SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 20-F

|ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|------------------------------------------------------------------------------------
|For the fiscal year ended December 31, 2004                                         

Commission File Number: 000-22828

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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)

75 Route de Longwy, L-8080 Bertrange, Grand-Duchy of Luxembourg(Address of principal executive offices)

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

Securities registered pursuant to Section 12(g) of the Act:

Common Shares, par value $1.50 each, as of December 31, 2004(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

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

Common Shares with a par value of $1.50 each: 99,219,079 as of December 31, 2004

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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 which financial statement item the Registrant has elected to follow:

Item 17 o    Item 18 ý



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TABLE OF CONTENTS

|                                                |           |     |                                                                              |  | Page
|----------------------------------------------- | --------- | --- | ---------------------------------------------------------------------------- |  | ----
|FORWARD-LOOKING STATEMENTS                      |           | 1  
|PRESENTATION OF FINANCIAL AND OTHER INFORMATION |           | 1  
|PART I                                          |           | 3  
|                                                | ITEM 1.   |     | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        |  | 3   
|                                                | ITEM 2.   |     | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |  | 3   
|                                                | ITEM 3.   |     | KEY INFORMATION                                                              |  | 3   
|                                                | ITEM 4.   |     | INFORMATION ON THE COMPANY                                                   |  | 17  
|                                                | ITEM 5.   |     | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |  | 58  
|                                                | ITEM 6.   |     | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   |  | 89  
|                                                | ITEM 7.   |     | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            |  | 95  
|                                                | ITEM 8.   |     | FINANCIAL INFORMATION                                                        |  | 99  
|                                                | ITEM 9.   |     | THE OFFER AND LISTING                                                        |  | 99  
|                                                | ITEM 10.  |     | ADDITIONAL INFORMATION                                                       |  | 100 
|                                                | ITEM 11.  |     | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                    |  | 108 
|                                                | ITEM 12.  |     | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  | 110 
|PART II                                         |           | 111
|                                                | ITEM 13.  |     | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  | 111 
|                                                | ITEM 14.  |     | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  | 111 
|                                                | ITEM 15.  |     | CONTROLS AND PROCEDURES                                                      |  | 111 
|                                                | ITEM 16A. |     | AUDIT COMMITTEE FINANCIAL EXPERT                                             |  | 111 
|                                                | ITEM 16B. |     | CODE OF ETHICS                                                               |  | 111 
|                                                | ITEM 16C. |     | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  | 112 
|                                                | ITEM 16D. |     | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |  | 112 
|                                                | ITEM 16E. |     | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES        |  | 112 
|PART III                                        |           | 113
|                                                | ITEM 17.  |     | FINANCIAL STATEMENTS                                                         |  | 113 
|                                                | ITEM 18.  |     | FINANCIAL STATEMENTS                                                         |  | 113 
|                                                | ITEM 19.  |     | EXHIBITS                                                                     |  | 113 

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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.

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

1

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such
persons in a licensed area multiplied by the Company's ownership interest in the licenses for such licensed area. The term "Proportional Subscribers" refers to the Company's share of the total
subscribers in an operation. Persons, population and pops data for 2004 and 2003 have been extracted from the "CIAThe World Factbook" for 2004 for countries where the license area covers
the entire country and have been estimated by management for countries where the license area is less than the entire country. In addition, information on the countries in which Millicom operates has
been extracted from the "CIAThe World Factbook" for 2004 with updates, where appropriate, from the U.S. Department of State's website. Market share data and penetration rates have been
obtained from EMC, a cellular market research firm. EMC is aware of, and has consented to being named, in this report, which consent may be incorporated by reference into registration statements we
file with the SEC. Unless otherwise indicated, subscriber figures represent the total number of cellular subscribers of operations in which we have an ownership interest.

Unless
otherwise indicated, all financial data and discussions thereon in this annual report are based upon financial statements prepared in accordance with International Financial
Reporting Standards ("IFRS") and subscriber figures represent the total number of cellular subscribers of systems in which the Company 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

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3.    KEY INFORMATION

Selected Financial Information

The Company reports under International Financial Reporting Standards ("IFRS"). The following tables present comparative information under IFRS and U.S. generally
accepted accounting principles ("U.S. GAAP"). For a reconciliation of our IFRS profit (loss) and balance sheet to U.S. GAAP and a discussion of the principal differences between the accounting
policies applied by us under IFRS and U.S. GAAP, please see Note 32 of the "Notes to the Consolidated Financial Statements".

The
following table sets forth summary financial data of the Company as of and for the years ended December 31, 2004, 2003, 2002, 2001 and 2000. The data are based upon the
Company's audited consolidated balance sheets as of December 31, 2004, 2003, 2002, 2001 and 2000 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 therein in this document are based upon financial statements prepared in accordance with IFRS.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

|                                |                                                                            | Year Ended December 31, |  
|------------------------------- | -------------------------------------------------------------------------- | ----------------------- | -
|
|
|Amounts in accordance with IFRS |                                                                            |                         |  
|Profit and Loss Statement Data: |                                                                            |                         |  
|                                | Revenues                                                                   |                         |  
|                                | Operating profit/(loss)                                                    |                         |  
|                                | Gain (loss) from investment securities                                     |                         |  
|                                | Profit/(loss) for the period from continuing operations(1)                 |                         |  
|                                | Profit/(loss) for the period                                               |                         |  
|                                | Basic (loss) earnings from continuing operations per common share          |                         | $
|                                | Basic (loss) earnings per common share                                     |                         | $
|                                | Weighted average number of shares in basic computation (in thousands)(2)   |                         |  
|                                | Diluted (loss) earnings from continuing operations per common share        |                         | $
|                                | Diluted (loss) earnings 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,
|-------------------------------- | ---------------------------------------- | ------------------
|
|
|Amounts in accordance with IFRS: |                                          |                   
|Balance Sheet Data:              |                                          |                   
|                                 | Property, plant and equipment, net       |                   
|                                 | Licenses, net                            |                   
|                                 | Investment in securities                 |                   
|                                 | Investments in associates(3)             |                   
|                                 | Cash, cash equivalents and time deposits |                   
|                                 | Total assets                             |                   
|                                 | Current liabilities                      |                   
|                                 | Non-current liabilities                  |                   
|                                 | Minority interest                        |                   
|                                 | Shareholders' equity/(deficit)           |                   

