen, potentially resulting in civil war in these
countries. Other countries in which we operate have only recently emerged from civil war and are attempting to rebuild their economies and governments, such as Sierra Leone and the Democratic Republic
of Congo.

As
a result of the above, we face several risks, ranging from the risk that our networks may be disrupted 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 conduct our local business as previously. Any of these events would adversely impact our revenues or results
of operations.

Most of the countries in which we operate have weak legal and telecommunications regulatory regimes compared to those in developed countries and this creates risks for our
operations.

In order for our operations to provide mobile services, they must receive a license from the government of the country in which they operate. Our ability to
operate is therefore dependent on the licenses granted by the government of each country. These licenses 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 business may be adversely affected by changes in the political structure or by actions or
decisions of specific government representatives in the relevant market. It is possible that a government could decide arbitrarily to revoke a license or impose new conditions that we do not agree
with and may not get consulted about in advance. We may not always have access to efficient avenues for appeal and may have to accept arbitrary conditions imposed upon us. This could adversely impact
our business and our revenues. Our favored recourse is often to the legal system of the relevant country; however, the legal and court systems of many countries in which we operate tend to be poorly
developed 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.

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. Even
when the outcome is successful, the enforcement of any award favorable to us could be a challenge.

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Some of the countries in which we operate have political regimes that do 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 potentially exists in any of the countries in which we operate, but might be highest in Bolivia at the moment under the current Government. The
government of President Evo Morales in Bolivia had initially declared that a nationalization of the telecommunications sector may be contemplated in connection with the government's decision to regain
more control over the Bolivian economy, as shown by certain measures implemented in the oil & gas sector in 2005-2006. We believe that nationalization of the telecommunications
sector will probably not occur but that the Bolivian government will attempt to 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 Telecel, our Bolivian operation, to increase government revenues. Measures
like these may have the effect of increasing our network rollout costs and reducing the profitability of our Bolivian operation.

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

Our operations are dependent on the health of the economies of the markets in which we operate. We offer our services in emerging market countries with economies
at various stages of development or structural reform. Most of the economies of the countries in which we operate have large sectors where a percentage of the local population earns a living on a
day-to-day basis and primarily spends its income on basic items such as food, housing and clothing, and has less income to spend on mobile telephony services. Therefore,
downturns in the economies of any particular country or region in which we operate may adversely affect demand for our services, which would result in reduced revenues.

Some
of these countries have historically experienced high inflation rates, although in the recent years inflation rates in all countries where we operate have been relatively low.
Periods of significant inflation in any of our markets could adversely affect our costs and financial condition.

Most 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, the countries in which we operate often lack basic 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 and Sierra
Leone, and in countries suffering from civil war-like events, such as Chad and Sri Lanka. 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 infrasctructures, which increases our
network development costs.

The
electricity supply is insufficient in certain countries in which we operate (predominantly Africa, with the exception of Mauritius) due to the growth experienced in such countries.
We therefore have to rely on diesel-powered generators that we source, install, maintain and refuel. In Chad and Sierra Leone, at December 31, 2007, close to 100% of our radio sites were
powered by diesel-powered generators, and in the Democratic Republic of Congo it was the case for about 75% of our sites. This increases our costs and impacts the profitability of our African
operations.

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

Many of the foreign countries in which we operate have implemented new taxes or increased the rates of existing taxes applicable to corporations as a method of
raising government revenue. Furthermore, competitive pricing pressure or the provisions of new tax laws may prevent us from passing these taxes onto our local customers. Consequently, any increase in
taxes applicable to our local operating subsidiaries could reduce the amount of earnings they generate.

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

Many of our countries receive significant inflows of funds from relatives and friends in developed countries that work abroad. A significant deterioration in the
developed country economies could impact the ability of those abroad to continue remitting funds because of job losses or reduced wages. Currently, we have not seen a noticeable adverse impact because
the job losses in developed markets have been mainly in industries, such as the financial sector, with limited or no impact on the jobs that normally attract the immigrant workers, but this situation
could change if the economic environment gets worse. Lower remittances would reduce the disposable income which would impact our revenues.

The recent increase in food prices within developed countries could have an inflationary impact on the emerging market economies.

A significant increase in food prices within our operating markets could impact the consumers' ability to pay for our products and services. Currently, we have
not seen a noticeable difference in consumer behavior towards our products and services. This might be because there is an agricultural sector in many of the economies in which we operate which could
be providing protection against inflationary food prices seen in developed countries, or because our products and services are essential for basic communication which is relatively high on the list of
customer needs and therefore consumers are making sacrifices to continue spending on our services. However, this situation could change if food prices remain higher than before or increase.

Currency fluctuations or devaluations reduce the amount of profit and assets that we are able to report.

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 US$. For each venture that reports its results in a currency other than the US$, a decrease in the value of that
currency against the US$ reduces our profits while also reducing both 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 of exchange rates for such currencies against the US$, which could affect our results of operations.

We
generally do not hedge our foreign currency exposures. Millicom had a net exchange gain of $15 million for the year ended December 31, 2007, compared to a gain of
$6 million for the year ended December 31, 2006, excluding an exchange loss of $36 million on the 5% Mandatory Exchangeable Notes.

Most of our operations receive revenue denominated in the local currency of the venture's country of operation. In the future, any of the countries in which these operations
are located may impose foreign exchange controls which will restrict our ability to receive funds from the operations.

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.

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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 and dividends and repay loans by exporting cash, instruments of credit or securities in foreign currencies. Although we have so far experienced no major
difficulty in obtaining permits to allow our operations to upstream cash directly or indirectly to the ultimate parent company of the Millicom group, this may not be the case in the future. Foreign
exchange control restrictions may be introduced in countries where we operate or strengthened where such restrictions already exist, or other countries where we operate that do not currently have such
restrictions may decide to impose them, in which cases the Company's ability to receive funds from the operations will subsequently be restricted, which will negatively impact the Company's revenues.

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.

Our ability to reduce our foreign currency exposure may be limited by restrictions on borrowings in local currency.

At the operations 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 it is financially viable, we borrow in local currency to help hedge against local currency net inflows. Our ability to reduce our foreign currency exchange exposure may be limited
by restrictions on borrowings in local currency. As such, there is a risk that we may not be able to fund our local operation's capital expenditure needs or reduce our foreign exchange exposure by
borrowing in local currency.

We own our operations through holding companies in jurisdictions which may effect changes to their respective laws that may unfavorably affect our financial status or tax
treatment.

We hold the interests in our mobile telephone companies through our 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 tax concessions we have obtained in certain of our countries of operation), foreign exchange controls, or other matters, are periodically subject to
change. Any such change could have a material adverse effect on our financial affairs and on our ability to receive, or the tax treatment of, funds from our local operations.

Our failure to comply with worldwide laws and regulations could result in liabilities and sanctions and this would have a material adverse effect on our business.

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



11

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These
laws and regulations impact 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. Even though the Company has increased its compliance efforts, there is always 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 or the 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.

We
expect that additional mobile telephony licenses will 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 likely to
sustain. In addition, in some of our markets, our competitors may have a greater coverage area than us. 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. Many of our competitors have substantially greater capital resources than we do. Price competition is
significant.

In
addition, new competitors, such as mobile and fixed line operators in developed markets that are able to leverage their existing networks may enter emerging markets. The level of
competition is influenced by the continuous and swift technological advances that characterize the industry, the regulatory developments that affect competition and alliances between market
participants.

There
is also a risk that, as new competitors enter into our markets and price competition intensifies, our customers may move to another mobile telephone operator. This may result in
our revenue declining, which would adversely affect our results of operations.

Any
failure by us to compete effectively 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.

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 that we service. In addition, such matters and
certain other aspects of mobile telephone operations, including rates charged to customers and the resale of mobile telephone services, may be subject to public utility regulation in the relevant
market. Our operations also typically require governmental permits, including permits for the construction and operation of cell sites. We do not believe that compliance with these permit requirements
generally has a material adverse effect on our company. However, we may become subject to claims or regulatory actions relating to any past or future non-compliance with permit
requirements.

Changes
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.

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

The purpose of universal service is to provide access to persons in non-urban areas and isolated areas with telephone and other telecommunications
services by the telecommunications build-out in rural areas through subsidies. There is a telecommunications divide in all of the countries in which we operate in relation to access to
telecommunications services (mobile, internet access, higher bandwidth telecommunication services) between urban and rural areas. When such services are available, they usually come at a significantly
higher cost to the customer than in urban areas due to the lower population density in rural areas that are often hard to reach due to the lack of the most basic infrastructure, in particular roads
and electricity. The goal of universal service is to promote the availability of quality services at fair, reasonable and affordable rates in all areas of the 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. For instance, India has implemented a universal service obligation in its New Telecom Policy 1999 funded by telecommunications operators paying a part of their net earnings into
the Universal Service Obligation Fund (USOF). We therefore believe that universal service obligations are a trend in telecommunications that will eventually become law in the countries in which we
operate.

To
date, none of the emerging markets in which we operate in have universal service obligations.

We
expect that most of the countries in which we operate will do so in the future. We believe this may have a negative impact on our profitability.

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

We may pursue new license opportunities. In each market we face competition for licenses from major international telecommunications companies as well as from
local competitors. While we typically try not to pay large amounts for mobile licenses, the competition for the granting or renewal of licenses is increasingly intense worldwide. As such, we might
have to pay substantial license fees in certain markets, as well as meet specified network build out requirements. We may not be successful in obtaining or renewing any 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.

Our markets are 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, substantial expansion of existing networks is required to remain competitive. Our networks are based on the GSM standard. 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. As new technologies develop, such as
third generation systems, including WiMAX and 3G, 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. To the extent our equipment or systems become obsolete, we may be required to
recognize an impairment charge to such assets, which may have a material adverse effect on our results of operations.

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

In line with the current trend in the European Union ("EU"), where the European Commission intends to change spectrum regulation in such a way that spectrum
(900 MHz and 1800 MHz bands) formerly reserved exclusively for GSM operators would be opened to other uses, such as 3G, we could find that new competitors are given access to the
spectrum bands we operate in. Among the markets that we operate in, we believe that the region most likely to follow the trends in EU telecommunications regulation is Africa. Although we do not
believe such changes will occur in the near future, we believe EU telecoms regulatory developments are likely to impact telecom regulatory trends in other parts of the world, particularly in Africa.
If such trends become law, our competitive position in the relevant countries may become adversely affected.

If we cannot successfully develop and manage our networks and distribution, for example as a result of natural disasters, we will be unable to expand our subscriber base and
will lose market share and revenues.

Our ability to increase our subscriber base depends upon the success of the 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 such as the tsunami in Sri Lanka (as occurred in late December 2004), the risk of hurricanes, volcanic activity and earthquakes in Central America, flooding in low-lying areas in
Bolivia and Paraguay (as occurred in the first quarter of 2007) and in South-East Asia. Other risks include sabotage, which is an ongoing risk particularly in Colombia and Sri Lanka. To
the extent we fail to expand our network and distribution capabilities on a timely basis, we may experience difficulty in expanding our subscriber base.

In
addition, our ability to manage our operations successfully is dependent upon our ability to implement sufficient operational resources and infrastructure. The failure or breakdown of
key components of our infrastructure, including our billing systems, may have a material negative effect on our profits and results of operations.

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

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



Our
success will also depend on our ability to continue to attract, retain and motivate qualified personnel. Competition for personnel in our markets is intense due to the small number
of qualified individuals available in most of our markets. Our failure to successfully manage our growth and personnel needs would have a material negative effect on our business and results of
operations.

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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 networks controlled by current or former government owned public
telecommunications operators or competing mobile telephone operators. Our financial results are affected by the cost of transmission and leased lines to effect interconnection. 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. Because we are
often one of the larger suppliers of telephone services in the countries we service, this could have the effect of reducing our revenue. In December 2007, the Colombian regulator significantly reduced
the interconnect rate. Since we have a customer base that receives significantly more calls from other networks than it makes, the change in the interconnect rate has had a significant impact on the
revenues and profitability of this operation.

Current concerns about the actual or perceived health risks relating to electromagnetic and radio frequency emissions, as well as the extensive publicity or possible resultant
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 some concern that these emissions may interfere with the operation of certain electronic equipment, including aircraft guidance systems, automobile braking
and steering systems (e.g., GPS), and civil and military radars. Although we expect that the actual or perceived risks relating to mobile communications devices and base stations, or press
reports about these risks will not significantly adversely affect us, its actual impact is difficult to estimate. It may have the effect of reducing our subscriber growth rate, subscriber base or
average use per subscriber, which would 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 will increase regulation of mobile handsets and base
stations as a result of these health concerns. Mobile telephone operators and handset manufacturers, including us, would 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, would 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.

Our ability to generate cash is dependent on our future operating and financial performance. This will be impacted by our ability to implement successfully our
business strategy, as well as general economic, financial, competitive, regulatory, technical 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 expenditures or sell assets. This could impact the operating performance of our business.

Our debt may have an adverse effect on our financial health and prevent us from fulfilling our obligations under such debt.

As of December 31, 2007, Millicom's total consolidated indebtedness was $1.8 billion. Of this amount, $0.6 billion represented the Company's
indebtedness and $1.2 billion represented our consolidated share of the indebtedness of our subsidiaries and joint ventures.

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Corporate
guarantees issued by the Company secured $0.2 billion of the indebtedness of our operations at December 31, 2007. 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 $0.7 billion at December 31, 2007.

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



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

We participate in 16 mobile operations worldwide, including the following operations where we have local partners with sufficient minority rights to prevent us
from having full control: Guatemala, Cambodia, Honduras and Mauritius. Our participation in each operation differs from market to market. Often our ability to withdraw funds, including dividends, from
these operations and to exercise management control over our partners depends on receiving the consent of the other participants. While the precise terms of the arrangements vary, our operations may
be negatively affected if disagreements develop with our partners.

We
rely upon dividends and other payments from our operations to generate the funds necessary to meet the Company's obligations, including the Company's debt obligations. The local
operations are legally separate and distinct from the Company and have no obligation to pay amounts due with respect to the Company's obligations or to make funds available for such payments. Our
local operations do not guarantee the Company's obligations. The ability of our operations to make such payments to the Company will be subject to, among other things, the availability of funds, the
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, most of which are 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 and the holders of our indebtedness.

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Certain insiders own significant amounts of our shares, giving them a substantial amount of management control.

Investment AB Kinnevik our largest shareholder owned 37,835,438 shares in Millicom, representing 36.9% of the voting shares as at December 31, 2007. The
Kinnevik group and its subsidiaries, the non-independent directors, the Stenbeck estate, and certain Stenbeck Trusts, beneficially owned 39,868,370 shares in Millicom, representing about
38.9% of Millicom's outstanding shares as at December 31, 2007. Kinnevik and its affiliates, having a significant ownership in Millicom, have significant influence over our management and
affairs. The influence that they have may not always be consistent with your interests.

A substantial number of our directors hold positions with Investment AB Kinnevik ("Kinnevik") or Tele2 AB, which may present conflicts that may be resolved in a manner
unfavorable to us.

Three Millicom board members hold executive and/or director positions with Kinnevik and Tele2 AB, a pan-European telecommunications company offering
fixed and mobile telephony. Tele2 AB is controlled by Kinnevik and certain of its affiliates. Furthermore, our Chairman used to be Chief Executive Officer of Kinnevik though he has not held an
executive position with Kinnevik for over 10 years.

These
positions may create, or appear to create, potential conflicts of interest when these directors are faced with decisions that may have different implications for us, Kinnevik or
Tele2 AB. There is a risk that these conflicts may ultimately be resolved in a manner unfavorable to Millicom.

While
it is the current understanding and has been the practice to date that we have the initial right to consider any telecommunications opportunity that arises in the emerging
non-European markets that we target, there is no contractual arrangement that grants us exclusivity to this effect among us, Kinnevik and Tele2 AB.

U.S. investors will be subject to special tax rules if we are considered to be a passive foreign investment company.

Special U.S. tax rules apply to U.S. taxpayers who own stock in a "Passive Foreign Investment Company," or "PFIC". We may be or may become a PFIC. Our status
under the PFIC rules for each year depends upon our income and assets from time to time during that year. If we make substantial investments in associated companies' securities and other "passive
assets", this may create a risk that we are a PFIC or may become a PFIC in the future. If we are determined to be a PFIC, then shareholders who are U.S. persons under U.S. tax laws will be subject to
specific unfavorable tax rules.

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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 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 the 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.

ITEM 4.    INFORMATION ON THE COMPANY

Background

Overview

We are a global mobile telecommunications operator with operations in some of the world's emerging markets over which we generally exercise management and voting
control. Our strategy of being a low cost provider, focused on prepaid services using mass market distribution methods, has enabled us to continue to pursue high growth while delivering operating
profitability.

We
have interests in 16 mobile operations in 16 countries, focusing on emerging markets in Central America, South America, Africa and Asia. At December 31, 2007 we no longer owned
the business in Pakistan whose sale was completed on February 13, 2007. This business has therefore been treated as a discontinued operation and excluded from most of the following discussion.

At
December 31, 2007, the countries where we had mobile operations had a combined population of approximately 287 million. This means that our licenses cover
287 million people, which represents the number of people who could receive mobile services under the terms of our licenses if our networks covered the entire population. Our total number of
subscribers reached 23.4 million (19.9 million on an attributable basis) at December 31, 2007.

Our
markets are attractive for mobile services due to their relatively low degree of penetration of fixed and mobile telephony services as compared to more developed markets. Usage of
telecommunications services has historically been low in the countries in which we operate due to poor or insufficient infrastructure, the unavailability and high costs of such services and the low
levels of disposable income. We believe there is significant opportunity for further growth of mobile services in our markets because our services are essential for basic communication in the markets
in which we operate, and therefore the percentage of GDP spent on mobile services will continue to grow in our markets. Furthermore, we believe that personal disposable income levels in our markets
will continue to rise.

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Lastly,
we are seeing growing demand for services beyond our traditional voice business, particularly with broadband. These other services could be a source of significant future growth.

Summary of Highlights and Recent Developments

On February 13, 2007, Millicom completed the sale of Paktel Limited (Millicom's operation in Pakistan), for total proceeds of $284.8 million
realising a net gain of $258.3 million. Millicom incurred costs of $14.2 million on the transaction and of the net proceeds of $270.6 million, Millicom received
$263.0 million in 2007 and the remaining $7.6 million in January 2008.

On
October 9, 2007, holders of our 4% Convertible Bonds converted $1 million bonds into 28,686 shares.

On
December 21, 2007, Millicom announced its early repurchase of its $200 million 4% Convertible Bonds due 2010, as permitted under the agreement.

On
January 22, 2008, Millicom announced the completion of the early redemption of its $200 million 4% Convertible Bonds due 2010. Following the conversion of
$1 million bonds into 28,686 SDRs in October 2007, the bondholders converted a further $196 million of the remaining $199 million of the outstanding bonds into 5,420,235 Ordinary
Shares and 202,236 SDRs. Millicom repaid in cash the face value of $3 million of bonds and accrued interests to those bondholders who did not convert their bonds as of the conversion deadline
of January 11, 2008.

Strategy

Our strategy is to operate with the lowest possible cost base from which we can offer the consumer better value for money through lower tariffs whilst at the same
time improving network quality and distribution. We believe that, given the relatively low mobile penetration levels in our markets compared to more developed markets, we can continue to achieve
significant growth in our subscriber base while continuing to improve our operating margins and cash flows by rolling out our tigo® brand across most of our operations and focusing on our
triple "A" operating strategy:



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Focusing on growth.We believe there is a significant opportunity for further growth in our markets due to the relatively low
mobile penetration levels (the weighted average penetration rate in the markets in which we operate is 31%) as many of our markets have high growth potential and substantial unmet demand for basic
voice telephony services. We believe we can grow our subscriber base and revenue by continuing to focus on prepaid services while controlling costs and maintaining our position with postpaid
customers. We will continue to invest in our existing mobile operations, where we believe we can generate attractive returns. In addition, we intend to increase our equity ownership in those of our
operations where we still have either joint-venture or minority partners, provided it is permitted under the terms of our license, through buy-outs of our partners when the opportunities
arise. We may participate in consolidation within our markets through the careful evaluation, selection and pursuit of strategic opportunities. We may pursue new license opportunities in our adjacent
markets within existing financial guidelines and provided there is group-wide synergy potential. We will also look to expand into other services such as broadband.

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

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

Some
voice technologies, like VoIP (Voice over Internet Protocol), are becoming increasingly widespread. VoIP allows voice communication by sending data packages with voice encapsulated
over data networks. These services are increasing their presence to compete with fixed-line services and international calls rather than with mobile telephony services.

We
are beginning to see strong demand for broadband services in some of our markets, particularly in the relatively more mature markets in Latin America. We are looking at the ways in
which we can meet this growing customer demand, including deploying new technologies where this is economically justified. One of them is 3G (WCDMA) using HSDPA since this provides a very spectrally
efficient wireless solution. This technology is being deployed in Asia and Africa in the 2100MHz spectrum while in the Americas 3G is using the current existing 850 and 1900MHz spectrum.

Other
new technologies will start to appear. One of them is mobile WiMAX 802.16m, Ultra Mobile Broadband (UMB) and Long Term Evolution (LTE) based on a new OFDMA technology. This
eventually will allow operators to have an all IP packet only connection. We are acquiring WiMAX licenses or spectrum in our countries of operation where they are available to ensure we can offer
WiMAX- based services if and when our customers demand them and we are able to offer these services at reasonable prices.

In
the case that future successful technologies are different from the one adopted by the company then this will force additional investment in network equipment replacement and
training.

Introducing new products and services.In 2008, Millicom will continue to launch innovative value added services like music
related services, interactive content services and advanced sms services to address the needs of our customers. 3G services will be launched in selected markets during 2008 to enhance the data related
services offered to Millicom's customers. In selected markets, Millicom plans to launch mobile payment and transactional services that will add convenience to Millicom's customers. This will be
another tool for us to retain customers.

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Sales, marketing and distribution.We pursue a low-cost, innovative and high-impact approach to
sales, marketing and distribution. Except in Central and South America, we do not provide handset subsidies for our prepaid subscribers. As a result, we typically have low overall subscriber
acquisition costs. In addition, we are focused on strengthening our distribution footprint and expanding our mass-market customer reach by distributing prepaid cards through
mass-market or retail outlets such as local convenience stores, newspaper stands, and street vendors.

We
believe that our focus on branded prepaid 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.

Competitive Strengths

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

Established prepaid operator.Our focus on prepaid mobile services for the mass market offers the advantage of lower
subscriber acquisition and operating costs, which results in higher margins and a faster average payback time (on average, less than three months). In addition, prepaid customers allow us to eliminate
customer bad debt issues and billing and collection costs. The introduction of prepaid mobile services has opened up the market for mobile services to customers who have previously been denied access
to mobile service. Increased demand for prepaid mobile services is also arising from business users and those customers who purchase prepaid credits in order to control their telephone costs, creating
a new segment of the market.

Delivering profitable growth.One of our key strengths is our ability to grow our businesses while enhancing our operating
profitability. We have generally been able to acquire our licenses at low cost with minimum build-out requirements. We aim to achieve strong subscriber growth while decreasing subscriber
acquisition costs through the creation of well-known perceived price leading brands. Additionally, we have developed an extensive distribution network at low cost that provides our
customers with broad service coverage, further leveraging our brand names in most of our operations.

Track record of innovation.We believe that innovation is another key to our success. In nearly all of our markets, we were
the first to launch branded prepaid mobile services which now predominate in our markets. We have been the first to focus on non-traditional distribution channels to increase our
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 our sales and marketing costs. We have also introduced e-PIN and per second billing in most of our markets. We will offer WiMAX services in those countries where we have acquired
WiMAX licenses if and when our customers demand these services and we are able to provide them at reasonable prices. Because we focus on prepaid services and low costs, we believe that we offer the
best value proposition to the customer.

Low operating costs and high capital efficiencies.We establish services in markets that we believe offer high potential
financial returns and substantial operational leverage. While we have always had a strategy to control costs, we initiated a stricter centralized cost reduction program for all of our operations in
2002 that we continue to apply today. We operate sizeable networks covering areas of the highest population density and business activity. Any further build-outs of our network
infrastructure are demand-driven. In addition, our migration to GSM has lowered our investment per capacity minute with faster payback times. Historically, our operations have generated an operating
profit before depreciation and amortization within 12 to 18 months of start-up.

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Integrated strategy.We actively pursue the many synergies inherent in our multi-country operations and the increasing scale
in our existing markets. Such synergies include sharing information and best practices about services, human resources, technologies and market strategies; centralized negotiation of financing and of
supply contracts for network equipment, and the rollout of a single brand, tigo®, 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, which allows us to operate in Africa with a low cost base.

Diversified operations.We believe our 16 operations based in 16 countries on three continents provide a balance of
established cash flow generation and high-growth potential. Our diversification across countries and continents also lessens our exposure to unfavorable changes in a single market or
currency. For example, we have continued to grow our total subscriber base and operating profitability despite the expiry of our BCC contract in Vietnam in May 2005 and the divestiture of our
operations in Peru and Pakistan, and without taking into account acquisitions of new businesses such as in Colombia and in the Democratic Republic of Congo.

Highly skilled senior management.Our highly skilled senior management have 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 while managing rapidly growing businesses and starting up and successfully integrating new businesses,
as has been the case recently in Colombia.

License Acquisition

As we established an early presence in most of the markets in which we operate, we have been able in most cases 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 a competitive application process in which the license is awarded on the merits of the application. We generally avoid cash auctions for mobile
telephone licenses. 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 the license period. Although the pursuit of mobile telephone licenses is usually highly competitive, our operating companies have been successful in obtaining licenses in preference to other
license applicants, including major international telecommunications companies.

Management Structure

The Millicom management team is led by Chief Executive Officer and President, Marc Beuls, who has overall responsibility for the business. Our Chief Operating
Officer, Mikael Grahne, is responsible for managing and coordinating the day-to-day operations and our Chief Financial Officer, David Sach, looks after the financial,
administrative and accounting areas. Our Chief Technical Officer, Osmar Coronel, oversees the build-out and maintenance of our networks; our Head of Human Resources, John Tumelty, oversees
the development of our employees, compensation and benefits and the recruitment of new talent; our Head of Operations, Won-Suck Song, oversees all sales, marketing, and distribution
activities; and our new Head of Supply Chain Management, Henri Vander Stichele, oversees the procurement and logistics functions, including managing our relationships with suppliers.

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We
operate in four major geographic regions of the world: Central America, South America, Africa and Asia. Mario Zanotti is the Head of Central America, and also manages our Colombian
operation; Ricardo Maiztegui is the Head of South America; Steven Juergens and Regis Romero are the Co-Heads of Africa; and Judy Tan is the Head of Asia. Each cluster manager reports
directly to Millicom's Chief Operating Officer. We believe this structure allows us to maintain a high degree of coordination, cooperation and cross- sharing of information among the various cluster
managers while providing a degree of regional responsibility that ensures quick and effective decision making.

The Industry

Mobile Telephone Industry Overview

Mobile Telephone Technology.Mobile telephone systems are capable of providing high quality, high capacity voice and data
communications to and from hand-held radiotelephones. Mobile telephone systems are capable of handling thousands of calls simultaneously and providing service to hundreds of thousands of
subscribers in any particular area.

Mobile
telephone technology is based upon the division of a given geographical area into a number of cells and the simultaneous use of radio channels in non-contiguous cells
within the system. Each cell contains a low power transmitter/receiver at a base station that communicates by radio signal with mobile telephones in that cell. Each cell is connected by microwave or
optical fiber to a central switching point or Mobile Switching Center (MSC or "switch") that controls the routing of calls and which, in turn, is connected to the public switched telephone network, if
one exists, or to other mobile operators. It is the switch's mobility management function that allows mobile telephone users to move freely from cell to cell while continuing their calls through a
process called hand-off.

Mobile
telephone systems generally offer subscribers the features offered by the most up-to-date fixed-line telephone services. Mobile telephone
systems are interconnected with both the fixed-line telephone network and other mobile networks. As a result, subscribers can receive and originate local, long-distance and
international calls from their mobile telephones. Mobile telephone system operators therefore require an interconnect arrangement with the local fixed-line telephone companies and/or other
mobile network operators, and the terms of such arrangements are material to the economic viability of the system.

A
mobile telephone system's capacity can be increased in various ways. Increasing demand may be satisfied, in the first instance, by adding available channel capacity to cells through
the addition of extra transmitters. When all available channels are used, further growth can be accomplished through a process known as cell splitting. Cell splitting entails dividing a single cell
into a number of smaller cells, through the construction of additional base stations, thereby allowing for greater channel reuse and hence increasing the number of calls that can be handled in a given
area.

Millicom
uses mainly GSM technology in its operations that are GPRS and EDGE enabled. GSM is a digital standard for mobile telephone systems that countries have adopted as a
common standard. GSM offers increased value-added services and enables transmissions to be made in encrypted form so that conversations cannot easily be intercepted. The GSM system allows subscribers
to use their mobile telephones in any country where the GSM system has been adopted and where appropriate roaming agreements are implemented, providing increased mobility and flexibility. GSM systems
have become ubiquitous worldwide.

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In
the United States, a number of digital standards have been developed and are being deployed. One of them is Code Division Multiple Access (CDMA), which is also popular in South
America and in the Asia-Pacific region. An enhanced version of CDMA is the technology used for the third generation mobile systems (3G) called WCDMA and CDMA2000 1X. What all third
generation (3G) networks have in common is that they support high data bandwidth applications such as full motion video, video conferencing and full Internet access to mobile devices. Universal Mobile
Telecommunications System (UMTS) is a type of 3G mobile technology which allows, besides voice and data, the delivery of audio and video to wireless devices anywhere through fixed, wireless and
satellite systems.

WiMAX
stands for Worldwide Interoperability for Microwave Access and is a wireless industry coalition whose members organized to advance IEEE 802.16 standards for broadband wireless
access (BWA) networks. WiMAX 802.16 technology is expected to enable multimedia applications with wireless connections.

Competing Technologies.Some niche technologies are available for certain services. One of these technologies consists of
Trunking services that are also deployed using radio communications with a cell technology and allows mobility for the user, but do not provide full duplex communication among users. This limitation
makes this service less desirable and this results in low competition as few operators use this technology. Another technology being deployed is "Push to talk" or "Push over Cellular" which utilizes
the mobile telephony network capability of handling data to allow a service similar to Trunking but using more sophisticated mobile handsets. These services are complementary to mobile services and
are usually deployed as an additional product within mobile services.

Some
other voice technologies, like VoIP (Voice over Internet Protocol), are becoming increasingly widespread. VoIP allows voice communication by sending data packages with voice
encapsulated over data networks. These services are increasing their presence to compete with fixed-line services and international calls rather than with mobile telephony services.

New
competing technologies are starting to be deployed. The first one of them is 3G (WCDMA) using HSDPA since this provides a very spectrally efficient wireless solution. This technology
is being deployed in Asia and Africa in the 2100MHz spectrum while in the Americas 3G is using the current existing 850 and 1900MHz spectrum.

Other
new technologies will start to appear. One of them is mobile WiMAX 802.16m, Ultra Mobile Broadband (UMB) and Long Term Evolution (LTE) based on a new OFDMA technology. This
eventually will allow operators to have an all IP packet only connection.

In
the case that future successful technologies are different from the one adopted by the company then this will force additional investment in network equipment replacement and
training.

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Operating Characteristics.The mobile telephony industry is typically characterized by high fixed costs and low variable
costs. Until technological limitations on total capacity are approached, additional mobile telephone system capacity can usually be added in increments that closely match demand and at less than the
proportionate cost of the initial capacity. The industry is also seeing declining equipment prices in real terms. Once revenues exceed fixed costs, incremental revenues are expected to yield an
increasing operating profit, giving mobile operators an incentive to stimulate and satisfy demand for their services in the market. The amount of profit, if any, under such circumstances is dependent
on, among other things, prices and variable marketing costs, which, in turn, are affected by the amount and the extent of competition. As competition increases in markets, prices have fallen with the
result that revenues and operating profits increase at a lower rate than subscriber growth. In addition, as penetration rates increase, there is a tendency for a higher proportion of new subscribers
to use prepaid services. Prepaid subscribers tend to have lower usage than credit subscribers, but the operating margin on prepaid is generally higher than with credit subscribers as the risk of
customer bad debt is eliminated and there generally is no subsidizing of handsets.

As
these services are using radio spectrum, which are generally monitored and regulated by governments, the utilization of frequencies generally requires that appropriate licenses are
obtained from pertinent authorities. The granting of licenses may involve significant fees, either paid as fixed upfront amounts or as variable charges.

Development of the Mobile Telephone Industry

Mobile Telephony in Developed Countries.The first mobile telephone networks were introduced in Scandinavia in the early
1980s and experienced modest growth for the first few years. Over the last 10 years, however, mobile telephony has grown rapidly. All developed countries now have mobile telephone service and
levels of penetration increased substantially in these countries.

Given
the rapid growth of mobile telephone subscribers in developed countries and high levels of penetration, the industry is increasingly introducing new technology that will expand
capacity and improve service, including the introduction of digital mobile telephone networks and the ability to access the Internet from handsets. In industrialized nations, mobile operators are in
the process of introducing "third generation" mobile technology that will permit always-on faster access to the Internet and voice and data transmissions.

Mobile Telephony in Developing Countries.While the mobile telephone industry is well-established in the
developed world, the mobile telephone industry in the developing world is still in a high growth phase. Millicom believes that mobile telephony will continue to grow rapidly in developing countries
because of the poor quality of the existing fixed-line service, the unsatisfied demand for basic telephone service and the increasing demand from users who want the convenience of mobile
telephones. In some countries the mobile telephone network provides significantly improved access to the local and international fixed-line network compared with the existing
fixed-line service. In addition, developing countries are expected to benefit both from better technology and lower equipment costs than those at comparable stages of market development in
developed countries. Penetration rates (the number of subscribers per 100 people) are lower in developing countries than in developed countries. Consequently, Millicom believes that its markets offer
high growth potential.

For
developing countries, mobile telephone networks can represent a faster and more cost-effective method of expanding telecommunications infrastructure than traditional
fixed-line networks. Fixed-line networks involve extensive outside infrastructure in the form of buried or overhead cable networks, while mobile telephone networks require less
construction activities.

25

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Competitive Position in the Market

The following table shows certain estimated information regarding Millicom's competitive position in each of its markets as at December 31, 2007. This
information was compiled 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 in comparison
to its competitors.

|                |  | Estimated Market Share Ranking at December 31, 2007
|--------------- |  | ---------------------------------------------------
|
|Central America |  |                                                    
|El Salvador     |  |                                                   
|Guatemala       |  |                                                   
|Honduras        |  | Millicom                                           
|South America   |  |                                                    
|Bolivia         |  |                                                   
|Colombia        |  | Am. Movil                                          
|Paraguay        |  |                                                   
|Africa          |  |                                                    
|Chad            |  | Celtel                                             
|DRC             |  |                                                   
|Ghana           |  | MTN                                                
|Mauritius       |  | Cellplus                                           
|Senegal         |  | France Tel.                                        
|Sierra Leone    |  |                                                   
|Tanzania        |  |                                                   
|Asia            |  |                                                    
|Cambodia        |  | Millicom                                           
|Laos            |  | Lao Tel.                                           
|Sri Lanka       |  |                                                   

---

26

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Operations

Description of operations

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

Central AmericaMillicom's mobile operations comprise El Salvador, Guatemala and Honduras.

South AmericaMillicom's mobile operations comprise Bolivia, Colombia and Paraguay.

AfricaMillicom's mobile operations comprise Chad, Democratic Republic of Congo, Ghana, Mauritius, Senegal, Sierra Leone and
Tanzania.

AsiaMillicom's mobile operations comprise Cambodia, the Lao People's Democratic Republic and Sri Lanka. The sale of
Millicom's operation in Pakistan was completed on February 13, 2007.

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

2007

2006

2005Central America

44
%
51
%
49
%South America

31
%
20
%
16
%Africa

18
%
20
%
22
%Asia

7
%
9
%
13
%Total

100
%
100
%
100
%


27

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Subsidiaries and their Market Presence

The following table shows certain information for each of Millicom's mobile operations as at December 31, 2007.

|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, 2007(3) |  
|--------------------------- |  | ------------------------------------ |  | ------------- | - | -------------------------- |  | -------------------------- |  | --------------------------------------------- |  | --------------------------------------------- | -
|
|Central America             |  |                                      |  |               |   |                            |  |                            |  |                                               |  |                                               |  
|El Salvador                 |  | Telemóvil El
Salvador S.A.           |  | 100.0         | % | S                          |  | 1993                       |  | 7                                             |  | 70                                            | %
|Guatemala                   |  | Comunicaciones
Celulares S.A.        |  | 55.0          | % | JV                         |  | 1990                       |  | 13                                            |  | 68                                            | %
|Honduras                    |  | Telefónica
Cellular S.A.             |  | 66.7          | % | JV                         |  | 1996                       |  | 7                                             |  | 55                                            | %
|South America               |  |                                      |  |               |   |                            |  |                            |  |                                               |  |                                               |  
|Bolivia                     |  | Telefónica Celular
de Bolivia S.A.   |  | 100.0         | % | S                          |  | 1991                       |  | 9                                             |  | 30                                            | %
|Colombia                    |  | Colombia Móvil S.A. E.S.P.           |  | 50.0
+1 share | % | S                          |  | 2006                       |  | 44                                            |  | 73                                            | %
|Paraguay                    |  | Telefónica Celular
del Paraguay S.A. |  | 100.0         | % | S                          |  | 1992                       |  | 7                                             |  | 67                                            | %
|Africa                      |  |                                      |  |               |   |                            |  |                            |  |                                               |  |                                               |  
|Chad                        |  | Millicom
Tchad S.A.                  |  | 87.5          | % | S                          |  | 2004                       |  | 10                                            |  | 7                                             | %
|DR of Congo                 |  | Oasis S.P.R.L.                       |  | 100.0         | % | S                          |  | 2005                       |  | 66                                            |  | 8                                             | %
|Ghana                       |  | Millicom Ghana
Company Limited       |  | 100.0         | % | S                          |  | 1992                       |  | 23                                            |  | 31                                            | %
|Mauritius                   |  | Emtel Limited                        |  | 50.0          | % | JV                         |  | 1989                       |  | 1                                             |  | 70                                            | %
|Senegal                     |  | Sentel GSM S.A.                      |  | 100.0         | % | S                          |  | 1999                       |  | 13                                            |  | 30                                            | %
|Sierra Leone                |  | Millicom (S.L.)
Limited              |  | 100.0         | % | S                          |  | 2001                       |  | 6                                             |  | 10                                            | %
|Tanzania                    |  | MIC Tanzania
Limited                 |  | 100.0         | % | S                          |  | 1994                       |  | 39                                            |  | 18                                            | %
|Asia                        |  |                                      |  |               |   |                            |  |                            |  |                                               |  |                                               |  
|Cambodia                    |  | Cam GSM
Company Limited              |  | 58.4          | % | JV                         |  | 1997                       |  | 14                                            |  | 16                                            | %
|Lao People's Democratic Rep |  | Millicom Lao
Co. Limited             |  | 74.1          | % | S                          |  | 2003                       |  | 7                                             |  | 15                                            | %
|Sri Lanka                   |  | Tigo (Pvt)
Limited                   |  | 100.0         | % | S                          |  | 1989                       |  | 21                                            |  | 24                                            | %
|                            |  |                                      |  |               |   |                            |  |                            |  |                                               |  |                                               |  
|Grand Total                 |  |                                      |  |               |   |                            |  |                            |  | 287                                           |  |                                               |  
|                            |  |                                      |  |               |   |                            |  |                            |  |                                               |  |                                               |  

---

28

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Selected Operating Data

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

|                                 |  | As at December 31, | 
|-------------------------------- |  | ------------------ | 
|
|
|
|
|Central America                  |  |                    | 
|El Salvador                      |  | 2,217,560          | 
|Guatemala                        |  | 3,681,405          | 
|Honduras                         |  | 2,925,959          | 
|Subtotal Central America         |  | 8,824,924          | 
|South America                    |  |                    | 
|Bolivia                          |  | 1,055,823          | 
|Colombia                         |  | 2,769,884          | 
|Paraguay                         |  | 2,067,019          | 
|Subtotal South America           |  | 5,892,726          | 
|Africa                           |  |                    | 
|Chad                             |  | 323,356            | 
|DR Congo                         |  | 546,500            | 
|Ghana                            |  | 2,023,091          | 
|Mauritius                        |  | 365,018            | 
|Senegal                          |  | 1,118,505          | 
|Sierra Leone                     |  | 104,029            | 
|Tanzania                         |  | 1,191,678          | 
|Subtotal Africa                  |  | 5,672,177          | 
|Asia                             |  |                    | 
|Cambodia                         |  | 1,652,649          | 
|Lao People's Democratic Republic |  | 130,512            | 
|Sri Lanka                        |  | 1,181,577          | 
|Subtotal Asia                    |  | 2,964,738          | 
|                                 |  |                    | 
|Total                            |  | 23,354,565         | 
|                                 |  |                    | 

29

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CENTRAL AMERICA

Central America consists of Millicom's mobile telephony in El Salvador, Guatemala and Honduras. Millicom Central America's licenses covered approximately
27 million people as at December 31, 2007.

El Salvador

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 current 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. He recently re-affirmed his commitment to a political and economic reform agenda
in El Salvador.

In
order to drive economic growth, the government of El Salvador continues to focus on opening new export markets, encouraging foreign investment and maintaining a tax regime that
promotes corporate investment. Implementation of the Central America Dominican Republic Free Trade Agreement, ratified by El Salvador in 2004, is viewed as a key policy to help achieve these
objectives. El Salvador became a member of the World Trade Organization in 1995. As the country does not have control over its monetary policies following the adoption of the U.S. dollar in 2001, the
government is committed to maintaining tight fiscal policies. The economy has grown significantly since the early 1990s but it is estimated that about 36% of the population remains under the poverty
line. El Salvador had a population of about 7 million in mid-2007. The 2007 GDP real growth rate was estimated at 4.7% and GDP per capita at about $5,200.

El
Salvador's telecommunications market is among 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 100.0% equity interest in Telemóvil El Salvador, S.A. Millicom accounts for this operation as a subsidiary, i.e., 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 full coverage GSM network was launched in August 2004. Services offered also include broadband internet, fixed wireless telephony
and public telephony.

In
2007 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 recently acquired by the Caribbean operator with the
same name. América Móvil of Mexico 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. Intelfon has a negligible market share to date.

Telemóvil's
strategy is based on offering a combination of high quality network coverage and services and low prices. Leveraging Telemóvil's distribution
capabilities through e-PIN and other electronic means further enhances this strategy. Telemóvil also aims to expand its value added services and further strengthen its
customer services operations.

30

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Telemóvil
was initially awarded a 15-year mobile license in September 1991 which was subsequently extended until 2018. Telemóvil acquired WiMAX
spectrum in 1998.

Telemóvil
operates a GSM/GPRS/EDGE network. The GSM/GPRS/EDGE network was launched in August 2004. Telemóvil also provides international
long-distance services, internet services and local telephony services.