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

|                                         |                                                                                                                         | Year Ended December 31, |  
|---------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ----------------------- | -
|
|
|Amounts in accordance with U.S. GAAP(6): |                                                                                                                         |                         |  
|Profit and Loss Statement Data:          |                                                                                                                         |                         |  
|                                         | Revenues                                                                                                                |                         |  
|                                         | Cost of sales                                                                                                           |                         |  
|                                         | Operating expenses                                                                                                      |                         |  
|                                         | Operating profit (loss)                                                                                                 |                         |  
|                                         | Gain (loss) from investment in securities                                                                               |                         |  
|                                         | Profit (loss) for the period from continuing operations (before cumulative effect of change in accounting principle)(1) |                         |  
|                                         | Profit (loss) for the period                                                                                            |                         |  
|                                         | Basic (loss) earnings from continuing operations per common share                                                       |                         | $
|                                         | Basic (loss) earnings per common share                                                                                  |                         | $
|                                         | Weighted average number of shares in basic computation (in thousands)(2)                                                |                         |  
|                                         | Diluted (loss) earnings from continuing operations per common share                                                     |                         | $
|                                         | Diluted (loss) earnings per common share                                                                                |                         | $
|                                         | Weighted average number of shares in diluted computation (in thousands)(2)                                              |                         |  

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|                                         |                                    | As of December 31,
|---------------------------------------- | ---------------------------------- | ------------------
|
|
|Amounts in accordance with U.S. GAAP(6): |                                    |                   
|Balance Sheet Data:                      |                                    |                   
|                                         | Property, plant and equipment, net |                   
|                                         | Licenses, net                      |                   
|                                         | Investment in securities           |                   
|                                         | Investments in associates          |                   
|                                         | Total assets                       |                   
|                                         | Current liabilities                |                   
|                                         | Non-current liabilities            |                   
|                                         | Minority interest                  |                   
|                                         | Shareholders' equity/(deficit)     |                   

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RISK FACTORS

Risks Relating to our Business

General Risks

This report contains "forward looking" statements that involve risks and uncertainties. Our actual results may differ significantly from
the results discussed in the forward looking statements. Factors that might cause such differences include those discussed below and elsewhere in this report. See "Forward Looking
Statements".

The agreement under which we conduct our operations in Vietnam, which is our largest contributor to revenue, expires on May 18, 2005, unless extended. We
do not exercise management control over Mobifone.

In
1994, Comvik International Vietnam AB ("CIV"), in which we have an 80% interest, Investment AB Kinnevik, formerly Industriförvaltnings AB Kinnevik ("Kinnevik"), our
largest shareholder, and Vietnam Mobile Services Co. ("VMS"), a Vietnamese government-owned company, entered into a Business Cooperation Contract ("BCC") to operate a nationwide cellular GSM system in
Vietnam known as Mobifone. The BCC provides for, among other things, 50/50 revenue sharing between CIV and VMS.

Our
operation in Vietnam, CIV, which derives all of its revenue from the BCC, is our largest contributor to revenue. The BCC has a 10-year term from May 19, 1995. Upon
its expiration on May 18, 2005, legal title to all equipment of the Vietnam operation contributed by us will be transferred to VMS at a price of $1.

At
the present time an extension of the BCC in its current form is not acceptable to the Vietnamese government. The Vietnamese government, in connection with steps by Vietnam to become a
member of the World Trade Organization, is under pressure to rapidly take steps to liberalize its economy. The Vietnamese government has announced its intention to initiate an equitization of VMS, our
current partner under the BCC. We have been informed that steps will have to be taken, such as the winding down of the BCC and the valuation of the assets, before the equitization process starts. Once
VMS is equitized, the Vietnamese government may open the equity to new investors including foreign strategic investors. The opening of the telecommunications sector to foreign investors may require
changes in the Vietnamese legislation. We have received no assurances from VMS or the Vietnamese government that CIV will be a strategic partner in the VMS equitization process. However, in two
Memoranda of Understanding dated February 4 and November 8, 2004, respectively, VMS and CIV agreed to continue their relation in the form of a joint stock company ("JSC").

CIV
and VMS/VNPT (the Vietnam Posts and Telecommunications Corporation) are in the process of negotiating an agreement that would allow CIV to become a shareholder of VMS once it is
equitized. We have received no assurance from the Vietnamese government as to when or whether such an agreement will be signed, nor do we know which terms and conditions such an agreement may be
subject to. We may not be successful in achieving any interim solution that allows us to continue our business in Vietnam. For now, our telecommunications services in Vietnam will cease and we will
receive no further revenues whatsoever from Vietnam from May 19, 2005.

CIV's
revenues for the year ended December 31, 2004 were $162,807,000 (18% of Millicom's total revenues) and operating profit was $68,183,000 (27% of Millicom's total operating
profit). All equipment recorded in CIV's financial statements will be fully amortized by May 18, 2005, at which date legal title to all equipment will be transferred to VMS at a price of $1. As
of December 31, 2004 CIV still needs to disburse to VMS, before the end of the revenue sharing agreement on May 18, 2005, approximately $27,639,000 of outstanding capital commitments under the
BCC. An impairment charge of $16.6 million has been recorded in the first quarter of 2005 in the consolidated Group accounts to account for the write-down of property, plant and
equipment in Vietnam as the BCC expires on

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May 18.
The Vietnam asset impairment is due to a late approval of investments required under the BCC which prevented CIV from generating revenues on these fixed assets.

In
addition, under the terms of the BCC, Millicom does not exercise management control over Mobifone. Certain management decisions, such as the decision to make certain capital
expenditures and other business policy decisions, are made by an advisory committee comprised of eight members, four of which are appointed by CIV and four by VMS. Although the advisory committee has
in the past made decisions based on our recommendations, the advisory committee may not make decisions based on our recommendations in the future and it may not act in a manner consistent with our
interests. In addition, CIV and VMS must agree in writing to amend the BCC, sell all or substantially all of the business assets or terminate any business license. If a dispute occurs between us and
VMS
and we are unable to resolve it satisfactory, our results of operations and financial condition could be adversely affected.

We have a history of losses and may incur losses in the future and we may be unable to achieve profitability.