As
at December 31, 2007, Telemóvil's GSM network comprised a total of 634 base stations with the capacity to handle a maximum of 2.8 million concurrent
subscribers, and covered 88% of the total population.

Guatemala

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. During the month of September 2007 general elections
were held in Guatemala. Since no candidate obtained the necessary majority of votes, a second round of elections were held on November 4, 2007. In this occasion Mr. Alvaro Colom was
elected President with 52.82% of votes. Mr Colom's Party is UNE, is of center-left tendency and does not control majority of seats in Congress.

Guatemala
is the largest and most populous of the Central American countries with a population of about 13 million in mid-2006. The agricultural sector accounts for
about one-quarter of GDP, two-fifths of exports, and half of the labor force. Ongoing challenges include increasing government revenues, negotiating further assistance from
international donors, upgrading both government and private financial operations, curtailing drug trafficking, fighting corruption, and narrowing the trade deficit. Remittances from a large expatriate
community that moved to the United States during the civil war have become an important source of foreign exchange. Overall economic outlook is positive given the government's
anti-corruption and pro-business stance, which underpins investor confidence, and rising inflows of foreign direct investment. The extension of the European Union's generalized
system of preferences, under which Guatemalan exports enjoy preferential access to EU markets, is expected to have a positive impact on the economy going forward. Guatemala joined the GATT in 1991 and
became member of the World Trade Organisation in 1995. The distribution of income in Guatemala remains very unequal with 75% of the population living under the poverty line, mostly in rural areas.
Guatemala had a population of about 13 million in mid-2007. The 2007 GDP real growth rate is estimated to be 5.6% and GDP per capita was about $5,400.

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.

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 Panamian company controlled
by our local partner Mr. Mario David Lopez Estrada. Millicom accounts for this operation as a joint venture, i.e. using the proportionate accounting method.

31

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Comcel
was the first mobile operator in Guatemala when it launched commercial operations in 1990. The company enjoyed a monopoly position until 1999 when Telefónica and
Telgua (owned by América Móvil) entered the market as the second and third operators. In 2001, BellSouth of the U.S. entered the market as the fourth operator but
Telefónica of Spain acquired BellSouth's operations in 2004. América Móvil offers an integrated telecommunications solution including fixed and mobile
telephony, cable TV and internet services. América Móvil and Telefónica are Comcel's most challenging competitors. 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 as of March 30, 2008 had not launched commercial operations.

Comcel
operates a GSM/GPRS/EDGE network. The GSM/GPRS/EDGE network was launched in August 2004. Comcel also provides international long-distance services, 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 WiMAX spectrum in July 2006.

At
December 31, 2007 the GSM network comprised 1356 base stations with the capacity to handle a maximum of over 3.9 million concurrent subscribers, and the network covered
79% of the total population.

Honduras

Honduras' government system is a democratic constitutional republic. Since the regional peace process that took place 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. The new government took office in
January 2006 and is expected to maintain the prudent, broadly market oriented policies of the previous leadership.

Although
GDP per capita in Honduras is one of the lowest in Latin America, it has increased since the 1990s and overall economic growth (as measured by real GDP) is higher than in many
other countries in the region and was estimated at 6% in 2007. GDP per capita was estimated at $3,300 in 2007. Honduras continues to focus on pursuing the economic and reform program agreed with the
International Monetary Fund (IMF) under the poverty reduction and growth facility in February 2004. Although no recent figures are available, it is estimated that between half and
two-thirds of Hondurans lived below the poverty line in 2006. Honduras suffers from a very unequal distribution of income and massive unemployment As the country has met most of its
macroeconomic targets, it has achieved debt relief under the IMF-World Bank's heavily indebted poor countries initiative. The United States is Honduras' largest trading partner. Honduras
became a member of the US-Central America Free Trade Agreement in May 2004. The economy relies heavily on a narrow range of exports, notably bananas and coffee, making it vulnerable to
natural disasters and shifts in commodity prices, but in recent years has experienced a rapid rise in exports of light manufacturers. Growth remains dependent on the economy of the U.S., its largest
trading partner, and on reducing the high crime rate, as a means of attracting and maintaining investment. Honduras had a population of about 7 million in mid-2007.

32

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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 monopoly over
local and long-distance telephony services, the government has opened value added services and mobile telephony to competition. Both mobile operators (Millicom's Celtel, the market leader,
and Megatel, owned by América Móvil) have the right to carry international traffic for their own customer base.

Millicom
has a 66.67% equity interest in Celtel. The remaining 33.33% of Celtel is owned by Proempres Panama S.A., a privately-held company controlled by our local
partners, Mr. Roberto Isaias Dassun and other members of his family. Millicom and Proempres entered into a revised shareholders agreement following the buy-out of a third
shareholder, Motorola Inc. of the United States, in 2005, under which the two shareholders exercise joint control of Celtel. Millicom accounts for this operation as a joint venture,
i.e., using the proportionate accounting method.

Celtel
launched commercial operations in 1996 as the first mobile operator in Honduras and today operates a GSM and CDMA network. Until late 2003, Celtel enjoyed a monopoly status in the
mobile market, when Megatel entered the market with a GSM network as the second operator. The third mobile license was issued to Hondutel (the State-owned fixed line incumbent) but their operations
have only limited coverage in the Tegucigalpa and San Pedro Sula regions. On December 19th, 2007 a bidding process to issue the fourth mobile license was completed by CONATEL (Honduran
Telecommunications Regulator) with the award of the license to Digicel Honduras S.A. de C.V. We expect their operations to start during the first half of 2008.

Celtel
operates a GSM/GPRS/EDGE network and a CDMA network. The GSM/GPRS/EDGE network was launched in August 2004. 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 not yet acquired a WiMAX license.

As
at December 31, 2007 the GSM network comprised 901 base stations with the capacity to handle a maximum of 3.0 million concurrent subscribers and covered 78% of the total
population.

33

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SOUTH AMERICA

Millicom's mobile operations in South America are located in Bolivia, Colombia and Paraguay. Our South American licenses covered approximately 60 million
people as at December 31, 2007.

Bolivia

Bolivia's system of government is a Unitary Democratic Republic. 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. In 2005, the government passed a controversial natural gas law that imposed on the oil and gas
firms significantly higher taxes and required production firms to sign new operating contracts, which were completed in October 2006. Bolivian officials are in the process of revamping the defunct
state owned oil company and acquiring majority ownership of five gas production, transportation, refining, and storage companies. The Morales administration has indicated plans to increase state
control over other sectors as well, including mining, electricity, transportation, and forestry. French company Suez exited the water sector in Bolivia after the government issued a decree canceling
its water concession.

Bolivia's
GDP per capita was estimated to be $4,400 in 2007. Economic reforms in the 1990s, including privatization of the main industries, resulted in an average real GDP growth rate of
approximately 4% per annum slowing down thereafter. The GDP real growth rate in 2007 was estimated to be above 4%. About 60% of Bolivians continued to live below the poverty line in 2007. Bolivia is a
beneficiary of the World Bank and the IMF's initiative for heavily indebted poor countries. The International Monetary Fund and the World Bank forgave a total of approximately $1.8 billion of
Bolivian debt in 2006 that has helped reduce fiscal pressures on the government. Oil and gas, mining, smelting, food and beverages, tobacco and clothing are the most important industries in Bolivia.
The country became member of the World Trade Organization in 1995 and is a member of Mercosur (the Southern Common Market with Argentina, Brazil, Paraguay and Uruguay). Bolivia's population at end of
2007 was of 9 million.

The
Superintendence of Telecommunications (Sittel) is part of the Sirese system, an autonomous government agency responsible for regulating the five basic utility sectors:
telecommunications, electricity, transport, oil and gas and water. Sittel is responsible for implementing the 1995 Telecommunications Law and other decrees and regulations and is in charge of the
granting of telecommunications licenses and concessions, the setting of some rates and the supervision of monopolistic practices in the telecommunications sector. All services within the Bolivian
telecommunications market have been opened up to competition following the market liberalization in 2001.

Millicom
has a 100% equity interest in Telecel. In addition to offering mobile services on a nationwide basis, Telecel offers limited long-distance telecommunication and Wi
Max services. Millicom accounts for this operation as a subsidiary, i.e. using the full consolidation accounting method.

34

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Telecel
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. In 1997, the network
was extended to the rest of the country. At that time, the government of Bolivia privatized the national incumbent fixed-line operator, Entel, by selling a 50.9% stake to Telecom Italia
and allowing it to launch a mobile network. At this time the Calling Party Pays system was introduced in Bolivia. Telecel 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
started offering nationwide GSM services in December 2005. As such, it was the last remaining operation in the Millicom group to adopt this technology platform.

From
1991 to 1996 Telecel was the only mobile operator in Bolivia. Móvil de Entel, the mobile subsidiary of incumbent operator Entel, launched its mobile services in 1996
and in 2001 NuevaTel (a joint venture, now 72% owned by Trilogy International Partners of the U.S., and 28% by Cooperative of Telecommunications Cochabamba, one of Bolivia's largest telecommunication
co-operatives) entered the market with a GSM network. By 2002, Móvil de Entel also started offering heavily subsidized GSM services. Consequently, Móvil de
Entel became the leading operator in terms of subscriber numbers. In December 2005 Telecel introduced tigo® with its new GSM network and at the end of 2006 Telecel had consolidated its own
position as the second operator in the Bolivian market. Telecel's new GSM services use tigo® to clearly distinguish them from the company's TDMA offerings. At December 31, 2007, the
total number of GSM subscribers was 734,125 representing 70% of the total Telecel Bolivia customer Base.

Telecel
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's license was extended in 1997 to cover the rest of the country for a period of 20 years. In December 2002, Telecel was also awarded a
40-year license to provide fixed-line long-distance telecommunication services in Bolivia. This license is mainly used to carry Telecel's mobile traffic. In May
2006 Telecel was awarded a 40-year data concession to provide WiMAX services in Bolivia.

At
December 31, 2007, 367 base stations were in place. Telecel's customer base reached 1,055,823 subscribers at the end of 2007, Covering 53% of Bolivia's population.

Colombia

Colombia's system of government is a constitutional republic. The president of the Republic of Colombia is Mr. Alvaro Uribe who has been in office since
August 2002 and was re-elected for another 4-year term in May 2006. A 40-year conflict between government forces and anti-government insurgent groups
and illegal paramilitary groups, both heavily funded by the drug trade, escalated during the 1990s. The insurgents lack the military or popular support necessary to overthrow the government and
violence has been decreasing since about 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, although their commitment to ceasing illicit activity is unclear. President Alvaro Uribe has stepped up efforts to reassert government control
throughout the country. However, neighboring countries worry about the violence spilling over their borders.

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Colombia's
GDP per capita was estimated to be $7,200 in 2007. Colombia's population was estimated at 44 million in mid-2007. Colombia's economy has experienced
positive growth in over the past three years despite a serious armed conflict and the GDP real growth rate was estimated at 6.5% in 2007. The economy continues to improve in part because of austere
government budgets, focused efforts to reduce public debt levels, an export oriented growth strategy, an improved security situation in the country, and high commodity prices. Ongoing economic
problems range from reforming the pension system to reducing high unemployment, and to achieving congressional passage of a fiscal transfer reform. New exploration is needed to offset declining oil
production. International and domestic financial analysts note with concern the growing central government deficit, which hovers at 5% of GDP. However, the government's economic policy and democratic
security strategy have engendered a growing sense of confidence in the economy, particularly within the business sector.

In
October 2006, Millicom acquired 50% plus one share of the share capital of Colombia Móvil S.A. ESP for a price $124.1 million, representing an Enterprise
Value of about $472.2 million. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

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.

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 four mobile companies: Movistar, belonging to the Telefónica group, Comcel
belonging to América Móvil, Avantel, a digital trunking operator (privately owned) and Colombia Móvil, majority owned by Millicom.

Colombia
Móvil S.A. ESP 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 (bearer), with a term of 10 years, extendable for 10 more years. Colombia
Móvil S.A. ESP is operating in Colombia with GSM/GPRS technology, on the 1900 MHz band, with 30 MHz of spectrum. Colombia Móvil does not have a WiMAX
license.

Colombia
Móvil's license required it to float up to 17.6% of its share capital as part of an initial public offering on the Bogotà stock exchange. During
February 2007, an offer of shares was made to the public but, as the minimal acceptance thresholds were not achieved, no new shares were issued to the public. This license requirement has now been
fully satisfied.

Colombia
is a "calling party pays" country. Interconnection is mandatory and it cannot be interrupted without previous permission from the regulator. Colombia Móvil has
fully operational interconnection agreements for voice and SMS services with two of the other mobile operators and is considering the interconnection conditions for other data services, such as MMS.

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.

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The
Colombian telecommunications market is very competitive with about 30 fixed local operators, two mobile operators, one mobile PCS, one digital trunking and three long distance
operators, which are owned by private and public shareholders. Colombia Móvil has interconnection with all fixed operators through direct or indirect agreements. Interconnection charges
have been commercially agreed or imposed by regulation. Mobile operators mutually pay interconnection charges for call termination. As at December 31, 2006, Colombia Móvil had a
market share of approximately 7.8%.

Colombia
Móvil rebranded and redesigned its services using tigo® in the last quarter of 2006. According to the Superintendencia de Industria y Comercio, the
country has an estimate of 32 million active mobile subscribers reaching a penetration of 73%, most of which are using prepaid.

As
at December 31, 2007, Colombia Móvil's network comprised 2,309 radio base stations with the capacity to handle a maximum of 4.2 million concurrent
subscribers. The network covered 77% of the total population at the end of 2007. The network is GSM/GPRS and EDGE enabled.

Paraguay

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 ruling Partido
Colorado political party has overseen a period of economic recovery and greater stability of public finances since taking office in 2003. Presidential elections are due to take place this year with
the current President Mr. Frutos candidate, Blanca Ovelar, fighting to unify the Partido Colorado in order to become stronger for next April Presidential Elections. The opposition is divided by
two main candidates which are Fernando Lugo (a former bishop in alliance with the main opposition party, the Liberal party) and Lino Oviedo (a former general of the Paraguayan army).

Paraguay
has a market economy characterized by a large informal sector. Soya and other agricultural products as well as meat are being exported to Mercosur, Europe and other countries,
(66% of economic growth was due to exports of agricultural products) this, together with royalties from Itaipu (the largest hydro electric power plant worldwide) and remittances from Paraguayans
living abroad, represent the main income sources. A large proportion of the population derives their living from agricultural activity, often on a subsistence basis. It is estimated that about 30% of
the population continued to live below the poverty line in 2007. During the 1990s, the average annual growth rate in GDP per capita was negative with growth of only 0.5% between 1990 and 1995. 2003
per capita GDP was about the same as in 1976 and 2007 GDP per capita was estimated at $4,000 (which is the highest of the last years). The economy has regained growth momentum since 2003 under the
Duarte Frutos administration. Preliminary Central Bank figures for 2007 had GDP up 6.4% over 2006 (highest GDP in 25 years); projected inflation 6% with an eyebrow-raising negative inflation of
2.2% for November. The real GDP growth rate was estimated at 4.5% in 2007. Paraguay had a population estimated at about 7 million in 2007.

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 and there are no signs of liberalization at least until 2008 after presidential
elections.

In
October 2007, Conatel decided to change ICX billing from per minute billing to per second billing, and the four mobile operators proceeded in the same way.

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Telecel
Paraguay is 100% owned by Millicom and 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 in Paraguay and was the market leader in the Paraguayan broadband market in 2007.

Until
1998, Telecel enjoyed a monopoly 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. Hutchison Whampoa owned Porthable entered the market as
the fourth mobile operator in 2001, followed in 2005 by América Móvil who acquired Porthable, re-named CTI, from Hutchison Whampoa, which is currently the
only operator to launch 3 G technology.

Telecel
was awarded a 10-year license for an 800MHz network in 1991, which was renewed in October 2001 until October 2006, when the license was again renewed until 2011. In
1997, The 1900MHz PCS license that expired in November 2007 was renewed for an additional 5 years period (until November 2012). This license is renewable for successive five-year
periods. The Wireless Local Loop and data transmission licenses were awarded in 1999, renewed in 2005 and 2004 and will expire in 2010 and 2009, respectively. Deregulation for international
voice & data services was claimed but PTT monopoly is likely to continue at least until presidential elections next April 2008.

Tigo
Paraguay subscribers grew 62% in 2007. By the end of 2007, Tigo had 2,067,019 subscribers. At December 31, 2007, 455 base stations were in place.

During
2007, Telecel launched Mini tariff and Electronic recharge for SMS Tariff, contributing to increase VAS revenue, which grew 118% compared to 2006.

AFRICA

Millicom's Africa cluster consists of its mobile operations in Chad, the Democratic Republic of Congo, Ghana, Mauritius, Senegal, Sierra Leone and Tanzania. Our
African licenses covered approximately 158 million people as at December 31, 2007.

Chad

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 finally 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. Déby made attacks on cities along the Sudanese border and into N'Djamena. By
order of the Government all networks were shut down in N'Djamena and along the Sudanese border. Fortunately no loss of life of our employees was recorded and damage to sites, residencies and
commercial property, mainly in N'Djamena, was not material. Foreign nationals and dependants were evacuated and effective deployment of business continuity plans (BCP) enabled Management to
ramp-up business after February 13, 2008.

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Chad's
primarily agricultural economy continues to be supported by major oil and gas projects which started in 2000. Over 80% of the country's population relies on subsistence farming
and 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 U.S. companies has been investing $3.7 billion to develop oil reserves, estimated at 1 billion
barrels, in southern Chad. The nation's total oil reserves has been estimated to be 2 billion barrels. Although cotton, cattle, gum arabic are important commodities produced for export in Chad,
around 97% of the country's exports are derived from the oil and gas industry. Chad started exporting oil in 2004. Following the resumption of IMF assistance in early 2005, a new poverty reduction and
strategy paper has begun to broadly shape future economic policy. Poverty remains a key issue in Chad with approximately 80% of the population living below the poverty line in 2006, and a 2007 GDP per
capita estimated at $1,600. Real GDP growth in 2007 was estimated at -1%. Chad became a member of the World Trade Organization in 1996. Chad had a population of about 10 million in
mid-2007 and had about 400,000 refugees from Sudan (Darfur) and Central Africa on its soil.

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 is considering a partial privatization of Sotel
Tchad although no timetable has yet been set.

Millicom
has an 87.5% equity interest in Millicom Tchad. The remaining 12.5% of the company is owned by a local business man, Mr. David Abtour. Millicom accounts for this
operation as a subsidiary, i.e. using the full consolidation accounting method.

Celtel
Tchad, in which Kuwait based Zain (formerly MTC) is the 100% majority shareholder, is the only other mobile operator in Chad.

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, 2007 Millicom Tchad's GSM network comprised 152 base stations with the capacity to handle a maximum of 450,000 concurrent subscribers and the network covered
50% of the total population.

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Democratic Republic of Congo (DRC)

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 about 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.

The
economy of the DRC, a nation endowed with vast potential wealth, has declined drastically since the mid-1980s. The war, which began in August 1998, dramatically reduced
national output and government revenue, increased external debt, and resulted in the deaths of about 3.5 million people from violence, 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 improved in late 2002 with the withdrawal of a large
portion of the invading foreign troops. The transitional government has reopened relations with international financial institutions and international donors, and President Kabila has begun
implementing reforms. Much economic activity lies outside the GDP data. Economic stability improved in 2003-7, although an uncertain legal framework, corruption, and a lack of openness in
government policy continues to hamper growth. In 2005-07, renewed activity in the mining sector, the source of most exports, boosted the government's fiscal position and GDP growth.
Business and economic prospects are expected to improve as a result of the announcement in February 2007 of the new government. Economic growth as measured by real GDP growth in DRC was estimated at
over 7% in 2007, largely driven by the country's main industries such as mining, mineral processing and textiles. The country continues to suffer from severe lack of infrastructure and continued
instability and attacks by rebels in the eastern parts of the country (Ituri region). DRC became a member of the World Trade Organization in 1997. DRC had a population estimated at about
66 million in 2007. GDP per capita was estimated at $300 in 2007. The percentage of persons living below the poverty line is not available but is clearly very large.

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 no developed 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.

Millicom
has a 100.0% equity interest in Oasis S.P.R.L. and accounts for this operation as a subsidiary, i.e., using the full consolidation accounting method.

Millicom
acquired Oasis from Orascom Telecom on September 13, 2005 for a total consideration of US$35 million and promptly engaged in the process of rebuilding the
company's network coverage, product and service offering, marketing strategy and distribution network. This turnaround was completed during 2006 together with an accelerated network
build-out and the building of a regional organization to support direct distribution effectively. Oasis also has an international gateway.

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Discussions have continued with the relevant authorities about whether, as a result of the acquisition of Oasis by Millicom, a license transfer fee of $14,750,000 may be due under a
ministerial decree dated July 29, 2005. Millicom's position is that no transfer fee is due because the wording of the law in question does not apply to the specific transaction structure by
which Millicom acquired Oasis. However, there is a risk that Oasis may not be able to avoid the payment of the transfer fee in 2008.

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 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 coverage to a large number of cities. The fourth operator, CCT, jointly owned by Chinese telecoms equipment provider ZTE (51%) and the
DRC government (49%), launched its GSM network in January 2002.

After
several years of underinvestment, Oasis' market position had declined to a number four position in terms of subscribers when it was acquired by Millicom in
mid-September 2005. Since then, Millicom has built up and re-launched the operation by introducing tigo® in January 2007 by offering a combination of improved
coverage and quality of mobile voice services, innovative products and services, a direct distribution network, and a new pricing strategy.

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 because no licenses are currently commercially available in DRC.

As
of December 31, 2007, Oasis' GSM network comprises 383 base stations with the capacity to handle a maximum of 800,000 concurrent subscribers. The network covers 22% of the
total population.

Ghana

Ghana in 1957 became the first sub-Saharan country in colonial Africa to gain its independence. A long series of military coups resulted in the
suspension of the constitution in 1981 and a ban on political parties. A new constitution, restoring multi-party politics, was approved in 1992. Lt. Jerry Rawlings, head of state since 1981, won
presidential elections in 1992 and 1996, but was constitutionally prevented from running for a third term in 2000, when John Kufuor succeeded him in a free and fair election.

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Ghana's
key industries include mining, lumber, light manufacturing, aluminum smelting and food processing. Gold, timber and cocoa production are major sources of foreign exchange. Ghana
remains dependent on international financial and technical assistance. The country opted for debt relief under the IMF-World Bank's heavily indebted poor countries program in 2002 and in
July 2004 it satisfied the program's conditions and the decision was taken to give Ghana debt relief of approximately US$3.5 billion on debt it owed to international institutions, resulting in
debt service savings of approximately US$100 million per annum for the following 20 years. Policy priorities include tighter monetary and fiscal policies, accelerated privatization and
improvement of social services. Ghana had an estimated 6.2% real GDP growth in 2007 and inflation rate at close to 11%. Ghana has been plagued with a recent energy crisis as its main source of
electricity (the Akosombo hydro-electric dam) was unable to generate enough electricity to meet the needs of the growing population and the expanding industrial activities. The energy crisis lasted
until the last quarter of 2007 when the water level in the dam has improved slightly and the power generation became more stable. Ghana's GDP per capita was estimated at $1,400 in 2007. Although no
reliable recent figures are available, it is estimated that at least a quarter of the estimated current population of 23 million (December 2007) continues to live under the poverty line.

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. Barely
over a decade ago, was the National Communications Authority (NCA) established to oversee the implementation of government regulations and act as the mainstream regulatory body for the industry.

Millicom
Ghana (tigo) was the first mobile operator in Ghana having commenced operations in 1992. Millicom Ghana further pioneered the concept of prepaid services in Ghana in 1998.
Millicom Ghana was the second largest mobile operator in Ghana as at December, 2007. In addition to Millicom Ghana, three other companies offer mobile services in the country: Kasapa, MTN, and
OneTouch. After nearly a decade of relatively slow growth, the mobile market in Ghana started seeing considerable growth in penetration starting in 2001 as a result of several favorable factors,
including the development of a regulatory framework, increased competition and the improving macroeconomic environment. Mobile penetration has increased in recent years from 7% to almost 30% at the
end of 2007.

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 MHz network. As at December
2007 it was estimated to have the highest subscriber base amongst all the mobile operators in Ghana. The start of operations of MTN resulted in significant erosion in Millicom Ghana's market share and
a consequential loss of its leadership position mainly due to the fact that it was not operating GSM service until 2002. MTN currently has the largest network coverage in Ghana. OneTouch is a division
of Ghana Telecom, Ghana's main fixed line service provider, operating a GSM 900 MHz network. In 2000, OneTouch entered the market as the fourth operator when Millicom Ghana was applying for its
GSM license. OneTouch was not allowed to launch commercial operations until July 2002. OneTouch was estimated to have a market share of about 15% at December 2007. Kasapa, majority owned by Hutchison
Whampoa, entered the market as the second operator with an AMPS network in 1995 when Millicom was enjoying its market monopoly. The company now operates (CDMA) service with limited coverage. Kasapa,
formerly known as Celltel, is the smallest Mobile operator in Ghana with approximately 290,000 subscribers and an estimated market share of 4% at December 2007. Westel, the national fixed line
operator was bought by Celtel (Zain) during 2007. Westel has both fixed and mobile license. Celtel is expected to rollout its mobile network during 2008 so as to bring the mobile market participants
to five.

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The
telecommunications sector in Ghana is regulated by the National Communications Authority (NCA). NCA has been in operation for the past decade and reports to the Ministry of
Communications. The primary function of the NCA includes the issuance of telecommunication business licenses, the regulation of interconnection rates, and ensuring the provision of good quality
services to the public.

In
December 2004, the government awarded GSM licenses to all four mobile operators in Ghana. Before this date, the operations were run based on a permission to use an allocated
frequency. 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 eventually launched its GSM operation, which led to an important growth in its subscriber base. NCA finally issued Millicom Ghana a formal
GSM operating license in December 2004, 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 tigo® 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 is considering acquiring a 3G license and has started preparing its
current network to be compatible for rollout when the license is finally acquired.

Millicom
Ghana's GSM network had a total of 452 cell sites with 702 Base Transceiver Stations (BTS), 7 Multi-Switching Centers (MSC), 12 Base Station Controllers (BSC), and the capacity
to handle over 3.57 million concurrent subscribers at December 31, 2007, and its network covered slightly over 61% of the total population as at the same date.

Mauritius

Mauritius' government system is a parliamentary democracy. After almost five 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.

Since
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, economic growth (as measured by real GDP) has been between 5% and 6% per year, which has resulted in more equitable income distribution, increased life expectancy, and
significantly improved infrastructure. Real GDP growth was estimated at over 5% in 2007 and GDP per capita at $11,900. About 10% of the Mauritius population lived under the poverty line in 2007.
Sugarcane is grown on approximately 90% of the cultivated land area and accounts for 25% of export earnings. The government's development strategy centers on foreign investment, expanding local
financial institutions and expanding the domestic telecommunications industry. Mauritius, with its strong textile sector, is well positioned to take advantage of the Africa Growth and Opportunity Act.
Mauritius had a population of about 1 million in mid-2007.

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.

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

Emtel
entered the market in 1989 as the first mobile operator in the country. Until 1996 Emtel enjoyed a monopoly 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.

Emtel
operates a GSM network which is GPRS enabled and a UMTS/3G network.

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's competitor Cellplus is subject to the
same condition. Cellplus and Emtel are in discussions with the relevant authorities to remove this condition. Since May 2006, Emtel has had temporary rights to offer WiMAX based services on a trial
basis, and acquired a WiMAX license in March 2007. Implementation of the Telecommunications Directive (1 of 2007) to reduce interconnect tariffs to the state-owned fixed-line
infrastructure has been postponed to 2008.

As
at December 31, 2007, Emtel's GSM network comprised 181 base stations with the capacity to handle a maximum of 537,000 concurrent subscribers, and covered 98% of the total
population. As at the same date, Emtel's 3G network had 161 base stations with the capacity to handle 100,000 concurrent subscribers. In 2007 Emtel started a WIMAX network with 5 base stations and an
HSDPA network of 29 base stations.

Senegal

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. Senegal remains one of the few stable democracies in Africa.

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Real
GDP growth was estimated at 5% in 2007 and GDP per capita at $1,700. About half of the population continues to live under the poverty line. The government continues to support the
New Partnership for Africa's Development which, with the backing of the G8, aims to increase donor support and inflows of foreign direct investment to African countries in exchange for improvements in
governance. Senegal also continues to pursue a donor supported economic reform program as outlined in the IMF's three-year poverty reduction and growth facility approved in April 2003.
Senegal still relies heavily upon outside donor assistance. Under the IMF's Highly Indebted Poor Countries (HIPC) debt relief program, Senegal will benefit from eradication of two-thirds
of its bilateral, multilateral, and private sector debt. The country's key industries include agriculture and fishing, mining, fertilizer production and petroleum refining. High unemployment, however,
continues to prompt illegal migrants to flee Senegal in search of better job opportunities in Europe. Senegal was also beset by an energy crisis that caused widespread blackouts in 2006. Senegal
became a member of the World Trade Organization in 1995. In September 2005, the World Bank and the IMF agreed to support Senegal's accelerated growth strategy, combining the goals fixed under the
poverty reduction and growth facility with the goal of increasing real GDP growth from its current level to 8% p.a. by 2015. Senegal had a population of about 13 million in 2007.

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 a 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. Consequently, France Telecom acquired a 33% stake in Sonatel in 1997 and later increased
the holding to 42.3%; other shareholders include the Senegalese government (27.7%), employees (10%), and the remaining shares are traded on the local stock exchange.

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.

Senegal
has developed one of the most extensive and modern telecommunication infrastructures in Africa. Mobile services were introduced in 1996 and, since the introduction of competition
in 1999 with the start of Sentel's commercial operations, the number of mobile subscribers has grown substantially. Sonatel, controlled by France Télécom, is still the
only other mobile operator in Senegal in addition to Millicom's Sentel.

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.

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. Sentel launched
tigo® in November 2005.

As
of December 31, 2007 Millicom had a 100% equity interest in Sentel.

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The
issue of a third mobile license has been discussed for a few years and by the end of 2007 a global licence has been granted to Sudatel (Sudan). Sudatel network would be on air by mid
of 2008. Sentel does not yet have a WiMAX license.

As
of December 31, 2007 Sentel' s GSM network comprised 383 base stations with the network capacity to handle a maximum of 1,750 million concurrent subscribers and covered
76.9% of the total population.

Sierra Leone

Sierra Leone's government system is a constitutional democracy which is currently re-establishing its authority following the end of a brutal
10-year civil war in 2002. The last United Nations peacekeepers withdrew in December 2005, leaving full responsibility for security with domestic forces, but a new civilian UN office
remains to support the government. Mounting tensions related to planned 2007 elections, deteriorating political and economic conditions in Guinea, and the tenuous security situation in neighboring
Liberia may present challenges to continuing progress in Sierra Leone's stability. With the support of the United Nations and contributions from the World Bank and the international community, the
rebuilding of the country's infrastructure is ongoing. Many of the 2 million people displaced during the civil war have now returned from neighboring countries and in 2006 the population was
estimated at 6 million.

Sierra
Leone is an extremely poor African nation with tremendous inequality in income distribution. While it possesses substantial mineral, agricultural, and fishery resources, its
economic and social infrastructure is not well developed, and serious social disorders continue to hamper economic development. About two-thirds of the working-age population
engages in subsistence agriculture. Manufacturing consists mainly of the processing of raw materials and of light manufacturing for the domestic market. Alluvial diamond mining remains the major
source of hard currency earnings, accounting for nearly half of Sierra Leone's exports. The fate of the economy depends upon the maintenance of domestic peace and the continued receipt of substantial
aid from abroad, which is essential to offset the severe trade imbalance and supplement government revenues. The IMF has completed a Poverty Reduction and Growth Facility program that helped stabilize
economic growth and reduce inflation. A recent increase in political stability has led to a revival of economic activity, particularly mining.

Although
no recent reliable figures are available, in the late 1980s about 70% of the population was living below the poverty line. We believe this figure is still accurate today. The
current population is estimated at about 6 million. The GDP per capita was estimated at $800 in 2006 with very small variance in 2007. Real GDP growth estimated at 7% in 2007. The nation's
abundant natural mineral resources have great appeal for international mining companies and offer a variety of peripheral economic development opportunities. Sierra Leone's location along the Atlantic
coast poses advantages as a logistic and shipping hub as well as attracting tourism provided the infrastructure is improves significantly.

Sierra
Leone has one of the lowest mobile telephone penetration rates in the world, estimated in 10.5%. The National Telecommunications Commission (NTC) was established as the regulatory
body by the Telecommunications Act of 2006. The 2006 Act gives Sierratel, the national incumbent fixed line operator, the exclusive right to operate the international gateway from February 2007. One
of the first decisions taken by the NTC was to increase the GSM license fee from $50,000 to $500,000 per year effective January 2007.

The
fixed-line telecommunications market in Sierra Leone is also highly underdeveloped (3000 lines). Consequently, mobile services have become the main telecommunications
platform. In addition to Millicom, there are three other mobile operators in Sierra Leone: Celtel, Comium and Africell.

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Millicom
(SL) is a wholly-owned subsidiary of the Millicom group. It launched commercial operations in 2001 as the second mobile operator and today operates a GSM 900 network, and in
2007 been awarded with 1800 license. When the Millicom (SL) service was launched, coverage was restricted and there was intermittent service failure in several important high-density
areas. In year 2005 Millicom (SL) started implementing an expansion and optimization of its network which was completed in October 2006 and now covers approximately 27% of the total population.

Millicom
(SL) operates a network providing full GPRS-EDGE functionalities. Expansion of Millicom's network is ongoing, with the aim for the network capacity to reach
150,000 subscribers from an existing subscriber base of 105,000 as December 2007. The next step will be to introduce internet access over mobile to the market, and to improve network quality.

Millicom
(SL) prepaid "Buzz" GSM had been its sole brand since the launch of the operation in 2001. Due to under-investment in the network and the brand, it lost out to its more
aggressive competitors. To reverse this situation, tigo® was launched on August 31, 2006 with encouraging results during 2007. As of December 31, 2007, Millicom (SL)'s GSM
network comprises 76 base stations.

In
December 2007 a new government took place. There is a lot of expectation on the new government who announced that they will be focused on fighting against corruption and to
effectively provide basic services to the country such as 24 hours a day electricity, water, health, roads, and education.

Tanzania

Tanzania's system of government is a federal republic formed by the union in 1964 of Tanganyika and Zanzibar. President Jakaya Mrisho Kikwete came to power after
winning the last democratic elections held on December 14, 2005. One-party rule came to an end in 1995 with the first democratic elections held 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 carrying out economic reforms that gathered pace during two terms in office of the previous president, Benjamin Mkapa.

Tanzania
is one of the poorest countries in the world. The economy depends heavily on agriculture, which accounts for almost half of GDP, provides 85% of exports, and employs 80% of the
work force. Topography and climatic conditions, however, limit cultivated crops to only 4% of the land area. Industry traditionally featured the processing of agricultural products and light consumer
goods, as well as tourism. The World Bank, the International Monetary Fund, and bilateral donors have provided funds to rehabilitate Tanzania's out-of-date economic
infrastructure and to alleviate poverty. The government and the IMF have agreed to replace the poverty reduction and growth facility (PRGF), which ran to August 2006, with a policy support instrument
(PSI), which provide extensive external monitoring of the government's reform efforts but would give no financial support, unlike the PRGF program. The PDI will continue to set the medium/term policy
framework and maintain macroeconomic stability while the government pushes ahead with its long-term five-year National Strategy for Growth and Reduction of Poverty (NSGRP),
usually referred to by its Swahili acronym (MKUKUTA), which is due to run to June 2010. Long-term growth through 2005 featured a pickup in industrial production and a substantial increase
in output of minerals, led by gold. Recent banking reforms have helped increase private-sector growth and investment. Continued donor assistance and solid macroeconomic policies supported real GDP
growth of almost 7% in 2007. Tanzania became a member of the World Trade Organization in 1995. Tanzania has a population of more than 39 million in 2007, with a growth of about 2%, 44% of the
population is under the age of 14. Its 2007 GDP per capita was estimated at $1,100 and in 2004 (latest available figure) about 35% of the population lived below the poverty line.

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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 minority shareholder, Ultimate Communications Limited, in January 2006, Millicom owns 100% of MIC Tanzania Limited. Due to an attachment order on
all the shares in MIC Tanzania, the 15.6% shareholding acquired from the minority shareholder has yet to be registered at the local Companies Registrar's office. The attachment order is the result of
a lawsuit instituted in Tanzania by a disgruntled former employee. Millicom expects the issue of the judgment lifting the attachment order to occur during the second quarter of 2008. Although there is
no assurance that the judgment will be in Millicom's favor, we expect it to be as the legal basis for the order is erroneous. Millicom accounts for this operation as a subsidiary, i.e., using
the full consolidation accounting method.

MIC
Tanzania was the first mobile operator in Tanzania, launching commercial services in 1994 that initially covered Dar es Salaam, Zanzibar, Arusha and Mwanza. In 1999, it introduced
its first GSM service offering and analogue services were discontinued in October 2005.

The
other mobile telephony operators in Tanzania are:



In
January 1994 MIC Tanzania was awarded a 15-year license to operate a nationwide mobile network and, in January 2004, the company's license was extended to a
25-year license expiring in January 2019. MIC Tanzania does not have a WiMAX license, but it will obtain one as part of the migration to the new converged licensing framework.

In
May 2007 we migrated to the converged licensing framework which is technological neutral. MIC Tanzania has been issued with three separate licences for Network facilities Services,
Network Services and, Application Services. While the first two will last for 25 years, the last one will last for 5 years renewable.

The
GSM network comprises 537 base stations with a maximum capacity of handling 1,033,333 concurrent subscribers. The network covers 85% of the total population.

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ASIA

Millicom has three operations in Asia: Cambodia, Laos, and Sri Lanka. Millicom completed the sale of its two operations in Pakistan, Pakcom Limited and Paktel
Limited, in June 2006 and February 2007, respectively, and terminated its management contract in Iran in September 2006. Millicom's Business Cooperation Contract ("BCC") in Vietnam expired in
mid-May 2005 and the final reconciliations and BCC liquidation documents were agreed by the two parties in February 2007. In May 2007 the formal Application for the Liquidation of the BCC
was submitted to the Hanoi Department of Planning and Investment. As required by Law, the Hanoi DPI has 30 days to raise any questions or objection to the BCC Liquidation Request, otherwise the
BCC is considered closed once both parties have settled final outstanding transactions. There was no objection from the Hanoi DPI and the final transaction between the two BCC parties was concluded on
17 June 2007, signifying the formal end to the BCC contract. Millicom's Asian operations in Sri Lanka, Cambodia and Laos covered approximately 42 million people as at December 31,
2007.

Cambodia

Cambodia is a constitutional monarchy. While the head of the state is King Norodom Sihamoni, the head of the Cambodian government ("GoC") is Prime Minister Hun
Sen. Cambodia gained independence from France in 1954. Following over 20 years of political turmoil that ended in 1993, the country held its first democratic elections in 1993. Cambodia has
been run by a coalition led by the dominant Cambodian Peoples Party ("CPP") since 1998. General elections are scheduled for July 2008 and CPP is expected to win the election.

Cambodia
has 14 million inhabitants and GDP (PPP) of $1,800. The country has a predominantly young population with 50% of population below the age of 30. The population is
primarily rural based, hence, it is heavily dependent on subsistence farming. Population growth is estimated at 2% p.a.

The
Cambodian economy recorded significant growth in recent years due to the GoC's efforts to stabilize the economy and reduce poverty. Such expansion has been driven largely by the
growth of the garment and tourism industries. As a result, GDP growth has reached double digits of 10-13% p.a. between 2004 and 2006 and is estimated at 9% in 2007. Inflation has been
historically low, averaging 2.8% between 2002 and 2004. However, inflation is expected to increase to 5.4% in 2007. Foreign direct investment is estimated at US$510 million equivalent for 2007,
up from US$84 million equivalent in 2003 which confirms improvement in investor sentiment and in the perception of Cambodia by the international business community.

Despite
recent improvements in the economy, the GoC is still heavily reliant on multilateral aid to supplement its budget. Such aid averaged US$500 million p.a. between 2001 and
2005. Although the GoC had made steps to diversify the economy, Cambodia remains heavily dependent on agricultural output. Furthermore, because of the high degree of dollarization of the economy, the
central bank is limited in its ability to use monetary policy tools to manage the economy. Lack of governance and corruption remain major issues. Poverty and unemployment remain high as the economy is
unable to absorb a rapidly growing labor force.

Economic
growth is expected to continue in the medium term. GDP growth is estimated at 7% and 6.4% in 2008 and 2009 respectively. FDI growth should also remain strong resulting from
improvement in the business environment as Cambodia complies with its World Trade Organization membership requirements. The economy is also expected to benefit from tourism and from newly found oil
and gas deposits. Despite these developments, the GoC is expected to continue to rely heavily on foreign aid to fund fiscal expenditures due to its weak revenue base.

The
Cambodian market is characterized by low mobile (15% or 2.1 million subscribers) and fixed line penetration (0.3% or 43,000 active lines).

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Cambodia's
telecommunication sector is overseen by the Ministry of Post and Telecommunication ("MPTC"), which is both the policy making body and the sector regulator. There is no
telecommunications law in place in Cambodia and in the absence of such law, the sector is governed by decrees and sub-decrees issued by MPTC and the Prime Minister. A draft
telecommunications law has been in development for over seven years, with assistance from the International Telecommunication Union ("ITU") and the Asian Development Bank ("ADB"). The draft law
proposes to separate the regulatory and policy making functions by setting up a regulator that will also assume traditional roles of license issuance, spectrum management, interconnection regulation,
universal access, and numbering. It is unclear when the draft telecommunications law will be approved by parliament.

During
the first half of 2006, the process was completed to split the MPTC's functions between two separate entities: a regulator still called MPTC, and an operational entity, Telecom
Cambodia. A number of other service providers are active in the market, an arrangement which was made possible through joint ventures with the MPTC or under MPTC-issued licenses. While
there have been plans to restructure the sector, the market has remained relatively unregulated thus far. Due to decades of war, there is very little telecommunications infrastructure remaining from
pre-Khmer Rouge days. As a result, Cambodia bypassed rebuilding fixed-line infrastructure and proceeded straight away to digital mobile technology.

Millicom
has a 58.4% equity interest in CamGSM. The remaining equity interest in the company is owned by a Cambodian company, Royal Group of Companies (RGC, a communication and
industrial conglomerate, represented by Mr. Neak Oknha Kith Meng) with a 38.5% interest and, indirectly, by a private business partner, Mr. Muhammad Akhtar Zaman, who owns 3.1%. Millicom
and RGC jointly control CamGSM. Millicom accounts for this operation as a joint venture, i.e., using the proportionate accounting method.

In
April 1996, CamGSM was awarded a 25-year license to operate a nationwide GSM network, the first such license granted in Cambodia. In July 1999, the license was extended to
35 years. The license contains an option for CamGSM to extend license if it so desires.

Although
CamGSM launched commercial operations in 1997 as the fourth operator in Cambodia, it gained market leadership through early deployment of prepaid services and rapid network
roll-out, starting with services exclusively in Phnom Penh that have since been expanded to cover five regional capitals as well as all provinces and major towns. CamGSM led the market
with the introduction of new services and development of indirect distribution channels. In 2003, CamGSM succeeded in gaining a license to operate mobile broadband services in Cambodia.

There
were three other mobile operators in Cambodia when CamGSM entered the market in 1997: Casacom (100% owned by Telekom Malaysia since late 2006), CamTel (wholly owned by Thai
conglomerate CP and only offering analogue postpaid mobile services) and Tricelcam (Malaysian). CamGSM established its market position through the introduction of quality services, development of
distribution outlets and branding aimed at the youth market segment. As a result, Tricelcam exited the market and CamTel has become unable to compete effectively with its AMPS platform. Shinawatra
entered the Cambodian mobile market in 1999, having previously operated in Cambodia with a wireless local loop license, and has competed primarily based on price, providing lower quality services and
coverage for lower-end users. Casacom has experienced erosion in its market share mainly due to slow adoption of prepaid services, failing to respond to price competition from Shinawatra,
and lack of innovation. Viettel, a Vietnamese operator, has recently arranged financing to start their network. Applifone, a Kazakhstan-based company, and local partners has started services in late
2007.

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Starting
in 2006, the MPTC, acting as regulator, issued new licenses, bringing the total number of licenses issued in Cambodia to 13, and is in the process of restructuring the spectrum
to accommodate the new operators. The restructuring saw CamGSM's frequency allocation reduced by 3.2MHz (to 9.3MHz), 5MHz (to 15MHz) 7MHz (to 15MHz) in the 900MHz, 1800MHz and 3G bands respectively.
The reallocation will not affect CamGSM's ability to set up calls and carry traffics for projected subscriber growth.

On
March 3, 2006 the MPTC advised CamGSM that it was increasing the revenue share associated with the license. CamGSM appealed the original sub-decree and on
March 22, 2006 satisfactorily resolved this issue with the regulator. The revenue share and related taxes associated with the license have increased from around 34% to 43% of revenues, and
should the ministry provide better terms to another operator in the future, the revenue share will be adjusted to match, in the spirit of a "most favored nations" clause. In Cambodia we also operate
an international gateway, a high-speed data business, and a TV station.

At
December 31, 2007, CamGSM's GSM network comprised 866 base stations with the capacity to handle a maximum of 2 million concurrent subscribers, and covered 55% of the
total population. The network is GPRS enabled and a program to activate EDGE throughout the network is expected to be completed in Q1 2008.

People's Democratic Republic of Lao (Laos)

Laos' government system is a one of one-party (communist) rule which took control in 1975. Initial closer ties to Vietnam and socialization were
replaced with a gradual return to private enterprise, a liberalization of foreign investment laws, and admission to ASEAN in 1997. The government of Laos, one of the few remaining official Communist
states, began decentralizing control and encouraging private enterprise in 1986. Economic growth, as measured by real GDP, has averaged approximately 6% per year since the late 1980s except during the
Asian financial crisis in 1997. Real GDP growth was 7% in 2007.

Key
industries in the country include mining, electricity generation, timber, agricultural processing, construction, garments and tourism. Despite this high growth rate, Laos remains a
country with a primitive infrastructure. It has no railroads, a rudimentary road system, and limited external and internal telecommunications. Subsistence agriculture, dominated by rice, accounts for
about half of GDP and provides 80% of total employment. The economy will continue to benefit from aid by the IMF and other international sources and from new foreign investment in hydropower and
mining. Construction will be another strong economic driver, especially as hydroelectric dam and road projects gain steam. Several policy changes since 2004 may help spur growth. In late 2004, Laos
gained Normal Trade Relations status with the U.S., allowing Laos-based producers to benefit from lower tariffs on exports. Laos is taking steps to join the World Trade Organization in the
next few years; the resulting trade policy reforms will improve the business environment. On the fiscal side, a value-added tax regime, slated to begin in 2008, will streamline the government's
inefficient tax system. Over 31% of Laos' population was estimated to live below the poverty line in 2006. Real GDP per capita was about $1,900 in 2007. Laos had a population of about 7 million
in mid-2007.

In
April 2001, the Lao National Assembly adopted a new Telecommunications Act. One of the most significant changes has been the creation of a separate regulatory unit in the Ministry of
Communications, Transport, Post and Construction which has been regarded as a first step in the setting up of an independent regulator. In late 2002 two consultancy projects were initiated in the
country, one funded by the Asian Development Bank and the other by the World Bank, for the purpose of assisting the government in preparing more detailed telecommunications regulations.

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Following Millicom's entry into neighboring Cambodia and Vietnam, Millicom started operations in Laos through its subsidiary Millicom Lao. In January 2002, Millicom Lao was awarded a
20-year license to operate a nationwide GSM network. Millicom has a 74.1% equity interest in Millicom Lao. The remaining 25.9% of the company is owned by the government of Laos. Millicom
accounts for this operation as a subsidiary, i.e., using the full consolidation accounting method.

The
company obtained a 50 MHz spectrum license for the 2.5GHz WiMAX band and permission to operate as Internet service provider in Aug 2006. Additional to this, Millicom Lao was
granted an international gateway license in Jan 2008 to operate VoIP IDD calls.

Although
Millicom Lao entered the market as the fourth GSM operator, starting commercial service in April 2003, it has reached a market share of 16.5% as at December 31, 2007,
mainly by targeting the younger population, making it the third largest mobile operator in the country in 2007. TiGO® was launched in Laos in March 2007.

The
other mobile operators in Laos are:



At
December 31, 2007, Millicom Lao's GSM network comprised 175 base stations with the capacity to handle a maximum of 150,000 concurrent subscribers and covered 60% of the total
population.

Sri Lanka

Sri Lanka, also known as The Democratic Socialist Republic of Sri Lanka achieved independence in 1948 following decades of occupation by Portugal, the Netherlands
and Britain. Sri Lanka is a South Asian country with a population of about 21 million and GDP (PPP) of $4,100. Sri Lanka is a democratic country with an elected Executive President and a
Parliament of 225 members. The last presidential elections were held in November 2005, with the next Presidential and Parliament elections due in 2011 and 2010, respectively. The country has been
plagued by years of conflict since 1983, when tensions between the Sinhalese majority and Tamil separatists erupted into a war. Although the government and the rebels entered into a
cease-fire in February 2002, violence between the Tamil Separatists (Liberation Tigers of Tamil Eelam, or LTTE, also known as the Tamil Tigers) and government forces intensified again in
2006. The conflict has escalated to a new level due to the Tamil separatists' demonstration of their air power capacity by attacking a government air force base located near the country's main
international airport and some other tarters in Colombo in 2007. In January 2008 the government formally withdrew from the cease-fire, and the violence has further escalated.

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In
1977, Sri Lanka opted for a more liberal economic policy, with export-oriented trade, and encouragement of foreign investments. Recent changes in government have brought some policy
reversals and the ruling Sri Lanka Freedom Party currently follows a more statist economic approach which seeks to reduce poverty by steering investment to disadvantaged areas, developing small and
medium enterprises, promoting agriculture, and expanding the already enormous civil service. The government has halted most privatizations. Although suffering from a brutal civil war that began in
1983. Sri Lanka saw GDP growth average 4.5% in the last ten years, with a brief interruption during the global downturn in 2001. In late December 2004, a major tsunami took about 31,000 lives, left
more than 6,300 persons missing and 443,000 displaced, and destroyed an estimated $1.5 billion worth of property.

Growth,
partly spurred by reconstruction after the tsunami, was 6% in 2005 and 7.4% in 2006. In 2007 the real GDP growth rate was estimated at 6%. Sri Lanka's most dynamic sectors are
food processing, textiles and apparel, food and beverages, port construction, telecommunications, and insurance and banking. In 2006, plantation crops made up only about 15% of exports, while textiles
and garments accounted for more than 60%. At the year end of 2007, it was estimated that about 1.5 million Sri Lankans work abroad and remit about US $2.6 billion in foreign income per
year. The struggle waged by the Tamil separatists in the Northern parts of the country for a largely independent homeland continues to cast a shadow over the economy. According to the Central Bank of
Sri Lanka, with the rise in oil prices and government borrowings, the rate of inflation which was 12.1% in 2006 has risen to about 17.5% in 2007.

Expansion
of telecommunication services in Sri Lanka first gained momentum after the liberalization of the sector in 1991 with the establishment of the Office of the Director General of
Telecommunications, the country's regulatory authority. Further momentum was gained after the part-privatization of Sri Lanka Telecom (SLT) in 1997. In the same year, the government also
established the Telecommunications Regulatory Commission (TRC), which took over from the Office of the Director General of Telecommunications to implement the targets of the National
Telecommunications Policy of 1994/95. The provision of basic telephone services in Sri Lanka was the sole responsibility of monopoly provider SLT until 1996, but to achieve the targets detailed in the
National Telecommunications Policy private-sector participation in the telecommunications market has been encouraged. The TRC has been tasked with the responsibility of facilitating and monitoring the
operational aspects of the various service providers, settling interconnection issues, recommending new licenses to operators, allocating radio frequencies and promoting the general interest of the
customer.

Sri
Lanka's telecommunications sector has been lagging behind in the development of a modern network infrastructure following almost two decades of violent political conflict. Due to the
lack of nationwide fixed-line telecommunications services, mobile services have played a key role in the development of the telecommunications sector in Sri Lanka. As a result of this
conflict, mainly in the north and east of Sri Lanka, mobile telephony operators have had to switch off telecommunication towers in the affected areas at regular intervals. This has hampered the
development of mobile telephony mainly in the North and East of the country and negatively impact mobile telephony operators, including Millicom's Tigo (Pvt) Limited (formerly Celltel Lanka Limited).

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In
addition to Tigo, three other operators are active in the Sri Lankan mobile market: Dialog Telekom, Sri Lanka Telecom (SLT) owned Mobitel and Hutchison Telecom. There is one dominant
fixed-line operator (Sri Lanka Telecom) and two Wireless Local Loop service operators, Suntel and Lanka Bell. Airtel, the mobile company of Bharti Telecom of India has secured the fifth
mobile license in Sri Lanka and is expected to commence commercial operations in September 2008. Dialog, the market leader, started commercial operations of its CDMA network in 2007. The Sri Lanka
telecommunications market is characterized by intense price and non price competition. This has resulted in intense marketing and brand image building costs along with lower Rate Per Minutes from all
operators. It is expected that the competition in the sector will further intensify in 2008 with the entrance of Airtel.

There
was no other mobile operator in Sri Lanka when Tigo (Pvt) Limited (Under the then brand name Celltel), entered the market in 1989. Until 1993, Celltel enjoyed a monopoly position
when Call Link (at the initial stages owned by Singapore Telecom) and Mobitel (at the initial stages owned by Telstra) entered the market as the second and third operators. In 1995, Dialog (owned by
Malaysia Telekom) entered the market as the fourth operator. After the privatization of Sri Lanka Telecom in 1997, SLT acquired 100% of Mobitel from Telstra. In 1998, Hutchison Telecom acquired Call
Link from Singapore Telecom.

Millicom
has a 100% equity interest in Tigo (Pvt) Limited and accounts for this operation as a subsidiary, i.e., using the full consolidation accounting method.

Tigo
(Pvt) Limited operates a GSM network on the 900 Mhz and 1800 Mhz bandwidths. Tigo (Pvt) Limited owns three different licenses, namely a Mobile telephony, an Internet services and an
External gateway operations license. Tigo now has a mobile telephone license valid until 2018. In 2005 Tigo (Pvt) Limited began a significant network upgrade program which was completed in 2006. As at
31st December 2007, Tigo (Pvt) Limited's GSM network comprised of 637 base stations.

GPRS
and EDGE services are already available to Tigo customers and the company is planning to provide 3G services by the end of 2008. The Company rebranded to Tigo in January 2007 and
effective April 2007 the Company name too was changed into Tigo Private Limited.

DIVESTED OPERATIONS

In 2007, Millicom completed the sale of Millicom Paktel, for total proceeds of $284.8 million realising a net gain of $258.3 million. Millicom
incurred costs of $14.2 million on the transaction and of the net proceeds of $270.6 million, Millicom received $263.0 million in 2007 and the remaining $7.6 million in
January 2008.

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 leases, 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 and municipal entities.

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



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Millicom
moved to new premises in a new office building effective March 26, 2007. Our registered office and principal executive offices are located in Leudelange, Grand Duchy of
Luxembourg, where we lease approximately 1,530 square meters of new office space plus parking spaces based on a nine-year lease expiring on October 31, 2015. Each party to the lease
may cancel it effective December 31, 2012 provided written notice of termination is given six months in advance.

Insurance

We maintain the types and amounts of insurance which we believe to be customary in the industry and countries in which we operate. We have conducted a review and
analysis of our worldwide insurance coverage with the assistance of AON Sweden AB. We consider our insurance coverage to be adequate both as to risks and amounts for the business we conduct. As our
insurance policies expire around the Group, we are standardizing our coverage along the reccomandations suggested by AON. These changes will increase our coverage terms at similar costs.

ITEM 4A.    UNRESOLVED STAFF COMMENTS

Not applicable.

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.

Operating Results

Millicom sold its operations in Pakistan in June 2006 and February 2007, and sold its operation in Peru in October 2006. Its Business Cooperation Contract in
Vietnam ended in May 2005. These operations have been classified as discontinued operations. The below discussion focuses on the results from continuing operations.

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Years Ended December 31, 2007 and 2006

The following table sets forth certain profit and loss statement items for the periods indicated:

|                                                             |  |           |   |           |   | Impact on Comparative Results
for Period |  
|------------------------------------------------------------ |  | --------- | - | --------- | - | ---------------------------------------- | -
|
|
|
|
|Revenues                                                     |  | 2,630,614 |   | 1,576,100 |   | 1,054,514                                |  
|Cost of sales                                                |  | (980,056  | ) | (616,739  | ) | (363,317                                 | )
|Gross profit                                                 |  | 1,650,588 |   | 959,361   |   | 691,227                                  |  
|Sales and marketing                                          |  | (489,327  | ) | (246,591  | ) | (242,736                                 | )
|General and administrative expenses                          |  | (425,356  | ) | (246,004  | ) | (179,352                                 | )
|Other operating expenses                                     |  | (72,949   | ) | (37,613   | ) | (35,336                                  | )
|Other operating income                                       |  |          |   | 4,036     |   | (4,036                                   | )
|Gain(loss) from sale of subsidiaries and joint ventures, net |  |          |   | 8,099     |   | (8,099                                   | )
|Operating profit                                             |  | 662,926   |   | 441,288   |   | 221,638                                  |  
|Interest expense                                             |  | (194,440  | ) | (123,969  | ) | (70,471                                  | )
|Interest and other financial income                          |  | 56,384    |   | 36,385    |   | 19,999                                   |  
|Other non operating income (expenses), net                   |  | 10,172    |   | (1,186    | ) | 11,358                                   |  
|Profit from associates                                       |  | 4,400     |   | 1,483     |   | 2,917                                    |  
|Profit before tax from continuing operations                 |  | 539,442   |   | 354,001   |   | 185,441                                  |  
|Charge for taxes                                             |  | (87,077   | ) | (118,205  | ) | 31,128                                   |  
|Profit for the year from continuing operations               |  | 452,365   |   | 235,796   |   | 216,569                                  |  
|Profit/(loss) from discontinued operations, net of tax       |  | 258,619   |   | (75,813   | ) | 334,432                                  |  
|Minority interests                                           |  | (13,842   | ) | 8,964     |   | (22,806                                  | )
|Net profit for the year attributable to equity holders       |  | 697,142   |   | 168,947   |   | 528,195                                  |  

Subscribers:Total subscribers for the years ended December 31, 2007 and 2006 by segment were as follows:

Subscribers

2007

2006

GrowthCentral America

8,824,924

5,164,167

71
%South America

5,892,726

4,329,973

36
%Africa

5,672,177

3,425,680

66
%Asia

2,964,738

2,025,625

46
%Total

23,354,565

14,945,445

56
%


56

---



As
of December 31, 2007, our worldwide total mobile subscriber base increased by 56% to 23,354,565 mobile subscribers from 14,945,445 mobile subscribers as of December 31,
2006. Growth was particularly strong in Central America and Africa (71% and 66%, respectively). There were significant increases recorded in the following countries; the Democratic Republic of Congo
(986%), Sierra Leone (147%), Honduras (88%), Chad (73%), Ghana (67%) and Guatemala (66%). This subscriber growth was driven by substantially higher capital expenditure in 2007. The higher capital
expenditure resulted in improvements in the quality of our networks and increased capacity and coverage which attracted additional subscribers. Expansion of the distribution network also helped drive
subscriber growth by increasing the points of sale where we sell our products, which makes the products more accessible. We are further driving higher penetration rates in our markets by continuing to
drive down the entry price for our services by using innovative distribution channels and techniques. Future subscriber growth is highly dependant on the level of capital expenditure invested in the
business; increased points of sale; innovative product development and continued focus on a competitive value proposition.

Our
attributable subscriber base increased to 19,853,015 mobile subscribers as at December 31, 2007 from 12,840,568 mobile subscribers as of December 31, 2006, an increase
of 55%. Prepaid subscribers accounted for 96% or 22,357,879 of the total cellular subscribers.

Revenues:Revenues for the years ended December 31, 2007 and 2006 by segment were as follows:

Revenue

2007

2006

GrowthUSD '000

USD '000Central America

1,149,368

796,111

44
%South America

809,881

321,038

152
%Africa

476,593

312,105

53
%Asia

194,772

146,846

33
%Total

2,630,614

1,576,100

67
%


We
derive revenues from the provision of telecommunications services such as monthly subscription fees, airtime usage fees, roaming fees, interconnect fees, connection fees for
subscription services and other services and equipment sales.

Total
revenues increased by 67% for the year ended December 31, 2007 to $2,631 million from $1,576 million for the year ended December 31, 2006. The increase
is mainly due to strong growth in the number of subscribers which increased by 56% to 23.4 million as of December 31, 2007 from 14.9 million as of December 31, 2006.
Revenue growth was seen throughout Millicom's segments and especially in South America where revenues increased by 152% for the year ended December 31, 2007, mainly as a result of having an
additional $357 million in revenue in Colombia as for 2007 there was a full year of revenues for Colombia compared to one quarter in 2006. We have also seen a very strong growth in revenue from
value-added services particularly in Paraguay. The increase in revenue for the year ended December 31, 2007 was 53% in Africa, 44% in Central America and 33% in Asia.

Central
and South America were the key drivers of this growth reflecting the success of tigo® in its third year. tigo® represents our triple "A" operating
strategy of a quality and widely available network, ubiquitous distribution and affordable products and services. Implementing this strategy across all our operations has been the key to driving
revenue growth. This strategy drove higher penetration rates in our existing markets which increased the subscriber base. Furthermore, the existing subscribers increased their average airtime usage
through additional voice minutes as we made the products more affordable and through the take up of value-added services.

57

---



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. At the end of 2006 we rebranded our Colombia operation to tigo® and at the beginning of 2007 we launched tigo® in Sri Lanka, the Democratic Republic of Congo
and the Lao People's Democratic Republic. This strategy will continue to drive higher penetration rates in our markets. The average revenue per user (ARPU) will most likely fall over time as we
penetrate deeper into the populations and reach customers with less disposal income. However, this might not happen immediately as we continue to see price elasticity amongst our existing customers
and as we continue to develop our valued added services. In addition, the performance of Millicom's new operations in Colombia and the Democratic Republic of Congo will likely have a significant
impact on revenues in the coming years.

A
number of telecommunications regulators in the countries where we operate have (for example recently in Colombia the regulator cut interconnect rates from 12 to 6 US cents), or are
expected to, reduce interconnection rates. Because we are often one of the larger suppliers of telephone services in the countries we service, this could have the effect of reducing our revenue.
Nonetheless, lower interconnect rates often enable us and our competitors to reduce prices to the final customer. Due to the price elasticity in our markets, lower prices usually drive significantly
higher usage which often results over time in overall increases in revenues.

Cost of sales:Cost of sales increased by 59% for the year ended December 31, 2007 to $980 million from
$617 million for the year ended December 31, 2006. 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, 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. Lastly, cost of sales was impacted by our Colombian business where we had a full year of costs in 2007 compared to one quarter in 2006. Gross profit margin increased
slightly to 63% for the year ended December 31, 2007 compared to 61% for the year ended December 31, 2006.

Future
gross margin percentages will be mostly affected by the mix of revenues generated from calls 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. In addition, Millicom's increased investments in
capital expenditure in 2007 and 2006 will increase depreciation in the coming years.

Sales and marketing:Sales and marketing expenses increased by 98% for the year ended December 31, 2007 to
$489 million from $247 million for the year ended December 31, 2006. Sales and marketing costs are comprised mainly of commissions to dealers for obtaining customers on our behalf
and selling prepaid reloads, general advertising and promotion costs for tigo®, point of sales materials for the retail outlets, and staff costs. The increase in sales and marketing costs
was mainly due to higher dealer commissions related to the higher revenues and the increase in subscribers, increased spending on brand awareness and point of sales materials, particularly where we
were aggressively rolling out tigo® in Africa and Asia, and increased sales and marketing costs in Colombia as Millicom rebranded this operation to tigo® at the end of 2006.
Furthermore, for 2007 there was a full year of sales and marketing expenses for Colombia compared to one quarter in 2006. As a percentage of revenues, sales and marketing expenses increased from 16%
for the year ended December 31, 2006 to 19% for the year ended December 31, 2007.

Future
sales and marketing costs will be impacted by the rollout of tigo® into the remaining Millicom markets where it is not yet used and the expansion of the distribution
network which requires higher spending on brand awareness point of sales materials. The level of future sales and marketing spend will impact both revenues and operating profits.

58

---



General and administrative expenses:General and administrative expenses increased by 73% for the year ended
December 31, 2007 to $425 million from $246 million for the year ended December 31, 2006. This increase is mainly explained by the increase in network maintenance costs to
support the expansion in our operations, but also higher staff costs from more employees needed to manage the growth of the business. In addition, there was an increase in share compensation costs.
Finally, for 2007 there was a full year of general and administrative expenses for Colombia compared to one quarter in 2006. As a percentage of revenues, general and administrative expenses remained
at approximately 16% for the years ended December 31, 2007 and 2006.

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.

Other operating expenses:Other operating expenses increased by 94% for the year ended December 31, 2007 to
$73 million from $38 million for the year ended December 31, 2006. This increase is mainly explained by:



Operating profit:Operating profit for the years ended December 31, 2007 and 2006 by segment were as follows:

Operating profit

2007

2006

GrowthUSD '000

USD '000Central America

526,369

334,923

57
%South America

106,552

49,657

115
%Africa

57,938

63,143

(8
)%Asia

41,072

36,070

14
%Unallocated

(69,005
)
(42,505
)Total

662,926

441,288

50
%


59

---



Total
operating profit for the year ended December 31, 2007 was $663 million compared with $441 million for the year ended December 31, 2006. This increase in
operating profit was due to the higher revenues. The operating profit margin fell from 28% to 25% mainly due to Millicom's operation in Colombia which incurred an operating loss of $31 million
for the year ended December 31, 2007 compared to a operating loss of $5 million for the period from October 2, 2006, the date of acquisition by Millicom of this operation, to
December 31, 2006. Millicom expects this operation to start recording an operating profit in 2008 and beyond. In addition Millicom's operation in the Democratic Republic of Congo increased its
operating losses from $16.4 for the year ended December 31, 2006 to $34.8 million for the year ended December 31, 2007 as it aggressively rolls out the triple "A" operating
strategy for the company, incurring sales and marketing and network rollout costs ahead of an expected increase in revenues as a result of the 986% increase in subscribers between December 31,
2006 and December 31, 2007. The operating margin for the segments varied from 2006 to 2007 mainly as a result of the different stages of implementation of the triple "A" operating strategy
among the companies. In most cases, those where the triple "A" model was implemented before 2006, mainly Central and South America (excluding Colombia), were able to improve their operating margins.
Those where the model has been implemented later, most African countries and Sri Lanka, saw pressure on the operating margins as they incurred costs ahead of revenues to implement the model, rebrand
as tigo® and grow their businesses.

In
future, our operating profitability will depend on the ability of Millicom to continue growing revenues while maintaining control of costs. Millicom is striving to improve the
profitability of its operations in Colombia and the Democratic Republic of Congo and expects both of these operations to generate operating profits when the impact of the introduction of
tigo® in these countries takes full effect in 2008.

Interest expense:Interest expense for the year ended December 31, 2007 increased by 57% to $194 million from
$124 million for the year ended December 31, 2006. This increase arose primarily as a result of Millicom's decision in Q4 2007 to redeem its 10% Senior Notes in December 2008.
Accordingly an additional interest expense of $31 million was taken, representing the remaining balance of the amortised costs of the 10% Senior Notes and a 5% premium to redeem these Notes
before maturity. In addition interest expense increased as a result of the additional borrowings in the operations used to fund Millicom's increased capital expenditure. Interest costs for the
operations will continue to increase in 2008 as Millicom arranges more of the funding for the growth in the operations through local borrowings. The early repayment of the 10% Senior Notes will
decrease the interest expense by $288 million over the years 2008 to 2013. In addition, the conversion in January 2008 of the 4% Convertible Notes will decrease the interest expense by
approximately $35 million over 2008 and 2009.

Interest and other income:Interest and other income for the year ended December 31, 2007 increased by 55% to
$56 million from $36 million for the year ended December 31, 2006. This increase was mainly due to the interest income on the higher cash balances.

Other non operating income (expenses), net:Other non operating income (expenses), net increased from an expense of
$1 million for the year ended December 31, 2006 to an income of $10 million for the year ended December 31, 2007. This increase was mainly as a result of higher exchange
gains, mainly on borrowings, as a number of currencies strengthened against the dollar offset by a charge of $5 million in respect of the repurchase by Millicom of part of the 10% Senior Notes.

60

---



Charge for taxes:The net tax charge for the year ended December 31, 2007 decreased to $87 million from
$118 million in the year ended December 31, 2006. This decrease is due to recognition of a deferred tax benefit of $86 million in our operation in Colombia as a result of the net
operating losses assumed as part of the acquisition of this operation and the losses incurred since the acquisition date. This benefit was offset by the increased tax charge as a result of the
increased profitability of our operations in 2007. The Group's effective tax rate decreased from 33% in 2006 to 16% in 2007, mainly as a result of the recognition of the deferred tax assets in our
operation in Colombia and a lower proportion of net corporate expenses and interest to total Group profit before taxes.

The
corporate expenses and interest exceed the income at the corporate holding companies and therefore the net total is not tax deductible. This causes the effective tax rate to
increase. Millicom has been both increasing the corporate income by charging the operating companies management and brand fees and decreasing the corporate interest expense by replacing corporate debt
with operating company debt.

In
future, as the business grows and the corporate staff increases its support to the operations, Millicom expects to be able to charge additional management fees and brand fees to the
operating companies as the profits of the operating companies grow, thus increasing the corporate income. In addition, as the Group profit before tax grows, it will further reduce the impact of the
net corporate expenses and interest on the Group's effective tax rate. In 2008, we expect that the beneficial impact of these two factors will likely be, at least partially, offset by the net losses
expected to be incurred by the Democratic Republic of Congo business, which may be non deductible and thus increase the effective tax rate.

The
Group effective tax rate is also impacted by operating companies that are taxed on revenues rather than profit before tax. In 2006, the Group effective rate benefited from these
situations. There is a risk that these situations could change and that these operating companies could be taxed on profit before tax in future years. This would likely increase the Group effective
tax rate. Overall, Millicom expects the Group effective tax rate to be slightly lower in 2008 if there are no significant changes in the methods of taxing the operating companies.

Net profit for the year attributable to equity holders of the company:The net profit for the year ended December 31,
2007 was $697 million compared to a net profit of $169 million for the year ended December 31, 2006. Profit from continuing operations increased to $452 million for the
year ended December 31, 2007 from $236 million for the year ended December 31, 2006 for the reasons stated above. The profit from discontinued operations for the year ended
December 31, 2007 was $259 million compared to the loss from discontinued operations for the year ended December 31, 2006 of $76 million and was significantly impacted by
the gain on the sale of Paktel.

61

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Operating Results

Years Ended December 31, 2006 and 2005

The following table sets forth certain profit and loss statement items for the periods indicated.

|                                                             |  |           |   |          |   | Impact on Comparative Results for Period |  
|------------------------------------------------------------ |  | --------- | - | -------- | - | ---------------------------------------- | -
|
|
|
|
|Revenues                                                     |  | 1,576,100 |   | 922,780  |   | 653,320                                  |  
|Cost of sales                                                |  | (616,739  | ) | (373,427 | ) | (243,312                                 | )
|Gross profit                                                 |  | 959,361   |   | 549,353  |   | 410,008                                  |  
|Sales and marketing                                          |  | (246,591  | ) | (124,187 | ) | (122,404                                 | )
|General and administrative expenses                          |  | (246,004  | ) | (143,341 | ) | (102,663                                 | )
|Other operating expenses                                     |  | (37,613   | ) | (23,137  | ) | 14,476                                   |  
|Other operating income                                       |  | 4,036     |   | 15,412   |   | (11,376                                  | )
|Gain(loss) from sale of subsidiaries and joint ventures, net |  | 8,099     |   | 1,269    |   | 6,830                                    |  
|Operating profit                                             |  | 441,288   |   | 275,369  |   | 165,919                                  |  
|Interest expense                                             |  | (123,969  | ) | (116,031 | ) | (7,938                                   | )
|Interest and other financial income                          |  | 36,385    |   | 23,373   |   | 13,012                                   |  
|Other non operating expenses, net                            |  | (1,186    | ) | (12,807  | ) | (11,621                                  | )
|Profit from associates                                       |  | 1,483     |   | 1,296    |   | 187                                      |  
|Profit before tax from continuing operations                 |  | 354,001   |   | 171,200  |   | 182,801                                  |  
|Charge for taxes                                             |  | (118,205  | ) | (68,795  | ) | (49,410                                  | )
|Profit for the year from continuing operations               |  | 235,796   |   | 102,405  |   | 133,391                                  |  
|Loss for the year from discontinued operations, net of tax   |  | (75,813   | ) | (98,260  | ) | 22,447                                   |  
|Minority interests                                           |  | 8,964     |   | 6,132    |   | 2,832                                    |  
|Net profit for the year attributable to equity holders       |  | 168,947   |   | 10,277   |   | 158,670                                  |  

Subscribers:Total subscribers for the years ended December 31, 2006 and 2005 by segment were as follows:

Subscribers

2006

2005

GrowthCentral America

5,164,167

2,737,126

89
%South America

4,329,973

1,337,739

224
%Africa

3,425,680

2,006,634

71
%Asia

2,025,625

1,429,766

42
%Total

14,945,445

7,511,265

99
%


62

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As of December 31, 2006, our worldwide total mobile subscriber base increased by 99% to 14,945,445 mobile subscribers from 7,511,265 mobile subscribers as of December 31,
2005. Growth was particularly strong in Central and South America, where we acquired our Colombian business with 1.9 million subscribers in the fourth quarter of 2006. Particularly significant
percentage increases by operating company were recorded in Ghana (170%), Chad (105%), Guatemala (91%), El Salvador (88%), Honduras (86%), and Paraguay (84%). This subscriber growth was driven by
substantially higher capital expenditure in 2006. The higher capital expenditure resulted in improvements in the quality of our networks and increased capacity and coverage which attracted additional
subscribers. Expansion of the distribution network also helped drive subscriber growth by increasing the points of sale where we sell our products, which makes the products more accessible. We are
further driving higher penetration rates in our markets by continuing to drive down the entry price for our services by using innovative distribution channels and techniques, for example
e-PIN.

Our
attributable subscriber base increased to 12,840,568 mobile subscribers as at December 31, 2006 from 6,277,234 mobile subscribers as of December 31, 2005, an increase
of 105%. Prepaid subscribers accounted for 94% or 14,069,319 of the total cellular subscribers. Total mobile minutes increased by 82% in the year ended December 31, 2006 compared with 2005.

Revenues:Revenues for the years ended December 31, 2006 and 2005 by segment were as follows:

Revenue

2006

2005

GrowthUSD '000

USD '000Central America

796,111

452,600

76
%South America

321,038

141,655

127
%Africa

312,105

204,397

53
%Asia

146,846

124,128

18
%Total

1,576,100

922,780

71
%


We
derive revenues from the provision of telecommunications services such as monthly subscription fees, airtime usage fees, roaming fees, interconnect fees, connection fees for
subscription services and other services and equipment sales.

Total
revenues increased by 71% for the year ended December 31, 2006 to $1,576 million from $923 million for the year ended December 31, 2005. The increase is
mainly due to strong growth in the number of subscribers which increased by 99% to 14.9 million as of December 31, 2006 from 7.5 million as of December 31, 2005. Revenue
growth was seen throughout Millicom's segments and especially in Central America where revenues increased by 76% for the year ended December 31, 2006. Revenues also increased for the year ended
December 31, 2006 by 127% in South America due to the implementation of per second billing and low denomination reloads in Paraguay and helped by the addition of $90 million of revenues
in the fourth quarter from Millicom's new operation in Colombia. The increase in revenue for the year ended December 31, 2006 was 53% in Africa and 18% in Asia.

Central
and South America were the key drivers of our revenue growth reflecting the success of tigo® in its second year. tigo® represents our triple "A" operating
strategy of a quality and widely available network, ubiquitous distribution and affordable products and services. Implementing this strategy across all our operations has been the key to driving
revenue growth. This strategy drove higher penetration rates in our existing markets which increased the subscriber base. Furthermore, the existing subscribers increased their average airtime usage
through additional voice minutes as we made the products more affordable and through the take up of value-added services. In addition our acquisition of Colombia added 2.1 million subscribers
and $90 million of revenue.

63

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Cost of sales:Cost of sales increased by 65% for the year ended December 31, 2006 to $617 million from
$373 million for the year ended December 31, 2005. 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, 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. Lastly, cost of sales was impacted by the acquisition of our Colombian business. As a result of these factors, gross margin increased slightly to 61% for the year ended
December 31, 2006 compared to 60% for the year ended December 31, 2005.

Sales and marketing:Sales and marketing expenses increased by 99% for the year ended December 31, 2006 to
$247 million from $124 million for the year ended December 31, 2005. Sales and marketing costs are comprised mainly of commissions to dealers for obtaining customers on our behalf
and selling prepaid reloads, general advertising and promotion costs for tigo®, point of sales materials for the retail outlets, and staff costs. The increase in sales and marketing costs
was mainly due to higher dealer commissions related to the higher revenues, increased spending on brand awareness and point of sales materials, particularly where we were aggressively rolling out
tigo® in Africa and Asia, and increased sales and marketing costs in Colombia as Millicom rebranded this operation to tigo® at the end of 2006. As a percentage of revenues,
sales and marketing expenses increased from 13% for the year ended December 31, 2005 to 16% for the year ended December 31, 2006.

General and administrative expenses:General and administrative expenses increased by 72% for the year ended
December 31, 2006 to $246 million from $143 million for the year ended December 31, 2005. This increase is mainly explained by the increase in network maintenance costs to
support the expansion in our operations, but also higher staff costs from more employees needed to manage the growth of the business. In addition, there was an increase in share compensation costs as
Millicom introduced a new long term incentive plan for its senior employees. As a percentage of revenues, general and administrative expenses remained stable at 16% for the years ended
December 31, 2006 and 2005.

Other operating expenses:Other operating expenses increased by 63% for the year ended December 31, 2006 to
$38 million from $23 million for the year ended December 31, 2005. This increase is mainly explained by:



Operating profit:Operating profit for the years ended December 31, 2006 and 2005 by segment was as follows:

Operating profit

2006

2005

GrowthUSD '000

USD '000Central America

334,923

177,012

89
%South America

49,657

29,555

68
%Africa

63,143

55,440

14
%Asia

36,070

33,418

8
%Unallocated

(42,505
)
(20,056
)Total

441,288

275,369

60
%


64

---



Total
operating profit for the year ended December 31, 2006 was $441 million compared with $275 million for the year ended December 31, 2005. This increase in
operating profit was due to the higher revenues. The operating profit margin fell slightly from 30% to 28% mainly due to the acquisition of Millicom's operation in Colombia in October 2006 which
incurred an operating loss of $5 million from the date of acquisition to December 31, 2006. Millicom expects this operation to record an operating loss in 2007 as it aggressively rolls
out the triple "A" operating strategy for the company incurring sales and marketing and network rollout costs ahead of the related revenues. Beyond 2007, this operation should generate operating
profits. The operating margin for the segments varied from 2005 to 2006 mainly as a result of the different stages of implementation of the triple "A" operating strategy among the companies. In most
cases, those where the triple "A" model was implemented before 2006, mainly Central and South America (excluding Colombia), were able to improve their operating margins. Those where the model has been
implemented later, most African countries and Sri Lanka, saw pressure on the operating margins as they incurred costs ahead of revenues to implement the model, rebrand as tigo® and grow
their businesses.

Interest expense:Interest expense for the year ended December 31, 2006 increased by 7% to $124 million from
$116 million for the year ended December 31, 2005. This increase arose primarily from additional borrowings in the operations which were offset by a lower interest charge from the 5%
Mandatory Exchangeable Notes which were settled in August 2006.

Interest and other income:Interest and other income for the year ended December 31, 2006 increased by 56% to
$36 million from $23 million for the year ended December 31, 2005. This increase was mainly due to the interest income on the higher cash balances.

Other non operating expenses, net:Other non operating expenses net decreased from $13 million for the year ended
December 31, 2005 to $1 million for the year ended December 31, 2006. This decrease was mainly as a result of higher exchange gains as a number of currencies strengthened against
the dollar.

Charge for taxes:The net tax charge for the year ended December 31, 2006 increased to $118 million from
$69 million in the year ended December 31, 2005. This increase is due to the increased profitability of our operations in 2006. The Group's effective tax rate decreased from 40% in 2005
to 33% in 2006, mainly as a result of a lower proportion of net corporate expenses and interest to total Group profit before taxes. This was due to both the growth in the Group profit before taxes and
a lower net total of corporate expenses and interest compared to the prior year.

Net profit for the year attributable to equity holders of the company:The net profit for the year ended December 31,
2006 was $169 million compared to a net profit of $10 million for the year ended December 31, 2005. Profit from continuing operations increased to $236 million for the year
ended December 31, 2006 from $102 million for the year ended December 31, 2005 for the reasons stated above. The loss from discontinued operations for the year ended
December 31, 2006 was $76 million compared to a loss from discontinued operations for the year ended December 31, 2005 of $98 million.

Liquidity and Capital Resources

Overview

We believe that our working capital is sufficient for our present requirements.

As
of December 31, 2007, Millicom's total consolidated outstanding debt and other financing was $1,834 million (2006: $1,494 million). Of this amount,
$659 million (2006: 710 million) represented the Company's and Millicom Telecommunications S.A. indebtedness and $1,175 million (2006: $784 million) represented the
consolidated indebtedness of our subsidiaries and joint ventures.

65

---



As
at December 31, 2007, we had total consolidated outstanding debt and other financing of $1,834 million. Of this amount,



At
the operating company level, we seek, in the long term, to finance the costs of developing and expanding mobile operations on a project-by-project basis.
Operations are typically financed initially by contributions from Millicom in the form of equity and, in some cases, debt. In many cases, we seek to replace such equity and debt with third party
financing, which after the initial stages of an operating company's development, is typically non-recourse to Millicom. 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") and the Overseas Private
Investment Corporation ("OPIC") and bank lines of credit.

We
seek to obtain financing at an operating company level in the relevant local currency so as to limit the impact of currency fluctuations, although this is not always possible.

Cash Upstreaming

The continued improvement in the operating and financial performance of our operations has allowed us to continue to upstream excess cash to the Company. For the
year ended December 31, 2007, we upstreamed $656 million from 13 of the 16 countries in which we operate. This upstreamed cash will be used to service our corporate debt obligations and
for further investment. In 2006, we upstreamed $361 million from 15 of 16 countries in which we operated. In 2005, we upstreamed $163 million from 15 of 17 countries in which we
operated.

Cash Flows

Years Ended December 31, 2007 and 2006

For the year ended December 31, 2007, cash provided by operating activities was $851 million, compared to $516 million for the year ended
December 31, 2006. The increase is mainly due to the growth of the profitability, as described in the preceding paragraphs.

Cash
used by investing activities was $847 million for the year ended December 31, 2007, compared to $527 million for the year ended December 31, 2006. In the
year ended December 31, 2007 Millicom used cash to purchase $861 million of property, plant and equipment compared to $463 million for the same period in 2006. In 2006, Millicom
used $35 million, net of cash acquired, to purchase investments in the Democratic Republic of Congo, Ghana, Honduras and Sierra Leone.

Financing
activities provided total cash of $245 million for the year ended December 31, 2007, compared to $136 million for the year ended December 31, 2006.
In the year ended December 31, 2007, we repaid debt of $316 million while raising funds of $546 million through new financing and $34 million through the issuance of
shares.

The
net cash inflow in year ended December 31, 2007 was $518 million compared to an inflow of $60 million for the year ended December 31, 2006. Millicom had
closing cash and cash equivalents balances of $1,175 million as at December 31, 2007 compared to $657 million as at December 31, 2006.

66

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Years Ended December 31, 2006 and 2005

For the year ended December 31, 2006, cash provided by operating activities was $516 million, compared to $319 million for the year ended
December 31, 2005. The increase is mainly due to increased cash flows from operating activities.

Cash
used by investing activities was $527 million for the year ended December 31, 2006, compared to $281 million for the year ended December 31, 2005. In the
year ended December 31, 2006 Millicom used cash to purchase $463 million of property, plant and equipment compared to $196 million for the same period in 2005. Furthermore
Millicom used $62 million to purchase the remaining minority interests in its operations in Paraguay, Senegal, Tanzania and Sierra Leone and $124 million to acquire its operation in
Colombia. This amount was offset by $151 million cash acquired as a result of the acquisition of Colombia. In 2005, Millicom used $72 million, net of cash acquired, to purchase
investments in the Democratic Republic of Congo, Ghana, Honduras and Sierra Leone.

Financing
activities provided total cash of $136 million for the year ended December 31, 2006, compared to $206 million for the year ended December 31, 2005.
In the year ended December 31, 2006, we repaid debt of $191 million while raising funds of $318 million through new financing and $14 million through the issuance of
shares.

The
net cash inflow in year ended December 31, 2006 was $60 million compared to an inflow of $183 million for the year ended December 31, 2005. Millicom had
closing cash and cash equivalents balances of $657 million as at December 31, 2006 compared to $597 million as at December 31, 2006.

Investments, Acquisition, Divestments and Capital Expenditures

Investments

Millicom will continue to invest in its existing mobile operations, where we believe we can generate attractive returns. In addition, we intend to 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. We may also pursue new license opportunities in our adjacent markets where the investment offers group-wide synergy potential. Such
synergies include sharing information and best practices about services, human resources, technologies, market strategies, and the centralized negotiation of financings and supply contracts for
network and subscriber equipment.