We
had a net profit in the years ended December 31, 2004 and 2003. However, excluding the effects of gains (losses) and valuation movement on investment in securities, fair value
result on financial instruments and other financial income we would have made net losses of $80,107,000 and $119,569,000, respectively, in the years ended December 31, 2003 and 2002. See
"Operating and Financial Review and Prospects."

We
may not achieve or maintain profitability in the future, nor can we be sure to always have sufficient resources to make payments on our indebtedness. Our future performance will
depend, in particular, on our ability to generate demand and revenue for our services, to maintain existing subscribers and customers and to attract new subscribers and customers. Costs in connection
with the acquisition and renewal of licenses and the costs incurred in order to commence and develop operations of cellular and related telecommunications systems will also affect revenues and
profitability.

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

We
have a substantial amount of debt and significant debt service obligations. As of December 31, 2004, Millicom's total consolidated indebtedness was $1,114,413,000. Of this
amount, $901,635,000 represented the Company and Millicom Telecommunications S.A. indebtedness and $212,778,000 represented our consolidated share of the indebtedness of our subsidiaries and joint
ventures. As of December 31, 2004, $365,006,000 of our indebtedness related to Millicom Telecommunications S.A.'s 5% Mandatory Exchangeable Notes, which are mandatorily exchangeable into Tele2
AB B shares and in respect of which no repayment in cash of principal is required. See "Operating and Financial Review and ProspectsDescription of Certain Indebtedness Millicom
Telecommunications S.A.'s 5% Mandatory Exchangeable Notes".

Corporate
guarantees, cash deposits and standby letters of credit (issued at our request and guaranteed by us) secured $59,327,000 of the indebtedness of our ventures at
December 31, 2004. 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
$514,027,000.

We
experienced liquidity concerns resulting from our substantial indebtedness in 2002. Although we implemented a restructuring program that improved our liquidity by reducing our overall
indebtedness and debt service obligations, we may incur additional indebtedness that may result in liquidity concerns or other negative consequences in the future. In January 2005 we issued 4%
convertible bonds due 2010 for a total principal amount of $200 million.

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Our
level of indebtedness may have important negative consequences for us. For example, it may:



Our ability to generate cash depends on many factors beyond our control, and we may not be able to generate cash required to service our
debt.

Our
ability to meet our debt service obligations or to refinance our debt depends on our future operating and financial performance and ability to generate cash. This will be affected 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 to meet our debt service obligations or fund our other business needs, we may, among other things, need to refinance all or a portion of our debt, obtain additional financing, delay
capital expenditures or sell assets. We may not be able to generate sufficient cash through any of the above. If we are not able to refinance any of our debt, obtain additional financing or sell
assets on commercially favorable terms or at all, we may not be able to satisfy our obligations with respect to our debt. If this were to occur, holders of the relevant debt would be able to declare
the full amount of such debt due and payable. Our assets may not be sufficient to pay such amounts.

Restrictions imposed by the indentures governing our outstanding debt contain covenants that limit our ability to take certain actions.

The
indentures governing our outstanding debt contain various covenants that limit our flexibility in operating our business. For example, these agreements restrict the ability of
Millicom and certain of its subsidiaries to, among other things:



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The
operating and financial restrictions and covenants in these agreements may adversely affect our ability to finance our future operations or capital needs, engage in other business
activities that may be in our interest or to react to adverse market developments.

Our ability to receive funds from, and to exercise management control over, our ventures is usually dependent upon the consent of other participants 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 17 cellular ventures in 16 countries. Our participation in each venture differs from market to market and we do not have a controlling interest in some operations.
Often our ability to withdraw funds, including dividends, from our participation in, and to exercise management control over, ventures and investments therein 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 venture partners, as has occurred in the past. For
example, in 2001, a dispute arose with local shareholders in our operation in El Salvador which resulted in our management determining that we could no longer exercise significant influence in the
operation and thus that it was not appropriate to consolidate the operation during the period of the dispute. Although this dispute was resolved in September 2003 and El Salvador is now
consolidated with our operations,
other disagreements may occur in the future that could adversely affect our operations. See "Notes to the Consolidated Financial StatementsSummary of Consolidation and Accounting
Policies".

We
rely upon dividends and other payments from our ventures to generate the funds necessary to meet our obligations, including our obligations under the notes. The ventures are legally
distinct from us and have no obligation to pay amounts due with respect to our obligations or to make funds available for such payments. Our ventures do not guarantee our obligations. The ability of
our ventures to make such payments to us will be subject to, among other things, the availability of funds, the agreement of the venture partner(s), the terms of each venture's indebtedness and local
law. The majority of our operations have entered into financing facilities, most of which are guaranteed by us, many of which restrict and some of which prohibit the payment of dividends by those
ventures to us. Claims of creditors of our ventures, including trade creditors, will generally have priority over our claims and the holders of our indebtedness. At December 31, 2004, the
consolidated debt and other financing of our ventures was $606,729,000 (including trade creditors, non-current and current license payables).

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

As
of December 31, 2004, Kinnevik and subsidiaries, together with senior executives and directors, the Stenbeck estate, and certain Stenbeck Trusts, beneficially owned nearly 38%
of the outstanding shares of our common stock. The Stenbeck estate is under administration in both Luxembourg and Sweden. Five members out of our eight person Board of Directors are independent. We
expect the number of board members to increase to nine in May 2005, with the addition of a new independent board member. Kinnevik and its affiliates, having a significant ownership in Millicom,
can exercise control over our management and affairs, including:



9

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We
may not always agree with the decisions of Kinnevik and the other insiders and their decisions may not always be consistent with your interests.

A substantial number of our directors and our President & Chief Executive Officer hold positions with Kinnevik or Tele2 AB, which may present conflicts
that may be resolved in a manner unfavorable to us.

Four
Millicom board members hold or held executive positions with Kinnevik, our largest shareholder. Cristina Stenbeck, a member of our Board of Directors, is also Vice Chairwoman of the
Board of Directors of Kinnevik and subsidiaries. In addition, a number of our directors and executive officers hold executive positions with or are directors of Tele2 AB, a pan-European
telecommunications company offering fixed and mobile telephony, as well as data network and Internet services. Tele2 AB is controlled by Kinnevik and certain of its affiliates. These positions may
create, or appear to create, potential conflicts of interest when these directors and executive officers 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 us. Moreover, a portion of certain of our directors' and officers' time is spent on matters relating to
Kinnevik and Tele2 AB, and not us. While it is the current expectation that we have the initial right to consider any telecommunications opportunity that arises in our markets, there is no contractual
arrangement to this effect among us and Kinnevik or Tele2 AB and we may in fact not receive such right of first refusal over any such business opportunity.