Acquisitions

On October 2, 2006, the Group acquired 50% plus one of the voting shares of Colombia Móvil S.A., a mobile operation in Colombia. The
purchase price of Colombia Móvil S.A. was $124 million, including acquisition costs of $2 million, and was financed through borrowings.

In
July, 2006, Millicom completed its purchase for a total consideration of $5 million of the remaining 4% ownership interest in Telefonica Celular del Paraguay S.A., its
subsidiary in Paraguay in which Millicom now has 100% ownership. The acquisition was approved by the regulatory authorities on July 12, 2006. Millicom recognised goodwill of $3 million
as a result of the acquisition of the minority interest, recorded under the caption "Intangible assets, net".

On
March 14, 2006, Millicom purchased for a total consideration of $35 million the remaining 25% ownership interest in Sentel GSM, its operation in Senegal in which
Millicom now has 100% ownership. Millicom recognised goodwill of $31 million as a result of the acquisition of the minority interest, recorded under the caption "Intangible assets, net".

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On
January 23, 2006, Millicom purchased for a total consideration of $20 million the remaining 15.6% ownership interest in Millicom Tanzania Limited, its operation in
Tanzania in which Millicom now has 100% ownership. Millicom recognised goodwill of $16 million as a result of the acquisition of the minority interest, recorded under the caption "Intangible
assets, net".

On
December 16, 2005, Millicom entered into an agreement with Comtech, the minority shareholder in its operation in Sierra Leone to purchase the remaining 30% of shares in Sierra
Leone not already held by Millicom for $3 million. The purchase was made in two installments. The first one, on December 16, 2005 by which the agreements were formally signed and 50% of
the purchase price was paid. The second one, which occurred on February 1, 2006, when the shares were actually transferred to Millicom and the second half of the purchase price was settled.
Between those dates, certain administrative matters had to be solved by the parties, the most significant one being the receipt by the National Bank of Sierra Leone of the confirmation of the sale. As
the latter was received on December 22, 2005, Millicom recorded the acquisition on that date as by then both parties had effectively fulfilled their main obligations under the agreement and the
remaining administrative matters were customary to the finalization of the agreement. The purchase price of $3 million is entirely recognised as goodwill as Millicom's operation in Sierra Leone
had negative equity on the acquisition date.

In
December 2005, Millicom bought an option to purchase 30% of Millicom (Ghana) Limited, Millicom's operation in Ghana, from a former shareholder for an amount of $20 million.
This amount is entirely recognised as goodwill as the purchase of the option represents, in substance, the acquisition of the economic benefits associated with the 30% minority interest and at the
date of the purchase of the option by Millicom, Millicom Ghana Limited had negative shareholders' equity.

On
September 13, 2005, the Group acquired 100% control of Oasis S.P.R.L., a mobile telephony provider in the Democratic Republic of Congo, at an acquisition cost of
$35 million.

On
May 26, 2005 Millicom acquired an additional 16.67% in the capital of its operation in Honduras, Telefonica Celular ("Celtel"), for a total consideration of $20 million,
bringing its ownership from 50.00% to 66.67%. Due to the existence of joint control, Millicom continues to account for Celtel as a joint venture using proportional consolidation. The results of Celtel
have been proportionally consolidated at 50.00% for the period from January 1, 2005 to May 26, 2005 and at 66.67% afterwards.

Divestments

The sale of Pakcom, one of Millicom's operations in Pakistan, was completed in June 2006 for $1. As part of the sale of Pakcom Limited, Millicom transferred 10%
of its ownership in Paktel Limited to the Arfeen group, at no cost to the Arfeen group, reducing Millicom's ownership in Paktel Limited to 88.68%. No gain or loss was recorded on this disposal. This
operation has been classified as a discontinued operation in the 2006 financial statements.

Millicom
decided to exit from its remaining business in Pakistan, Paktel Limited, on November 13, 2006. The agreement relating to the sale of our 88.68% interest in Paktel Limited
to China Mobile Communications Corporation for an enterprise value of $460 million, resulting in net proceeds of approximately $284 million, was signed on January 21, 2007 and the
transaction was completed on February 13, 2007. Paktel Limited has been classified as a discontinued operation in the 2006 financial statements.

Millicom
had entered in October 2003 into a Management Agreement to manage a mobile telephony network for Rafsanjan Industrial Complex Islamic Cooperative Company ("RIC") in Iran. On
September 11, 2006, Millicom and RIC mutually agreed to terminate the Management Agreement, mainly because the business relationship with RIC had not developed as favorably as initially
expected.

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Millicom
also had an option to acquire at book value an equity ownership in a new Iranian company that would operate the mobile network to be contributed by RIC. Between
February 9, 2004 and February 9, 2007 Millicom could acquire up to 47% of the equity of this company. After that date and until February 9, 2009, Millicom had the right to acquire
an additional 30% of the equity in addition to any shares acquired before that date, provided that the total percentage acquired did not exceed 47%. Millicom intended to exercise the option if, among
other conditions, RIC managed to negotiate a favorable interconnection agreement with Telecommunications Company of Iran ("TCI"), the incumbent Iranian telecommunications operator. As RIC failed to
obtain favorable interconnection terms from TCI and in consideration of other factors, Millicom irrevocably terminated its rights under the option agreement in November 2006.

In
May 2006, Millicom divested its wholly-owned subsidiary MIC-USA Inc. for $1. A net gain of $6.1 million was recognized from the sale and
MIC-USA Inc. ceased to be consolidated from the date of sale. As part of the sale of MIC-USA Inc., Millicom sold Great Universal Inc. and Modern
Holdings Inc. Although Great Universal Inc. and Modern Holdings Inc were wholly-owned by Millicom, they were not consolidated because of the existence of outstanding warrants that
enabled warrant holders to control Great Universal Inc. and Modern Holdings Inc. These entities were accounted for as financial assets available for sale. As a result, the revaluation
reserve was reversed and no gain or loss was recorded on their disposal in 2006.

Millicom
also sold other minor subsidiaries and other joint-ventures in 2006, including Millicom Peru S.A., its operation in Peru, which has been treated as a discontinued
operation, for $6.4 million net proceeds resulting in a gain of $2.7 million.

Millicom
has an 80% equity interest in Comvik International (Vietnam) AB ("Comvik") which had entered into a Business Cooperation Contract ("BCC") with a government-owned company to
operate a nationwide cellular GSM network in Vietnam (Mobifone). The BCC expired in May 2005 and Millicom had been negotiating with the Vietnamese government to convert the BCC into an equity
ownership interest. During the third quarter of 2006, Millicom concluded that it was unlikely that an acceptable agreement would be reached in the near future and therefore has classified Comvik as a
discontinued operation from that date. Millicom has no other continuing operation in Vietnam. As of December 31, 2006, Comvik has been presented as an abandoned operation. As such its assets
and liabilities are still included under the relevant individual balance sheet captions. There is likely to be limited financial impact from the closure of the BCC in 2007.

In
2005, Millicom completed the sale of Millicom Chile S.A., which held certain rights in Chile, for net total proceeds of $0.9 million realising a net gain of
$0.9 million.

In
2005, Millicom disposed of or liquidated a number of other minor subsidiaries for nil net proceeds realising a net gain of $0.4 million.

Capital Expenditures

Our capital expenditure of property, plant and equipment, licenses and other intangibles by geographical region for the years ended December 31, 2007, 2006
and 2005 has been as follows:

2007

2006

2005Central America

291,678

202,649

82,082South America

325,077

73,649

30,498Africa

342,992

263,830

113,277Asia

93,948

110,084

39,566Unallocated items and discontinued operations

1,907

107,969

310,517Total

1,055,602

758,181

575,940


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We
expect to direct our capital expenditures towards our new operation in Colombia, the roll out of tigo® across African and Asia regions, particularly in the Democratic
Republic of Congo, as well as to continue network expansion (coverage and capacity) in each cluster.

Commitments to Purchase Network Equipment within One Year

As of December 31, 2007, we had commitments to purchase network equipment, land and buildings and other fixed assets with a value of $400.2 million
from a number of suppliers, all of which was within one year, except $28.0 million within two years.

As
of December 31, 2006, we had commitments to purchase network equipment, land and buildings and other fixed assets with a value of $308.6 million from a number of
suppliers, all of which was within one year.

Financing

We finance our operations on a project-by-project basis at both the operational and parent entity level. Once a license is awarded, we
make an initial investment in the form of equity and, in some cases, debt. The local operation typically is granted between six and 12 months to build out its initial mobile telephone network.
During this initial phase, we frequently supplement our investment with financing provided by equipment suppliers for the purchase of network equipment. Generally, such financing covers a period of
18 months to three years and is often guaranteed by Millicom. We seek to refinance the vendor financing with longer-term borrowing from commercial banks and international agencies.
Where practicable, we endeavor to obtain financing in local currencies and without recourse to Millicom. However, Millicom may guarantee such project financing for an initial period until certain
performance targets are achieved. We intend to continue to pursue a project-by-project approach to fund our systems. If additional investment is required, we seek, whenever
possible, to fund such investment through shareholder loans from the Company. As our local operations become more established and local financial markets become more developed, we are increasingly
able to finance at the operational level in the local currency on a non-recourse basis. As of December 31, 2007, approximately 50% of our debt at the operational level was
denominated in local currency.

Millicom's
total consolidated indebtedness as of December 31, 2007 was $1,834 million and our total consolidated net indebtedness (representing total consolidated
indebtedness after deduction of cash, cash equivalents, short-term time deposits) was $660 million. Our annual interest expense for the years ended December 31, 2007 and 2006
was $194 million and $124 million, respectively.

10% Senior Notes

On November 24, 2003, Millicom issued $550.0 million aggregate principal amount of 10% Senior Notes (the "10% Senior Notes") due on
December 1, 2013. The 10% Senior Notes bear interest at 10% per annum, payable semi-annually in arrears on June 1 and December 1. The effective interest rate is 10.7%.

The
10% Senior Notes are general unsecured obligations of Millicom and rank equal in right of payment with all future unsecured and unsubordinated obligations of Millicom. The 10% Senior
Notes are not guaranteed by any of Millicom's subsidiaries, joint ventures or affiliates, and as a result are structurally subordinated in right of payment to all indebtedness of such subsidiaries,
joint ventures and affiliates.

If
Millicom experiences 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.

During
2007, Millicom repurchased $90 million of the 10% Senior Notes incurring in a charge of $5.0 million which is recorded under the caption "Other non operating income
(expenses), net".

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In
October 2007, Millicom decided that it would redeem the balance of the Notes in December 2008 and pay the contractual redemption premium of 5%. As a result, Millicom reclassified the
10% Senior Notes from non current to current and recorded an additional interest expense of $31 million for the year ended December 31, 2007, which represented the increase in financial
liabilities due to the recognition of the 5% pre-payment expense and an increase in the amortised cost of the Notes due to the earlier settlement date.

4% convertible Notes

In January 2005, Millicom raised $200.0 million aggregate principal amount of 4% Convertible Notes due 2010 (the "4% Convertible Notes"). The net proceeds
of the offering were received on January 7, 2005 in the amount of $195.9 million.

The
4% Convertible Notes are general unsecured obligations of Millicom and rank equal in right of payment with all future unsecured and unsubordinated obligations of Millicom. The rate
of interest payable on the 4% Convertible Notes is 4% per annum. Interest is payable semi-annually in arrears on January 7 and July 7 of each year, beginning on
July 7, 2005. The effective interest rate is 9.6%.

The
4% Convertible Notes were constituted by a trust deed dated January 7, 2005 between Millicom and The Bank of New York, as Trustee for the holders of notes.

Millicom
has apportioned part of the value of the 4% Convertible Notes to equity and part to debt. The value allocated to equity as of December 31, 2007 was $38.9 million
(2006: $39.1 million) and the value allocated to debt was $178.9 million (2006: $171.2 million).

As
of December 31, 2007, $1 million of the 4% Convertible Notes were converted into 28,686 ordinary shares.

On
January 22, 2008, Millicom converted a further $196 million of the outstanding bonds into 5,622,471 shares. On the same day Millicom repaid in cash the remaining
$3 million of bonds that were not converted, including accrued interest. The conversion resulted in an increase of equity amounting to approximately $176 million in January 2008 (see
note 31). As a result Millicom reclassified the 4% Convertible Notes from non current to current.

Other Debt and Financing

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

2007

2006US$ '000

US$ '000Bolivia(i)

41,874

28,241Chad (ii)

23,830

Colombia(iii)

436,670

372,396Democratic Republic of Congo(iv)

60,877

25,781El Salvador(v)

199,715

154,223Ghana(vi)

108,244

38,391Honduras(vii)

56,961

20,132Senegal(viii)

62,557

28,367Sri Lanka(ix)

53,416

34,357Tanzania(x)

51,471

18,151Other

79,910

63,775Total other debt and financing

1,175,525

783,814Of which:due after more than 1 year

945,206

649,153due within 1 year

230,319

134,661


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Significant individual financing facilities are described below:

i)     Bolivia

In December 2007, Telefonica Celular de Bolivia SA ("Telecel Bolivia"), Millicom's operation in Bolivia, signed a financing agreement for
$40.0 million with the Nederlandse Financieringsmaatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as the Netherlands Development Finance Company. The A tranche of
$20.0 million was provided directly by the FMO. This tranche is repayable over 7 years and bears an interest at $LIBOR rate plus 2.25%. The B tranche of $20 million is provided
equally by Nordea and Standard bank. This tranche is repayable over 5 years and bears interest at $LIBOR plus 2.00%. Both tranches are guaranteed by the Company and were fully drawn as at
December 31, 2007.

As
at December 31, 2006, Telecel Bolivia also had $7.2 million outstanding on a financing agreement with the International Finance Corporation granted in 2001 and
$15.0 million outstanding on a bridge financing from Standard Bank. Both of these amounts were repaid during 2007.

In
addition to the above, Telecel Bolivia also had $1.9 million of other debt and financing outstanding as at December 31, 2007 (2006: $6.0 million).

ii)    Chad

In May 2007, Millicom Tchad S.A., Millicom's operation in Chad, entered into a $32.0 million, 5 year loan with the China Development Bank to
finance equipment purchases from Huawei, an equipment supplier. This loan bears interest at $LIBOR plus 2% and is 100% guaranteed by the Company. As of December 31, 2007, $12.1 million
was outstanding under this facility.

In
August 2007, Millicom Tchad S.A. entered into a Euro11.0 million, 5 year loan with PROPARCO (Promotion et participation pour la coopération
économique). This loan bears interest at EURIBOR plus 2% and is 100% guaranteed by the Company. As at December 31, 2007, the Euro equivalent of $11.7 million was
outstanding under this facility.

iii)   Colombia

In October 2006, the Company acquired a majority ownership 50% plus 1 share in Colombia Movil S.A. E.S.P. At the time of the acquisition the Company had a
COP 168,539 million (approximately $83 million) Hermes guaranteed export credit facility with Citigroup maturing in January 2012 and a COP 309,800 million ($154 million)
loan facility arranged by BBVA maturing in November 2009. These facilities bear interest at IPC plus 6.30% and DTF plus 4.15%, respectively and are 100% guaranteed by the minority shareholders. As at
December 31, 2007 $53.7 million (2006: $59.1 million) and $94.5 million (2006: 127.7 million) respectively were outstanding under these facilities.

Colombia
Movil S.A. E.S.P. also had local currency loans from the minority shareholders outstanding as at December 31, 2007 of $229.5 million (2006:
$185.6 million). These loans bear interest at DTF plus 4.15% and mature between 2011 and 2013.

In
addition, as at December 31, 2007 Colombia Movil S.A. E.S.P. had $57.0 million (2006: $nil) outstanding in respect of local currency 60 day treasury
credits from various banks and $2.0 million (2006: $nil) of other debt and financing, in US$ and local currency.

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iv)    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 $106.3 million, 7 year loan
from the China Development Bank to finance equipment purchases from Huawei, an equipment supplier. 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, 2007, $55.9 million was outstanding under this facility (2006: $21.5 million) and in
addition Oasis had other debt and financing of $5.0 million (2006: $4.3 million).

v)     El Salvador

In September 2006, Telemovil 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%. As of December 31, 2007,
$199.7 million of this facility was outstanding (2006: $154.2 million).

vi)    Ghana

In December 2007 Millicom (Ghana) Limited, Millicom's operation in Ghana, entered into a $60.5 million local 5 year club-deal Facility
(Agent Stanbic). 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. The local Tranche was fully drawn whereas the outstanding amount under the offshore DFI Tranche amounted to $30.0 million at the end of December 2007.

In
July 2005, Millicom (Ghana) Limited entered into a $20 million loan agreement with Citibank N.A., 75% guaranteed by the Overseas Private Investment Corporation and 100%
guaranteed by the Company. This loan bears interest at $LIBOR plus 2.5% and is repayable in 8 semi-annual installments commencing from January 2007. As at December 31, 2007, the
outstanding was $15.0 million (2006: $20.0 million).

In
2006, Millicom (Ghana) Limited entered into a $18.4 million loan from Ericsson Credit B.V., bearing interest at $LIBOR plus 2.5%. This loan was settled in December 2007.

In
addition as at December 31, 2007, Ghana had other debt and financing of $2.7 million (2006: $nil).

vii)  Honduras

Telefonica Celular S.A., Millicom's operation in Honduras, has facilities with 7 local banks maturing between 2008 and 2015. These facilities are in
dollars and in Lempiras and are unsecured. Interest rates are either fixed or variable, ranging as of December 31, 2007 between 7.28% and 10.25% (2006: between 6.38% and 11%). As at
December 31, 2007, the outstanding debt under these facilities was $57.0 million (2006: $20.1 million).

viii) Senegal

In December 2005, Sentel GSM, Millicom's operation in Senegal entered into a XAF12,500 million loan agreement with Crédit Lyonnais
Sénégal ("CLS"). This loan bears a fixed interest rate of 8% and is fully repayable at maturity, in December 2010. The outstanding amount in US$ as at December 31,
2007 was $27.9 million (2006: $25.2 million).

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In
addition Sentel GSM entered into a 5 year additional Tranche of XAF7,500 million with CLS in July 2007. This tranche bears an 8.5% fixed interest rate and was fully
drawn at the end of 2007. The outstanding amount under this additional Tranche in US$as at December 31, 2007 was $17.3 million.

In
September 2006, Sentel GSM additionally entered into a XAF2,500 million bridge loan with the Compagnie Bancaire de l'Afrique Orientale (CBAO). This loan bears a 7% interest
rate and matures in March 2008. As of December 31, 2007 $0.7 million (XAF336 million) (2006: $3.2 million (XAF1,611 million)) of this facility was outstanding.

In
addition, in 2007, Sentel GSM entered into two new loans with CBAO amounting in total to XAF7,500 million bearing fixed interest respectively of 6.5% and 8%. These loans were
fully drawn as at December 31, 2007 and the amount outstanding was $16.7 million.

ix)   Sri Lanka

In 2004, Tigo (Pvt) Limited, Millicom's operation in Sri Lanka arranged a five year syndicated loan of LKR 2,000 million (US$18.2 million) through
ABN-Amro, 47.5% is ABN-Amro guaranteed which in turn is counter guaranteed by the Company. The loan carries interest equal to the Sri Lankan Weighted Average Treasury Bill rate
plus 2.75% which for the year ended December 31, 2007 was approximately 20% (2006: 14%). The unsecured tranche carries interest equal to the Sri Lankan Weighted Average Treasury Bill rate plus
3%. Tigo (Pvt) Limited must repay the loan between 2006 and 2009. The outstanding US$ amount as of December 31, 2007 was $9.8 million (2006: $14.6 million).

In
2006, Tigo (Pvt) Limited entered into a LKR4,200 million (US$38.2 million) facility, 50% is ABN-Amro guaranteed which in turn is counter guaranteed by the
Company. This loan matures in December 2011, and bears interest equal to the average weighted prime lending rate plus 1.75% (Tranche A) and plus 1% (Tranche B) approximately 19% and 18%
(2006: 15% and 16%). As of December 31, 2007, this facility was fully drawn and the outstanding US$ amount was $38.2 million (2006: $12.4 million).

In
addition to the above, Tigo (Pvt) Limited also had $5.4 million (2006: $7.4 million of which $2.0 million was in local currency) of other debt and local financing
outstanding as at December 31, 2007.

x)     Tanzania

In March 2007 Millicom Tanzania Limited, Millicom's operation in Tanzania, entered into a new 5 year Citi-Opic facilities, bearing interest
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, 2007 amounted to $22.9 million.

At
the same time Millicom Tanzania Limited entered into a 5 year $10 million Term Loan with Barclays bearing interest of LIBOR plus 3% and a 5 year
$16.5 million vendor financing with Ericsson credit AB, priced at LIBOR plus 2.5%. The amount outstanding as at December 31, 2007 was $8.5 million under the Barclays loan and
$14.0 million under the Ericsson loan.

In
addition to the above, Millicom Tanzania Limited also had $6.1 million (2006: $18.1 million) of other debt and financing outstanding as at December 31, 2007.

Guarantees

In the normal course of business, the Company has issued guarantees to secure some of the obligations of some of its operations under bank financing agreements.
As of December 31, 2007, the Company has issued $206.5 million of guarantees (2006: $141.7 million).

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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 is $739.2 million (2006: $516.0 million). The assets pledged by the Group for these debts and financings amount to $448.6 million (2006: $758.6 million).

Effect of Exchange Rate Fluctuations

Exchange
rates for currencies of the countries in which our companies operate may fluctuate in relation to the U.S. dollar, and such fluctuations may have a material adverse effect on
our earnings, assets or cash flows when translating local currency into U.S. dollars. For each operation that reports in a currency other than the U.S. dollar, a decrease in the value of that currency
against the U.S. dollar would reduce our profits while also reducing both our assets and liabilities. To the extent that our operations upstream cash in the future, the amount of U.S. dollars we will
receive will be affected by fluctuations of exchange rates for such currencies against the U.S. dollar. The exchange rates obtained when converting local currencies into U.S. dollars are set by
foreign exchange markets over which we have no control. We usually do not enter into hedging transactions to limit our foreign currency exposure. Millicom had a net exchange gain of $15 million
for the year ended December 31, 2007, compared to a gain of $6 million for the year ended December 31, 2006, excluding an exchange loss of $36 million on the 5% Mandatory
Exchangeable Notes.

Trend Information

We believe there is a significant opportunity for rapid growth in our markets due to low mobile penetration in economies with high growth potential and
substantial pent-up demand for basic voice telephony services. We believe we can grow our subscriber base and revenue by continuing to focus on prepaid services while controlling costs and
maintaining our position with postpaid customers. We are developing a number of non-traditional distribution channels in our operations to expand our market share and reduce our operating
costs. There is, however, a risk that, as new competitors enter our prepaid markets, as will be the case in Sri Lanka in the late 2007, and price competition intensifies, our prepaid customers may be
more likely to move from one mobile operator to another than our postpaid customers. This also has the effect of driving prices down, thus eroding the profitability of the mobile operators. In that
event, we believe our strong service coverage and increasing use of non-traditional distribution channels, competitive tariffs and brand awareness will enable us to compete effectively in
our prepaid markets. However, this may not always be the case and, if we determine that the business is not sustainable, we may decide to exit the relevant market.

Research and Development, Patents and Licenses, etc.

As we established an early presence in most of the markets in which we operate, 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. When 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 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 28 to the consolidated financial statements.

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Critical Accounting Policies

The consolidated financial statements as of December 31, 2007 are prepared in accordance with consolidation and accounting policies consistent with those
of the 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 through items at the shareholder and board level. The method of consolidation used 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 different currencies. The Group's consolidated financial statements are presented in U.S.
dollar (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 the identifiable assets less the liabilities and contingent
liabilities of the acquired subsidiary, joint venture or associate at the date of transaction. If the fair value of the identifiable assets, liabilities or contingent liabilities or the cost of the
acquisition can be determined only provisionally, then Millicom initially accounts for the Goodwill using these provisional values. Within twelve months of the acquisition date, Millicom then
recognises any adjustments to these 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 the provisional fair values are made as if the adjusted fair values had been recognised 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.

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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 so allocated:



Impairment
is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where
the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. Where goodwill forms
part of a cash-generating unit (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 of the operation. Goodwill disposed of in this circumstance is measured based on the relative
values of the operation disposed and the portion of the cash-generating unit retained.

Before
January 1, 2005, goodwill was amortised using the straight-line method over its estimated useful life but not longer than 20 years and assessed for an
indication of impairment at each balance sheet date. Millicom ceased amortization of goodwill from January 1, 2005 and eliminated the carrying amount of accumulated amortization existing on
that date with a corresponding decrease in the cost of goodwill.

Trademarks and Subscriber bases

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

Impairment of Non-current Assets

The Group assesses at each reporting date 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 recoverable amount is the higher of the fair value less cost to sell and value in use and is
determined for an individual asset, 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. In assessing value in use, the estimated future cash flows are 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. Impairment losses of continuing operations are recognised in
the consolidated statements of profit and loss in those expense categories consistent with the function of the impaired asset.

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An
assessment is made at each reporting date as to whether there is any indication that previously recognised 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 recognised 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 recognised. If that is the case, 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 recognised for the asset in prior years. Such reversal is recognised 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.

Trade receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for
impairment. A provision for impairment of trade receivable is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered
indicators that the trade receivable is impaired. 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 amount of the provision is recognised in the consolidated statements of profit and loss within "Cost of sales". The nominal value less impairment of trade receivables
is assumed to approximate their fair values.

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 borrowing costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statements of profit and loss over the period of the borrowing using the effective interest method.

The
fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a
liability on an amortised cost basis until extinguishment, conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in
equity, net of income tax effects.

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 balance sheet
date.

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Provisions

Provisions are recognised 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 recognised 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, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

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 recognised 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 recognised:



These revenues consist of the sale of handsets and accessories. Revenue is recognised when the significant risks and rewards of ownership of handsets and
accessories have been passed to the buyer.



These recurring revenues consist of connection fees, monthly subscription fees, airtime usage fees, interconnection fees, roaming fees and fees from other
telecommunications services such as data services and short message services. Recurring revenues are recognised 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 amortised over the estimated life of the customer relationship. Related costs are also deferred, to the extent of the revenues
deferred, and amortised over the estimated life of the customer relationship. The estimated life of the customer relationship is calculated based on the percentage of disconnections for the same type
of customer which has occurred historically.



Prepayments allow the forward purchase of a specified amount of airtime by customers. Revenues are recognised as credit is used. Unutilised airtime is carried in
the balance sheet and is included under deferred revenue within "other current liabilities".



Revenues from value added services such as text messaging, video messaging, ringtones, games etc, are recognised net of payments to the providers of these
services when they are responsible for the contents and for determining the price paid by the subscriber.

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Revenue arrangements with multiple deliverables 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.

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 is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is 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 are included in assumptions about the number
of options that are expected to vest. At each balance sheet date, the Group revises its estimate of the number of options that are expected to vest. It recognises the impact of the revision of
original estimates, if any, in the consolidated statements of profit and loss, 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, restricted share awards are granted to the Directors, management and key employees.

The
cost of these equity-transactions is recognised, 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 recognised for equity-settled transactions at each reporting date until
the vesting date reflects 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 recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which 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
recognised as if the terms had not been modified. In addition, an expense is recognised 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 on temporary differences at the balance sheet date between the tax base of assets and liabilities and
their carrying amount for financial reporting purposes. Deferred tax liabilities are recognised 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 the accounting profit nor taxable profit or
loss.

Deferred
income tax assets are recognised for all deductible temporary differences, 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 utilised except where the deferred tax
assets relating to the deductible temporary difference arise from the initial recognition of an assets or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting nor taxable profit or loss.

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The
carrying amount of deferred income tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that
it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred
income tax assets and liabilities are measured at the tax rate expected to apply to the year when the assets is realised or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated
statements of profit and loss. Deferred tax assets and deferred tax liabilities are offset, if legally enforceable rights exist to set off current tax assets against current tax liabilities 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 statements of profit and loss. Comparative
figures in the consolidated statements of profit and loss 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.

Significant Recent Accounting Developments

IFRS Developments

The following IFRS and IFRIC interpretations were issued with an effective date for financial periods beginning on or after March 1, 2007. The Group has
chosen not to early adopt these standards and interpretations.



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Tabular Disclosure of Contractual Obligations

Contractual Obligations

We have various contractual obligations to make future payments, including debt agreements, payables for license fees and lease obligations. The following table
summarizes our obligations under these contracts due by period as of December 31, 2007.

|                                        |  | Within 1 year |  | Within 2-3 years |  | Within 4-5 years |  | After 5 years |  | Total    
|--------------------------------------- |  | ------------- |  | ---------------- |  | ---------------- |  | ------------- |  | ---------
|
|Debt (after unamortized financing fees) |  | 889,085       |  | 381,467          |  | 425,469          |  | 138,270       |  | 1,834,291
|Unpaid portion of license fees          |  | 1,869         |  | 915              |  |                 |  |              |  | 2,784    
|Operating leases                        |  | 25,732        |  | 57,257           |  | 43,934           |  | 110,918       |  | 237,841  
|Financial leases                        |  | 976           |  | 2,035            |  | 1,119            |  | 2,091         |  | 6,221    
|Capital expenditure                     |  | 372,116       |  | 28,038           |  |                 |  |              |  | 400,154  
|                                        |  |               |  |                  |  |                  |  |               |  |          
|Total                                   |  | 1,289,778     |  | 469,712          |  | 470,522          |  | 251,279       |  | 2,481,291
|                                        |  |               |  |                  |  |                  |  |               |  |          

The
following table summarizes our obligations under these contracts due by period as of December 31, 2006.

|                                        |  | Within 1 year |  | Within
2-3 years |  | Within
4-5 years |  | After
5 years |  | Total    
|--------------------------------------- |  | ------------- |  | ---------------- |  | ---------------- |  | ------------- |  | ---------
|
|Debt (after unamortized financing fees) |  | 134,661       |  | 246,808          |  | 416,303          |  | 695,884       |  | 1,493,656
|Unpaid portion of license fees          |  | 7,200         |  | 2,139            |  |                 |  |              |  | 9,339    
|Operating leases                        |  | 33,669        |  | 44,719           |  | 25,628           |  | 54,014        |  | 158,030  
|Financial leases                        |  | 2,482         |  | 1,894            |  | 914              |  | 2,480         |  | 7,770    
|Capital expenditure                     |  | 308,613       |  |                 |  |                 |  |              |  | 308,613  
|                                        |  |               |  |                  |  |                  |  |               |  |          
|Total                                   |  | 486,625       |  | 295,560          |  | 442,845          |  | 752,378       |  | 1,977,408
|                                        |  |               |  |                  |  |                  |  |               |  |          

ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Board of Directors

Directors

Millicom's directors are as follows:

|Name                |  | Position |  | Independent |  | Year Elected |  | Date of
Expiration
of Term
|------------------- |  | -------- |  | ----------- |  | ------------ |  | --------------------------
|Kent Atkinson       |  | Member   |  | Yes         |  | 2007         |  | May 2008                  
|Mia Brunell Livfors |  | Member   |  | No          |  | 2007         |  | May 2008                  
|Donna Cordner       |  | Member   |  | No          |  | 2004         |  | May 2008                  
|Daniel Johannesson  |  | Chairman |  | Yes         |  | 2003         |  | May 2008                  
|Michel Massart      |  | Member   |  | Yes         |  | 2003         |  | May 2008                  
|Cristina Stenbeck   |  | Member   |  | No          |  | 2003         |  | May 2008                  

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Daniel Johannesson (born 1943)Non-executive Chairman, Chairman of the Compensation and Nomination
Committees.Daniel Johannesson was elected to the Board of Millicom in May 2003. He became Chairman on March 8, 2004. He has held a number of executive
positions at major Swedish companies including senior executive at the construction company Skanska, where he was responsible for their telecommunications and facilities management interests, and
Chief Executive Officer of Investment AB Kinnevik and Director General of Swedish national railway operator, SJ. He is also Vice Chairman of Unibet Group PLC.

Kent Atkinson (born 1945)Non-executive Director and Member of the Audit and Compensation
Committees.Kent Atkinson was elected to the Board of Millicom in May 2007. Previously, Kent joined the Bank of London and South America (later acquired by Lloyds
Bank) in 1964 and held a number of senior managerial positions in the U.K., Latin America and the Middle East. He returned to the U.K. in 1989 as Executive Director for Lloyds TSB South East Region
before joining the main board as Group Finance Director in 1994, a position he held for eight years until his retirement as an executive in 2002. He remained on the Lloyds TSB board of directors for a
further year as a Non-Executive Director. Currently, Kent is the Senior Independent Director and Chairman of the Audit Committee of Coca-Cola HBC S.A., and a
Non-Executive Director of Gemalto N.V. He is also a non-Executive Director and Chairman of the Audit Committee of Standard Life plc, Deputy Chairman of Standard Life
Assurance Limited and a member of Standard Life's Investment Committee.

Mia Brunell Livfors (born 1965)Non-executive Director and Member of the Compensation Committee.Mia
Brunell was elected to the Board of Millicom in May 2007. From August 2006, Mia 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. Mia joined Kinnevik owned company Modern Times Group MTG AB in 1992, and was appointed CFO in 2001. As CFO, Mia
played a central role in MTG's development. Currently, Mia is a member of the Board of Directors of Korsnäs AB, Mellersta Sveriges Lantbruks AB, Metro International S.A.,
Tele2 AB, Transcom WorldWide S.A., Modern Times Group (MTG), and CTC Media, Inc.a Russian associated company of MTG.

Donna Cordner (born 1956)Non-executive Director.Donna 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 group 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 CEO 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 named as Market Area Director and CEO for Russia in March 2008.

Michel Massart (born 1951)Non-executive Director, Chairman of the Audit Committee and Member of the Nomination
Committee.Michel Massart was elected to the Board of Millicom in May 2003. Until June 2002, he was a partner of PricewaterhouseCoopers in Belgium, where he set up
the corporate finance department in 1997. He is a former member of the Board of the Institute of Statutory Auditors. He is a professor at Solvay Business School in Brussels, Belgium.

Cristina Stenbeck (born 1977)Non-executive Director, Member of the Compensation Committee.Cristina
Stenbeck became a director of Millicom in May 2003. She is Chairman of the Board of Directors of Investment AB Kinnevik and Vice Chairman of Metro International S.A. and a director of Modern
Times Group AB, Tele2 AB and Transcom WorldWide S.A.

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Board Practices

The Board has developed and continuously evaluates its work procedures in line with the corporate governance rules of NASDAQ in the United States of America
regarding reporting, disclosure and other requirements applicable to NASDAQ listed companies. The Board received confirmation in early 2006 from the Stockholm Stock Exchange that it is exempt from the
Swedish Code of Corporate Governance so long as it adheres to NASDAQ corporate governance rules. The Board's work procedures also take into account the requirements of the U.S. Sarbanes-Oxley Act of
2002 to the extent it applies to foreign private issuers.

The
Board has adopted work procedures to establish a division of work between the Board and the President and CEO. The Chairman conducts discussions with each member of the Board
regarding the work procedures of the Board and performs a yearly evaluation of the Board's work. The members of the Board evaluate the performance of each other, each year. The Board also evaluates
annually the performance of the CEO.

The
Board held 5 meetings in person and 6 meetings by way of telephone conference during 2007.

Due
to the resignation of Mr. Tope Lawani on September 3, 2007, a Non-executive Director and Audit Committee member, Millicom received a letter from the NASDAQ
Listing Qualifications Department indicating it was not in compliance with the independent director and audit committee requirements as set forth in Marketplace Rule 4350. In its letter, NASDAQ
provided Millicom a cure period until the earlier of the next annual shareholders' meeting or September 3, 2008, to regain compliance. Millicom fully expects to regain compliance prior to the
expiration of the cure period.

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



The
main task of the Board committees is to work on behalf of the Board within their respective areas of responsibility. The Board also creates "ad hoc" committees from time to time to
work on specific projects when the need arises. Any "ad hoc" committee reports back to the full Board.

Audit Committee.Millicom's directors have established an Audit Committee that convenes at least four times a year,
comprising three directors, Mr. Michel Massart (Chairman and financial expert), Mr. Kent Atkinson and Mr. Tope Lawani (Until September 3, 2007). 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) and accounting standards, independence of
external auditors, audit fees, the internal audit function, the fraud risk assessment 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 8 times during 2007 and Millicom's external auditors participated in each such meeting.

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Compensation Committee.Millicom's Compensation Committee was chaired by Donna Cordner until February 13, 2007.
Ms. Cordner resigned from the Committee after accepting a senior executive role with Tele2 AB, after which she became a non-independent director. The Committee accepted her
resignation on February 13. She was replaced in her role as chair of the Committee by Mr. Johannesson. Tope Lawani agreed to be an interim member until another full time member was
appointed after the Annual Meeting of Shareholders on May 29,2007. Ms. Brunell and Mr. Atkinson became members of the Committee after the Annual Meeting of Shareholders on
May 29, 2007. Ms. Brunell is a non-independent director and Mr. Atkinson is an independent Director. In this respect, Millicom has opted to follow home country
(Luxembourg) corporate practice rather than NASDAQ Marketplace Rule 4350(c)(3). Allen & Overy, Millicom's Luxembourg legal counsel, have sent a letter to this effect to NASDAQ on
February 12, 2007.

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 a new
Long-Term Incentive Plan. The grants of restricted shares to management under this plan are determined by the Committee and approved by the Board.

Nominations Committee.Millicom's Nominations Committee is chaired by Mr. Johannesson. Until the Annual Meeting of
Shareholders on May 29,2007, the two other members were Mr. Cravatte and Mr. Massart, who replaced Ms. Cordner on February 13, 2007. After the Annual Meeting of
Shareholders on May 29, 2007 Mr. Cravatte is no longer a member of the Nominations Committee due to his resignation as a Director The Nominations Committee's main task is to recommend
directors for election to the Board by the shareholders at the AGM. At the AGM, shareholders may vote for or against the directors proposed for election or may elect different directors. The
Nominations Committee also reviews and recommends the fees and the grants of shares to directors, which are presented to the Board and voted on by the shareholders at the AGM.

Corporate Policy Manual.The Board has adopted the Millicom 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 their 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") is comprised of an annual fee and share-based compensation. Up until May
2006, the Directors were issued share options. Subsequent to May 2006, the Directors are issued restricted shares. The annual fee and the share based compensation grants are proposed by the Board 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, 2007, 2006 and 2005 was as follows:

|                             |                                                    |  |        |     |     | Other members of the board |         |      
|---------------------------- | -------------------------------------------------- |  | ------ | --- | --- | -------------------------- | ------- | -----
|
|
|
|
|2007                         |                                                    |  |        |     |     |                            |         |      
|Fees                         |                                                    |  |        | 82  |     |                            |         | 305  
|Share based compensation:(i) |                                                    |  |        |     |     |                            |         |      
|                             | Restricted share grants(ii)                        |  | 960    |     | 82  |                            | 4,074   |      
|                             |                                                    |  |        |     |     |                            |         |      
|Total                        |                                                    |  |        | 164 |     |                            |         | 655  
|                             |                                                    |  |        |     |     |                            |         |      
|2006                         |                                                    |  |        |     |     |                            |         |      
|Fees                         |                                                    |  |        | 75  |     |                            |         | 415  
|Share based compensation:(i) |                                                    |  |        |     |     |                            |         |      
|                             | Restricted share grants(ii)                        |  | 1,122  |     | 50  |                            | 8,976   |      
|                             | Charge for share options                           |  |        |     | 164 |                            |         |      
|                             |                                                    |  |        |     |     |                            |         |      
|Total                        |                                                    |  |        | 289 |     |                            |         | 1,919
|                             |                                                    |  |        |     |     |                            |         |      
|2005                         |                                                    |  |        |     |     |                            |         |      
|Fees                         |                                                    |  |        | 75  |     |                            |         | 455  
|Share based compensation:(i) |                                                    |  |        |     |     |                            |         |      
|                             | Share options granted/charge for share option(iii) |  | 25,000 |     | 137 |                            | 175,000 |      
|                             |                                                    |  |        |     |     |                            |         |      
|Total                        |                                                    |  |        | 212 |     |                            |         | 1,309
|                             |                                                    |  |        |     |     |                            |         |      

---

The number of shares and share options beneficially owned by the Board as at December 31, 2007 and 2006 was as follows:

|              |  | Chairman |  | Other members of the Board |  | Total    
|------------- |  | -------- |  | -------------------------- |  | ---------
|2007          |  |          |  |                            |  |          
|Shares(i)     |  | 2,082    |  | 2,100,753                  |  | 2,102,835
|Share options |  | 45,000   |  | 55,000                     |  | 100,000  
|2006          |  |          |  |                            |  |          
|Shares(i)     |  | 1,122    |  | 2,154,362                  |  | 2,155,484
|Share options |  | 45,000   |  | 206,668                    |  | 251,668  

---

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Senior Management and Employees

Senior Management

|Name                  |  | Position                             
|--------------------- |  | -------------------------------------
|Marc Beuls            |  | President and Chief Executive Officer
|Mikael Grahne         |  | Chief Operating Officer              
|David Sach            |  | Chief Financial Officer              
|Mario Zanotti         |  | Head of Central America              
|Ricardo Maiztegui     |  | Head of South America                
|Steven Jurgens        |  | Co-Head of Africa                    
|Regis Romero          |  | Co-Head of Africa                    
|Judy Tan              |  | Head of Asia                         
|Won-Suck Song         |  | Head of Operations                   
|Osmar Coronel         |  | Chief Technical Officer              
|John Tumelty          |  | Head of Human Resources              
|Henri Vander Stichele |  | Head of Supply Chain Management      

Marc Beuls, born 1956, President and Chief Executive Officer. Marc Beuls was elected President and CEO of Millicom in January 1998. He was
formerly Senior Vice President Finance. Mr. Beuls joined Millicom in March 1992. From 1982 to 1992, he worked for Générale de Banque of Belgium. Marc Beuls has a
degree in Economics from Limburg Business School in Belgium, with specialization in Finance and Accounting.

Mikael Grahne, born 1953, Chief Operating Officer. Mikael Grahne 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.

David Sach, born 1961, Chief Financial Officer. David Sach joined Millicom in September 2005 as Chief Financial Officer, having previously
been the Senior Vice President Finance for Equant. Previously, Mr. Sach held senior finance positions at EMI and Thomson Corporation. Mr. Sach started his career at
PricewaterhouseCoopers. Mr. Sach is a CPA and has a degree in Accounting from the State University of New York.

Mario Zanotti, born 1962, Head of Central America. Mario Zanotti was appointed Head of Central America in 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 CEO 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.

Ricardo Maiztegui, born 1963, Head of South America. Ricardo Maiztegui was appointed Head of South America in 2002 after having joined
Millicom in 1998 as Managing Director of Telecel in Paraguay. Prior to joining Millicom he was Marketing Director in CTI (Verizon), and previously at Telintar (Telefonica). Mr Maiztegui has an
Executive MBA from Universidad Austral in Argentina and a Master in Physics from Universidad de Buenos Aires.

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Steven Juergens, born 1951, Co-Head of Africa. Steven R.D. Jurgens joined Millicom in May 2007 as Co-Head of
Africa responsible for French speaking markets. He has a Lic. Oec. Degree in business administration from HEC-University of Lausanne in 1979. He started his career in brand and trade
marketing followed by successive senior general management assignments for British American Tobacco in Asia, Africa and Europe until 2005. Previously, he was a Director with privately held HvLandwyck
Group in Luxemburg. He is a Supervisory Board member of AJF charitable trust, Netherlands.

Regis Romero, born 1971, Co-Head of Africa. Regis Romero was appointed Co-Head of Africa in 2006. He has been with
Millicom since 1998, previously as Commercial Manager in Bolivia, then as Chief Operating Officer in Paraguay. 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.

Judy Tan, born 1971, Head of Asia. Judy Tan joined Millicom in 1998. She was appointed to her current position in 2007. Previously, she
also had a Group-wide operations role supporting the Chief Operating Officer. Judy Tan qualified as a Certified Public Accountant with PricewaterhouseCoopers, Singapore, and has an MBA
from Imperial College, London.

Won-Suck Song, born 1967, Head of Operations. Won-Suck Song was appointed to his current position in 2007; he has
a Group-wide role coordinating sales and marketing activities. He started his career with the Kinnevik group in 1997, where he held the position of Chief Operating Officer of Metro
International before being transferred in June 2001 to Tele2 AB as Executive Vice President. He studied Mechanical engineering at the Royal Institute of Technology in Stockholm, Sweden.

Osmar Coronel, born 1964, Chief Technical Officer. Osmar Coronel was appointed Chief Technical Officer of Millicom in 2006. He was
previously the Chief Technical Manager of Millicom's operations in Paraguay, before moving to Comcel, Millicom's operation in Guatemala, in 2002. Prior to joining Millicom, he was a Division Manager
of the Paraguay PTT. He was a former Fulbright Scholar (1992/93). Osmar Coronel is an MBA from Northwestern University's Kellogg School of Management in the U.S., has a degree in Electrical
Engineering from the National University of Asuncion, Paraguay and a Masters degree in Electrical Engineering from Southern Illinois University in the U.S.

John Tumelty, born 1952, Head of Human Resources. John Tumelty was appointed Head of Human Resources in 2006. He has been with Millicom
since 1995, previously as Chief Financial Officer in Ghana and then as General Manager of Paktel in Pakistan and more recently Mobitel in Tanzania. Prior to joining Millicom he held various senior
positions in finance with Mobil Oil Corporation in the Middle East and Africa over a 15 year period. John Tumelty has a Bachelor's degree from Strathclyde University in the U.K. and qualified
as an English Chartered Accountant with Touche Ross in London.

Henri Vander Stichele, born 1966, Head of Supply Chain Management. Henri Vander Stichele joined Millicom in November 2007. He started his
career in 1993 within the Consumer Electronics division of Philips Electronics. Within Philips, he held several procurement positions in the Netherlands, France and Belgium. In 2000 he switched to the
automotive industry with ArvinMeritor as the Procurement Director for the Doors division. Prior to joining Millicom, Henri was the Global Procurement Director for several procurement groups within
Nokia and Nokia Siemens Networks. Henri has a master degree in Aerospace Engineering from the Delft University of Technology.

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Remuneration of Officers

The remuneration of the Officers of the Company comprises an annual base salary, bonuses, 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 are issued restricted shares. Share-based compensation is granted once a year by the Compensation Committee of the Board. For 2007, the annual base
salary and other benefits of the Chief Executive Officer (CEO) were proposed by the Compensation Committee and approved by the Board and the annual base salary and other benefits of the Chief
Operating Officer (COO) and Chief Financial Officer (CFO) were set by the CEO, reviewed by the Compensation Committee and approved by the Board.

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The remuneration charge for the Officers for the year ended December 31, 2007, 2006 and 2005 was as follows:

|                              |                                                           | Chief Executive Officer |        | Chief Operating Officer |       | Chief Financial Officer |        |      
|----------------------------- | --------------------------------------------------------- | ----------------------- | ------ | ----------------------- | ----- | ----------------------- | ------ | -----
|
|
|
|2007                          |                                                           |                         |        |                         |       |                         |        |      
|Base salary                   |                                                           |                         |        | 2,351                   |       |                         |        | 629  
|Bonus                         |                                                           |                         |        | 2,008                   |       |                         |        | 547  
|Pension                       |                                                           |                         |        |                        |       |                         |        |     
|Other benefits                |                                                           |                         |        |                        |       |                         |        | 138  
|                              |                                                           |                         |        | 4,359                   |       |                         |        | 1,314
|Share based compensation: (i) |                                                           |                         |        |                         |       |                         |        |      
|                              | Shares issued/charge under long term incentive plans (ii) |                         | 8,527  |                         | 2,076 |                         | 3,282  |      
|                              | Charge for share options                                  |                         |        |                         | 104   |                         |        |      
|                              |                                                           |                         |        |                         |       |                         |        |      
|Total                         |                                                           |                         |        | 6,539                   |       |                         |        | 2,218
|                              |                                                           |                         |        |                         |       |                         |        |      
|2006                          |                                                           |                         |        |                         |       |                         |        |      
|Base salary                   |                                                           |                         |        | 1,982                   |       |                         |        | 624  
|Bonus (iii)                   |                                                           |                         |        | 1,669                   |       |                         |        | 712  
|Pension                       |                                                           |                         |        |                        |       |                         |        |     
|Other benefits                |                                                           |                         |        |                        |       |                         |        | 138  
|                              |                                                           |                         |        | 3,651                   |       |                         |        | 1,474
|Share based compensation: (i) |                                                           |                         |        |                         |       |                         |        |      
|                              | Restricted shares (iv)                                    |                         | 3,132  |                         | 104   |                         | 1,853  |      
|                              | Charge for long term incentive plans (v)                  |                         |        |                         | 1,031 |                         |        |      
|                              | Share options granted/charge for share options            |                         |       |                         | 240   |                         |       |      
|                              |                                                           |                         |        |                         |       |                         |        |      
|Total                         |                                                           |                         |        | 5,026                   |       |                         |        | 2,046
|                              |                                                           |                         |        |                         |       |                         |        |      
|2005                          |                                                           |                         |        |                         |       |                         |        |      
|Base salary                   |                                                           |                         |        | 1,449                   |       |                         |        | 475  
|Bonus                         |                                                           |                         |        | 602                     |       |                         |        | 325  
|Pension                       |                                                           |                         |        | 401                     |       |                         |        |     
|Other benefits                |                                                           |                         |        |                        |       |                         |        | 238  
|                              |                                                           |                         |        | 2,452                   |       |                         |        | 1,038
|Share based compensation: (i) |                                                           |                         |        |                         |       |                         |        |      
|                              | Share options granted/charge for share options            |                         | 75,000 |                         | 553   |                         | 37,600 |      
|                              |                                                           |                         |        |                         |       |                         |        |      
|Total                         |                                                           |                         |        | 3,005                   |       |                         |        | 1,238
|                              |                                                           |                         |        |                         |       |                         |        |      

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The number of shares, share options and unvested share awards beneficially owned by the Officers as at December 31, 2007 and 2006 was as follows:

|                        |  | Chief Executive Officer |  | Chief Operating Officer |  | Chief Financial Officer |  | Total    
|----------------------- |  | ----------------------- |  | ----------------------- |  | ----------------------- |  | ---------
|2007                    |  |                         |  |                         |  |                         |  |          
|Shares                  |  | 1,664,770               |  | 578,897                 |  | 9,700                   |  | 2,253,367
|Share options           |  | 45,000                  |  | 22,560                  |  | 100,000                 |  | 167,560  
|Share awards not vested |  | 96,488                  |  | 38,561                  |  | 24,951                  |  | 160,000  
|2006                    |  |                         |  |                         |  |                         |  |          
|Shares                  |  | 1,001,604               |  | 554,705                 |  | 1,430                   |  | 1,557,739
|Share options           |  | 791,664                 |  | 40,080                  |  | 100,000                 |  | 931,744  

Severance Payments

If the employment of any of the twelve key senior managers of Millicom is terminated, severance of up to 12 months salary is potentially payable.

The
senior executives have each entered into a Change of Control Agreement effective January 1, 2006, whereby if the executive's employment is terminated during the period
commencing on a change of control of Millicom and ending on the second anniversary of such event, either by the Millicom entity employing the executive without cause (other than by reason of
disability or death) or by the executive for "good reason", in lieu of any other severance benefits to which the executive would be entitled under any other plans or programs of his employer or
Millicom, the executive will be entitled to the following benefits:



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Each
employee of Millicom worldwide and each of the nine members of Millicom's Board of Directors who owns options to purchase Millicom share has entered into an agreement effective as
of March 1, 2006 with Millicom which gives the employee/director the same benefits as those given to the senior executives in respect of immediate vesting of share options in the event of a
change of control, as outlined in the first bullet point above.

Employees

The average number of permanent employees during the years ended December 31, 2007, 2006 and 2005 was as follows:

2007

2006

2005Continuing operations

4,768

3,243

2,386Discontinued operations



450

552Total average number of permanent employees

4,768

3,693

2,938


Long-Term Incentive Plans

In May 2006 at the Annual General Meeting a long term incentive plan ("2006 LTIP") was approved although the terms and conditions of the plan were not finalized
until 2007. This long term incentive plan was based on a target share award granted to eligible Millicom employees, limited to Millicom senior-level employees, key high potential employees and certain
critical new recruits. The shares granted are subject to a one-year holding period once the shares are vested.

The
shares awarded under the 2006 LTIP will vest at the end of a three year period, or performance cycle, subject to specified market and performance conditions related to Millicom's
share price growth compared to a peer group index, revenue growth, EBITDA margin, and profit margin. The achievement of a certain level of each condition, measured at the end of the three years,
yields a specific percentage of shares awarded to each employee at the grant date.

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The
plan has been designed so that the shares normally vest at the end of the three-year performance period. However, for the performance cycle from 2006 through 2008 only,
the shares granted vest 20% on December 31, 2006, 20% on December 31, 2007 and 60% on December 31, 2008. In addition at the end of the third-year performance period
there could be an additional 40% of shares that vest if further performance targets relating to Millicom's share price growth compared to a peer group index, revenue growth, EBITDA margin, and profit
margin are achieved.

The
total charge for the above plan is estimated at $24.9 million which will be recorded over the service period. Since the plan was approved at the Annual General Meeting in May
2006 and, as such, the employees became aware of the intention to issue the plan at that date, a charge of $7.7 million was recorded in 2006. 57,957 shares were issued in 2007 representing the
grants that vested on December 31, 2006. For the year ended December 31, 2007 a charge of $11 million was recorded.

A
new long term incentive plan covering 2007-2009 ("2007 LTIP") was approved by the Board on March 15, 2007. This plan consists of two elements: performance share plan
and a matching share award plan.

The
shares awarded under the performance share plan will vest at the end of a three year period, or performance cycle, subject to performance conditions related to Millicom's "earnings
per share". The achievement of a certain level of each condition, measured at the end of the three years, yields a specific percentage of shares awarded to each employee at the grant date.

The
matching share award plan requires employees to invest in shares of the Group in order to receive potential matching shares. The shares awarded under this plan vest at the end of a
three year period, or performance cycle subject to market conditions that are based on the "total shareholder return" ("TSR") of Millicom's shares compared to the TSR of six similar mobile telephony
companies during the three-year performance cycle of the plan. A fair value has been determined for potential shares under this plan based on this market condition and this value is
applied to the total potential number of matching shares and will be expensed over the vesting period. Under the matching share award plan rules, Millicom issued 9,214 new shares on June 22,
2007 which were purchased by employees at fair market value.

The
total charge for the above plans is estimated at $24.2 million ($15.8 million for the performance shares and $8.4 million for the matching share award plan)
which will be recorded over the service period. A charge of $4.5 million has been recorded in 2007 in respect of the performance shares and $2.4 million in respect to the matching share
award plan.

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

Matching share award plan 2007

Performance shares 2007

Performance shares 2006Maximum share awards

187,470

250,700

446,600Revision for expected forfeitures

(26,738
)
(35,756
)
(72,053
)Revision for expectations in respect of performance conditions





(26,753
)Shares issued





(57,957
)Share awards expected to vest

160,732

214,944

289,837


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Options

The following table summarizes information about share options outstanding at December 31, 2007. The market price of the Company's shares as at
December 31, 2007 was $117.94 (2006: $61.64).

|              |  | Options outstanding |  | Options exercisable
|------------- |  | ------------------- |  | -------------------
|
|3.32  3.75   |  | 3.51                |  | 27,552             
|9.00          |  | 9.00                |  | 10,732             
|20.56         |  | 20.56               |  | 451,408            
|25.05  29.75 |  | 26.37               |  | 118,315            
|31.88  35.91 |  | 34.06               |  | 99,996             
|3.32  35.91  |  | 22.60               |  | 708,003            

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, 2007 |  | Exercise price $ |  | Terms of option                                                                                                                                
|--------------------------------------------------- |  | ----------------------------------------------------- |  | ---------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|May 1996, May 1997, May 1998,
May 2000 and May 2004 |  | 179,995                                               |  | 25.05  35.91    |  | Exercisable immediately. Options have an indefinite life.                                                                                      
|May 2005                                            |  | 76,667                                                |  | 20.56            |  | Exercisable immediately. Options have a twenty year life.                                                                                      
|December 2001, December 2002,
May 2003 and May 2004 |  | 76,600                                                |  | 3.32  25.05     |  | Exercisable over a three-year period in equal installments. Options expire after six years from date of grant.                                 
|May 2005                                            |  | 274,741                                               |  | 20.56            |  | Exercisable over a five year period in equal installments. Options expire after six years from date of grant.                                  
|July 2005 and May 2006                              |  | 100,000                                               |  | 20.56            |  | Exercisable over a five-year period in equal installments from the start of the fourth year. Options expire after six years from date of grant.

ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Principal Shareholders

The table below sets out certain information known to Millicom as at March 31, 2007, 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

36.9
%The Stenbeck Family(1)

2,032,932

2.0
%


---

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

Kinnevik

The Company's principal shareholder is Investment AB Kinnevik and subsidiaries ("Kinnevik"). Kinnevik is a Swedish holding company with interests in the
telecommunications, media, publishing and paper industries. As of December 31, 2007, Kinnevik owned approximately 37% of Millicom.

During
2007 and 2006, Kinnevik did not purchase any Millicom shares.

Services purchased and sold to related companies

The Group made purchases in 2007 for an amount of $4.1 million (2006: $5.3 million) and had outstanding balances of $1.5 million (as of
December 31, 2006: $5.2 million) with related parties. These related parties are companies where Kinnevik is the principal shareholder. The services purchased and supplied covered fraud
detection, network and IT support, acquisition of assets and customer care systems. These purchases were made on an arm's length basis.

There
were no sales to related companies. As of December 31, 2007, Millicom had no receivables from related parties (2006: $1.2 million).

ITEM 8.    FINANCIAL INFORMATION

Financial Statements and Other Information

We file our financial statements under Item 18.

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Legal Proceedings

We are 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

Holders of Millicom common share are entitled to receive dividends ratably when, as and if declared by the Company's Board of Directors, subject to Luxembourg
legal reserve requirements. Millicom has not paid any cash dividends on its common shares since inception. Millicom anticipated that it retained any earnings for use in the operation and expansion of
its business. Due to the strength of the balance sheet and the net cash proceeds from the sale of our business in Pakistan, the Board has recommended a special dividend of $2.40 a share be paid
following the Annual General Meeting in May of 2008. The Group has not yet established a formal dividend policy. Any future dividends will be based on the free cash flows of the Group going forward.

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 National Market.

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.

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All
prices quoted below have been adjusted to reflect the reverse stock split effected in February 2003 and the one effected in February 2004. All figures presented are based upon a par
value of $1.50 each.

High

LowYear ended December 31, 2002

$
11.00

$
0.19Year ended December 31, 2003

$
20.23

$
0.99Year ended December 31, 2004

$
28.51

$
14.15Year ended December 31, 2005

$
27.09

$
15.60Year ended December 31, 2006

$
63.82

$
27.38First Quarter 2006

$
48.04

$
27.38Second Quarter 2006

$
52.46

$
39.33Third Quarter 2006

$
43.71

$
31.71October 2006

$
51.34

$
40.85November 2006

$
57.79

$
47.92December 2006

$
63.82

$
55.65Year ended December 31, 2007

$
127.40

$
60.21First Quarter 2007

$
82.04

$
60.21Second Quarter 2007

$
95.91

$
79.16Third Quarter 2007

$
99.81

$
66.00October 2007

$
119.27

$
82.38November 2007

$
124.66

$
98.50December 2007

$
127.40

$
104.50January 2008

$
120.21

$
86.10February 2008

$
118.22

$
97.95March 2008

$
114.62

$
93.47


On
April 2, 2008, the closing market price for Millicom common stock on the NASDAQ National Market was $99.13.

Our
shares are also traded on theStockholmsbörsen(the Stockholm Stock Exchange).

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.

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The
articles of incorporation of Millicom define its purpose as follows: "[...] to engage in all transactions pertaining directly or indirectly to the acquisition
of participating interests in any business enterprise, including but not limited to, the administration, management, control and development of any such enterprise, and to engage in all other
transactions in which a company created under the laws of Luxembourg may engage".

Directors

Restrictions on votingIn case 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 the annual remuneration of the 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, the directors may vote on the number of shares they may be allotted under any share-based compensation scheme.

The
Nominations Committee also 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 are elected for a one year term with a maximum of
six years and are re-eligible annually.

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

Shares

Rights attached to the sharesMillicom has only one class of shares, common share, 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.

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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, twice with an
interval of eight days, at least eight days prior to the meeting. If all the shares are registered shares, a convening notice may, as an alternative to the publication, be sent to each shareholder by
registered mail at least eight days before the annual general meeting (AGM). According to article 17 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 2008 AGM will take place in Luxembourg on May 27, 2008 at 4:00 p.m. 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. 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 Millicom common stock has its primary listing on NASDAQ, each time a shareholder acquires beneficial ownership of more than 5% of our common stock, the shareholder must file
within 10 days of acquisition a Schedule 13D with the U.S. Securities and Exchange Commission, who will notify Millicom and NASDAQ accordingly.

Material Contracts



On November 24, 2003, Millicom issued $550.0 million aggregate principal amount of 10% Senior Notes (the "10% Senior Notes") due on
December 1, 2013. The 10% Senior Notes bear interest at 10% per annum, payable semi-annually in arrears on June 1 and December 1. The effective interest rate is 10.7%.

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The
10% Senior Notes are general unsecured obligations of Millicom and rank equal in right of payment with all future unsecured and unsubordinated obligations of Millicom. The 10% Senior
Notes are not guaranteed by any of Millicom's subsidiaries, joint ventures or affiliates, and as a result are structurally subordinated in right of payment to all indebtedness of such subsidiaries,
joint ventures and affiliates.

If
Millicom experiences 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.

During
2007, Millicom repurchased $90 million of the 10% Senior Notes incurring in a charge of $5.0 million which is recorded under the caption "Other non operating income
(expenses), net".

In
October 2007, Millicom decided that it would redeem the balance of the Notes in December 2008 and pay the contractual redemption premium of 5%. As a result, Millicom reclassified the
10% Senior Notes from non current to current and recorded an additional interest expense of $31 million for the year ended December 31, 2007, which represented the increase in financial
liabilities due to the recognition of the 5% pre-payment expense and an increase in the amortised cost of the Notes due to the earlier settlement date.



In January 2005, Millicom raised $200.0 million aggregate principal amount of 4% Convertible Notes due 2010 (the "4% Convertible Notes"). The net proceeds
of the offering were received on January 7, 2005 in the amount of $195.9 million.

The
4% Convertible Notes are general unsecured obligations of Millicom and rank equal in right of payment with all future unsecured and unsubordinated obligations of Millicom. The rate
of interest payable on the 4% Convertible Notes is 4% per annum. Interest is payable semi-annually in arrears on January 7 and July 7 of each year, beginning on
July 7, 2005. The effective interest rate is 9.6%.

The
4% Convertible Notes were constituted by a trust deed dated January 7, 2005 between Millicom and The Bank of New York, as Trustee for the holders of notes.

Millicom
has apportioned part of the value of the 4% Convertible Notes to equity and part to debt. The value allocated to equity as of December 31, 2007 was $38.9 million
(2006: $39.1 million) and the value allocated to debt was $178.9 million (2006: $171.2 million).

As
of December 31, 2007, $1 million of the 4% Convertible Notes were converted into 28,686 ordinary shares.

On
January 22, 2008, Millicom converted a further $196 million of the outstanding bonds into 5,622,471 shares. On the same day Millicom repaid in cash the remaining
$3 million of bonds that were not converted, including accrued interest. The conversion resulted in an increase of equity amounting to approximately $176 million in January 2008 (see
note 31). As a result Millicom reclassified the 4% Convertible Notes from non current to current.

Exchange Controls

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



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Luxembourg Taxation

The following paragraphs describe very generally the tax laws of Luxembourg as they apply to investors in the Company, which is a Luxembourg corporation, and also
the taxation of investors who are citizens or residents of, or persons domiciled in, the United States. The following is intended merely as a general summary of the principal tax consequences of the
holding and disposition of shares of Millicom common stock, and is not intended as a substitute for professional tax advice that takes into account the particular circumstances relevant to a specific
investor. Accordingly, investors should consult their own professional advisors on the possible tax consequences of holding or disposing of shares of Millicom common stock, under the laws of their
countries of citizenship, residence or domicile.

Taxation of Distributions

Dividends received before January 1, 2007 are subject to a withholding tax of 20%. Article 10 (2) ii of the Treaty provides that dividends
received from a Luxembourg company by a U.S. Holder (as defined below) are generally subject to a tax of 15% in most cases. The reduced withholding tax rate provided for by the Treaty is available
immediately provided that a residence certificate is submitted by the U.S. Holder to the Luxembourg company prior to the distribution. For dividends distributed as of January 1, 2007, the
domestic rate is 15% of the gross dividend.

Sale and Disposition

Under Luxembourg domestic tax law, gains realized by an investor on the sale of shares who is a resident of Luxembourg for tax purposes or who has a permanent
establishment or a fixed place of business in Luxembourg, to which the shares in Millicom are attributable, are subject to Luxembourg income tax, except, under certain circumstances, where the
conditions of the Luxembourg participation exemptions are met or in the case of an individual investor acting in the course of the management of his/her private assets, if the sale is not of a
speculative nature and the investor does not hold a substantial participation in Millicom.

Gains
realized on the sale of shares in Millicom by a non-resident investor who had a participation of more than 10% are considered taxable in Luxembourg when the shares are
sold six months after their acquisition, or when the beneficiary has been a Luxembourg taxpayer during more than 15 years and became a non-resident taxpayer less than five years
before the realization of such income.

The
United States and Luxembourg are each a party to the Convention between the United States of America and the Grand-Duchy of Luxembourg with Respect to Taxes on Income and Property
(the "Treaty") for the purpose of avoiding double taxation. The Treaty grants to the state of residence of the seller the exclusive right to tax gains from the alienation of property. Thus, gains from
the sale of Millicom shares by a qualifying U.S. resident are exempt from Luxembourg taxation.

U.S. Federal Income Tax Considerations

The following is a discussion of certain U.S. federal income tax consequences of purchasing, owning and disposing of Millicom shares by U.S. Holders, 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. This discussion does not address U.S. state,
local and non-U.S. tax consequences. The discussion applies only to U.S. Holders who hold shares 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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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. 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 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 that 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.

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, including the amount of any Luxembourg taxes withheld, other than certain pro rata distributions of shares to
all shareholders, will constitute foreign source dividend income to the extent paid out of our 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 reported to U.S. Holders as
dividends. 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, calculated by reference to the exchange rate in effect on the
date the payment is received by the holder, 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 euro, 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 by certain
"qualified foreign corporations" to certain non-corporate U.S. Holders in taxable years beginning before January 1, 2011 will be taxable at a maximum rate of 15%. Millicom expects
to be considered a qualified foreign corporation. Non-corporate U.S. Holders should consult their own tax advisors to determine whether they are subject to any special rules that limit
their ability to be taxed at this favorable rate.

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Luxembourg
taxes withheld from dividends on shares 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. 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

A U.S. Holder will generally recognize capital gain or loss on the sale or other disposition of shares, which will be long-term capital gain or loss
if the holder has held such shares for more than 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 (as
determined in U.S. dollars) and such holder's tax basis in the shares (as determined in U.S. dollars). Any gain or loss will generally be U.S. source gain or loss for foreign tax credit purposes.

Passive Foreign Investment Company Considerations

Millicom believes that it was not a PFIC for U.S. federal income tax purposes for its 2007 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 the market price of our shares, 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, certain adverse U.S. federal income tax rules would apply on a sale or other
disposition (including certain pledges) of shares 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 would be allocated
ratably over the U.S. Holder's holding period for the shares. 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, and an interest charge would be
imposed on the amount allocated to each such taxable year. Further, any distribution in respect of shares in excess of 125% of the average of the annual distributions on shares received by the U.S.
Holder during the preceding three years or the U.S. Holder's holding period, whichever is shorter, would be subject to taxation as described above. Certain elections may be available that would result
in alternative treatments (such as a mark-to-market treatment) of the shares. U.S. Holders should consult their tax advisors to determine whether any such elections are
available and, if so, what the consequences of the alternative treatments would be in those holders' particular circumstances.

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.

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Information Reporting and Backup Withholding

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 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 no loss of exemption from backup withholding has occurred. 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.

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.

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ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

Interest Rate Risk

The interest rate risk generally arises from 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 the risk for 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 in which neither category of debt falls below 25% of the total debt. The Group actively monitors its borrowings to ensure the
compliance with this policy. At December 31, 2007, approximately 43% of the Group's borrowings are at a fixed rate of interest (2006: 52%).

The
table below summarizes, as at December 31, 2007, our fixed rate debt and floating rate debt:

|                              |  | Amounts due within |  
|----------------------------- |  | ------------------ | -
|
|
|Fixed rate                    |  | 716,916            |  
|Average nominal interest rate |  | 8.5                | %
|Floating rate                 |  | 172,169            |  
|Average nominal interest rate |  | 10.8               | %
|                              |  |                    |  
|Total                         |  | 889,085            |  
|                              |  |                    |  
|Average nominal interest rate |  | 8.9                | %

The
table below summarizes, as at December 31, 2006, our fixed rate debt and floating rate debt:

|                              |  | Amounts due within |  
|----------------------------- |  | ------------------ | -
|
|
|Fixed rate                    |  | 15,177             |  
|Average nominal interest rate |  | 8.2                | %
|Floating rate                 |  | 119,484            |  
|Average nominal interest rate |  | 9.7                | %
|                              |  |                    |  
|Total                         |  | 134,661            |  
|                              |  |                    |  
|Average nominal interest rate |  | 9.5                | %

We
have not historically used interest rate swaps, forward rate agreements or other futures contracts but instead have mainly managed our interest exposure by diversifying our debt
between fixed and floating-rate loans. In the future, we may use such instruments to manage our interest exposure. There can be no assurance, however, that the use of any such instruments
will be effective.

Exchange Rate 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.

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We
seek to protect our reported earnings from falling in U.S. dollar terms, from currency depreciation, by periodically adjusting our prices in local currency terms to reflect any such
depreciation. In certain countries that experience very high inflation, we set our prices in direct relation to the U.S. dollar. However, there can be no assurance that a significant devaluation of a
currency against the U.S. dollar can be offset, in whole or in part, by a corresponding price increase, even over the long term. For example, the devaluation of the currency in Paraguay in 2002 had an
adverse effect on the results of our operations.

Millicom
had a net exchange gain of $15 million for the year ended December 31, 2007, compared to a gain of $6 million for the year ended December 31, 2006,
excluding an exchange loss of $36 million on the 5% Mandatory Exchangeable Notes.

To
some extent, the broad mix of currencies in which we conduct our businesses and the geographic spread of our operations provide us with some measure of protection against specific
exchange rate movements and reduces the overall sensitivity of our results to specific exchange rate fluctuations. We do not generally hedge our foreign currency exposure as it is considered that the
cost of purchasing financial instruments outweighs the benefits derived.

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 funding
source available to a joint venture or subsidiary. In these circumstances, Millicom has currently decided to accept the remaining currency risk associated with the financing of 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 our debt detailing the balances at December 31, 2007, that were denominated in U.S. dollars and in other local currencies.

2007

2006US$ '000

US$ '000US dollar

1,226,332

1,029,499Colombia

435,615

372,396Honduras

41,352

10,990Senegal

62,557

28,367Sri Lanka

48,016

28,958Others

20,419

23,446Total local currency

607,959

464,157Total

1,834,291

1,493,656


ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable for Annual Report filing.

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PART II

ITEM 13.    DEFAULTS, DIVIDENDS 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

Disclosure Controls and Procedures

As of December 31, 2007, the Group, 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 Securities Exchange Act of 1934 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 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 the reports it files under the Securities Exchange
Act of 1934 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.

There
has been no significant change in the Group's internal controls over financial reporting that occurred during the period covered by this annual report that has materially affected,
or is reasonably likely to materially affect, the Company's internal controls over financial reporting. We actively manage our operations through:



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We
seek to obtain a controlling ownership of our operations. In most cases where we do not hold a controlling share in an operation, we manage our operation based on shareholders'
agreements or similar arrangements, special rights with respect to board representation or special voting rights. Such provisions provide us with the means to approve or disapprove actions proposed by
our partners. In some cases the shareholders' agreements contain buyout, arbitration or other procedures that can be invoked in the event of a fundamental disagreement between us and our partner.

Attestation report of the registered public accounting firm

The registered public accounting firm that audited the Group's financial statements included in this annual report on Form 20-F has issued an
attestation report on the Group's internal control over financial reporting. The "Report of Independent Registered Public Accounting FirmInternal control over financial reporting" can be
found on pages F-3 and F-4 of the financial statements filed with this annual report on Form 20-F.

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors has appointed Michel Massart as its Audit Committee financial expert. Mr. Massart 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 its Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and to all other Millicom
employees. 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. Millicom will make its Code of Ethics available in 2008 on its website www.millicom.com.

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, 2007 and 2006.

2007
US$ '000

2006
US$ '000Audit Fees

3,801

3,862Audit-Related Fees

14

113Tax Fees

54

80All Other Fees

12

6Total

3,881

4,061


Audit-related
services consist principally of consultations related to financial accounting and reporting standards, including making recommendations to management regarding internal
controls and procedure relates to the maintenance of fixed asset registers and inventory procedures 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. Other services are services not included in the other categories.

Audit Committee Pre-approval Policies

The policies and procedures provide that no non-audit services can be rendered by Millicom's auditors without the prior consent of the Audit
Committee.

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ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

Not applicable.

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PART III

ITEM 17.    FINANCIAL STATEMENTS

Not applicable.

ITEM 18.    FINANCIAL STATEMENTS

See pages F-1 through F-76.

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).**
|4.1  |  | Share Purchase Agreement dated January 21, 2007 between Millicom Pakistan B.V. and Millicom International Cellular S.A., as seller and guarantor, respectively, and China Mobile Communications Corporation, as purchaser, relating to the
sale and purchase of 88.86% of the issued share capital of Paktel Limited.***             
|12.1 |  | Certification of Marc Beuls required by Securities Exchange Act of 1934, as amended ("Exchange Act"), Rule 13a 14(a).                                                                                                                                                                                                                
|12.2 |  | Certification of David Sach required by Exchange Act Rule 13a 14(a).                                                                                                                                                                                                                                                                 
|13.1 |  | Certification of Marc Beuls required by Exchange Act Rule 13a 14(b).                                                                                                                                                                                                                                                                 
|13.2 |  | Certification of David Sach required by Exchange Act Rule 13a 14(b).                                                                                                                                                                                                                                                                 

---

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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: April 3, 2008 |  | MILLICOM INTERNATIONAL CELLULAR S.A.
|-------------------- |  | ------------------------------------
|                     |  | By:                                 
|                     |  |                                     
|                     |  |                                     
|                     |  | By:                                 
|                     |  |                                     
|                     |  |                                     

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INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                |  |     
|------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Audited Consolidated Financial Statements of Millicom and its Subsidiaries for the Years Ended December 31, 2007, 2006 and 2005 |  |     
|Management's Report on Internal Control Over Financial Reporting                                                                |  | F-2 
|Report of Independent Registered Public Accounting Firm                                                                         |  | F-3 
|Consolidated Statements of Profit and Loss for the Years ended December 31, 2007, 2006 and 2005                                 |  | F-5 
|Consolidated Balance Sheets as of December 31, 2007 and 2006                                                                    |  | F-6 
|Consolidated Statements of Cash Flows for the Years ended December 31, 2007, 2006 and 2005                                      |  | F-8 
|Consolidated Statements of Changes in Equity for the Years ended December 31, 2007, 2006 and 2005                               |  | F-9 
|Notes to the Consolidated Financial Statements                                                                                  |  | F-11

F-1

---





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 adopted by the European Union as well as those issued by the International Accounting Standards Board.

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, 2007. 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, 2007.

PricewaterhouseCoopers
S.à.r.l has issued an unqualified report on our 2007 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.

|March 31, 2008 |  | By: | /s/MARC BEULS
|-------------- |  | --- | -------------
|               |  |     | Name:        
|               |  |     | Title:       
|               |  | By: | /s/DAVID SACH
|               |  |     | Name:        
|               |  |     | Title:       

F-2

---





Report of Independent Registered Public Accounting Firm

To
the Shareholders of
Millicom International Cellular S.A.

In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of profit and loss, changes in shareholders' equity and cash flows present fairly, in
all material respects, the financial position of Millicom International Cellular S.A. and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2007 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, Millicom International Cellular S.A. and its subsidiaries
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established inInternal
ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's Board of Directors is responsible
for these 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 F2 of the accompanying consolidated financial statements. Our responsibility is to express opinions on these
financial statements and on the internal control over financial reporting of Millicom International Cellular S.A. and its subsidiaries based on our audits (which were integrated audits in 2007
and 2006). 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 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 financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the 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.

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

---



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.
Réviseur d'entreprises |  | Luxembourg, March 31, 2008

F-4

---





|Consolidated statements of profit and loss           |  | Millicom International
|---------------------------------------------------- |  | ----------------------
|                                                    
|for the years ended December 31, 2007, 2006 and 2005 |  | Cellular S.A.         

|
|

|                                                                           |  | Notes |  | 2007      |   | 2006      |   | 2005     |  
|-------------------------------------------------------------------------- |  | ----- |  | --------- | - | --------- | - | -------- | -
|
|Revenues                                                                   |  | 9     |  | 2,630,614 |   | 1,576,100 |   | 922,780  |  
|Cost of sales                                                              |  |       |  | (980,056  | ) | (616,739  | ) | (373,427 | )
|Gross profit                                                               |  |       |  | 1,650,558 |   | 959,361   |   | 549,353  |  
|Sales and marketing                                                        |  |       |  | (489,327  | ) | (246,591  | ) | (124,187 | )
|General and administrative expenses                                        |  |       |  | (425,356  | ) | (246,004  | ) | (143,341 | )
|Other operating expenses                                                   |  |       |  | (72,949   | ) | (37,613   | ) | (23,137  | )
|Other operating income                                                     |  |       |  |          |   | 4,036     |   | 15,412   |  
|Gain from sale of subsidiaries and joint ventures, net                     |  | 5     |  |          |   | 8,099     |   | 1,269    |  
|Operating profit                                                           |  | 9, 10 |  | 662,926   |   | 441,288   |   | 275,369  |  
|Interest expense                                                           |  |       |  | (194,440  | ) | (123,969  | ) | (116,031 | )
|Interest and other financial income                                        |  |       |  | 56,384    |   | 36,385    |   | 23,373   |  
|Other non operating income (expenses), net                                 |  | 12    |  | 10,172    |   | (1,186    | ) | (12,807  | )
|Profit from associates                                                     |  | 17    |  | 4,400     |   | 1,483     |   | 1,296    |  
|Profit before tax from continuing operations                               |  |       |  | 539,442   |   | 354,001   |   | 171,200  |  
|Charge for taxes                                                           |  | 13    |  | (87,077   | ) | (118,205  | ) | (68,795  | )
|Profit for the year from continuing operations                             |  |       |  | 452,365   |   | 235,796   |   | 102,405  |  
|Profit/(loss) for the year from discontinued operations, net of tax        |  | 6     |  | 258,619   |   | (75,813   | ) | (98,260  | )
|Net profit for the year                                                    |  |       |  | 710,984   |   | 159,983   |   | 4,145    |  
|Attributable to:                                                           |  |       |  |           |   |           |   |          |  
|Equity holders of the company                                              |  |       |  | 697,142   |   | 168,947   |   | 10,277   |  
|Minority interest                                                          |  |       |  | 13,842    |   | (8,964    | ) | (6,132   | )
|                                                                           |  |       |  | 710,984   |   | 159,983   |   | 4,145    |  
|Earnings per share for the year                                            |  | 14    |  |           |   |           |   |          |  
|(expressed in US$ per common share)                                        |  |       |  |           |   |           |   |          |  
|Basic                                                                      |  |       |  |           |   |           |   |          |  
|profit from continuing operations attributable to equity holders          |  |       |  | 4.35      |   | 2.43      |   | 0.98     |  
|profit (loss) from discontinued operations attributable to equity holders |  |       |  | 2.55      |   | (0.75     | ) | (0.88    | )
|profit for the year attributable to equity holders                        |  |       |  | 6.90      |   | 1.68      |   | 0.10     |  
|Diluted                                                                    |  |       |  |           |   |           |   |          |  
|profit from continuing operations attributable to equity holders          |  |       |  | 4.22      |   | 2.41      |   | 0.96     |  
|profit (loss) from discontinued operations attributable to equity holders |  |       |  | 2.39      |   | (0.74     | ) | (0.86    | )
|profit for the year attributable to equity holders                        |  |       |  | 6.61      |   | 1.67      |   | 0.10     |  

The accompanying notes are an integral part of these consolidated financial statements.

F-5

---





|Consolidated balance sheets      |  | Millicom International
|-------------------------------- |  | ----------------------
|                                
|as of December 31, 2007 and 2006 |  | Cellular S.A.         

|
|

|                                              |  | Notes |  | 2007      |  | 2006     
|--------------------------------------------- |  | ----- |  | --------- |  | ---------
|
|ASSETS                                        |  |       |  |           |  |          
|NON-CURRENT ASSETS                            |  |       |  |           |  |          
|Intangible assets, net                        |  | 15    |  | 467,502   |  | 482,775  
|Property, plant and equipment, net            |  | 16    |  | 2,066,122 |  | 1,267,159
|Investments in associates                     |  | 17    |  | 11,234    |  | 6,838    
|Deferred taxation                             |  | 13    |  | 97,544    |  | 3,706    
|Other non-current assets(i)                   |  |       |  | 19,855    |  | 26,225   
|                                              |  |       |  |           |  |          
|TOTAL NON-CURRENT ASSETS                      |  |       |  | 2,662,257 |  | 1,786,703
|CURRENT ASSETS                                |  |       |  |           |  |          
|Inventories                                   |  |       |  | 82,893    |  | 54,245   
|Trade receivables, net                        |  | 18    |  | 223,579   |  | 185,455  
|Amounts due from joint venture partners       |  |       |  | 65,348    |  | 37,346   
|Amounts due from other related parties        |  | 29    |  |          |  | 1,221    
|Prepayments and accrued income                |  |       |  | 71,175    |  | 58,429   
|Current tax assets                            |  |       |  | 8,982     |  | 4,916    
|Supplier advances for capital expenditure(ii) |  |       |  | 76,514    |  | 55,080   
|Other current assets(i) (ii)                  |  | 19    |  | 48,481    |  | 73,834   
|Cash and cash equivalents                     |  | 20    |  | 1,174,597 |  | 656,692  
|                                              |  |       |  |           |  |          
|TOTAL CURRENT ASSETS                          |  |       |  | 1,751,569 |  | 1,127,218
|                                              |  |       |  |           |  |          
|Assets held for sale                          |  | 6     |  |          |  | 407,073  
|                                              |  |       |  |           |  |          
|TOTAL ASSETS                                  |  |       |  | 4,413,826 |  | 3,320,994
|                                              |  |       |  |           |  |          

---

The accompanying notes are an integral part of these consolidated financial statements.

F-6

---



|Consolidated balance sheets (continued) |  | Millicom International
|--------------------------------------- |  | ----------------------
|                                       
|as of December 31, 2007 and 2006        |  | Cellular S.A.         

|
|

|                                                          |                                                                            | Notes |    | 2007      |         | 2006      |        
|--------------------------------------------------------- | -------------------------------------------------------------------------- | ----- | -- | --------- | ------- | --------- | -------
|
|EQUITY AND LIABILITIES                                    |                                                                            |       |    |           |         |           |        
|EQUITY                                                    |                                                                            |       |    |           |         |           |        
|                                                          | Share capital and premium                                                  |       | 21 |           | 417,352 |           | 372,526
|                                                          | Other reserves                                                             |       | 23 |           | 45,557  |           | 2,966  
|                                                          | Retained profits/(accumulated losses)                                      |       |    |           | 127,856 |           | (39,565
|                                                          | Profit for the year attributable to equity holders                         |       |    |           | 697,142 |           | 168,947
|                                                          |                                                                            |       |    |           |         |           |        
|                                                          |                                                                            |       |    | 1,287,907 |         | 504,874   |        
|                                                          | Minority interest                                                          |       |    |           | 80,429  |           | 77,514 
|                                                          |                                                                            |       |    |           |         |           |        
|TOTAL EQUITY                                              |                                                                            |       |    | 1,368,336 |         | 582,388   |        
|LIABILITIES                                               |                                                                            |       |    |           |         |           |        
|Non-current Liabilities                                   |                                                                            |       |    |           |         |           |        
|                                                          | Debt and other financing                                                   |       |    |           |         |           |        
|                                                          | 10% Senior Notes                                                           |       | 24 |           |        |           | 538,673
|                                                          | 4% Convertible NotesDebt component                                        |       | 24 |           |        |           | 171,169
|                                                          | Other debt and financing                                                   |       | 24 |           | 945,206 |           | 649,153
|                                                          | Provisions and other non-current liabilities                               |       | 25 |           | 55,601  |           | 49,353 
|                                                          | Deferred taxation                                                          |       | 13 |           | 42,414  |           | 34,368 
|                                                          |                                                                            |       |    |           |         |           |        
|Total non-current liabilities                             |                                                                            |       |    | 1,043,221 |         | 1,442,716 |        
|Current Liabilities                                       |                                                                            |       |    |           |         |           |        
|                                                          | Debt and other financing                                                   |       |    |           |         |           |        
|                                                          | 10% Senior Notes                                                           |       | 24 |           | 479,826 |           |       
|                                                          | 4% Convertible NotesDebt component                                        |       | 24 |           | 178,940 |           |       
|                                                          | Other debt and financing                                                   |       | 24 |           | 230,319 |           | 134,661
|                                                          | Payables and accruals for the purchase of property, plant and equipment(i) |       |    |           | 460,533 |           | 276,850
|                                                          | Other trade payables(i)                                                    |       |    |           | 238,252 |           | 151,454
|                                                          | Amounts due to joint venture partners                                      |       |    |           | 60,914  |           | 32,017 
|                                                          | Amounts due to other related parties                                       |       | 29 |           | 1,475   |           | 5,184  
|                                                          | Accrued interest and other expenses                                        |       |    |           | 128,426 |           | 113,316
|                                                          | Current tax liabilities                                                    |       |    |           | 82,028  |           | 89,077 
|                                                          | Provisions and other current liabilities                                   |       | 25 |           | 141,556 |           | 99,292 
|                                                          |                                                                            |       |    |           |         |           |        
|Total current liabilities                                 |                                                                            |       |    | 2,002,269 |         | 901,851   |        
|                                                          |                                                                            |       |    |           |         |           |        
|Liabilities directly associated with assets held for sale |                                                                            | 6     |    |          |         | 394,039   |        
|                                                          |                                                                            |       |    |           |         |           |        
|TOTAL LIABILITIES                                         |                                                                            |       |    | 3,045,490 |         | 2,738,606 |        
|                                                          |                                                                            |       |    |           |         |           |        
|TOTAL EQUITY AND LIABILITIES                              |                                                                            |       |    | 4,413,826 |         | 3,320,994 |        
|                                                          |                                                                            |       |    |           |         |           |        

---

The accompanying notes are an integral part of these consolidated financial statements.