Due to our insufficient equity, there is a risk our shareholders may vote not to continue our business.

Under
Luxembourg company law, when companies have accumulated losses equal to or greater than half of the amount of their subscribed share capital, an extraordinary shareholders' meeting
must be
convened for the shareholders to determine whether to dissolve the company or to continue the business. At such shareholders' meeting a quorum of 50% of the shareholders must be present or represented
to consider a resolution to liquidate or continue the company. If there is no quorum at the initial shareholders' meeting, a second meeting must be convened at which no quorum is required.

As
of December 31, 2003, we had accumulated losses on a parent company stand-alone basis, equal to more than half our subscribed share capital. At the shareholders' meeting held
on July 7, 2004, the shareholders voted to continue our operations.

As
of December 31, 2004, we had accumulated losses on a parent company stand-alone basis, equal to more than half our subscribed share capital. At the shareholders' meeting to be
held on May 31, 2005 the shareholders will vote on whether to continue or dissolve our operations.

We
may again accumulate losses equal to or greater than half the amount of our subscribed share capital in future years. In such event, our shareholders must take a vote on whether to
dissolve the Company, in which case a liquidator is appointed, or whether to continue the business despite these losses. The liquidator may be any person appointed by our shareholders, including our
board of directors. If no liquidator is appointed, the Company's board of directors is deemed to be the liquidator. The liquidator is responsible for liquidating the Company in the best possible way
financially. The realization of assets may be done by disposing of our entire business, individual ventures, groups of ventures, licenses or any other type of liquidation intended to realize the best
value for our shareholders. The realization of assets may, in the case of dissolution and liquidation, not achieve as high a value as may be obtained if such assets are divested in the normal course
of business.

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", or in a "Foreign Personal Holding Company," or "FPHC". We may be or may
become, a PFIC. Our status under the PFIC rules for each year depends upon our income and assets

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from
time to time during that year. Our substantial investments in associated companies' securities and other "passive assets" result in 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.

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 Luxembourg or other 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 outside the United States. 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.

Risks Related to our Cellular Telephone Operations

We face intense competition in the cellular telephone operator market.

The
cellular systems in which we have interests face competition from landline telephone networks and other cellular telephone operators in the markets in which they operate.

Other
cellular telephone operators will obtain licenses in some markets, including markets where we do not have a licensed cellular telephone competitor. Moreover, additional licenses
may be awarded in markets where we already face competition from other communications technologies that are being or may be developed and/or perfected in the future. In some of our markets, there may
be more cellular telephone operators than the market is likely to sustain. In addition, in some of our markets, our competitors may have more advanced technology than us, such as GSM, or a greater
coverage area than us, or both. The cellular telephone operators in each market compete for customers principally on the basis of services offered, quality of service, coverage area and price. Many of
our competitors have substantially greater capital resources than we do. Price competition is significant.

In
addition, new competitors, such as cable companies that are able to leverage their existing networks, may enter the telecommunications 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 our prepaid markets and price competition intensifies, our prepaid customers may be more likely to move from one cellular telephone
operator to another than our postpaid customers. This may result in our revenue declining, which would adversely affect our results of operations.

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

The cellular telephone operations market is heavily regulated.

The
licensing, construction, ownership and operation of cellular telephone networks, and the grant, maintenance and renewal of cellular 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 cellular telephone operations, including rates charged to customers and the resale of cellular telephone services, may be subject to public utility regulation in the relevant market. For
example, in Vietnam, the regulator determines tariffs charged to customers. Our ventures 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 noncompliance with permit requirements.

A
number of regulators have, or are expected to, reduce interconnection rates. Because we are often one of the larger suppliers of cellular telephone services in the countries we
service, this may have the effect of reducing our revenue. Changes in the regulation of our activities, such as increased or decreased regulation affecting prices, the terms of interconnect
arrangements with landline telephone networks or mobile operators or requirements for increased capital investments, may materially adversely affect us.

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

We
may pursue new license opportunities within existing financial guidelines and group-wide synergy potential. In each market we face competition for licenses from major
international telecommunications entities as well as from local competitors. While we typically try not to pay large amounts for cellular licenses, the competition for the granting or renewal of
licenses is increasingly intense worldwide. As such, we anticipate that we will 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 cellular telephone licenses, or if licenses are awarded that they can be obtained 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 make substantial expenditures to replace our
products.

Fixed
network and other system equipment used in the cellular telephone industry has a limited life and must be replaced frequently due to damage or as a result of ordinary wear and
tear. In addition, as new technologies develop, such as if our competitors were to introduce third generation systems, equipment may need to be replaced or upgraded or a cellular telephone network may
need to be rebuilt in whole or in part, at substantial cost, to remain competitive. For example, we are building out networks based on the GSM standard in Paraguay, Bolivia, Guatemala, Honduras, El
Salvador and Pakistan due to increased competition from other GSM providers in those markets as well as the anticipated benefits of migrating to the GSM standard, including lower repair and
maintenance costs, greater availability of handsets and increased functionality. Unforeseable technological developments may render our services unpopular with customers or obsolete. In addition, 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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If we cannot successfully develop and manage our networks, 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. The build-out of our networks is subject to risks and
uncertainties which may delay the introduction of service in some areas and increase the cost of network construction. To the extent we fail to expand our network on a timely basis, we may experience
difficulty in expanding our subscriber base. In addition, our ability to manage our ventures 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 a number of our key senior management and technical personnel. Management of growth will
require, among other things:



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

In some of our markets our licenses and frequency allocations are subject to ongoing review, which may result in modification or early termination of
licenses.

The
continued existence and terms of cellular telephone licenses and frequency allocations are subject to ongoing review and, in some cases, to modification or early termination. For
instance, the BCC in Vietnam expires on May 18, 2005. See the above risk factor titled: "The agreement under which we conduct our operations in Vietnam, which is our
largest contributor to revenue, expires on May 18, 2005, unless extended. We do not exercise management control over Mobifone."