F-7

---





|Consolidated statements of cash flows                |  | Millicom International
|---------------------------------------------------- |  | ----------------------
|                                                    
|for the years ended December 31, 2007, 2006 and 2005 |  | Cellular S.A.         

|
|

|                                                 |                                                                     | Notes |            | 2007      |          | 2006(i)  |          | 2005(i)  |         
|------------------------------------------------ | ------------------------------------------------------------------- | ----- | ---------- | --------- | -------- | -------- | -------- | -------- | --------
|
|Cash flows from operating activities             |                                                                     |       |            |           |          |          |          |          |         
|Profit before taxes from continuing operations   |                                                                     |       |            | 539,442   |          | 354,001  |          | 171,200  |         
|Adjustments                                      |                                                                     |       |            |           |          |          |          |          |         
|                                                 | Interest expense                                                    |       |            |           | 194,440  |          | 123,969  |          | 116,031 
|                                                 | Interest income                                                     |       |            |           | (56,384  | )        | (36,385  | )        | (23,373 
|                                                 | Other non operating (income) expenses, net                          |       | 12         |           | (10,172  | )        | 1,186    |          | 12,807  
|                                                 | Profit from associates                                              |       | 17         |           | (4,400   | )        | (1,483   | )        | (1,296  
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Operating profit                                 |                                                                     |       |            | 662,926   |          | 441,288  |          | 275,369  |         
|Adjustments for non-cash items:                  |                                                                     |       |            |           |          |          |          |          |         
|                                                 | Depreciation and amortization                                       |       | 10, 15, 16 |           | 354,940  |          | 229,241  |          | 141,286 
|                                                 | Loss on disposal and impairment of property, plant and equipment    |       | 10         |           | 3,815    |          | 4,455    |          | 2,494   
|                                                 | Reduction of goodwill                                               |       | 10, 15     |           | 23,358   |          |         |          |        
|                                                 | Gain from sale of subsidiaries and joint ventures                   |       | 5, 10      |           |         |          | (8,099   | )        | (1,269  
|                                                 | Share-based compensation                                            |       | 22         |           | 19,228   |          | 12,850   |          | 3,075   
|                                                 | Other non cash items                                                |       |            |           | 1,000    |          |         |          | (6,299  
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|                                                 |                                                                     |       |            | 1,065,267 |          | 679,735  |          | 414,656  |         
|                                                 | Increase in trade receivables, prepayments and other current assets |       |            |           | (24,640  | )        | (31,117  | )        | (858    
|                                                 | Increase in inventories                                             |       |            |           | (25,357  | )        | (22,360  | )        | (69     
|                                                 | Increase in trade and other payables                                |       |            |           | 95,927   |          | 69,903   |          | 47,465  
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Changes to working capital                       |                                                                     |       |            | 45,930    |          | 16,426   |          | 46,538   |         
|                                                 | Interest expense paid                                               |       |            |           | (151,604 | )        | (109,119 | )        | (98,903 
|                                                 | Interest received                                                   |       |            |           | 55,836   |          | 29,077   |          | 25,013  
|                                                 | Taxes paid                                                          |       |            |           | (164,896 | )        | (100,599 | )        | (68,116 
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Net cash provided by operating activities        |                                                                     |       |            | 850,533   |          | 515,520  |          | 319,188  |         
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Cash flows from investing activities             |                                                                     |       |            |           |          |          |          |          |         
|                                                 | Acquisition of subsidiaries and JV, net of cash acquired            |       | 4          |           |         |          | (34,768  | )        | (72,250 
|                                                 | Proceeds from disposal of subsidiaries and JV, net of cash disposed |       | 5          |           |         |          | (958     | )        | 1,899   
|                                                 | Purchase of intangible assets and license renewals                  |       | 15         |           | (25,816  | )        | (40,490  | )        | (8,183  
|                                                 | Purchase of property, plant and equipment                           |       | 16         |           | (861,327 | )        | (462,684 | )        | (196,470
|                                                 | Proceeds from sale of property, plant and equipment                 |       |            |           | 3,853    |          |         |          | 5,226   
|                                                 | Cash provided (used) by other investing activities                  |       |            |           | 36,777   |          | 12,327   |          | (10,918 
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Net cash used by investing activities            |                                                                     |       |            | (846,513  | )        | (526,573 | )        | (280,696 | )       
|Cash flows from financing activities:            |                                                                     |       |            |           |          |          |          |          |         
|                                                 | Proceeds from issuance of shares                                    |       |            |           | 33,626   |          | 14,227   |          | 3,553   
|                                                 | Proceeds from issuance of debt and other financing                  |       |            |           | 545,528  |          | 318,308  |          | 300,040 
|                                                 | Repayment of debt and financing                                     |       |            |           | (315,955 | )        | (191,430 | )        | (95,355 
|                                                 | Payment of dividends to minority interests                          |       |            |           | (18,286  | )        | (4,873   | )        | (2,000  
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Net cash provided by financing activities        |                                                                     |       |            | 244,913   |          | 136,232  |          | 206,238  |         
|                                                 | Transfer of cash to assets held for sale                            |       |            |           |         |          | (7,135   | )        | (3,013  
|                                                 | Cash provided (used) by discontinued operations                     |       | 6          |           | 260,904  |          | (60,488  | )        | (56,812 
|                                                 | Exchange gains (losses) on cash and cash equivalents                |       |            |           | 8,068    |          | 2,569    |          | (1,719  
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Net increase in cash and cash equivalents        |                                                                     |       |            | 517,905   |          | 60,125   |          | 183,186  |         
|                                                 | Cash and cash equivalents at the beginning of the year              |       |            |           | 656,692  |          | 596,567  |          | 413,381 
|                                                 |                                                                     |       |            |           |          |          |          |          |         
|Cash and cash equivalents at the end of the year |                                                                     |       |            | 1,174,597 |          | 656,692  |          | 596,567  |         
|                                                 |                                                                     |       |            |           |          |          |          |          |         

---

The accompanying notes are an integral part of these consolidated financial statements.

F-8

---





|Consolidated statements of changes in equity         |  | Millicom International
|---------------------------------------------------- |  | ----------------------
|                                                    
|For the years ended December 31, 2007, 2006 and 2005 |  | Cellular S.A.         

|
|

|                                                        |  | Attributable to equity holders |  |      |   |         | 
|------------------------------------------------------- |  | ------------------------------ |  | ---- | - | ------- | 
|
|
|Balance as of January 1, 2005                           |  | 99,219                         |  | (655 | ) | 148,828 | 
|                                                        |  |                                |  |      |   |         | 
|Negative goodwill derecognised                          |  |                               |  |     |   |        | 
|Profit for the year                                     |  |                               |  |     |   |        | 
|Dividends paid to minority shareholders                 |  |                               |  |     |   |        | 
|Shares issued via the exercise of share options         |  | 485                            |  |     |   | 727     | 
|Share based compensation(iv)                            |  |                               |  |     |   |        | 
|4% Convertible Notesequity component (v)               |  |                               |  |     |   |        | 
|Transfer to accumulated losses                          |  |                               |  |     |   |        | 
|Fair value adjustment on financial assets               |  |                               |  |     |   |        | 
|Currency translation differences                        |  |                               |  |     |   |        | 
|                                                        |  |                                |  |      |   |         | 
|Balance as of December 31, 2005                         |  | 99,704                         |  | (655 | ) | 149,555 | 
|Profit for the year                                     |  |                               |  |     |   |        | 
|Dividends paid to minority shareholders                 |  |                               |  |     |   |        | 
|Shares issued via the exercise of share options         |  | 913                            |  | 655  |   | 1,369   | 
|Minority interest following acquisition of subsidiaries |  |                               |  |     |   |        | 
|Share based compensation(iv)                            |  | 67                             |  |     |   | 101     | 
|Transfer to accumulated losses                          |  |                               |  |     |   |        | 
|Fair value adjustment on financial assets               |  |                               |  |     |   |        | 
|Currency translation differences                        |  |                               |  |     |   |        | 
|                                                        |  |                                |  |      |   |         | 
|Balance as of December 31, 2006                         |  | 100,684                        |  |     |   | 151,025 | 
|                                                        |  |                                |  |      |   |         | 

F-9

---



|Consolidated statements of changes in equity (continued) |  | Millicom International
|-------------------------------------------------------- |  | ----------------------
|                                                        
|For the years ended December 31, 2007, 2006 and 2005     |  | Cellular S.A.         

|
|

|                                                  |  | Attributable to equity holders |  |   |  |         | 
|------------------------------------------------- |  | ------------------------------ |  | - |  | ------- | 
|
|
|Balance as of December 31, 2006                   |  | 100,684                        |  |  |  | 151,025 | 
|                                                  |  |                                |  |   |  |         | 
|Profit for the year                               |  |                               |  |  |  |        | 
|Dividends paid to minority shareholders           |  |                               |  |  |  |        | 
|Shares issued via the exercise of share options   |  | 1,626                          |  |  |  | 2,440   | 
|Shares issued as payment of bonuses (vi)          |  | 13                             |  |  |  | 20      | 
|Share based compensation(iv)                      |  | 9                              |  |  |  | 14      | 
|Issuance of shares2006 LTIP(iii)                 |  | 58                             |  |  |  | 87      | 
|Issuance of shares(vii)                           |  | 9                              |  |  |  | 14      | 
|Conversion of part of the 4% Convertible Notes(v) |  | 29                             |  |  |  | 43      | 
|Transfer to legal reserve                         |  |                               |  |  |  |        | 
|Currency translation differences                  |  |                               |  |  |  |        | 
|                                                  |  |                                |  |   |  |         | 
|Balance as of December 31, 2007                   |  | 102,428                        |  |  |  | 153,643 | 
|                                                  |  |                                |  |   |  |         | 

---

The accompanying notes are an integral part of these consolidated financial statements.

F-10

---





|Notes to the consolidated financial statements |  | Millicom International
|---------------------------------------------- |  | ----------------------
|                                              
|as of December 31, 2007, 2006 and 2005         |  | Cellular S.A.         

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 operator of mobile telephone services in the world's emerging markets. 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.

As
of December 31, 2007, Millicom had 16 mobile operations in 16 countries focusing on emerging markets in Central America, South America, Africa and Asia. The Group sold its
Pakistani operation in February 2007. The Company's shares are traded on the NASDAQ National Market under the symbol MICC and on the Stockholm stock exchange under the symbol MIC. Millicom delisted
from the Luxembourg stock exchange on January 16, 2006. 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.

Millicom
operates 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, Senegal, Sierra Leone and Tanzania in Africa; and in Cambodia, Laos and Sri Lanka in Asia.

The
Board of Directors approved these consolidated financial statements on March 31, 2008. The consolidated financial statements will be ratified by the Annual General Meeting.

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 ($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, 2007 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

As
of December 31, 2007, 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 Instrumentsthat has been partially adopted by the European Union and for new standards
and interpretations that will be 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 adopted by the European Union and International Financial Reporting Standards as issued by the IASB.

F-11

---



The
preparation of financial statements in conformity with International Financial Reporting Standards ("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 ultimately may differ from these estimates. The 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
31 December 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.

Subsidiaries

Subsidiaries are those 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 presently exercisable or presently 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 and continue to be consolidated until the date that
control ceases.

The
acquisition method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, equity
instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets, liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the acquisition date, irrespective of any minority interest. The excess of the cost of acquisition over the fair value of the
Group's share of identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group's share of identifiable net assets of the subsidiary
acquired, the difference is recognised directly to the consolidated statements of profit and loss (see accounting policy for Goodwill).

Minority interests

The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority interests
result in gains and losses for the Group that are recorded in the consolidated statements of profit and loss. Purchases from minority interests result in goodwill, being the difference between any
consideration paid and the carrying value of the relevant share acquired of the net assets of the subsidiary.

Joint ventures

Millicom determines the existence of joint control by reference to the joint venture agreements, articles of association, structures and voting protocols of the
Boards of Directors of those ventures.

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Entities
that are jointly controlled are consolidated using the proportionate method which only includes the Group's share of the assets, liabilities, income and expenses of the joint
ventures in which the Group has an interest in the consolidated financial statements.

The
Group recognizes the portion of gains or losses on the sale of assets by the Group to the joint venture that is attributable to the other parties in the joint venture. The Group does
not recognise its share of profits or losses that results from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, if a loss on the
transaction provides evidence of a reduction in the net realizable value of current assets or an impairment loss, the loss is recognised 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 recognised at cost. The Group's investment in associates includes goodwill (net of any
accumulated impairment loss) identified on acquisition.

The
Group's share of the post-acquisition profits or losses of associates is recognised in the consolidated statements of profit and loss, and its share of
post-acquisition movements in reserves is recognised in reserves. The 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 recognise 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. Unrealised 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.

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 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 different currencies. The Group's consolidated financial statements are presented in U.S.
dollar (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 the exchange rates prevailing at the
date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in currencies other than the functional currency are recognised in the consolidated statements of profit and loss, except when deferred in equity as qualifying cash flow hedges
and qualifying net investment hedges.

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Translation
differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss if applicable. Translation differences on
non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in the consolidated statements of profit and loss as part of the
fair value gain or loss. Translation differences on non-monetary financial assets such as investments classified as available for sale are included in the fair value reserve in equity.

Translation into presentation currency

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency
different from the 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 recognised in the consolidated statements of profit and loss as part of the
gain or loss on sale.

Goodwill
and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The
following is a table of the principal currency translation rates to the U.S. dollar as of December 31, 2007 and 2006 and the average rates for the year ended
December 31, 2007.

|Country      |  | Currency  |  | 2007
Average rate |  | 2007
Year-end rate |  | 2006
Year-end rate
|------------ |  | --------- |  | ----------------- |  | ------------------ |  | ------------------
|Bolivia      |  | Boliviano |  | 7.84              |  | 7.64               |  | 7.99              
|Chad         |  | CFA Franc |  | 478.14            |  | 448.66             |  | 497.45            
|Colombia     |  | Peso      |  | 2,084.69          |  | 2,017.23           |  | 2,240.00          
|Ghana        |  | Cedi      |  | 0.94              |  | 0.97               |  | 0.92              
|Guatemala    |  | Quetzal   |  | 7.70              |  | 7.66               |  | 7.62              
|Honduras     |  | Lempira   |  | 18.90             |  | 18.90              |  | 18.90             
|Laos         |  | Kip       |  | 9,712.08          |  | 9,459.00           |  | 9,855.00          
|Luxembourg   |  | Euro      |  | 0.73              |  | 0.69               |  | 0.76              
|Mauritius    |  | Rupee     |  | 31.32             |  | 28.48              |  | 32.82             
|Paraguay     |  | Guarani   |  | 5,041.95          |  | 4,750.01           |  | 5,170.00          
|Senegal      |  | CFA Franc |  | 478.14            |  | 448.66             |  | 497.45            
|Sierra Leone |  | Leone     |  | 2,984.21          |  | 2,977.59           |  | 2,973.94          
|Sri Lanka    |  | Rupee     |  | 110.39            |  | 108.65             |  | 107.42            
|Sweden       |  | Krona     |  | 6.73              |  | 6.47               |  | 6.84              
|Tanzania     |  | Shilling  |  | 1,237.51          |  | 1,153.99           |  | 1,264.22          

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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.

2.4   Segment Reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from
those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different
from those of segments operating in other economic environments (see note 9).

2.5   Property, plant and equipment

Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment in value. 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 and is expected without significant cost. All repairs and maintenance expenditures are expensed as incurred.

Estimated
useful lives are:

Buildings

40 years or life of lease if lowerNetworks (including civil works)

5 to 10 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 balance sheet 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, labour 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 recognised as a separate asset, as appropriate, only 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 other repairs and maintenance are charged to the consolidated statements of profit and loss during 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 recognised 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.

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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 fair value
as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated
intangible assets, excluding capitalised development costs, are not capitalised and expenditure is charged against profits in the year in which expenditure is incurred. Intangible assets are amortised
over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an
intangible asset with finite useful life is 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 asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in the consolidated statements of profit and loss in the expense category consistent with the function of the intangible assets.

Goodwill

Goodwill represents the excess of cost of an acquisition over the Group's share in the fair value of the identifiable assets less the liabilities and contingent
liabilities of the acquired subsidiary, joint venture or associate at the date of transaction. If the fair value of the identifiable assets, liabilities or contingent liabilities or the cost of the
acquisition can be determined only provisionally, then Millicom initially accounts for the goodwill using these provisional values. Within twelve months of the acquisition date, Millicom then
recognises any adjustments to these 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 the provisional fair values are made as if the adjusted fair values had been recognised 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 so allocated:



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Impairment
is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where
the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. Where goodwill forms
part of a cash-generating unit (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 of the operation. Goodwill disposed of in this circumstance is measured based on the relative
values of the operation disposed and the portion of the cash-generating unit retained. Impairment losses related to goodwill cannot be reversed in future periods.

Licenses

Licences are shown at historical cost unless acquired in a business combination where the cost is the fair value as at the date of acquisition. Licenses have a
finite useful life and are carried at cost less accumulated amortization and any accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the
cost of the licenses over their estimated useful lives.

The
terms of the 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 amortised from the date the network is available for use using the straight-line basis over periods of 5 to 20 years
depending on the term of the license. Licenses held, subject to certain conditions, are usually renewable and are generally non-exclusive. When determining the useful life of the licenses,
management usually does not consider renewal periods since there is no guarantee that the license will be renewed without significant cost (or at no cost). Under the terms of the respective licenses,
the joint ventures and subsidiaries are generally entitled to enter into interconnection agreements with operators of both landline and other mobile networks.

Trademarks and Subscriber bases

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

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2.7   Impairment of non-financial assets

The Group assesses at each reporting date 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 fair value less cost to sell and is determined
for an individual asset, 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 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 recognised in the consolidated statements of profit and loss 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 recognised 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 recognised 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 recognised. If that is the case, 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 recognised for the asset in prior years. Such reversal is recognised 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.

2.8   Other assets

Other assets include financial assets at fair value through profit or loss, loans and receivables, held to maturity investments or available for sale financial
assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly
attributable costs. Millicom determines the classification of its financial assets upon initial recognition and, where allowed and appropriate, re-evaluates this designation at each
financial year-end.

All
regular purchases and sales of financial assets are recognised on the trade date, the date on which the Group commits to purchase or sell the asset. Investments are derecognised when
the rights to receive the cash flows from the investment have expired or have been transferred and the Group has transferred substantially all the risks and rewards.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are
carried at amortised cost using the effective interest method. Gains and losses are recognised in income when the loans and receivables are derecognised or impaired, as well as through the
amortisation process.

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Financial assets at fair value through profit or loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management.
Derivatives are also included in this category unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be
realised within 12 months of the balance sheet date.

Held to maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held to maturity when Millicom has the
intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held to maturity are
measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any
difference between the initially recognised amount and the maturity amount. For investments carried at amortised cost, gains and losses are recognised in income when the investments are derecognised
or impaired, as well as through the amortisation process.

Available for sale financial assets

Available for sale financial assets are those non-derivative financial assets that are designated as available for sale or are not classified in any
of the three preceding categories. After initial recognition, available for sale financial assets are measured at fair value with gains or losses being recognised as a separate component of equity
until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the consolidated
statement of profit and loss.

The
fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market prices at the close of business on the balance sheet
date. For investments 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.

2.9   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".

2.10 Inventories

Inventories (which mainly consist of mobile telephone equipment and related accessories) are stated at the lower of cost and net realisable value. Cost is
determined using the first-in, first-out (FIFO) method. The net realisable value is the estimated selling price in the ordinary course of business, less applicable variable
selling expenses.

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2.11 Trade receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for
impairment. A provision for impairment of trade receivable is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered
indicators that the trade receivable is impaired. 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 amount of the provision is recognised in the consolidated statements of profit and loss within "Cost of sales". The nominal value less impairment of trade receivables
is assumed to approximate their fair values.

2.12 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.

2.13 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.

2.14 Derivative financial instruments

Derivatives are initially recorded at cost and then re-measured to fair value through the consolidated statements of profit and loss.

A
derivative embedded in a financial instrument is treated as a separate derivative when (i) its economic risks and characteristics are not closely related to those of the host
contract, (ii) a separate instrument with the same terms as the embedded derivative would qualify as a derivative, (iii) the combined instrument (derivative and host contract) is not
carried at fair value with unrealised gains and losses reported in the statements of profit and loss.

2.15 Impairment of financial assets

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. Impairment
losses recognised in the consolidated statements of profit and loss on equity instruments are not reversed through the consolidated statements of profit and loss.

2.16 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 equity share capital, the consideration paid including any directly attributable incremental costs is shown under the caption "Treasury
share" 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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2.17 Borrowings and borrowing costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statements of profit and loss over the period of the borrowing using the effective interest method.

The
fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a
liability on an amortised cost basis until extinguishment, conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option, which is recognised and included in
equity, net of income tax effects.

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 balance sheet
date.

Borrowing
costs which are not capitalised are recognised as an expense when incurred.

2.18 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 capitalised 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.

Capitalised
leased assets are depreciated over the shorter of the estimated useful life of the asset 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 recognised as an expense in the consolidated statements of profit and loss on a straight-line basis over the lease term.

2.19 Provisions

Provisions are recognised 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 recognised 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, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.

2.20 Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortized cost using the effective interest method where the effect of the
passage of time is material.

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2.21 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 recognised 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 recognised:

Revenues from provision of telecom services

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 recognised 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 amortised over the estimated life of the customer relationship. Related costs are also deferred, to the extent of the revenues
deferred, and amortised over the estimated life of the customer relationship. The estimated life of the customer relationship is calculated based on the percentage of disconnections for the same type
of customer which has occurred historically.

Prepayments

Prepayments allow the forward purchase of a specified amount of airtime by customers. Revenues are recognised as credit is used. Unutilised airtime is carried in
the balance sheet and is included under deferred revenue within "other current liabilities".

Value added services

Revenues from value added services such as text messaging, video messaging, ringtones, games etc, are recognised net of payments to the providers of these
services when they are responsible for the contents and for determining the price paid by the subscriber 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 subscriber then the revenue is recognised gross.

Equipment revenues

These revenues consist of the sale of handsets and accessories on a stand alone basis (if sold with other services, multiple element arrangements accounting would
then apply). Revenue is recognised when the significant risks and rewards of ownership of handsets and accessories have been passed to the buyer.

Multiple-element arrangements

Revenue arrangements with multiple deliverables ("Bundled Offers" such as equipments 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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2.22 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. Costs of sales are recorded on an accrual basis.

Cost
of sales also includes the depreciation and impairment of network equipment.

2.23 Customer acquisition costs

Specific customer acquisition costs, including dealer commissions and handset subsidies, are charged to sales and marketing when the subscriber is activated.

2.24 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. Millicom has no further payment obligations once the contributions
have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the
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 recognised in the balance sheet in respect of the defined benefit pension
plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised 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 the maturities of the related pension liability.

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 is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is 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 are included in assumptions about the number
of options that are expected to vest. At each balance sheet date, the Group revises its estimate of the number of options that are expected to vest. It recognises the impact of the revision of
original estimates, if any, in the consolidated statements of profit and loss, 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, restricted share awards are granted to the Directors, management and key employees.

F-23

---



The
cost of these equity-transactions is recognised, 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 recognised for equity-settled transactions at each reporting date until
the vesting date reflects 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 recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which 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
recognised as if the terms had not been modified. In addition, an expense is recognised 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.

2.25 Taxation

Current tax

Current tax assets and liabilities for the 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 balance sheet date.

Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax base of assets and liabilities and
their carrying amount for financial reporting purposes. Deferred tax liabilities are recognised 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 the accounting profit nor taxable profit or
loss.

Deferred
income tax assets are recognised for all deductible temporary differences, 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 utilised except where the deferred tax
assets relating to the deductible temporary difference arise from the 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 the accounting nor taxable profit or loss.

The
carrying amount of deferred income tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that
it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred
income tax assets and liabilities are measured at the tax rate expected to apply to the year when the assets is realised or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated
statements of profit and loss. Deferred tax assets and deferred tax liabilities are offset, if legally enforceable rights exist to set off current tax assets against current tax liabilities and the
deferred taxes relate to the same taxable entity and the same taxation authority.

F-24

---



2.26 Discontinued operations

Revenues and expenses associated with discontinued operations are presented in a separate line on the consolidated statements of profit and loss. Comparative
figures in the consolidated statements of profit and loss 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.

2.27 Changes in accounting policies

The consolidated financial statements as of December 31, 2007 are prepared in accordance with consolidation and accounting policies consistent with those
of the previous financial years.

The
Group has adopted the following new and amended IFRS and IFRIC interpretations during the year. Adoption of these revised standards and interpretations did not have any effect on the
financial performance or position of the Group. They did however give rise to additional disclosures, including in some cases, revisions to accounting policies.



The
principal effects of these changes are as follows:



F-25

---





The
following IFRS and IFRIC interpretations were issued with an effective date for financial periods beginning on or after March 1, 2007. The Group has chosen not to early adopt
these standards and interpretations.



F-26

---





3.     SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

10% Senior Notes

In October 2007, Millicom decided that it would redeem the balance of the 10% Senior Notes in December 2008, and pay the contractual redemption premium of 5% (see
note 24). Millicom therefore reviewed its estimates of future cash flows, taking into account the 5% pre-payment and the acceleration of the amortization of the unamortized costs.
An additional interest expense of $31 million was recorded for the year ended December 31, 2007, which represented the increase in financial liabilities due to this change in estimate.
Millicom also reclassified the 10% Senior Notes from non-current to current.

Millicom's operations in Pakistan

As of December 31, 2006, Millicom was actively engaged in selling its remaining operation in Pakistan, Paktel Limited after having sold its interest in
Pakcom Limited. The sale of Paktel Limited was completed on February 13, 2007. Since Millicom was exiting this geographical area of operation, both Paktel Limited and Pakcom Limited were
classified as discontinued operations. Pakcom Limited was classified as an asset held for sale in the 2005 financial statements but not as a discontinued operation since Millicom still intended to
operate in Pakistan at the end of 2005 through Paktel Limited.

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.

F-27

---



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 the inherent uncertainties in this evaluation process, actual losses may be different from the originally estimated provision. 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 changes
subsequent to these estimates may significantly affect future operating results.

Accounting
for property, plant and equipment, and intangible assets involves the use of estimates for determining the fair value at the acquisition date, 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 the fair values of assets and liabilities, as well as of the
useful lives of the assets is based on management's judgment.

Deferred
tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant
management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax
planning strategies (see note 13).

For
our critical accounting estimates reference is made to the relevant individual notes to these consolidated financial statements, more specifically
note 4Acquisition of subsidiaries, joint ventures and minority interests; note 13Taxes; note 15Intangible assets,
note 16Property, plant and equipment, note 18Trade receivables, note 22Share based compensation (relating to the long term incentive plan)
and note 28Commitments and contingencies.

4.     ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND MINORITY INTERESTS

Year ended December 31, 2007

Millicom did not acquire any subsidiaries, joint ventures or minority interests during the year ended December 31, 2007.

Year ended December 31, 2006

Millicom acquired the following subsidiaries, joint ventures and minority interests during the year ended December 31, 2006:

Net acquisition cost

Net cash acquired

TotalUS$ '000

US$ '000

US$ '000Colombia Móvil S.A.

(124,148
)
151,080

26,932Telefonica Celular del Paraguay S.A.

(5,000
)


(5,000
)Sentel GSM

(35,200
)


(35,200
)Millicom Sierra Leone Limited

(1,500
)


(1,500
)Millicom Tanzania Limited

(20,000
)


(20,000
)Total

(185,848
)
151,080

(34,768
)


F-28

---



Colombia Móvil S.A.

On October 2, 2006, the Group acquired 50% plus one of the voting shares of Colombia Móvil S.A., a mobile operation in Colombia.
Millicom completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2006. The final determined fair
value of the identifiable assets and liabilities acquired were as follows:

Recognised on acquisition

Carrying valueUS$ '000

US$ '000Intangible assets, net(i)

176,124

71,124Property, plant and equipment, net(ii)

245,285

274,937Financial assets(iii)

15,411

167Inventories

15,297

15,297Trade receivables

31,195

31,195Prepayments and accrued income

14,954

14,954Current tax assets

5,991

5,991Other current assets

14,740

14,740Cash and cash equivalents(iv)

151,080

28,566670,077

456,971Non-current debt and other financing

165,530

165,530Other non-current payables

19,705

19,705Current debt and other financing

238,160

238,160Trade payables

59,276

59,276Accrued interest and other expenses

20,227

20,227Current tax liabilities

20,588

20,588Other current liabilities

7,523

7,523Contingent liabilities(iii)

15,244

546,253

531,009Fair value of net assets acquired and contingent liabilities (100%)

123,824Fair value of net assets acquired and contingent liabilities (50% acquired)

61,912Goodwill arising on acquisition

62,236Acquisition cost

124,148


---

F-29

---



The
goodwill is attributable to the profitability potential of the acquired business and the synergies expected to arise from the Group's acquisition of Colombia Movil S.A. The
fair value of the subscriber 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
acquisition cost of Colombia Movil S.A. was $124.1 million, including acquisition costs of $1.6 million and was financed through borrowings.

The
acquired business contributed revenues of $90.2 million and net losses of $13.8 million for the period from acquisition to December 31, 2006. If the acquisition
had occurred on January 1, 2006, unaudited pro forma Group revenue from continuing operations would have been $1,823 million, and the unaudited pro forma profit for the year from
continuing operations would have been $176 million. These amounts have been calculated using the Group accounting policies.

In
2007, the Group reversed $23.4 million of goodwill as a result of the recognition of deferred tax assets in respect of tax losses carried forward (see note 13).

Telefonica Celular del Paraguay S.A

In July, 2006, Millicom completed its purchase for a total consideration of $5.0 million of the remaining 4% ownership interest in Telefonica Celular del
Paraguay S.A., its subsidiary in Paraguay in which Millicom now has 100% ownership. The acquisition was approved by the regulatory authorities on July 12, 2006. Millicom recognised
goodwill of $3.1 million as a result of the acquisition of the minority interest, recorded under the caption "Intangible assets, net".

Sentel GSM

On March 14, 2006, Millicom purchased for a total consideration of $35.2 million the remaining 25% ownership interest in Sentel GSM, its operation
in Senegal in which Millicom now has 100% ownership. Millicom recognised goodwill of $31.5 million as a result of the acquisition of the minority interest, recorded under the caption
"Intangible assets, net".

Millicom Sierra Leone Limited

On February 1, 2006, Millicom paid $1.5 million as the second instalment in respect of the acquisition on December 16, 2005 of 30% of the
shares in Millicom Sierra Leone Limited.

Millicom Tanzania Limited

On January 23, 2006, Millicom purchased for a total consideration of $20.0 million the remaining 15.6% ownership interest in Millicom Tanzania
Limited, its operation in Tanzania in which Millicom now has 100% ownership. Millicom recognised goodwill of $15.9 million as a result of the acquisition of the minority interest, recorded
under the caption "Intangible assets, net".

F-30

---



Year ended December 31, 2005

Millicom acquired the following subsidiaries, joint ventures and minority interests during the year ended December 31, 2005:

Net acquisition cost

Net cash acquired

TotalUS$ '000

US$ '000

US$ '000Oasis S.P.R.L.

(35,000
)
864

(34,136
)Telefonica Celular

(20,000
)
3,386

(16,614
)Millicom Sierra Leone Limited

(1,500
)


(1,500
)Millicom (Ghana) Limited

(20,000
)


(20,000
)Total

(76,500
)
4,250

(72,250
)


Oasis S.P.R.L.

On September 13, 2005, the Group acquired 100% of the voting shares of Oasis S.P.R.L. ("Oasis"), a mobile operation in the Democratic Republic of Congo.
The acquisition cost of Oasis was $35.0 million and was fully paid in cash.

The
acquired business contributed revenues of $17.8 million (from the date of acquisition to December 31, 2005: $5.2 million) and net losses of $26.3 million
(from the date of acquisition to December 31, 2005: loss of $4.9 million) to Millicom for the year ended December 31, 2006.

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2006. On
finalization of the allocation of the purchase price Millicom used the discounted excess earnings method to ascertain the value to be allocated to the subscriber bases. As a result, Millicom adjusted
the value allocated to subscriber bases from the provisional amount of $4.0 million to $nil and therefore reversed $0.2 million of amortization charges previously recorded in 2005.

The
remaining goodwill was attributed to the profitability potential of the acquired business and the synergies expected to arise from the Group's acquisition of Oasis.

Telefonica Celular

On May 26, 2005, Millicom acquired an additional 16.7% in the capital of its operation in Honduras, Telefonica Celular ("Celtel"), for a total
consideration of $20.0 million, taking its ownership from 50.00% to 66.7%. Due to the presence of joint control, Millicom continues to account for Celtel as a joint venture using proportional
consolidation. The 2005 results of Celtel have been proportionally consolidated at 50.00% from January 1, 2005 to May 26, 2005 and at 66.7% afterwards.

At
the time of the additional acquisition, for the valuation of the identifiable assets and liabilities Millicom has involved a third party valuation specialist. In accordance with the
provisions of IFRS 3, as the initial fair value computation of the identifiable assets and liabilities was in excess of the acquisition cost, Millicom reassessed the valuation. After this
reassessment the remaining excess of $6.3 million was immediately recognised in the consolidated statements of profit and loss under the caption "Other operating income".

F-31

---



Millicom Sierra Leone Limited

On December 16, 2005, Millicom entered into an agreement with Comtech, the minority shareholder in its operation in Sierra Leone to purchase the remaining
30% of shares in Sierra Leone not already held by Millicom for $3.0 million. The purchase was made in two installments. The first one, on December 16, 2005 by which the agreements were
formally signed and 50% of the purchase price was paid. The second one, which occurred on February 1, 2006, when the shares were actually transferred to Millicom and the second half of the
purchase price was settled. Between those dates, certain administrative matters had to be solved by the parties, the most significant one being the receipt by the National Bank of Sierra Leone of the
confirmation of the sale. As the later was received on December 22, 2005, Millicom recorded the acquisition on that date as by then both parties had effectively fulfilled their main obligations
under the agreement and the remaining administrative matters were customary to the finalization of the agreement. The purchase price of $3.0 million is entirely recognized as goodwill as
Millicom's operation in Sierra Leone had negative equity on the acquisition date.

Millicom (Ghana) Limited

In December 2005, Millicom bought an option to purchase 30% of Millicom (Ghana) Limited, Millicom's operation in Ghana, from a former shareholder for an amount of
$20.0 million. This amount is entirely recognised as goodwill as the purchase of the option represents, in substance, the acquisition of the economic benefits associated with the 30% minority
interest and at the date of the purchase of the option by Millicom, Millicom Ghana Limited had negative shareholders' equity.

5.     DISPOSALS OF SUBSIDIARIES AND JOINT VENTURES

The gains from sales of subsidiaries and joint ventures during the years ended December 31, 2007, 2006 and 2005 were as follows:

2007

2006

2005US$ '000

US$ '000

US$ '000From continuing operations



8,099

1,269From discontinued operations

258,346

738

Total

258,346

8,837

1,269


Year ended December 31, 2007

In 2007, Millicom completed the sale of Paktel Limited, for total proceeds of $284.8 million realising a net gain of $258.3 million. Millicom
incurred costs of $14.2 million on the transaction and of the net proceeds of $270.6 million, Millicom received $263.0 million in 2007 and the remaining $7.6 million in
January 2008 (see note 6).

Year ended December 31, 2006

As part of the sale of Pakcom Limited (see note 6), Millicom transferred in 2006 for $1 of consideration 10% of its ownership in Paktel Limited to the
Arfeen Group, reducing Millicom's ownership in Paktel Limited to 88.9%. No gain or loss was recorded on the disposal.

F-32

---



In
May 2006, Millicom disposed of its wholly-owned subsidiary MIC-USA Inc. for $1. A net gain of $6.1 million was recognised from the sale and
MIC-USA Inc. ceased to be consolidated from the date of sale. As part of the disposal of MIC-USA Inc., Millicom disposed of Great Universal Inc. and Modern
Holdings Inc. Although Great Universal Inc. and Modern Holdings Inc. were wholly-owned by Millicom, they were not consolidated because of the existence of outstanding warrants
that enabled the warrant holder to control Great Universal Inc. and Modern Holdings Inc. These entities were accounted for as financial assets available for sale. Upon disposal, the
revaluation reserve was reversed and no gain or loss was recorded on their disposal in 2006.

Millicom
sold other minor subsidiaries and other joint-ventures, including its operation in Peru which has been treated as a discontinued operation, for $6.4 million net proceeds
resulting in a gain of $2.7 million. Cash disposed in the sale of those companies amounted to $2.4 million.

Year ended December 31, 2005

In 2005, Millicom completed the sale of Millicom Chile S.A., which held certain rights in Chile, for net total proceeds of $0.9 million, realizing a
net gain of $0.9 million.

In
2005, Millicom disposed of or liquidated a number of other minor subsidiaries for nil net proceeds, realizing a net gain of $0.4 million.

The
impact of the above-mentioned disposals and the carrying amounts at the date of disposal of the assets and liabilities disposed of during the years ended December 31, 2007 and
2006 were as follows:

2007

2006US$ '000

US$ '000Property, plant and equipment



1,517Financial assetsavailable for sale



2,977Financial assetsother



18Current assets



1,197Assets held for sale

404,442

257,765Non current liabilities



(2,947
)Current liabilities



(2,483
)Liabilities directly associated with assets held for sale

(392,158
)
(253,541
)Loans written-off



(6,939
)12,284

(2,436
)Gain on sale

258,346

8,837Total net sales price, in cash and cash equivalents

270,630

6,401Less: Cash disposed



(2,397
)Deferred sales proceeds

(7,593
)
Cash flow on disposal net of cash

263,037

4,004From continuing operations



958From discontinued operations

263,037

4,962


F-33

---



6.     DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Discontinued operations

The results of discontinued operations for the years ended December 31, 2007, 2006 and 2005 are presented below:

2007

2006

2005US$ '000

US$ '000

US$ '000Revenues

6,130

69,125

163,309Operating expenses(i) (ii)

(5,178
)
(106,793
)
(235,934
)Gain from disposal

258,346

738

Operating profit (loss)

259,298

(36,930
)
(72,625
)Non-operating expenses, net

(679
)
(38,983
)
(29,530
)Profit (loss) before tax

258,619

(75,913
)
(102,155
)Tax benefit



100

3,895Profit (loss) for the year attributable to equity holders

258,619

(75,813
)
(98,260
)


---

The
cash provided (used) by discontinued operations for the years ended December 31, 2007, 2006 and 2005 is presented below:

2007

2006

2005US$ '000

US$ '000

US$ '000Net cash (used) provided by operating activities

(2,133
)
(30,925
)
90,990Net cash provided (used) by investing activities

263,037

(40,869
)
(162,963
)Net cash provided by financing activities



11,306

15,161Cash provided (used) by discontinued operations

260,904

(60,488
)
(56,812
)


The
following table gives details of non cash investing and financing activities of discontinued operations for the years ended December 31, 2007, 2006 and 2005:

2007

2006

2005US$ '000

US$ '000

US$ '000Investing activitiesAcquisition of property, plant and equipment



(62,177
)
Acquisition of licenses





(217,885
)Financing activitiesVendor financing



62,177

License payable





217,885


F-34

---



Pakcom Limited and Paktel Limited

In November 2006, Millicom decided to exit from its remaining business in Pakistan, Paktel Limited, and, as a result Paktel Limited and Pakcom Limited have been
classified as discontinued operations. In addition as at December 31, 2006 the assets and liabilities of Paktel Limited are disclosed under the captions "Assets held for sale" and "Liabilities
directly associated with assets held for sale". The sale of Pakcom Limited was completed in June 2006 and the sale of Paktel Limited was completed in February 2007.

Comvik International (Vietnam) A.B.

Millicom has an 80% equity interest in Comvik International (Vietnam) AB ("Comvik") which had entered into a Business Cooperation Contract ("BCC") with a
government-owned company to operate a nationwide cellular GSM network in Vietnam (Mobifone). The BCC expired in May 2005 and Millicom has been negotiating with the Vietnamese government to convert the
BCC into an equity ownership interest since before the expiry of the BCC. During the third quarter of 2006, Millicom concluded that it was unlikely that an acceptable agreement would be reached in the
near future and therefore classified Comvik as a discontinued operation from that date. Millicom has no other continuing operation in Vietnam. As of December 31, 2006, Comvik was presented as
an abandoned operation. As such its assets and liabilities were included under the relevant individual balance sheet captions. All the remaining assets and liabilities were realised and settled in
2007.

Other

Other operations have been classified as discontinued operations in 2006, consisting mainly of Millicom Peru S.A. All these operations were divested in the
second half of 2006 (see note 5).

Assets held for sale

During the fourth quarter of 2006, Millicom began actively negotiating the sale of its shares in Paktel and therefore it was classified as a disposal group held
for sale in the December 31, 2006 balance sheet. As of December 31, 2006, Millicom measured all assets and liabilities of Paktel at book value since the expected selling price was
significantly higher. Consequently, no impairment was recognised on the assets of Paktel in 2006. In 2007, Millicom completed the sale of Paktel (see note 5). Paktel was part of the segment
Asia.