In
Pakistan, Pakcom is planning to rollout a CDMA network during 2005. Pakcom reached agreement with the Pakistan Telecommunications Authority (PTA) for the renewal of its license for 15
years. The license is for CDMA Services. Pakcom is still in the process of negotiating the allocation of the spectrum with the PTA.

While
we would not usually expect any of our cellular telephone companies to be required to cease operations at the end of the term of its business arrangement, license or permit, we
cannot be sure that business arrangements or licenses will be renewed on equivalent or satisfactory economic terms, or at all. Upon termination, the license and the assets of the cellular telephone
company associated with the system may revert to the government or local telecommunications agency, in some cases without any, or adequate, compensatory payment being made to us.

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

Our
ventures are dependent upon access to networks not controlled by us, primarily networks controlled by current or former government owned public telecommunications operators or
competing cellular 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.

The current concerns about the actual or perceived health risks relating to electromagnetic and radio frequency emissions, as well as the attendant 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 automobile braking and steering systems. The actual or perceived risks
relating to mobile
communications devices and base stations, or press reports about these risks, would adversely affect us, including by reducing our subscriber growth rate, subscriber base or average use per
subscriber, and would have a negative impact on the market price of our shares. In addition, if a link between electromagnetic or radio frequency emissions and adverse health concerns is demonstrated,
government authorities would increase regulation of mobile handsets and base stations as a result of these health concerns or cellular telephone operators, including us, would be held liable for costs
or damages associated with these concerns. Any such regulation or litigation would also have a materially adverse effect on our financial position and results of operations.

Country Risks

We operate in some markets that are politically unstable, and this instability may negatively affect our operations.

We
have interests in cellular telephone licenses in 16 countries around the world and are subject to government regulation in each market. Most of the countries in which we operate are
emerging economies and are, therefore, subject to greater political and economic risks than more developed countries. The governments of the 16 countries differ widely with respect to structure,
constitution and stability, and most of these countries lack mature legal and regulatory systems. Many of the countries in which we operate are suffering from political instability and civil unrest
and these problems may continue or arise in the future. As a result, we face the risk that our networks may be disrupted in particular countries, which would adversely affect our revenues or results
of operations.

In
order for our ventures to provide cellular services, they must receive a license from the government of the countries in which they operate. Our ability to operate is dependent on the
licenses granted by the government of each country. These licenses generally allow our ventures 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, the operations may be adversely affected by changes in the political structure or government representatives in the relevant
market. For instance, if a government decides to revoke a license to operate in the middle of its term, our recourse is to the legal system of the relevant country. Because the legal and court systems
of most countries in which we operate are not highly developed and are subject to political influence and other inherent uncertainties, it is often difficult to obtain a fair or unbiased resolution.
Recent political and economic changes have resulted in political and regulatory uncertainty in certain countries in which we operate, as further described in "Business." There is also a risk that a
country in which we operate may arbitrarily decide to expropriate the assets of one of our ventures.

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In
addition, most of the countries in which our ventures operate have volatile economies. Downturns in the economies of any particular country, or of a region generally, may adversely
affect demand for our services, which would result in reduced revenues.

We have operations in Iran and may exercise an option to acquire equity in an Iranian company, which may subject us to political and regulatory
risk.

In
2004, we entered into agreements with Rafsanjan Industrial Complex, an Iranian company, under which we manage a cellular telephone network in Iran developed and owned by the Rafsanjan
Industrial Complex.

We
are a non-U.S. company and our management contract in Iran is not subject to the Iran-Libya Sanctions Act of 1996, extended until August 2007, nor to
other U.S. restrictions on U.S. or non-U.S. companies operating in Iran. We do not employ U.S. citizens or permanent U.S. residents in our Iranian business.

There
have recently been discussions between the Government of Iran and representatives of the international community about Iran's nuclear research program and its potential application
to nuclear weapons and it is possible that U.S. sanctions may be amended or further extended or new regulations may be introduced by the U.S., the European Union, the United Nations or by any other
country or international organization, with the effect of prohibiting or adversely affecting our operations in Iran. Our only contractual obligation in Iran is to provide management services to the
Rafsanjan Industrial Complex, at a cost which is not expected to be material. We also have an option to acquire up to 47% of the equity in the Iranian company yet to be formed that will operate the
network. If we were to exercise our option, we might acquire a substantial investment in Iran. Any amendment or new regulation prohibiting or adversely affecting our operations in Iran or a dispute
with the representatives of the Rafsanjan Industrial Complex or the Iranian government may have a material effect on our results of operations.

We operate in a number of jurisdictions, any of which may effect changes to its laws that may unfavorably affect our financial status.

We
hold interests in our cellular telephone companies through our subsidiaries and affiliates in various jurisdictions in and outside Luxembourg. The laws or administrative practices
relating to taxation (including the current position as to withholding taxes on dividends from the ventures, and tax concessions in certain operations), foreign exchange or otherwise in these
jurisdictions are periodically subject to change. For instance, countries may impose restrictions or other restraints on the conversion of local currencies and the transfer of funds or dividends by
our venture companies to our holding company in Luxembourg. For example, according to the rules of the State Bank of Pakistan there is a restriction on the amount of royalty fees that a Pakistani
company can be remit abroad. The limit is
5% of annual net sales excluding sales tax. Any such change could have a material adverse effect on our financial affairs and on our ability to receive funds from the venture.

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

Most
of the ventures in which we have interests receive substantially all of their revenues in the currency of the markets in which they operate. We derive substantially all of our
revenues through funds generated by the ventures and, therefore, we rely on the ability of the ventures to transfer funds to us. Although there are foreign exchange controls in some of the countries
in which our cellular telephone companies operate which could significantly restrict the ability of these ventures to pay interest and dividends and repay loans by exporting cash, instruments of
credit or securities in foreign currencies, we have experienced no material difficulty in obtaining permits to allow our ventures to export cash to us. This may not, however, always be the case. In
addition, in some countries, it may be

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difficult
to convert large amounts of local currency into foreign currency because of limited foreign exchange markets. The practical effect of this are time delays in accumulating significant amounts
of foreign currency. In addition, a few countries in which we operate restrict the export of cash in local currencies. Additional foreign exchange control restrictions may be introduced in the future
and our ability to receive funds from the ventures will subsequently be restricted.

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

Exchange
rates for currencies of the countries in which our ventures operate 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 venture that reports in a currency other than the U.S. dollar, a decrease in the value of that currency
against the U.S. dollar reduces our profits while also reducing both our assets and liabilities. A relevant example is the devaluation of the guarani in Paraguay in 2002 which had an adverse effect on
the results of our operations. For the year ended December 31, 2004 and 2003, we had exchange losses of $26,796,000 and $45,602,000, respectively, mainly due to the exchange loss on the 5%
Mandatory Exchangeable Notes denominated in Swedish Krona. For the years ended December 31, 2002, we had an exchange loss of $23,483,000. To the extent that our operations retain earnings or
distribute dividends in local currencies, the amount of U.S. dollars we receive is affected by fluctuations of exchange rates for such currencies against the U.S. dollar. We generally do not hedge our
foreign currency exposure.

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

At
the venture level, we seek to reduce our foreign exchange exposure arising from transactions through a policy of matching, as far as possible, assets and liabilities. Our ability to
reduce our foreign currency exchange exposure may be limited by restrictions on borrowings in local currency. For example, under the State Bank of Pakistan regulations in Pakistan, foreign controlled
services sector companies, such as our Pakistan operations, are required to meet certain financial ratios to engage in long-term borrowing in the local market. Pakcom either meets or has
obtained waivers with respect to these ratios. Our other Pakistani operation, Paktel, does not meet all applicable ratios but has received a waiver from the State Bank of Pakistan in respect of its
borrowings for the initial phases of its GSM network build-out. If we fail to meet the applicable requirements or obtain a waiver, we expect to finance the later stages of the
build-out from cash flows from operations, short-term borrowing or other financing arrangements. In the future Pakcom or Paktel may not meet the required ratios or obtain
waivers. Also, we may not be able to fund Pakcom's or Paktel's capital expenditure needs or reduce our foreign exchange exposure by borrowing in local currency.

Potential inflation in local economies may affect some customers' ability to pay for our ventures' services and it may also adversely affect the stability of the
cellular operations market in those areas.

Our
operations are dependent on the economies of the markets in which we operate. These markets are in countries with economies in various stages of development or structural reform,
most of which are subject to rapid fluctuations in terms of consumer prices, employment levels, gross domestic product and interest and foreign exchange rates. These fluctuations affect the ability of
customers to pay for our ventures' services. In addition, these fluctuations affect the ability of the market to support our existing cellular telephone interests or any growth in cellular telephone
operations. Also, periods of significant inflation in any of our markets adversely affects our costs and financial condition.

We are subject to foreign taxes in the countries in which we operate, which reduces amounts we receive from our operating ventures or may increase our tax
costs.

Many
of the foreign countries in which we operate have increasingly turned to new taxes, as well as aggressive interpretations of current taxes, as a method of increasing revenue. In
addition, the

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provisions
of new tax laws may prohibit us from passing these taxes on to our local customers. Consequently, these taxes may reduce the amount of earnings that we can generate from our services.

Our
Pakcom venture has received tax assessment notices from Pakistan's tax authorities relating to, among other things, the disallowance of realized foreign exchange losses and interests
in the amount of approximately $12 million. Pakcom has filed petitions disputing these assessments. In some cases, Pakcom has received unfavorable decisions, which it has successfully appealed
and is in the process of working towards a close of the issues permanently by using the local alternative dispute resolution system, a new legislative route for closing historical tax issues. Our
Paktel venture closed the assessment of prior years on the same basis as obtained for the tax year 2000 providing carried forward tax losses available to tax assessments after fiscal year 2000. If
these or other tax assessments are ultimately resolved in a manner unfavorable to us, this will reduce amounts we receive from our Pakistani operating ventures or increase our tax costs.

ITEM 4.    INFORMATION ON THE COMPANY

The Company

We are a global mobile telecommunications operator with a portfolio of investments in the world's emerging markets over which we typically 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 17 cellular systems in 16 countries, focusing on emerging markets in Asia, Latin America and Africa. As of December 31, 2004, the countries where we had
cellular operations had a combined population of approximately 408.8 million. This means that 408.8 million is the number of people who were covered by our licenses (representing the
number of people who could receive cellular services under the term of the license if the network covered the entire population). Our total subscribers reached 7.7 million (5.3 million
on a proportional basis) as of December 31, 2004.

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. We operate primarily with prominent local business partners
through companies over which we typically exercise management control.

Our
markets are attractive for cellular services due to low wireline and cellular penetration. Usage of cellular services has historically been low in the countries in which we operate
due to poor or insufficient infrastructure, the high costs of such services and low levels of disposable income. We believe there is a significant opportunity for further growth of cellular services
in our markets due to
the reduction in the cost of providing cellular services to the consumer, and due to rising disposable personal income levels. For example, Vietnam and Pakistan, our two largest markets, had cellular
penetration rates of only approximately 5.3% and 4.5%, respectively, as of December 31, 2004.

We
have achieved strong growth and operating profitability. For the year ended December 31, 2004, we generated revenues of $921.5 million and had net profit of
$68.2 million, or a net profit of $46.4 million if gains and valuation movement on investment securities, fair value result on financial instruments and gain realized on debt exchange
are excluded.

As
at December 31, 2004, we had total consolidated debt and other financing of $1,114,413,000.

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The continued improvement in the operating and financial performance of our ventures has allowed us to continue to upstream excess cash to Millicom. During the year ended
December 31 2002, we upstreamed $96.7 million, of which $8.8 million was from divested operations. For the year ended December 31, 2003, we upstreamed $129.3 million
from 14 of the 15 countries in which we then operated. For the year ended December 31, 2004, we upstreamed $171.0 million from 13 of the 15 countries in which we operate. This upstreamed
cash will be used to service our corporate debt obligations and for further investment.

Recent Developments

The following data reflects our results of operations for the year ended December 31, 2004. This should be read in conjunction with the audited
consolidated financial statements included elsewhere in this report.

Summary of Highlights

Millicom's listing onStockholmsbörsen(OMX Stockholm or the Swedish Stock Exchange) became
effective on March 30, 2004.