F-35

---



The
major classes of assets and liabilities classified as held for sale as at December 31, 2007 and 2006 are as follows:

2007

2006US$ '000

US$ '000AssetsIntangible assets, net



187,414Property, plant and equipment, net



192,881Other non-current Assets



500Trade receivables, net



11,148Inventories



494Other current assets



7,501Cash and cash equivalents



7,135Assets held for sale



407,073LiabilitiesOther non-current liabilities



107,439Trade payables



33,277Current tax liabilities



3,345Other current liabilities



108,072Current debt and other financing



77,576Non-current debt and other financing



64,330Liabilities directly associated with assets held for sale



394,039Net assets directly associated with disposal group



13,034


F-36

---



7.     SUBSIDIARIES

The Group has the following significant subsidiaries, which are consolidated:

|Name of the company |                                         | Country |                                  | Holding December 31, 2007 |                | Holding December 31, 2006
|------------------- | --------------------------------------- | ------- | -------------------------------- | ------------------------- | -------------- | -------------------------
|
|Central America     |                                         |         |                                  |                           |                |                          
|                    | Telemóvil El Salvador S.A.              |         | El Salvador                      |                           | 100.0          |                          
|South America       |                                         |         |                                  |                           |                |                          
|                    | Telefónica Celular de Bolivia S.A.      |         | Bolivia                          |                           | 100.0          |                          
|                    | Telefónica Celular del Paraguay S.A.(i) |         | Paraguay                         |                           | 100.0          |                          
|                    | Colombia Móvil S.A. E.S.P.(i)           |         | Colombia                         |                           | 50.0 + 1 share |                          
|Africa              |                                         |         |                                  |                           |                |                          
|                    | Millicom Ghana Company Limited(i)       |         | Ghana                            |                           | 100.0          |                          
|                    | Sentel GSM S.A.(i)                      |         | Senegal                          |                           | 100.0          |                          
|                    | Millicom (S.L.) Limited(i)              |         | Sierra Leone                     |                           | 100.0          |                          
|                    | MIC Tanzania Limited(i)                 |         | Tanzania                         |                           | 100.0          |                          
|                    | Oasis S.P.R.L.(i)                       |         | Democratic Republic of Congo     |                           | 100.0          |                          
|                    | Millicom Tchad S.A.                     |         | Chad                             |                           | 87.5           |                          
|Asia                |                                         |         |                                  |                           |                |                          
|                    | Millicom Lao Co. Limited                |         | Lao People's Democratic Republic |                           | 74.1           |                          
|                    | Paktel Limited(ii)                      |         | Pakistan                         |                           |               |                          
|                    | Tigo (Pvt) Limited                      |         | Sri Lanka                        |                           | 99.9           |                          
|Unallocated         |                                         |         |                                  |                           |                |                          
|                    | Millicom International Operations S.A.  |         | Luxembourg                       |                           | 100.0          |                          
|                    | Millicom International Operations B.V.  |         | Netherlands                      |                           | 100.0          |                          
|                    | MIC Latin America B.V.                  |         | Netherlands                      |                           | 100.0          |                          
|                    | Millicom Africa B.V.                    |         | Netherlands                      |                           | 100.0          |                          
|                    | Millicom Holding B.V.                   |         | Netherlands                      |                           | 100.0          |                          

---

8.     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, 2007 |      | Holding December 31, 2006
|------------------- | ----------------------------- | ------- | --------- | ------------------------- | ---- | -------------------------
|
|Central America     |                               |         |           |                           |      |                          
|                    | Comunicaciones Celulares S.A. |         | Guatemala |                           | 55.0 |                          
|                    | Telefónica Celular S.A.       |         | Honduras  |                           | 66.7 |                          
|Africa              |                               |         |           |                           |      |                          
|                    | Emtel Limited                 |         | Mauritius |                           | 50.0 |                          
|Asia                |                               |         |           |                           |      |                          
|                    | Cam GSM Company Limited       |         | Cambodia  |                           | 58.4 |                          

F-37

---



The share of assets and liabilities of the jointly controlled entities at December 31, 2007 and 2006, which are included in the
consolidated financial statements, are as follows:

2007

2006US$ '000

US$ '000Current assets

184,202

145,271Non-current assets

489,301

320,934Total assets

673,503

466,205Current liabilities

263,876

197,238Non-current liabilities

96,207

52,777Total liabilities

360,083

250,015


The
share of revenues and operating expenses of the jointly controlled entities for the years ended December 31, 2007, 2006 and 2005, which are included in the consolidated
financial statements, are as follows:

2007

2006

2005US$ '000

US$ '000

US$ '000Revenues

901,564

625,544

365,671Total operating expenses

(483,430
)
(365,826
)
(237,439
)Operating profit

418,134

259,718

128,232


9.     SEGMENT INFORMATION

The primary segment reporting format is determined to be geographic segments as the Group's risks and rates of return are affected predominantly by the fact that
it operates in different countries in different geographical areas. The Group operates mainly in one reportable business segment, telecommunications services. The operating businesses are organised
and managed according to the geographical areas, which represent the basis on which the information is presented to the Board of Directors and executive management to evaluate past performance and for
making decisions about the future allocation of resources.

For
segmental information on investment in associates and profit from associates (see note 17).

Primary Reporting FormatGeographical Segments

The Group operates in 16 countries within four regions: Central America, South America, Africa and Asia.

F-38

---



The following tables present revenues, operating profit/ (loss) and other segment information for the years ended December 31, 2007, 2006 and 2005:

|December 31, 2007                                                |  | Central America |  | South America |  | Africa    |  | Asia    |  | Unallocated item |   | Total Continuing Operations |  | Discontinued Operations (note 6) |   | Elimination |   | Total     |  
|---------------------------------------------------------------- |  | --------------- |  | ------------- |  | --------- |  | ------- |  | ---------------- | - | --------------------------- |  | -------------------------------- | - | ----------- | - | --------- | -
|
|Revenues                                                         |  | 1,149,368       |  | 809,881       |  | 476,593   |  | 194,772 |  |                 |   | 2,630,614                   |  | 6,130                            |   |            |   | 2,636,744 |  
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Operating profit/(loss)                                          |  | 526,369         |  | 106,591       |  | 57,939    |  | 41,041  |  | (69,014          | ) | 662,926                     |  | 259,298                          |   |            |   | 922,224   |  
|Add back:                                                        |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Depreciation and amortization                                    |  | 80,695          |  | 144,704       |  | 91,375    |  | 37,927  |  | 239              |   | 354,940                     |  |                                 |   |            |   | 354,940   |  
|Loss on disposal and impairment of property, plant and equipment |  | 1,083           |  | 1,937         |  | 251       |  | 588     |  | (44              | ) | 3,815                       |  |                                 |   |            |   | 3,815     |  
|Reduction of goodwill                                            |  |                |  | 23,358        |  |          |  |        |  |                 |   | 23,358                      |  |                                 |   |            |   | 23,358    |  
|Corporate costs                                                  |  |                |  |              |  |          |  |        |  | 49,591           |   | 49,591                      |  |                                 |   |            |   | 49,591    |  
|Share based compensation                                         |  |                |  |              |  |          |  |        |  | 19,228           |   | 19,228                      |  |                                 |   |            |   | 19,228    |  
|Gain on disposal of subsidiaries and joint ventures, net         |  |                |  |              |  |          |  |        |  |                 |   |                            |  | (258,346                         | ) |            |   | (258,346  | )
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Adjusted operating profit(i)                                     |  | 608,147         |  | 276,590       |  | 149,565   |  | 79,556  |  |                 |   | 1,113,858                   |  | 952                              |   |            |   | 1,114,810 |  
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Total Assets                                                     |  | 1,086,366       |  | 1,143,305     |  | 1,046,669 |  | 299,976 |  | 1,087,774        |   | 4,664,090                   |  |                                 |   | (250,264    | ) | 4,413,826 |  
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Total Liabilities                                                |  | 521,285         |  | 859,455       |  | 947,234   |  | 227,936 |  | 875,084          |   | 3,430,994                   |  |                                 |   | (385,504    | ) | 3,045,490 |  
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Additions to:                                                    |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Property, plant and equipment                                    |  | 282,312         |  | 319,861       |  | 339,669   |  | 93,354  |  | 926              |   | 1,036,122                   |  | 38                               |   |            |   | 1,036,160 |  
|Intangible assets                                                |  | 9,366           |  | 5,216         |  | 3,323     |  | 594     |  | 943              |   | 19,442                      |  |                                 |   |            |   | 19,442    |  
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  
|Capital expenditure                                              |  | 291,678         |  | 325,077       |  | 342,992   |  | 93,948  |  | 1,869            |   | 1,055,564                   |  | 38                               |   |            |   | 1,055,602 |  
|                                                                 |  |                 |  |               |  |           |  |         |  |                  |   |                             |  |                                  |   |             |   |           |  

F-39

---



|
|

|December 31, 2006                                                |  | Central America |  | South America |  | Africa  |  | Asia    |  | Unallocated item |   | Total Continuing Operations |   | Discontinued Operations (note 6) |   | Elimination |   | Total     |  
|---------------------------------------------------------------- |  | --------------- |  | ------------- |  | ------- |  | ------- |  | ---------------- | - | --------------------------- | - | -------------------------------- | - | ----------- | - | --------- | -
|
|Revenues                                                         |  | 796,111         |  | 321,038       |  | 312,105 |  | 146,846 |  |                 |   | 1,576,100                   |   | 69,125                           |   |            |   | 1,645,225 |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Operating profit/(loss)                                          |  | 334,923         |  | 49,657        |  | 63,143  |  | 36,070  |  | (42,505          | ) | 441,288                     |   | (36,930                          | ) |            |   | 404,358   |  
|Add back:                                                        |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Depreciation and amortization                                    |  | 79,242          |  | 68,335        |  | 56,763  |  | 24,701  |  | 200              |   | 229,241                     |   | 28,516                           |   |            |   | 257,757   |  
|Loss on disposal and impairment of property, plant and equipment |  | 1,265           |  | 26            |  | 2,666   |  | 357     |  | 141              |   | 4,455                       |   | (7,850                           | ) |            |   | (3,395    | )
|Corporate costs                                                  |  |                |  |              |  |        |  |        |  | 37,413           |   | 37,413                      |   |                                 |   |            |   | 37,413    |  
|Share based compensation                                         |  |                |  |              |  |        |  |        |  | 12,850           |   | 12,850                      |   |                                 |   |            |   | 12,850    |  
|Gain on disposal of subsidiaries and joint ventures, net         |  |                |  |              |  |        |  |        |  | (8,099           | ) | (8,099                      | ) |                                 |   |            |   | (8,099    | )
|Other items                                                      |  |                |  |              |  |        |  |        |  |                 |   |                            |   | 3,340                            |   |            |   | 3,340     |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Adjusted operating profit(i)                                     |  | 415,430         |  | 118,018       |  | 122,572 |  | 61,128  |  |                 |   | 717,148                     |   | (12,924                          | ) |            |   | 704,224   |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Total Assets                                                     |  | 771,553         |  | 941,133       |  | 699,532 |  | 209,022 |  | 468,000          |   | 3,089,240                   |   | 428,663                          |   | (196,909    | ) | 3,320,994 |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Total Liabilities                                                |  | 363,829         |  | 641,522       |  | 585,753 |  | 153,585 |  | 887,255          |   | 2,631,944                   |   | 540,968                          |   | (434,306    | ) | 2,738,606 |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Additions to:                                                    |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Property, plant and equipment                                    |  | 176,769         |  | 71,495        |  | 263,579 |  | 104,596 |  | 68               |   | 616,507                     |   | 107,901                          |   |            |   | 724,408   |  
|Intangible assets                                                |  | 25,880          |  | 2,154         |  | 251     |  | 5,488   |  |                 |   | 33,773                      |   |                                 |   |            |   | 33,773    |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Capital expenditure                                              |  | 202,649         |  | 73,649        |  | 263,830 |  | 110,084 |  | 68               |   | 650,280                     |   | 107,901                          |   |            |   | 758,181   |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  

|
|

F-40

---



|December 31, 2005                                                |  | Central America |  | South America |  | Africa  |  | Asia    |  | Unallocated item |   | Total Continuing Operations |   | Discontinued Operations (note 6) |   | Elimination |   | Total     |  
|---------------------------------------------------------------- |  | --------------- |  | ------------- |  | ------- |  | ------- |  | ---------------- | - | --------------------------- | - | -------------------------------- | - | ----------- | - | --------- | -
|
|Revenues                                                         |  | 452,600         |  | 141,655       |  | 204,397 |  | 124,128 |  |                 |   | 922,780                     |   | 163,309                          |   |            |   | 1,086,089 |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Operating profit/(loss)                                          |  | 177,012         |  | 29,555        |  | 55,440  |  | 33,418  |  | (20,056          | ) | 275,369                     |   | (72,625                          | ) |            |   | 202,744   |  
|Add back:                                                        |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Depreciation and amortization                                    |  | 61,420          |  | 26,961        |  | 32,340  |  | 20,422  |  | 143              |   | 141,286                     |   | 77,070                           |   |            |   | 218,356   |  
|Loss on disposal and impairment of property, plant and equipment |  | 875             |  | 137           |  | 387     |  | 127     |  | 968              |   | 2,494                       |   | 52,155                           |   |            |   | 54,649    |  
|Corporate costs                                                  |  |                |  |              |  |        |  |        |  | 22,994           |   | 22,994                      |   |                                 |   |            |   | 22,994    |  
|Share based compensation                                         |  |                |  |              |  |        |  |        |  | 3,075            |   | 3,075                       |   |                                 |   |            |   | 3,075     |  
|Gain on disposal of subsidiaries and joint ventures, net         |  |                |  |              |  |        |  |        |  | (1,269           | ) | (1,269                      | ) |                                 |   |            |   | (1,269    | )
|Other items                                                      |  |                |  |              |  |        |  |        |  | (5,855           | ) | (5,855                      | ) | 1,385                            |   |            |   | (4,470    | )
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Adjusted operating profit(i)                                     |  | 239,307         |  | 56,653        |  | 88,167  |  | 53,967  |  |                 |   | 438,094                     |   | 57,985                           |   |            |   | 496,079   |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Total Assets                                                     |  | 430,747         |  | 158,393       |  | 373,737 |  | 146,909 |  | 862,330          |   | 1,972,116                   |   | 637,103                          |   | (49,563     | ) | 2,559,656 |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Total Liabilities                                                |  | 138,018         |  | 96,896        |  | 306,210 |  | 101,472 |  | 1,177,754        |   | 1,820,350                   |   | 664,999                          |   | (259,477    | ) | 2,225,872 |  
|                                                                 |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Additions to:                                                    |  |                 |  |               |  |         |  |         |  |                  |   |                             |   |                                  |   |             |   |           |  
|Property, plant and equipment                                    |  | 78,503          |  | 30,048        |  | 110,285 |  | 39,188  |  | 36               |   | 258,060                     |   | 91,685                           |   |            |   | 349,745   |  
|Intangible assets                                                |  | 3,579           |  | 450           |  | 2,992   |  | 378     |  | 784              |   | 8,183                       |   | 218,012                          |   |            |   | 226,195   |  
|Capital expenditure                                              |  | 82,082          |  | 30,498        |  | 113,277 |  | 39,566  |  | 820              |   | 266,243                     |   | 309,697                          |   |            |   | 575,940   |  

---

F-41

---



10.   ANALYSIS OF OPERATING PROFIT

The Group's operating income and expenses from continuing operations analysed by nature of expense is as follows:

2007

2006

2005US$ '000

US$ '000

US$ '000Revenues

2,630,614

1,576,100

922,780Cost of rendering telecommunication services

(689,634
)
(433,878
)
(263,807
)Depreciation and amortization (notes 9,15 and 16)

(354,940
)
(229,241
)
(141,286
)Dealer commissions

(214,959
)
(120,327
)
(58,870
)Advertising and promotion

(113,010
)
(46,275
)
(25,264
)Phone subsidies

(112,777
)
(56,695
)
(26,325
)Employee related costs (note 11)

(169,589
)
(97,005
)
(51,810
)Operating lease expense (note 28)

(47,681
)
(23,517
)
(15,012
)External services

(52,143
)
(32,329
)
(17,064
)Network maintenance

(47,553
)
(24,607
)
(16,653
)Utilities

(46,193
)
(25,521
)
(14,634
)Reduction of goodwill (notes 9 and 15)

(23,358
)


Loss on disposal of assets (note 9)

(2,064
)
(1,503
)
(2,494
)Impairment of assets (notes 9 and 16)

(1,751
)
(2,952
)
Other operating income



4,036

15,412Gain from sale of subsiariaries and joint ventures, net



8,099

1,269Other expenses

(92,036
)
(53,097
)
(30,873
)Operating profit

662,926

441,288

275,369


11.   EMPLOYEE RELATED COSTS

Employee related costs are comprised of the following:

2007

2006

2005US$ '000

US$ '000

US$ '000Wages and salaries

(118,792
)
(65,179
)
(39,691
)Social security

(13,578
)
(6,497
)
(3,006
)Share based compensation (see note 22)

(19,228
)
(12,850
)
(3,075
)Other employee related costs(i)

(17,991
)
(12,479
)
(6,038
)Total

(169,589
)
(97,005
)
(51,810
)


---

The
average number of permanent employees during the years ended December 31, 2007, 2006 and 2005 was as follows:

2007

2006

2005Continuing operations

4,768

3,243

2,386Discontinued operations



450

552Total average number of permanent employees

4,768

3,693

2,938


F-42

---



12.   OTHER NON-OPERATING INCOME (EXPENSES), NET

The Group's other non-operating income (expenses), net is comprised of the following:

2007

2006

2005US$ '000

US$ '000

US$ '000Valuation movement on financial assets:Tele2 A.B."B" shares



(36,386
)
(63,356
)Embedded derivative on the 5% Mandatory Exchangeable Notes



66,095

(5,978
)Other financial derivatives



(785
)
681Exchange gain/(loss) on the 5% Mandatory Exchangeable Notes



(35,616
)
60,591Loss on repurchase of the 10% Senior Notes (see note 24)

(4,961
)


Other exchange gains/(losses)

15,133

5,506

(4,745
)Other non operating income (expenses), net

10,172

(1,186
)
(12,807
)


13.   TAXES

Group taxes are mainly comprised of 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 2007,
2006 or 2005.

The
effective tax rate on continuing operations is approximately 16% (2006: 33%, 2005: 40%). Currently Millicom operations are in jurisdictions with income tax rates of 10% to 40% (2006:
10% to 40%, 2005: 15% to 35%).

The
reconciliation between the weighted average statutory tax rate and the effective average tax rate is as follows:

2007

2006

2005%

%

%Weighted average statutory tax rate(i)

23

24

27Taxes based on revenue

(10
)
(5
)
(3
)Recognition of previously unrecorded tax losses

(11
)
(1
)
(1
)Unrecognised current year tax losses(ii)

10

11

13Withholding taxes on transfers between operating and non operating entities

4

4

4Effective tax rate(iii)

16

33

40


---

F-43

---



In
October 2006, the Group acquired Colombia Móvil (see note 4). At the time of acquisition, Colombia Móvil had tax loss carry forwards. When
completing the purchase price allocation, Millicom assessed that it was not probable that these tax loss carry-forwards would be used. Thus no deferred tax asset was recognized on acquisition. Given
the 2007 actual results of Colombia Móvil and its forecasted performance, Colombia Móvil is expected to be profitable in the foreseeable future. Accordingly, an amount of
$85.8 million was recorded in deferred tax assets corresponding to $39.0 million related to tax losses after the acquisition and $46.8 million related to tax losses prior to the
acquisition. Management has estimated that these tax losses will be used against future taxable profit. As part of these losses existed at the time of acquisition some of the goodwill recorded at
acquisition was reversed resulting in an expense of $23.4 million in 2007 recorded under the caption "other operating expenses".

The
charge for income taxes from continuing operations is shown in the following table and recognises that revenue and expense items may affect the financial statements and tax returns
in different periods (temporary differences):

2007

2006

2005US$ '000

US$ '000

US$ '000Current income tax charge

(172,869
)
(117,128
)
(65,235
)Net deferred income tax benefit/(charge)

85,792

(1,077
)
(3,560
)Charge for taxes

(87,077
)
(118,205
)
(68,795
)


The
tax effects of significant items comprising the Group's net deferred income tax asset and liability as of December 31, 2007 and 2006 are as follows:

|                                      |                                                                                                         | Consolidated balance sheet |         | Consolidated income statement |        
|------------------------------------- | ------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ----------------------------- | -------
|
|
|Deferred income tax assets:           |                                                                                                         |                            |         |                               |        
|Loss carryforwards                    |                                                                                                         | 85,812                     |         |                              |        
|Temporary differences:                |                                                                                                         |                            |         |                               |        
|                                      | Provision for doubtful debtors                                                                          |                            | 1,117   |                               | 1,002  
|                                      | Temporary differences between book and tax basis of intangible assets and property, plant and equipment |                            | 3,621   |                               | 962    
|                                      | Temporary differences between book and tax basis of other assets and liabilties                         |                            | 6,994   |                               | 1,742  
|                                      |                                                                                                         |                            |         |                               |        
|                                      |                                                                                                         | 97,544                     |         | 3,706                         |        
|                                      |                                                                                                         |                            |         |                               |        
|Deferred income tax liabilities:      |                                                                                                         |                            |         |                               |        
|                                      | Temporary differences between book and tax basis of fixed assets                                        |                            | (42,825 | )                             | (36,160
|                                      | Provision for doubtful debtors                                                                          |                            | 1,008   |                               | 1,525  
|                                      | Other temporary differences                                                                             |                            | (597    | )                             | 267    
|                                      |                                                                                                         |                            |         |                               |        
|                                      |                                                                                                         | (42,414                    | )       | (34,368                       | )      
|                                      |                                                                                                         |                            |         |                               |        
|Deferred income tax benefit/(expense) |                                                                                                         |                            |         |                               |        
|                                      |                                                                                                         |                            |         |                               |        

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.

F-44

---



No
deferred tax liability has been recognised in respect of $1,095.0 million (2006: $753.1 million) of unremitted earnings of subsidiaries, joint ventures and associates
because the Group is in a position to control the timing of the reversal of the temporary difference and it is unlikely that such differences will reverse in the foreseeable future. Furthermore, it is
not practicable to estimate the amount of unrecognized deferred tax liabilities in respect of these unremitted earnings.

Unrecognised
net operating losses and other tax loss carryforwards relating to the subsidiaries of Millicom, amounted to $153.8 million as at December 31, 2007 (2006:
$317.7 million, 2005: $97.1 million) with expiry periods of between 1 and 7 years except for $34.0 million where the losses do not expire. In addition the Company has
unrecognized net operating losses of $1,940 million (2006: $1,564 million) which do not expire.

14.   EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to equity holders of the Company by the weighted average number
of shares outstanding during the year.

Diluted
earnings per share amounts are calculated by dividing the net profit attributable to equity holders of the Company (after deducting interest on the convertible notes if the
conversion of these notes would be dilutive) 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:

2007

2006

2005US$ '000

US$ '000

US$ '000BasicNet profit attributable to equity holders from continuing operations

439,088

244,311

96,795Net profit/(loss) attributable to equity holders from discontinued operations

258,054

(75,364
)
(86,518
)Net profit attributable to equity holders used to determine the basic earnings per share

697,142

168,947

10,277DilutedNet profit attributable to equity holders from continuing operations

439,088

244,311

96,795Interest expense on convertible debt (note 24)

16,640



Net profit attributable to equity holders from continuing operations used to determine the diluted earnings per share

455,728

244,311

96,795Net profit/(loss) attributable to equity holders from discontinued operations

258,054

(75,364
)
(86,518
)Net profit attributable to equity holders used to determine the diluted earnings per share

713,782

168,947

10,277


F-45

---



|
|

2007

2006

2005'000

'000

'000Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share

101,088

100,361

98,803Effect of dilution:Potential incremental shares as a result of share options(i)

1,250

1,010

1,118Assumed conversion of convertible debt(ii)

5,709



Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of dilution(i)

108,047

101,371

99,921


---

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.

15.   INTANGIBLE ASSETS

The movements in intangible assets in 2007 were as follows:

|                                          |  | Goodwill |   | Licences |   | Other   |   | Total    |  
|----------------------------------------- |  | -------- | - | -------- | - | ------- | - | -------- | -
|
|Opening balance, net                      |  | 196,178  |   | 165,222  |   | 121,375 |   | 482,775  |  
|Additions                                 |  |         |   | 7,064    |   | 12,378  |   | 19,442   |  
|Amortisation charge(i)                    |  |         |   | (24,918  | ) | (24,087 | ) | (49,005  | )
|Reduction of goodwill(i) (notes 9 and 13) |  | (23,358  | ) |         |   |        |   | (23,358  | )
|Other movements                           |  |         |   |         |   | 7,780   |   | 7,780    |  
|Exchange rate movements                   |  | 11,037   |   | 7,486    |   | 11,345  |   | 29,868   |  
|                                          |  |          |   |          |   |         |   |          |  
|Closing balance, net                      |  | 183,857  |   | 154,854  |   | 128,791 |   | 467,502  |  
|As at December 31, 2007                   |  |          |   |          |   |         |   |          |  
|Cost or valuation                         |  | 183,857  |   | 213,043  |   | 170,909 |   | 567,809  |  
|Accumulated amortisation                  |  |         |   | (58,189  | ) | (42,118 | ) | (100,307 | )
|                                          |  |          |   |          |   |         |   |          |  
|Net                                       |  | 183,857  |   | 154,854  |   | 128,791 |   | 467,502  |  
|                                          |  |          |   |          |   |         |   |          |  

F-46

---



The
movements in intangible assets in 2006 were as follows:

|                                                     |  | Goodwill |   | Licences |   | Other   |   | Total    |  
|---------------------------------------------------- |  | -------- | - | -------- | - | ------- | - | -------- | -
|
|Opening balance, net                                 |  | 77,351   |   | 271,937  |   | 24,199  |   | 373,487  |  
|Additions                                            |  |         |   | 32,520   |   | 1,253   |   | 33,773   |  
|Changes in the composition of the Group (note 4)(ii) |  | 112,724  |   | 71,124   |   | 105,000 |   | 288,848  |  
|Amortisation charge(i)                               |  |         |   | (26,354  | ) | (13,317 | ) | (39,671  | )
|Other movements                                      |  |         |   |         |   | (2,745  | ) | (2,745   | )
|Exchange rate movements                              |  | 6,409    |   | 3,103    |   | 6,985   |   | 16,497   |  
|Transfer to assets held for sale, net (note 6)       |  | (306     | ) | (187,108 | ) |        |   | (187,414 | )
|                                                     |  |          |   |          |   |         |   |          |  
|Closing balance, net                                 |  | 196,178  |   | 165,222  |   | 121,375 |   | 482,775  |  
|As at December 31, 2006                              |  |          |   |          |   |         |   |          |  
|Cost or valuation                                    |  | 196,178  |   | 208,760  |   | 136,213 |   | 541,151  |  
|Accumulated amortisation                             |  |         |   | (43,538  | ) | (14,838 | ) | (58,376  | )
|                                                     |  |          |   |          |   |         |   |          |  
|Net                                                  |  | 196,178  |   | 165,222  |   | 121,375 |   | 482,775  |  
|                                                     |  |          |   |          |   |         |   |          |  

---

The
following table provides details of cash used for additions to intangible assets:

2007

2006

2005US$ '000

US$ '000

US$ '000Additions

19,442

33,773

226,195Additions from Discontinued Operations





(218,012
)Subtotal

19,442

33,773

8,183License installments

6,374

6,717

Cash used from continuing operations for additions from intangible assets

25,816

40,490

8,183


Impairment test of goodwill

For the year ended December 31, 2007, management tested for the impairment of all goodwill. 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 to which the goodwill is allocated.

The
recoverable amount of a cash-generating unit is determined based on discounted cash flow calculation. The cash flow projections used (EBITDA margins, income tax, working
capital, capital expenditure and license renewal cost) are extracted from financial budgets approved by the management covering a period of 3 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 1.5%. The cash flows are discounted using suitable discount and
growth rates. No impairment losses were recorded on goodwill for the years ended December 31, 2007 and 2006.

F-47

---



The allocation of goodwill to cash generating units, net of exchange rate movements, is shown below:

2007

2006US$ '000

US$ '000Millicom's operations in:Colombia(i)

49,731

66,523El Salvador

42,053

42,053Ghana

18,780

19,811Senegal

38,430

34,661Tanzania

16,233

14,818Other

18,630

18,312Total goodwill

183,857

196,178


---

The
recoverable amounts have been determined for the cash generating units based on the following discount rates for the years ended December 31, 2007 and 2006:

Discount rate after tax2007

2006Central America

11.9%13.1%

11.5%13.8%South America

11.0%14.1%

11.8%15.3%Africa

12.8%16.1%

11.5%20.9%Asia

13.0%15.3%

12.5%16.8%


16.   PROPERTY, PLANT AND EQUIPMENT

The movements in 2007 were as follows:

|                             |  | Network equipment |   | Land and Buildings |   | Construction in Progress |   | Other(i) |   | Total     |  
|---------------------------- |  | ----------------- | - | ------------------ | - | ------------------------ | - | -------- | - | --------- | -
|
|Opening balance, net         |  | 933,381           |   | 32,628             |   | 231,638                  |   | 69,512   |   | 1,267,159 |  
|Additions                    |  | 62,765            |   | 3,336              |   | 948,238                  |   | 21,821   |   | 1,036,160 |  
|Disposals                    |  | (5,551            | ) | (139               | ) |                         |   | (227     | ) | (5,917    | )
|Impairments(ii)              |  | (1,722            | ) |                   |   |                         |   | (29      | ) | (1,751    | )
|Depreciation charge(iii)     |  | (286,497          | ) | (1,385             | ) |                         |   | (18,053  | ) | (305,935  | )
|Asset retirement obligations |  | 10,690            |   |                   |   | 4,615                    |   |         |   | 15,305    |  
|Other movements              |  | (7,780            | ) |                   |   |                         |   |         |   | (7,780    | )
|Transfers                    |  | 792,292           |   | 16,199             |   | (808,491                 | ) |         |   |          |  
|Exchange rate movements      |  | 59,425            |   | 1,340              |   | 5,984                    |   | 2,132    |   | 68,881    |  
|                             |  |                   |   |                    |   |                          |   |          |   |           |  
|Closing Balance              |  | 1,557,003         |   | 51,979             |   | 381,984                  |   | 75,156   |   | 2,066,122 |  
|                             |  |                   |   |                    |   |                          |   |          |   |           |  
|As at December 31, 2007      |  |                   |   |                    |   |                          |   |          |   |           |  
|Cost or valuation            |  | 2,228,969         |   | 64,883             |   | 381,984                  |   | 130,300  |   | 2,806,136 |  
|Accumulated depreciation     |  | (671,966          | ) | (12,904            | ) |                         |   | (55,144  | ) | (740,014  | )
|                             |  |                   |   |                    |   |                          |   |          |   |           |  
|Net                          |  | 1,557,003         |   | 51,979             |   | 381,984                  |   | 75,156   |   | 2,066,122 |  
|                             |  |                   |   |                    |   |                          |   |          |   |           |  

F-48

---



The
movements in 2006 were as follows:

|                                                   |  | Network equipment |   | Land and Buildings |   | Construction in Progress |   | Other(i) |   | Total     |  
|-------------------------------------------------- |  | ----------------- | - | ------------------ | - | ------------------------ | - | -------- | - | --------- | -
|
|Opening balance, net                               |  | 451,180           |   | 21,093             |   | 156,090                  |   | 43,411   |   | 671,774   |  
|Additions                                          |  | 20,479            |   | 6,420              |   | 647,435                  |   | 50,074   |   | 724,408   |  
|Disposals                                          |  | (958              | ) | (84                | ) |                         |   | (461     | ) | (1,503    | )
|Change in composition of the Group (notes 4 and 5) |  | 199,030           |   | (1,134             | ) | 43,878                   |   | 1,994    |   | 243,768   |  
|Impairments(iv)                                    |  | (2,952            | ) |                   |   |                         |   |         |   | (2,952    | )
|Depreciation charge(iii)                           |  | (193,416          | ) | (2,464             | ) |                         |   | (22,206  | ) | (218,086  | )
|Asset retirement obligations                       |  | 16,378            |   |                   |   |                         |   |         |   | 16,378    |  
|Transfers                                          |  | 558,999           |   | 8,661              |   | (567,660                 | ) |         |   |          |  
|Exchange rate movements                            |  | 22,511            |   | 1,016              |   | 2,360                    |   | 366      |   | 26,253    |  
|Transfer to assets held for sale (note 6)          |  | (137,870          | ) | (880               | ) | (50,465                  | ) | (3,666   | ) | (192,881  | )
|                                                   |  |                   |   |                    |   |                          |   |          |   |           |  
|Closing Balance                                    |  | 933,381           |   | 32,628             |   | 231,638                  |   | 69,512   |   | 1,267,159 |  
|                                                   |  |                   |   |                    |   |                          |   |          |   |           |  
|As at December 31, 2006                            |  |                   |   |                    |   |                          |   |          |   |           |  
|Cost or valuation                                  |  | 1,517,557         |   | 41,780             |   | 231,638                  |   | 144,927  |   | 1,935,902 |  
|Accumulated depreciation                           |  | (584,176          | ) | (9,152             | ) |                         |   | (75,415  | ) | (668,743  | )
|                                                   |  |                   |   |                    |   |                          |   |          |   |           |  
|Net                                                |  | 933,381           |   | 32,628             |   | 231,638                  |   | 69,512   |   | 1,267,159 |  
|                                                   |  |                   |   |                    |   |                          |   |          |   |           |  

---

The
amount of borrowing costs capitalized for the year ended December 31, 2007 was $5.8 million (2006: $4.5 million).

The
following table provides details of cash used for the purchase of property, plant and equipment:

2007

2006

2005US$ '000

US$ '000

US$ '000Additions

1,036,160

724,408

349,745Additions from discontinued Operations

(38
)
(107,901
)
(91,685
)Subtotal

1,036,122

616,507

258,060Suppliers advances

20,055

40,171

Change in capex payable

(171,809
)
(128,124
)
(61,590
)Vendor financing (see note 27)

(23,041
)
(65,870
)
Cash used from continuing operations for purchase of property, plant and equipment

861,327

462,684

196,470


F-49

---



17.   INVESTMENT IN ASSOCIATES

As at December 31, 2007 and 2006 the principal associates are Navega.com S.A., which is unlisted, and Metrored S.A., which is a subsidiary of
Navega.com S.A.

Navega.com S.A.
is 45% owned by Millicom's joint venture in Guatemala of which Millicom holds 55.0% (see note 8). Metrored S.A. is 51% owned by
Navega.com S.A. and 49% owned by Millicom's joint venture in Honduras of which Millicom holds 66.7% (see note 8). The following table provides summarised financial information of the
Group's investment in associates:

2007

2006US$ '000

US$ '000Opening balance(i)

6,838

5,367Share of profit(i),(ii)

4,400

1,483Exchange rate movements

(4
)
(12
)Closing balance(i)

11,234

6,838


---

The
Group's share of revenues and net profits of its principal associates and its share of the assets and liabilities are as follows:

|Name             |  | Country of incorporation |  | Assets |  | Liabilities |  | Revenues |  | Profit |  | % interest held |  
|---------------- |  | ------------------------ |  | ------ |  | ----------- |  | -------- |  | ------ |  | --------------- | -
|
|2007             |  |                          |  |        |  |             |  |          |  |        |  |                 |  
|Navega.com S.A.  |  | Guatemala                |  | 16,393 |  | 9,640       |  | 8,826    |  | 3,054  |  | 24.7            | %
|Metrored S.A.(i) |  | Honduras                 |  | 11,384 |  | 6,903       |  | 6,848    |  | 1,346  |  | 45.3            | %
|                 |  |                          |  |        |  |             |  |          |  |        |  |                 |  
|                 |  |                          |  | 27,777 |  | 16,543      |  | 15,674   |  | 4,400  |  |                 |  
|                 |  |                          |  |        |  |             |  |          |  |        |  |                 |  
|2006             |  |                          |  |        |  |             |  |          |  |        |  |                 |  
|Navega.com S.A.  |  | Guatemala                |  | 13,613 |  | 9,914       |  | 5,802    |  | 961    |  | 24.7            | %
|Metrored S.A.(i) |  | Honduras                 |  | 8,476  |  | 5,337       |  | 3,976    |  | 522    |  | 45.3            | %
|                 |  |                          |  |        |  |             |  |          |  |        |  |                 |  
|                 |  |                          |  | 22,089 |  | 15,251      |  | 9,778    |  | 1,483  |  |                 |  
|                 |  |                          |  |        |  |             |  |          |  |        |  |                 |  

---

18.   TRADE RECEIVABLES

2007

2006US$ '000

US$ '000Gross trade receivables

259,522

207,067Less: provisions for impairment of receivables

(35,943
)
(21,612
)Trade receivables, net

223,579

185,455


F-50

---



As
at 31 December 2007 and 2006, the ageing analysis of trade receivables is as follows:

|                  |  |         |  | Past due but not impaired |  |       
|----------------- |  | ------- |  | ------------------------- |  | ------
|
|
|
|2007              |  |         |  |                           |  |       
|Telecom operators |  | 72,249  |  | 27,735                    |  | 21,069
|Own subscribers   |  | 21,698  |  | 6,099                     |  | 2,148 
|Others            |  | 16,277  |  | 3,045                     |  | 1,952 
|                  |  |         |  |                           |  |       
|Total             |  | 110,224 |  | 36,879                    |  | 25,169
|                  |  |         |  |                           |  |       
|2006              |  |         |  |                           |  |       
|Telecom operators |  | 79,674  |  | 21,173                    |  | 17,577
|Own subscribers   |  | 23,417  |  | 3,630                     |  | 2,441 
|Others            |  | 12,103  |  | 5,649                     |  | 1,735 
|                  |  |         |  |                           |  |       
|Total             |  | 115,194 |  | 30,452                    |  | 21,753
|                  |  |         |  |                           |  |       

19.   OTHER CURRENT ASSETS

Other current assets are comprised as follows:

2007

2006US$ '000

US$ '000VAT tax sales receivables

20,444

12,581Pledged deposits

8,233

45,402Receivables from the sale of Paktel (see note 5)(i)

7,593

Other

12,211

15,851Total other current assets

48,481

73,834


---

20.   CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised as follows:

2007

2006US$ '000

US$ '000Cash and cash equivalents in U.S. dollars

1,050,919

503,869Cash and cash equivalents in other currencies

123,678

152,823Total cash and cash equivalents

1,174,597

656,692


F-51

---



21.   SHARE CAPITAL

Share capital and share premium

The authorised share capital of the Company totals 133,333,200 registered shares (2006: 133,333,200). As at December 31, 2007, the total subscribed and
fully paid-in share capital and premium was $417.4 million (2006: $372.5 million) consisting of 102,428,260 (2006: 100,683,880) registered common shares at a par value of
$1.50 (2006: $1.50) each.

In
2007, the Company issued a total of 1,744,380 new shares (2006: 980,282 new shares and 654,852 from treasury share), resulting from:



At
the Company's Annual General Meeting in May 2006, the shareholders voted to transfer $101.9 million of the share premium account to the statutory accumulated losses.

22.   SHARE BASED COMPENSATION

Share options

Up 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.

The
following table summarizes information about share options outstanding at December 31, 2007. The market price of the Company's shares as at December 31, 2007 was
$117.94 (2006: $61.64).

|            |  | Options outstanding |  | Options exercisable
|----------- |  | ------------------- |  | -------------------
|
|3.323.75   |  | 3.51                |  | 27,552             
|9.00        |  | 9.00                |  | 10,732             
|20.56       |  | 20.56               |  | 451,408            
|25.0529.75 |  | 26.37               |  | 118,315            
|31.8835.91 |  | 34.06               |  | 99,996             
|3.3235.91  |  | 22.60               |  | 708,003            

F-52

---



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, 2007 |  | Exercise price $ |  | Terms of option                                                                                                                                
|--------------------------------------------------- |  | ----------------------------------------------------- |  | ---------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|May 1996, May 1997, May 1998, May 2000 and May 2004 |  | 179,995                                               |  | 25.0535.91      |  | Exercisable immediately. Options have an indefinite life.                                                                                      
|May 2005                                            |  | 76,667                                                |  | 20.56            |  | Exercisable immediately. Options have a twenty year life.                                                                                      
|December 2001, December 2002, May 2003 and May 2004 |  | 76,600                                                |  | 3.3225.05       |  | Exercisable over a three-year period in equal installments. Options expire after six years from date of grant.                                 
|May 2005                                            |  | 274,741                                               |  | 20.56            |  | Exercisable over a five year period in equal installments. Options expire after six years from date of grant.                                  
|July 2005 and May 2006                              |  | 100,000                                               |  | 20.56            |  | Exercisable over a five-year period in equal installments from the start of the fourth year. Options expire after six years from date of grant.

The
following table summarizes the Company's share options as of December 31, 2007, 2006 and 2005, and changes during the years then ended:

|                                 |  | 2007  |  | 2006       |   | 2005  | 
|-------------------------------- |  | ----- |  | ---------- | - | ----- | 
|
|Outstanding at beginning of year |  | 21.04 |  | 2,380,305  |   | 15.96 | 
|Granted                          |  |      |  |           |   | 20.56 | 
|Expired/forfeited(i)             |  | 20.83 |  | (46,430    | ) | 28.53 | 
|Exercised                        |  | 20.37 |  | (1,625,872 | ) | 9.08  | 
|Outstanding at end of year       |  | 22.60 |  | 708,003    |   | 21.04 | 
|Exercisable at end of year       |  | 24.59 |  | 358,574    |   | 20.91 | 

---

F-53

---



The
range of fair value of options granted determined using option pricing models was $6.30 to $8.31 for 2006 and $2.76 to $8.63 for 2005. The significant inputs into the model were
share price of $19.21 for 2006 and $17.88 for 2005 at the grant date, exercise price as disclosed above, expected exercise date based on previous exercise behavior for employees and for directors
between 1 and 20 years, option contractual term as previously disclosed, annual risk-free interest rate of 3.74% for both 2006 and 2005 and expected share price volatility of 46.5%
for both 2006 and 2005 based on statistical analysis of daily share prices over the last 2 years amended for the change in the debt levels of the Company over the same period of time. No new
options were granted in 2007.

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.

For
the year ended December 31, 2007 Millicom recorded a charge of $0.6 million (2006: $2.8 million; 2005:$3.1 million) related to share options.

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. Grants to directors and employees in 2007 were as follows:

Number of shares

Share price at date of grant

2007 Expense (US$ '000)Directors

5,034

85.86

432Employee share grants relating to 2006

4,017

80.39

323Total

9,051



755


Grants
to directors and employees in 2006 were as follows:

Number of shares

Share price at date of grant

2006 Expense (US$ '000)Directors

10,098

44.58

450Employees

57,415

33.33

1,913Total

67,513



2,363


Compensation
expense for the total number of shares awarded to directors was measured on the grant date, the date of the Annual General Meeting of Shareholders on May 29, 2007,
using Millicom's closing share price as quoted on the NASDAQ National Market on that date.

Compensation
expense for the total number of shares awarded to employees was measured on the grant date, the date the employees were notified of their individual share allocations on
April 4, 2007, using Millicom's closing share price as quoted on the NASDAQ National Market on that date. The shares are subject to a restriction of a one-year holding period. As
the shares related to services provided in 2006, they vested immediately on the grant date.