On
April 26, 2004 Millicom redeemed the outstanding amount of 2% Senior Convertible PIK Notes Due 2006 (the "2% Notes") in an aggregate principal amount of approximately $160,000
for redemption in cash in accordance with the terms of the Indenture covering the 2% Notes. An amount of $63,371,000 out of the total $63,531,000 2% Notes was converted into Millicom shares before
April 26, 2004.

On
September 22, 2004, Millicom sold its 65% holding in its high speed wireless data joint venture in Argentina, Millicom Argentina S.A., to the local partner.

On
October 25, 2004 Millicom's subsidiary in Pakistan, Paktel, signed agreements with the Pakistan Regulator to switch on its GSM network with immediate effect and to renew its
license for 15 years from October 23, 2004 for an amount of $291,000,000 payable over 13 years.

On
November 8, 2004 Millicom was awarded a 10 year license to operate a GSM 900 wireless telephony network in the Republic of Chad.

On
November 8, 2004 Millicom's subsidiary Comvik International Vietnam AB, signed a second memorandum of understanding (MOU) with Vietnam Mobile Telephone Services Company. The
MOU expresses the wish of both parties to continue working together in the future in the form of a joint stock company incorporated under the law on enterprises in Vietnam.

On
December 1, 2004, Telemovil, Millicom's subsidiary in El Salvador, extended its cellular license in El Salvador. This license, initially up for renewal in 2006, has now been
extended and will expire in 2018.

On
December 2, 2004, Millicom's subsidiary in Ghana, Mobitel, signed a new GSM license agreement replacing the previous agreement. The new license has a term of 15 years
and is renewable at expiration for a 10 year period. The payments for the license fee amount to $22,500,000 payable over six years resulting in an initial license value recorded at the present
value of cash outflows of $18,537,000.

In
December 2004, the Company raised $209,160,000 in equity through the offering of 9 million shares in the form of Ordinary Shares or Swedish Depository Receipts (SDRs).
The shares were issued on December 7, 2004 at a price of $23.24 and the net proceeds were $203,620,000.

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In
January 2005 Millicom issued an aggregate principal amount of $200 million of 4% Convertible Bonds due 2010 convertible into Ordinary Shares and/or SDRs. The net
proceeds of the offering were paid on January 7, 2005 in the amount of $195,875,000.

On
March 2, 2005 the registration statement for the exchange offer of our 10% Senior Notes was declared effective and the special interest charge ceased to accrue.

On
April 18, 2005 Pakcom reached agreement with the Pakistan Telecommunications Authority (PTA) for the renewal of its license for 15 years. The license is for CDMA
services. The payment terms are
similar to those agreed in 2004 by Paktel, Millicom's other venture in Pakistan. Pakcom will pay a license fee of $291 million, of which 50% is payable over the first three years and the
remaining 50% over 10 years. Pakcom is still in negotiations with the PTA regarding the allocation of the spectrum.

Subscriber Growth

As of December 31, 2004, our worldwide total cellular subscriber base increased to 7,713,201 cellular subscribers from 5,690,542 cellular subscribers as of
December 31, 2003. Total cellular subscribers increased by 36% in the year ended December 31, 2004. Particularly significant percentage increases were recorded in Ghana, Senegal,
Mauritius, Sri Lanka and Vietnam.

Our
proportional cellular subscriber base increased to 5,332,259 cellular subscribers as at December 31, 2004 from 4,025,577 cellular subscribers as of December 31, 2003.
Our proportional cellular subscribers increased by 32% in the year ended December 31, 2004. Of the 5,332,259 proportional cellular subscribers reported as of December 31, 2004,
4,756,113, or 89%, were prepaid customers.

Financial Results for the year ended December 31, 2004

Total revenues for the year ended December 31, 2004 were $921.5 million, an increase from $647.1 million for the year ended
December 31, 2003. Revenues for the year ended December 31, 2004 for South East Asia, Central America and Africa increased by 32%, 84% and 77% to $231.8 million,
$305.0 million and $150.0 million, respectively, relative to year ended December 31, 2003.

Total
cellular minutes increased by 31% in the year ended December 31, 2004 compared with 2003.

In
respect of our holding in Tele2 AB shares, we recorded a valuation loss of $127.2 million in the year ended December 31, 2004 compared to a gain of $246.8 million
in the year ended December 31, 2003, reflecting the movement in the market price of the Tele2 AB shares. In addition, we recorded a gain of $148.7 million, reflecting the change in the
fair value of the embedded derivative on the 5% Mandatory Exchangeable Notes in 2004, compared to a loss of $84.6 million for the period from August 7, 2003 to December 31, 2003.

Change in Accounting Policy

In 2003 we changed our accounting treatment in respect of the 5% Mandatory Exchangeable Notes and the underlying Tele2 AB shares. As a result, we mark to market
on a quarterly basis the value of our holding of Tele2 AB shares, with any resulting changes in fair value of the shares being recorded in the profit and loss statement under the heading "Gain (loss)
and valuation movement on investment in securities". We also account for the embedded derivative relating to the corresponding revaluation of the 5% Mandatory Exchangeable Notes and to the potential
30% premium if the price of the Tele2 AB shares is above the reference price in accordance with the terms of the 5% Mandatory Exchangeable Notes, at fair value with any subsequent change in its fair
value being recorded in the profit and loss statement. The net impact on our results reflects an economic hedge against a decrease in the price of Tele2 AB shares below the reference price and the
gain that we would realize at

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maturity
if the price of the Tele2 AB shares is above the reference price as provided in the 5% Mandatory Exchangeable Notes. Changes in the market value of the Tele2 AB shares will affect our net
income (loss) on a quarterly basis until the 5% Mandatory Exchangeable Notes mature in August 2006.

Under
U.S. GAAP, the fair value adjustment of our investment in Tele 2 AB shares is recorded in the revaluation reserve as a separate component of shareholders' equity. Accordingly,
under U.S. GAAP, we reclassified the unrealized loss resulting from the change in fair value of the Tele 2 AB shares of $127,158,000 and the gain of $241,163,000 for the years ended
December 31, 2004 and 2003 respectively to shareholders' equity.