F-54

---



Long term incentive plans

In May 2006 at the Annual General Meeting a long term incentive plan ("2006 LTIP") was approved although the terms and conditions of the plan were not finalized
until 2007. This long term incentive plan was based on a target share award granted to eligible Millicom employees, limited to Millicom senior-level employees, key high potential employees and certain
critical new recruits. The shares granted are subject to a one-year holding period once the shares are vested.

The
shares awarded under the 2006 LTIP will vest at the end of a three year period, or performance cycle, subject to specified market and performance conditions related to Millicom's
share price growth compared to a peer group index, revenue growth, EBITDA margin, and profit margin. The achievement of a certain level of each condition, measured at the end of the three years,
yields a specific percentage of shares awarded to each employee at the grant date.

The
plan has been designed so that the shares normally vest at the end of the three-year performance period. However, for the performance cycle from 2006 through 2008 only,
the shares granted vest 20% on December 31, 2006, 20% on December 31, 2007 and 60% on December 31, 2008. In addition at the end of the third-year performance period
there could be an additional 40% of shares that vest if further performance targets relating to Millicom's share price growth compared to a peer group index, revenue growth, EBITDA margin, and profit
margin are achieved.

The
total charge for the above plan is estimated at $24.9 million which will be recorded over the service period. Since the plan was approved at the Annual General Meeting in May
2006 and, as such, the employees became aware of the intention to issue the plan at that date, a charge of $7.7 million was recorded in 2006. 57,957 shares were issued in 2007 representing the
grants that vested on December 31, 2006. For the year ended December 31, 2007 a charge of $11 million was recorded..

A
new long term incentive plan covering 2007-2009 ("2007 LTIP") was approved by the Board on March 15, 2007. This plan consists of two elements: performance share plan
and a matching share award plan.

The
shares awarded under the performance share plan will vest at the end of a three year period, or performance cycle, subject to performance conditions related to Millicom's "earnings
per share". The achievement of a certain level of each condition, measured at the end of the three years, yields a specific percentage of shares awarded to each employee at the grant date.

The
matching share award plan requires employees to invest in shares of the Group in order to receive potential matching shares. The shares awarded under this plan vest at the end of a
three year period, or performance cycle subject to market conditions that are based on the "total shareholder return" ("TSR") of Millicom's shares compared to the TSR of six similar mobile telephony
companies during the three-year performance cycle of the plan. A fair value has been determined for potential shares under this plan based on this market condition and this value is
applied to the total potential number of matching shares and will be expensed over the vesting period. Under the matching share award plan rules, Millicom issued 9,214 new shares on June 22,
2007 which were purchased by employees at fair market value.

The
total charge for the above plans is estimated at $24.2 million ($15.8 million for the performance shares and $8.4 million for the matching share award plan)
which will be recorded over the service period. A charge of $4.5 million has been recorded in 2007 in respect of the performance shares and $2.4 million in respect to the matching share
award plan.

F-55

---



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

Matching share award plan 2007

Performance shares 2007

Performance shares 2006Maximum share awards

187,470

250,700

446,600Revision for expected forfeitures

(26,738
)
(35,756
)
(72,053
)Revision for expectations in respect of performance conditions





(26,753
)Shares issued





(57,957
)Share awards expected to vest

160,732

214,944

289,837


Total share-based compensation expense

Total share-based compensation for years ended December 31, 2007, 2006 and 2005 was as follows:

2007

2006

2005US$ '000

US$ '000

US$ '000Share options

627

2,781

3,075Restricted share grants

755

2,363

2006 LTIP

10,971

7,706

2007 LTIP

6,875



Total share-based compensation expense

19,228

12,850

3,075


F-56

---



23.   OTHER RESERVES

|                                                    |  | Legal reserve |  | Equity-settled transaction reserve |   | Equity component convertible notes |   | Currency translation reserve |   | Revaluation reserve |   | Total   |  
|--------------------------------------------------- |  | ------------- |  | ---------------------------------- | - | ---------------------------------- | - | ---------------------------- | - | ------------------- | - | ------- | -
|
|As at January 1, 2005                               |  | 13,577        |  | 2,297                              |   |                                   |   | (71,116                      | ) |                    |   | (55,242 | )
|Fair value adjustment                               |  |              |  |                                   |   |                                   |   |                             |   | (3,308              | ) | (3,308  | )
|Shares issued via the exercise of share options     |  |              |  | (462                               | ) |                                   |   |                             |   |                    |   | (462    | )
|Share based compensation                            |  |              |  | 3,075                              |   |                                   |   |                             |   |                    |   | 3,075   |  
|4% Convertible Notesequity component               |  |              |  |                                   |   | 39,109                             |   |                             |   |                    |   | 39,109  |  
|Currency translation movement                       |  |              |  |                                   |   |                                   |   | (5,005                       | ) |                    |   | (5,005  | )
|                                                    |  |               |  |                                    |   |                                    |   |                              |   |                     |   |         |  
|As at December 31, 2005                             |  | 13,577        |  | 4,910                              |   | 39,109                             |   | (76,121                      | ) | 3,308               |   | (15,217 | )
|Fair value adjustment                               |  |              |  |                                   |   |                                   |   |                             |   | (3,308              | ) | (3,308  | )
|Net shares issued via the exercise of share options |  |              |  | (1,549                             | ) |                                   |   |                             |   |                    |   | (1,549  | )
|Share based compensation                            |  |              |  | 10,487                             |   |                                   |   |                             |   |                    |   | 10,487  |  
|Currency translation movement                       |  |              |  |                                   |   |                                   |   | 12,553                       |   |                    |   | 12,553  |  
|                                                    |  |               |  |                                    |   |                                    |   |                              |   |                     |   |         |  
|As at December 31, 2006                             |  | 13,577        |  | 13,848                             |   | 39,109                             |   | (63,568                      | ) |                    |   | 2,966   |  
|Transfer from retained profit                       |  | 1,526         |  |                                   |   |                                   |   |                             |   |                    |   | 1,526   |  
|Net shares issued via the exercise of share options |  |              |  | (3,838                             | ) |                                   |   |                             |   |                    |   | (3,838  | )
|Share based compensation                            |  |              |  | 18,473                             |   |                                   |   |                             |   |                    |   | 18,473  |  
|Issuance of shares2006 LTIP                        |  |              |  | (4,523                             | ) |                                   |   |                             |   |                    |   | (4,523  | )
|Conversion of part of the 4% Convertible Notes      |  |              |  |                                   |   | (196                               | ) |                             |   |                    |   | (196    | )
|Currency translation movement                       |  |              |  |                                   |   |                                   |   | 31,149                       |   |                    |   | 31,149  |  
|                                                    |  |               |  |                                    |   |                                    |   |                              |   |                     |   |         |  
|As at December 31, 2007                             |  | 15,103        |  | 23,960                             |   | 38,913                             |   | (32,419                      | ) |                    |   | 45,557  |  
|                                                    |  |               |  |                                    |   |                                    |   |                              |   |                     |   |         |  

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 2007, the shareholders voted to transfer $1.5 million from retained profits to the legal reserve.

Equity-settled transaction reserve

The cost of share options is recognised as an increase in the Equity-settled transaction reserve over the period in which the performance and/or service
conditions are fulfilled. If the options are subsequently exercised then the cost attributed to these options is transferred from the Equity-settled transaction reserve to the share premium. The
reserve will be transferred to the share premium account when the shares vest.

F-57

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Equity component convertible notes

The portion of the convertible bond representing the fair value of the conversion option at the time of issue is included in equity reserve (see note 24).

In
October 2007, $1 million of the 4% Convertible Notes were converted into 28,686 shares. The equity component of the 4% Convertible Notes was then reduced by $0.2 million
and reclassified to share premium.

Currency translation reserve

For the purposes of consolidating joint ventures, associates and subsidiaries with functional currencies other than U.S. dollars, their balance sheets are
translated to U.S. dollars using the closing exchange rate. Profit and loss 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.

24.   BORROWINGS

Borrowings are comprised of the following:

2007

2006US$ '000

US$ '000Corporate debt:10% Senior Notes

479,826

538,6734% Convertible Notesdebt component(i)

178,940

171,169Other Debt and Financing

1,175,525

783,814Total borrowings

1,834,291

1,493,656


---

Borrowings
due after more than one year:

2007

2006US$ '000

US$ '000Corporate debt:10% Senior Notes



538,6734% Convertible Notesdebt component



171,169

709,842Other debt and financing:Bank financing

1,061,310

706,745Vendor financing

17,947

27,923Finance leases

7,061

4,933Total non-current other debt and financing

1,086,318

739,601Less: portion payable within one year

(141,112
)
(90,448
)Total other debt and financing due after more than one year

945,206

649,153


F-58

---



Borrowings
due within one year:

2007

2006US$ '000

US$ '000Corporate debt:10% Senior Notes

479,826

4% Convertible Notesdebt component

178,940

658,766

Other debt and financing:Bank financing

83,698

38,167Vendor financing

5,509

6,046Total current other debt and financing

89,207

44,213Portion of non-current debt payable within one year

141,112

90,448Total other debt and financing due within one year

230,319

134,661


10% Senior Notes

On November 24, 2003, Millicom issued $550.0 million aggregate principal amount of 10% Senior Notes (the "10% Senior Notes") due on
December 1, 2013. The 10% Senior Notes bear interest at 10% per annum, payable semi-annually in arrears on June 1 and December 1. The effective interest rate is 10.7%.

The
10% Senior Notes are general unsecured obligations of Millicom and rank equal in right of payment with all future unsecured and unsubordinated obligations of Millicom. The 10% Senior
Notes are not guaranteed by any of Millicom's subsidiaries, joint ventures or affiliates, and as a result are structurally subordinated in right of payment to all indebtedness of such subsidiaries,
joint ventures and affiliates.

If
Millicom experiences 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.

During
2007, Millicom repurchased $90 million of the 10% Senior Notes incurring in a charge of $5.0 million which is recorded under the caption "Other non operating income
(expenses), net".

In
October 2007, Millicom decided that it would redeem the balance of the Notes in December 2008 and pay the contractual redemption premium of 5%. As a result, Millicom reclassified the
10% Senior Notes from non current to current and recorded an additional interest expense of $31 million for the year ended December 31, 2007, which represented the increase in financial
liabilities due to the recognition of the 5% pre-payment expense and an increase in the amortised cost of the Notes due to the earlier settlement date.

4% convertible Notes

In January 2005, Millicom raised $200.0 million aggregate principal amount of 4% Convertible Notes due 2010 (the "4% Convertible Notes"). The net proceeds
of the offering were received on January 7, 2005 in the amount of $195.9 million.

The
4% Convertible Notes are general unsecured obligations of Millicom and rank equal in right of payment with all future unsecured and unsubordinated obligations of Millicom. The rate
of interest payable on the 4% Convertible Notes is 4% per annum. Interest is payable semi-annually in arrears on January 7 and July 7 of each year, beginning on
July 7, 2005. The effective interest rate is 9.6%.

F-59

---



The
4% Convertible Notes were constituted by a trust deed dated January 7, 2005 between Millicom and The Bank of New York, as Trustee for the holders of notes.

Millicom
has apportioned part of the value of the 4% Convertible Notes to equity and part to debt. The value allocated to equity as of December 31, 2007 was $38.9 million
(2006: $39.1 million) and the value allocated to debt was $178.9 million (2006: $171.2 million).

As
of December 31, 2007, $1 million of the 4% Convertible Notes were converted into 28,686 ordinary shares.

On
January 22, 2008, Millicom converted a further $196 million of the outstanding bonds into 5,622,471 shares. On the same day Millicom repaid in cash the remaining
$3 million of bonds that were not converted, including accrued interest. The conversion resulted in an increase of equity amounting to approximately $176 million in January 2008 (see
note 31). As a result Millicom reclassified the 4% Convertible Notes from non current to current.

Other Debt and Financing



2007

2006US$ '000

US$ '000Bolivia (i)

41,874

28,241Chad (ii)

23,830

Colombia (iii)

436,670

372,396Democratic Republic of Congo (iv)

60,877

25,781El Salvador (v)

199,715

154,223Ghana (vi)

108,244

38,391Honduras (vii)

56,961

20,132Senegal (viii)

62,557

28,367Sri Lanka (ix)

53,416

34,357Tanzania (x)

51,471

18,151Other

79,910

63,775Total other debt and financing

1,175,525

783,814Of which:due after more than 1 year

945,206

649,153due within 1 year

230,319

134,661




i)     Bolivia

In December 2007, Telefonica Celular de Bolivia SA ("Telecel Bolivia"), Millicom's operation in Bolivia, signed a financing agreement for
$40.0 million with the Nederlandse Financieringsmaatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as the Netherlands Development Finance Company. The A tranche of
$20.0 million was provided directly by the FMO. This tranche is repayable over 7 years and bears an interest at $LIBOR rate plus 2.25%. The B tranche of $20 million is provided
equally by Nordea and Standard bank. This tranche is repayable over 5 years and bears interest at $LIBOR plus 2.00%. Both tranches are guaranteed by the Company and were fully drawn as at
December 31, 2007.

As
at December 31, 2006, Telecel Bolivia also had $7.2 million outstanding on a financing agreement with the International Finance Corporation granted in 2001 and
$15.0 million outstanding on a bridge financing from Standard Bank. Both of these amounts were repaid during 2007.

F-60

---



In
addition to the above, Telecel Bolivia also had $1.9 million of other debt and financing outstanding as at December 31, 2007 (2006: $6.0 million).

ii)    Chad

In
May 2007, Millicom Tchad S.A., Millicom's operation in Chad, entered into a $32.0 million, 5 year loan with the China Development Bank to finance equipment
purchases from Huawei, an equipment supplier. This loan bears interest at $LIBOR plus 2% and is 100% guaranteed by the Company. As of December 31, 2007, $12.1 million was outstanding
under this facility.

In
August 2007, Millicom Tchad S.A. entered into a Euro11.0 million, 5 year loan with PROPARCO (Promotion et participation pour la coopération
économique). This loan bears interest at EURIBOR plus 2% and is 100% guaranteed by the Company. As at December 31, 2007, the Euro equivalent of $11.7 million was
outstanding under this facility.

iii)   Colombia

In
October 2006, the Company acquired a majority ownership 50% plus 1 share in Colombia Movil S.A. E.S.P. At the time of the acquisition the Company had a COP
168,539 million (approximately $83 million) Hermes guaranteed export credit facility with Citigroup maturing in January 2012 and a COP 309,800 million ($154 million) loan
facility arranged by BBVA maturing in November 2009. These facilities bear interest at IPC plus 6.30% and DTF plus 4.15%, respectively and are 100% guaranteed by the minority shareholders. As at
December 31, 2007 $53.7 million (2006: $59.1 million) and $94.5 million (2006: 127.7 million) respectively were outstanding under these facilities.

Colombia
Movil S.A. E.S.P. also had local currency loans from the minority shareholders outstanding as at December 31, 2007 of $229.5 million (2006:
$185.6 million). These loans bear interest at DTF plus 4.15% and mature between 2011 and 2013.

In
addition, as at December 31, 2007 Colombia Movil S.A. E.S.P. had $57.0 million (2006: $nil) outstanding in respect of local currency 60 day treasury
credits from various banks and $2.0 million (2006: $nil) of other debt and financing, in US$and local currency.

iv)    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 $106.3 million, 7 year loan from the China Development
Bank to finance equipment purchases from Huawei, an equipment supplier. 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, 2007, $55.9 million was outstanding under this facility (2006: $21.5 million) and in addition Oasis had other debt
and financing of $5.0 million (2006: $4.3 million).

v)     El Salvador

In
September 2006, Telemovil 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%. As of December 31, 2007, $199.7 million of this
facility was outstanding (2006: $154.2 million).

F-61

---



vi)    Ghana

In
December 2007 Millicom (Ghana) Limited, Millicom's operation in Ghana, entered into a $60.5 million local 5 year club-deal Facility (Agent Stanbic). 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. The
local Tranche was fully drawn whereas the outstanding amount under the offshore DFI Tranche amounted to $30.0 million at the end of December 2007.

In
July 2005, Millicom (Ghana) Limited entered into a $20 million loan agreement with Citibank N.A., 75% guaranteed by the Overseas Private Investment Corporation and 100%
guaranteed by the Company. This loan bears interest at $LIBOR plus 2.5% and is repayable in 8 semi-annual installments commencing from January 2007. As at December 31, 2007, the
outstanding was $15.0 million (2006: $20.0 million).

In
2006, Millicom (Ghana) Limited entered into a $18.4 million loan from Ericsson Credit B.V., bearing interest at $LIBOR plus 2.5%. This loan was settled in December 2007.

In
addition as at December 31, 2007, Ghana had other debt and financing of $2.7 million (2006: $nil).

vii)  Honduras

Telefonica
Celular S.A., Millicom's operation in Honduras, has facilities with 7 local banks maturing between 2008 and 2015. These facilities are in dollars and in Lempiras and
are unsecured. Interest rates are either fixed or variable, ranging as of December 31, 2007 between 7.28% and 10.25% (2006: between 6.38% and 11%). As at December 31, 2007, the
outstanding debt under these facilities was $57.0 million (2006: $20.1 million).

viii) Senegal

In
December 2005, Sentel GSM, Millicom's operation in Senegal entered into a XAF12,500 million loan agreement with Crédit Lyonnais
Sénégal ("CLS"). This loan bears a fixed interest rate of 8% and is fully repayable at maturity, in December 2010. The outstanding amount in US$as at December 31,
2007 was $27.9 million (2006: $25.2 million).

In
addition Sentel GSM entered into a 5 year additional Tranche of XAF7,500 million with CLS in July 2007. This tranche bears an 8.5% fixed interest rate and was fully
drawn at the end of 2007. The outstanding amount under this additional Tranche in US$as at December 31, 2007 was $17.3 million.

In
September 2006, Sentel GSM additionally entered into a XAF2,500 million bridge loan with the Compagnie Bancaire de l'Afrique Orientale (CBAO). This loan bears a 7% interest
rate and matures in March 2008. As of December 31, 2007 $0.7 million (XAF336 million) (2006: $3.2 million (XAF1,611 million)) of this facility was outstanding.

In
addition, in 2007, Sentel GSM entered into two new loans with CBAO amounting in total to XAF7,500 million bearing fixed interest respectively of 6.5% and 8%. These loans were
fully drawn as at December 31, 2007 and the amount outstanding was $16.7 million.

F-62

---



ix)   Sri Lanka

In
2004, Tigo (Pvt) Limited, Millicom's operation in Sri Lanka arranged a five year syndicated loan of LKR 2,000 million (US$18.2 million) through ABN-Amro,
47.5% is ABN-Amro guaranteed which in turn is counter guaranteed by the Company. The loan carries interest equal to the Sri Lankan Weighted Average Treasury Bill rate plus 2.75% which for
the year ended December 31, 2007 was approximately 20% (2006: 14%). The unsecured tranche carries interest equal to the Sri Lankan Weighted Average Treasury Bill rate plus 3%. Tigo (Pvt)
Limited must repay the loan between 2006 and 2009. The outstanding US$amount as of December 31, 2007 was $9.8 million (2006: $14.6 million).

In
2006, Tigo (Pvt) Limited entered into a LKR4,200 million (US$38.2 million) facility, 50% is ABN-Amro guaranteed which in turn is counter guaranteed by the
Company. This loan matures in December 2011, and bears interest equal to the average weighted prime lending rate plus 1.75% (Tranche A) and plus 1% (Tranche B) approximately 19% and 18%
(2006: 16% and 15%). As of December 31, 2007, this facility was fully drawn and the outstanding US$amount was $38.2 million (2006: $12.4 million).

In
addition to the above, Tigo (Pvt) Limited also had $5.4 million (2006: $7.4 million of which $2.0 million was in local currency) of other debt and local financing
outstanding as at December 31, 2007.

x)     Tanzania

In
March 2007 Millicom Tanzania Limited, Millicom's operation in Tanzania, entered into a new 5 year Citi-Opic facilities, bearing interest 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, 2007
amounted to $22.9 million.

At
the same time Millicom Tanzania Limited entered into a 5 year $10 million Term Loan with Barclays bearing interest of LIBOR plus 3% and a 5 year
$16.5 million vendor financing with Ericsson credit AB, priced at LIBOR plus 2.5%. The amount outstanding as at December 31, 2007 was $8.5 million under the Barclays loan and
$14.0 million under the Ericsson loan.

In
addition to the above, Millicom Tanzania Limited also had $6.1 million (2006: $18.1 million) of other debt and financing outstanding as at December 31, 2007.

Fair value of financial liabilities

Borrowings are recorded at amortised cost. The fair value of borrowings as at December 31, 2007 and 2006 is as follows:

2007

2006US$ '000

US$ '00010% Senior Notes

489,459

601,2194% Convertible Notes(i)

199,000

184,542Other debt and financing

1,173,252

783,954Fair value of total debt

1,861,711

1,569,715




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.

F-63

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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, 2007 and 2006. Amounts issued to cover bank
guarantees are recorded in the consolidated balance sheets 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, 2007:

|                  |  | Bank and other financing guarantees(i) |  | Supplier guarantees(ii) |  | Total
|----------------- |  | -------------------------------------- |  | ----------------------- |  | -----
|
|
|01 year          |  |                                       |  |                        |  |     
|13 years         |  | 36,335                                 |  | 50,205                  |  | 1,200
|35 years         |  | 80,557                                 |  | 102,606                 |  |     
|More than 5 years |  | 89,598                                 |  | 166,000                 |  |     
|                  |  |                                        |  |                         |  |      
|Total             |  | 206,490                                |  | 318,811                 |  | 1,200
|                  |  |                                        |  |                         |  |      

As of December 31, 2006:

|                  |  | Bank and other financing guarantees(i) |  | Supplier guarantees(ii) |  | Total 
|----------------- |  | -------------------------------------- |  | ----------------------- |  | ------
|
|
|01 year          |  | 23,422                                 |  | 33,489                  |  | 12,891
|13 years         |  | 15,786                                 |  | 18,711                  |  | 34,123
|35 years         |  | 60,966                                 |  | 76,450                  |  |      
|More than 5 years |  | 41,547                                 |  | 196,121                 |  |      
|                  |  |                                        |  |                         |  |       
|Total(iii)        |  | 141,721                                |  | 324,771                 |  | 47,014
|                  |  |                                        |  |                         |  |       

---

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 is
$739.2 million (2006: $516.0 million). The assets pledged by the Group for these debts and financings amount to $448.6 million (2006: $758.6 million).

F-64

---



25.   OTHER NON-CURRENT AND CURRENT PROVISIONS AND LIABILITIES

Provisions and other non-current liabilities are comprised as follows:

2007

2006US$ '000

US$ '000Non-current legal provisions (note 28)

7,133

20,195Long-term portion of asset retirement obligations

42,502

23,933Unpaid portion of license fees

915

2,139Other

5,051

3,086Total

55,601

49,353


Included
in non-current legal provisions are litigation contingencies of $3.7 million (2006: $16.3 million) that were assumed as part of the Colombia
Móvil S.A. acquisition. The founding shareholders of Colombia Móvil S.A. committed to reimburse Millicom for any payments relating to these litigation
contingencies. As a consequence, Millicom has booked a corresponding receivable.

Provisions
and other current liabilities are comprised as follows:

2007

2006US$ '000

US$ '000Deferred revenues

82,932

62,070Subscriber deposits

4,890

3,894Current legal provisions (note 28)

3,207

3,561Asset retirement obligations

413

669Unpaid portion of license fees

2,745

7,200Other tax payables

32,939

12,019Other

14,430

9,879Total

141,556

99,292


26.   DIRECTORS' AND OFFICERS' REMUNERATION

Directors

The remuneration of the members of the board of directors of the Company (the "Board") is comprised of an annual fee and share-based compensation. Up until May
2006, the Directors were issued share options. Subsequent to May 2006, the Directors are issued restricted shares. The annual fee and the share based compensation grants are proposed by the Board and
approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

F-65

---



The
remuneration charge for the Board for the years ended December 31, 2007, 2006 and 2005 was as follows:

|                             |                                                     | Chairman |        | Other members of the board |     | Total
|---------------------------- | --------------------------------------------------- | -------- | ------ | -------------------------- | --- | -----
|
|2007                         |                                                     |          |        |                            |     |      
|Fees                         |                                                     |          |        | 82                         |     |      
|Share based compensation:(i) |                                                     |          |        |                            |     |      
|                             | Restricted shares(ii)                               |          | 960    |                            | 82  |      
|                             |                                                     |          |        |                            |     |      
|Total                        |                                                     |          |        | 164                        |     |      
|                             |                                                     |          |        |                            |     |      
|2006                         |                                                     |          |        |                            |     |      
|Fees                         |                                                     |          |        | 75                         |     |      
|Share based compensation:(i) |                                                     |          |        |                            |     |      
|                             | Restricted shares(ii)                               |          | 1,122  |                            | 50  |      
|                             | Charge for share options                            |          |        |                            | 164 |      
|                             |                                                     |          |        |                            |     |      
|Total                        |                                                     |          |        | 289                        |     |      
|                             |                                                     |          |        |                            |     |      
|2005                         |                                                     |          |        |                            |     |      
|Fees                         |                                                     |          |        | 75                         |     |      
|Share based compensation:(i) |                                                     |          |        |                            |     |      
|                             | Share options granted/charge for share options(iii) |          | 25,000 |                            | 137 |      
|                             |                                                     |          |        |                            |     |      
|Total                        |                                                     |          |        | 212                        |     |      
|                             |                                                     |          |        |                            |     |      

---

The
number of shares and share options beneficially owned by the Board as at December 31, 2007 and 2006 was as follows:

Chairman

Other members of the Board

Total2007Shares(i)

2,082

2,100,753

2,102,835Share options

45,000

55,000

100,0002006Shares(i)

1,122

2,154,362

2,155,484Share options

45,000

206,668

251,668




F-66

---





Officers

The remuneration of the Officers of the Company ("Officers") comprises of 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.
For 2006, the annual base salary and other benefits of the Chief Executive Officer ("CEO") was proposed by the Compensation Committee and approved the Board and the annual base salary and other
benefits of the Chief Operating Officer and Chief Financial Officer were set by the CEO and approved by the Board.

F-67

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The
remuneration charge for the Officers for the year ended December 31, 2007, 2006 and 2005 was as follows:

|                             |                                                          | Chief Executive Officer |        | Chief Operating Officer |       | Chief Financial Officer |        | Total
|---------------------------- | -------------------------------------------------------- | ----------------------- | ------ | ----------------------- | ----- | ----------------------- | ------ | -----
|
|2007                         |                                                          |                         |        |                         |       |                         |        |      
|Base salary                  |                                                          |                         |        | 2,351                   |       |                         |        | 629  
|Bonus                        |                                                          |                         |        | 2,008                   |       |                         |        | 547  
|Pension                      |                                                          |                         |        |                        |       |                         |        |     
|Other benefits               |                                                          |                         |        |                        |       |                         |        | 138  
|                             |                                                          |                         |        |                         |       |                         |        |      
|                             |                                                          |                         |        | 4,359                   |       |                         |        | 1,314
|Share based compensation:(i) |                                                          |                         |        |                         |       |                         |        |      
|                             | Shares issued/charge under long term incentive plans(ii) |                         | 8,527  |                         | 2,076 |                         | 3,282  |      
|                             | Charge for share options                                 |                         |        |                         | 104   |                         |        |      
|                             |                                                          |                         |        |                         |       |                         |        |      
|Total                        |                                                          |                         |        | 6,539                   |       |                         |        | 2,218
|                             |                                                          |                         |        |                         |       |                         |        |      
|2006                         |                                                          |                         |        |                         |       |                         |        |      
|Base salary                  |                                                          |                         |        | 1,982                   |       |                         |        | 624  
|Bonus(iii)                   |                                                          |                         |        | 1,669                   |       |                         |        | 712  
|Pension                      |                                                          |                         |        |                        |       |                         |        |     
|Other benefits               |                                                          |                         |        |                        |       |                         |        | 138  
|                             |                                                          |                         |        |                         |       |                         |        |      
|                             |                                                          |                         |        | 3,651                   |       |                         |        | 1,474
|Share based compensation:(i) |                                                          |                         |        |                         |       |                         |        |      
|                             | Restricted shares(iv)                                    |                         | 3,132  |                         | 104   |                         | 1,853  |      
|                             | Charge for long term incentive plans(v)                  |                         |        |                         | 1,031 |                         |        |      
|                             | Share options granted/charge for share options           |                         |       |                         | 240   |                         |       |      
|                             |                                                          |                         |        |                         |       |                         |        |      
|Total                        |                                                          |                         |        | 5,026                   |       |                         |        | 2,046
|                             |                                                          |                         |        |                         |       |                         |        |      
|2005                         |                                                          |                         |        |                         |       |                         |        |      
|Base salary                  |                                                          |                         |        | 1,449                   |       |                         |        | 475  
|Bonus                        |                                                          |                         |        | 602                     |       |                         |        | 325  
|Pension                      |                                                          |                         |        | 401                     |       |                         |        |     
|Other benefits               |                                                          |                         |        |                        |       |                         |        | 238  
|                             |                                                          |                         |        |                         |       |                         |        |      
|                             |                                                          |                         |        | 2,452                   |       |                         |        | 1,038
|Share based compensation:(i) |                                                          |                         |        |                         |       |                         |        |      
|                             | Share options granted/charge for share options           |                         | 75,000 |                         | 553   |                         | 37,600 |      
|                             |                                                          |                         |        |                         |       |                         |        |      
|Total                        |                                                          |                         |        | 3,005                   |       |                         |        | 1,238
|                             |                                                          |                         |        |                         |       |                         |        |      

---

F-68

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The number of shares, share options and unvested share awards beneficially owned by the senior management as at December 31, 2007 and 2006 was as follows:

|                        |  | Chief
Executive Officer |  | Chief
Operating Officer |  | Chief
Financial Officer |  | Total    
|----------------------- |  | ----------------------- |  | ----------------------- |  | ----------------------- |  | ---------
|2007                    |  |                         |  |                         |  |                         |  |          
|Shares                  |  | 1,664,770               |  | 578,897                 |  | 9,700                   |  | 2,253,367
|Share options           |  | 45,000                  |  | 22,560                  |  | 100,000                 |  | 167,560  
|Share awards not vested |  | 96,488                  |  | 38,561                  |  | 24,951                  |  | 160,000  
|2006                    |  |                         |  |                         |  |                         |  |          
|Shares                  |  | 1,001,604               |  | 554,705                 |  | 1,430                   |  | 1,557,739
|Share options           |  | 791,664                 |  | 40,080                  |  | 100,000                 |  | 931,744  

Severance payments

If employment of the Officers is terminated by Millicom, severance payment of up to 12 months salary is payable.

27.   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,
2007, 2006 and 2005.

2007

2006

2005US$ '000

US$ '000

US$ '000Investing activitiesSale of Tele2 AB "B" shares



252,140

Acquisition of property, plant and equipment (see note 16)

(23,041
)
(65,870
)
Derecognition of the embedded derivative on the 5% Mandatory Exchangeable Notes



105,372

Asset retirement obligations

(15,305
)
(16,378
)
(1,908
)Excess of fair value over the acquisition costs of 16.67% of Telefonica Celular





6,299Financing activitiesVendor financing

23,041

65,870

Settlement of the 5% Mandatory Exchangeable Notes



(357,512
)
Shares issued as payment of bonuses

1,000



Share based compensation (see note 22)

19,228

12,850

3,075


28.   COMMITMENTS AND CONTINGENCIES

Operational environment

Millicom has operations in emerging markets, namely Asia, 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 is involved in discussions regarding taxation, interconnect, license renewals and tariffing arrangements, which can have a
significant impact on the long-term economic viability of its operations.

F-69

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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, 2007, the total amount of claims against Millicom's operations was $49.5 million (December 31, 2006: $59.9 million) of which $0.9 million (2006:
$11.6 million) relate to joint ventures. As at December 31, 2007 $10.3 million (December 31, 2006: $23.8 million) has been provided for these contingent liabilities
in the consolidated balance sheet. Management is of the opinion that while it is impossible to ascertain the ultimate legal and financial liability with respect to these contingencies, the ultimate
outcome of these contingencies is not anticipated to have a material effect on the Group's financial position and operations.

Lease commitments



The Group has the following annual operating lease commitments as of December 31, 2007 and 2006.

2007

2006US$ '000

US$ '000Operating lease commitmentsWithin:
one year

25,732

33,669Between:
one-five years

101,191

70,347After:
five years

110,918

54,014Total

237,841

158,030


The
operating leases comprised mainly of lease agreements relating to land and buildings. The operating lease terms and conditions reflect normal market conditions. Operating lease
expense from continuing operations was $47.7 million in 2007 (2006: $23.5 million, 2005: $15 million).



The Group's future minimum payments on the finance leases were not material. These financial leases are comprised mainly of lease agreements relating to vehicles
used by the Group.

Capital commitments

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
$400.3 million (2006: $308.6 million), of which $88.2 (2006: $47.9 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
$377.8 million and remains until the time the total support from Millicom equals the support from the founding shareholders of Colombia Móvil S.A.

Contingent assets

Due to the late delivery by suppliers of network equipment in various operations, Millicom is entiltled to compensation. This compensation is in the form of
discount vouchers on future purchases of network equipment. The amount of vouchers received but not recognised as they had not yet been used as at December 31, 2007 was $30 million
(2006: $nil).

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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.

29.   RELATED PARTY TRANSACTIONS

Kinnevik

The Company's principal shareholder is Investment AB Kinnevik and subsidiaries ("Kinnevik"). Kinnevik is a Swedish holding company with interests in the
telecommunications, media, publishing and paper industries. As of December 31, 2007, Kinnevik owned approximately 37% of Millicom.

During
2007 and 2006, Kinnevik did not purchase any Millicom shares.

Services purchased and sold to related companies

The Group made purchases for an amount of $4.1 million (2006: $5.3 million) and had outstanding balances of $1.5 million (as of
December 31, 2006: $5.2 million) with related parties. These related parties are companies where Kinnevik is the principal shareholder. The services purchased and supplied covered fraud
detection, network and IT support, acquisition of assets and customer care systems. These purchases were made on an arm's length basis.

There
were no sales to related companies. As of December 31, 2007, Millicom had no receivables from related parties (2006: $1.2 million).

30.   FINANCIAL RISK MANAGEMENT

Interest rate risk

The interest rate risk generally arises from 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 the risk for 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 in which neither category of debt falls below 25% of the total debt. The Group actively monitors its borrowings to ensure the
compliance with this policy. At December 31, 2007, approximately 43% of the Group's borrowings are at a fixed rate of interest (2006: 52%).

The
table below summarizes, as at December 31, 2007, our fixed rate debt and floating rate debt:

|                              |  | Amounts due within |  
|----------------------------- |  | ------------------ | -
|
|
|Fixed rate                    |  | 716,916            |  
|Average nominal interest rate |  | 8.5                | %
|Floating rate                 |  | 172,169            |  
|Average nominal interest rate |  | 10.8               | %
|                              |  |                    |  
|Total                         |  | 889,085            |  
|                              |  |                    |  
|Average nominal interest rate |  | 8.9                | %

F-71

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The table below summarizes, as at December 31, 2006, our fixed rate debt and floating rate debt.

|                              |  | Amounts due within |  
|----------------------------- |  | ------------------ | -
|
|
|Fixed rate                    |  | 15,177             |  
|Average nominal interest rate |  | 8.2                | %
|Floating rate                 |  | 119,484            |  
|Average nominal interest rate |  | 9.7                | %
|                              |  |                    |  
|Total                         |  | 134,661            |  
|                              |  |                    |  
|Average nominal interest rate |  | 9.5                | %

A
one hundred basis point fall or rise in market interest rates for all currencies in which the group had borrowings at December 31, 2007, would increase or reduce profit before
tax for the year by approximately $10.4 million (2006: $7.2 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 funding
source available to a joint venture or subsidiary. In these circumstances, Millicom has currently decided to accept the remaining currency risk associated with the financing of 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 our debt detailing the balances at December 31, 2007 and 2006, that were denominated in US$ and in other local currencies.

2007

2006US$ '000

US$ '000US$

1,226,332

1,029,499Colombia

435,615

372,396Honduras

41,352

10,990Senegal

62,557

28,367Sri Lanka

48,016

28,958Others

20,419

23,446Total local currency

607,959

464,157Total

1,834,291

1,493,656


At
December 31, 2007, 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 would have increased/decreased by $12.6 and $10.4 million respectively (2006: $12.8 and $10.5 million respectively). This increase/decrease in profit before tax would have
mainly been as a result of the conversion of the results of our operations with foreign functional currencies. The increase in the effect of a change in the rate of the US$between 2007 and 2006 is
mainly as a result of the increase in the size of the Group and the increase in foreign currency debt.

F-72

---



The
change of the US$ against the functional currencies of the operations located in Central America has not been considered as these currencies have been closely linked to US$ in the
recent years.

Credit risk

Financial instruments that potentially subject the Group to credit risk are primarily cash and cash equivalents, pledged deposits, letters of credit, trade
receivables, amount due from joint venture partners, supplier advances and other current assets. The counter parties to the 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 is a significant risk of non-performance by these
counter parties.

A
large portion of the turnover is made of prepaid airtime. For customers for which 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
receivables are mainly derived from the balances towards other telecom operators. The credit risk towards the 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 the expected collectibility
of all trade receivables.

There
is no significant concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, internationally dispersed.

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 the capital expenditures required to maintain and develop
local businesses.

The
Group manages its liquidity risk through the use of bank overdrafts, bank loans (onshore and offshore), vendor financing, Export Credit Agencies and Direct Financial Institutions
("DFI") and finance leases. We believe that there is sufficient liquidity available in our markets to meet our ongoing liquidity needs. As the Group operates in the emerging markets, we are able to
take advantage of local liquidity. Additionally, we are able to arrange offshore funding through the use of Export Credit Agency guarantees and DFI (IFC, PROPARCO, DEG and FMO), who have been
established specifically to finance development in our markets. Given the respective Government backing and/or ownership of these institutions, we do not expect this to stop.

F-73

---



The
tables below summarize the maturity profile of the Group's net financial liability at December 31, 2007 and 2006.

|Year ended 31 December 2007                      |  | Less than 1 year |   | 1 to 5 years |   | >5 years |   | Total      |  
|------------------------------------------------ |  | ---------------- | - | ------------ | - | -------- | - | ---------- | -
|
|Total borrowings (see note 24)                   |  | (889,085         | ) | (806,936     | ) | (138,270 | ) | (1,834,291 | )
|Cash and cash equivalent                         |  | 1,174,597        |   |             |   |         |   | 1,174,597  |  
|                                                 |  |                  |   |              |   |          |   |            |  
|Net debt                                         |  | 285,512          |   | (806,936     | ) | (138,270 | ) | (659,694   | )
|Future interest commitments(i)                   |  | (100,180         | ) | (137,916     | ) | (8,679   | ) | (246,775   | )
|Trade payables (excluding accruals)              |  | (621,818         | ) |             |   |         |   | (621,818   | )
|Other financial liabilities (including accruals) |  | (409,342         | ) |             |   |         |   | (409,342   | )
|Trade receivables                                |  | 223,579          |   |             |   |         |   | 223,579    |  
|Other financial assets                           |  | 190,343          |   | 19,855       |   |         |   | 210,198    |  
|                                                 |  |                  |   |              |   |          |   |            |  
|Net financial liability                          |  | (431,906         | ) | (924,997     | ) | (146,949 | ) | (1,503,852 | )
|                                                 |  |                  |   |              |   |          |   |            |  

|
|

|Year ended 31 December 2006                      |  | Less than 1 year |   | 1 to 5 years |   | >5 years |   | Total      |  
|------------------------------------------------ |  | ---------------- | - | ------------ | - | -------- | - | ---------- | -
|
|Total borrowings (see note 24)                   |  | (134,661         | ) | (663,111     | ) | (695,884 | ) | (1,493,656 | )
|Cash and cash equivalent                         |  | 656,692          |   |             |   |         |   | 656,692    |  
|                                                 |  |                  |   |              |   |          |   |            |  
|Net debt                                         |  | 522,031          |   | (663,111     | ) | (695,884 | ) | (836,964   | )
|Future interest commitments(i)                   |  | (92,681          | ) | (363,231     | ) | (135,185 | ) | (591,097   | )
|Trade payables (excluding accruals)              |  | (428,304         | ) |             |   |         |   | (428,304   | )
|Other financial liabilities (including accruals) |  | (249,809         | ) |             |   |         |   | (249,809   | )
|Trade receivables                                |  | 185,455          |   |             |   |         |   | 185,455    |  
|Other financial assets                           |  | 98,563           |   | 26,225       |   |         |   | 124,788    |  
|                                                 |  |                  |   |              |   |          |   |            |  
|Net financial asset/(liability)                  |  | 35,255           |   | (1,000,117   | ) | (831,069 | ) | (1,795,931 | )
|                                                 |  |                  |   |              |   |          |   |            |  

---

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. No changes were made in the objectives, policies or processes during the years ended 31 December 2007 and
31 December 2006.

The
Group monitors capital using primarily a net debt to adjusted operating profit ratio.

2007

2006US$ '000

US$ '000Net debt

659,694

836,964Adjusted operating profit (see note 9)

1,113,858

717,148Ratio

RatioNet debt to adjusted operating profit ratio

0.6

1.2


F-74

---



The
Group also reviews its gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, interest bearing loans and borrowings, less cash
and cash equivalents, excluding discontinued operations. Capital represents equity attributable to the equity holders of the parent.

2007

2006US$ '000

US$ '000Net debt

659,694

836,964Equity

1,287,907

504,874Net debt and equity

1,947,601

1,341,838Gearing ratio

34
%
62
%


31.   SUBSEQUENT EVENTS

4% Convertible Notes

In December 2007, Millicom announced that any of its 4% Convertible Bonds that were not converted into shares by 11 January 2008 at the request of the
bondholders would be redeemed in cash. Before December 2007, $1 million of the bonds had been converted into 28,686 shares. In early January a further $196.0 million of the outstanding
bonds were converted into 5,622,471 shares. Millicom repaid the $3.0 million of bonds that were not converted, including accrued interest.

The
conversion will result in an increase in equity amounting to approximately $176 million in Q1 2008 and a decrease in interest expenses of approximately
$35 million over 2008 and 2009. There were 108,050,731 shares outstanding after the conversion.

Proposed dividend

Due to the strength of the balance sheet and the net cash proceeds from the sale of our business in Pakistan, the Board has recommended a special dividend of
$2.40 a share be paid following the Annual General Meeting in May of 2008. The Group has not yet established a formal dividend policy. Any future dividends will be based on the free cash flows of the
Group going forward.

F-75

---



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 relationsShared Value Limited
30 St. James's Square
London SW1 4JH
Tel: +44(0)20 7321 5010
Fax: +44(0)20 7321 5020
E-mail mic@sharedvalue.net

Visit MIC's homepage athttp://www.millicom.com

Financial CalendarFebruary 13, 2008
Full year results 2007

April 22,
2008
First quarter results

July 22,
2008
Second quarter results

October 21,
2008
Third quarter results

February 2009
Full year results 2008

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