Completion of Senior Notes Offering

On November 24, 2003, Millicom completed its offering of $550 million in aggregate principal amount of 10% Senior Notes due 2013 (the "10% Senior
Notes"). Millicom used a portion of the net proceeds from such offering to repay in full $395 million of the 11% Senior Notes and used another part of such net proceeds to repay in full
$137 million of the 13.5% Senior Subordinated Notes due 2006 (the "13.5% Senior Subordinated Notes") on December 29, 2003. See "Results of Tender Offer and Consent
Solicitations" below and "Operating and Financial Review and ProspectsLiquidity and Capital ResourcesOverview".

History

Millicom International Cellular S.A., a stock corporation (société anonyme)
organized under the laws of the Grand Duchy of Luxembourg, was formed in December 1990 by two of the cellular industry's early pioneers, Kinnevik and Millicom Incorporated, a Delaware
corporation ("Mil-Inc"), to hold certain of their cellular interests in 12 countries.

Mil-Inc
was formed in 1979 to pursue opportunities in the nascent American mobile telephone industry. In 1982, the U.S. Federal Communications Commission (the "FCC") awarded
Mil-Inc one of only three developmental licenses for cellular telephony. Also in 1982, Mil-Inc founded, with Racal Electronics Plc, a joint venture that evolved into Vodafone
Group Plc, now the largest cellular telephone operator in the world. The interest in this joint venture was sold to finance Mil-Inc's further development. Mil-Inc, after
initially pursuing U.S. cellular opportunities, decided in 1992 to concentrate on non-U.S. markets, in which licenses generally could be obtained, at that time, without the cost of
acquiring interests in licenses awarded by the FCC lottery system.

From
early 1983, Kinnevik and Mil-Inc began jointly applying for cellular telephone licenses internationally. The first successful joint application resulted in the award of
a cellular license for Hong Kong in 1983. In 1990, after approximately seven years of co-operation, 12 successful license bids and the establishment of cellular operations in a number of
markets, Kinnevik and Mil-Inc agreed to form Millicom for the purposes of managing the development of these operations and pursuing new licenses. At the date of formation, the Millicom
common stock was owned approximately 49% by Kinnevik and 46% by Mil-Inc. Millicom subsequently disposed of the joint venture in Hong Kong to fund its continuing development.

Millicom's
principal executive offices are located at 75 Route de Longwy, L-8080 Bertrange, Grand-Duchy of Luxembourg, European Union. Our telephone number is: +352 27 759
101. Millicom's web site is: http://www.millicom.com.

The Merger

In 1993, it was determined that a merger of Mil-Inc and Millicom could accomplish goals sought by both companies.

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Under
an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"), dated September 21, 1993, as amended, between Millicom, MIC-USA Inc
(MIC-USA"), a wholly owned subsidiary of Millicom, and Mil-Inc, Mil-Inc was merged (the "Merger") with and into MIC-USA on December 31, 1993 (the
"Effective Date"). The outstanding shares of Mil-Inc common stock were exchanged for approximately 46.5% of the Millicom common stock (exclusive of the additional merger shares described
below). Kinnevik held the remaining 53.5% of Millicom common stock.

Immediately
prior to the Merger, substantially all of the operations other than the cellular telephone operations and certain related liabilities of Mil-Inc were transferred
to Great Universal, Inc., a Delaware corporation at that date an indirect wholly owned subsidiary of Millicom ("Great Universal"). Both Millicom and Great Universal have separate management and
transactions between Great Universal, both MIC and our affiliates are subject to certain restrictions as described below.

Following
the Effective Date, Millicom contributed to the capital of Great Universal an aggregate of 211,864 shares of Millicom common stock, par value $2 each, calculated at the time of
issuance as having an aggregate value of $5,027,000.

Merger Warrants

Immediately prior to the Merger, Mil-Inc stockholders received from MIC-USA warrants to purchase from MIC-USA 100% of the
shares (3,867,287 shares) of Great Universal common stock for a purchase price equal to $1.30 per share (the "Warrants"). The purpose of the warrant distribution was to afford Mil-Inc
stockholders the opportunity to participate in the future prospects of such non-cellular businesses and to reduce or eliminate Millicom's interests in such businesses in the event the
Warrants are exercised. The Warrants are not transferable except in certain limited circumstances. They became exercisable on January 1, 1999 and expire six months after an initial public
offering of Great Universal on a public market in the United States, unless extended under certain circumstances (the "Warrant Expiration Date"). At present, no registration statement relating to the
shares of Great Universal (and, subsequent to the reorganization described below, Modern Holdings) underlying the Warrants has been filed with the U.S. Securities and Exchange Commission.

On
December 31, 1993, Great Universal and Millicom entered into an agreement under which, as an inducement to Millicom to contribute its common stock to Great Universal, as
described above, Great Universal granted to MIC-USA an option (the "Put Option") to require Great Universal to purchase from MIC-USA the shares of Great Universal common stock
not acquired by exercise of the Warrants. Additionally, Millicom granted to Great Universal the option (the "Call Option") to purchase from MIC-USA the Great Universal common stock. The
purchase price for the Great Universal common stock upon exercise of either the Put Option or the
Call Option is an amount equal to the difference between the aggregate exercise price of such Warrants ($5,027,473) and the actual aggregate exercise price of the Warrants exercised prior to their
expiration. The Put Option and the Call Option are exercisable as to all of the remaining Great Universal common stock for a period of 20 days commencing on the day following the Warrant
Expiration Date. Great Universal may pay the purchase price for the Great Universal, Inc. common stock by delivering to MIC-USA that number of the shares of Millicom common stock
which in the aggregate equals the purchase price, based upon the last sale price of Millicom common stock as quoted on the NASDAQ National Market on the Warrant Expiration Date.

If
all of the Warrants are exercised or all of the shares of Great Universal common stock not acquired by exercise of the Warrants are repurchased by Great Universal, will have no
further ownership interest in Great Universal. Certain of Millicom's management and shareholders who became holders of Warrants as part of the Merger may become shareholders of Great Universal or may
participate in the management of Great Universal if they choose to exercise the Warrants. From December 30, 1993, the date on which the Warrants were issued, until the Warrant Expiration Date,

21

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Millicom
may not consummate a transaction with Great Universal or any of its affiliates that involves the sum of $1,000,000 or more unless Millicom and Great Universal shall have received an opinion
from an independent investment bank that such transaction is on terms at least as favorable as those that can be obtained from an unrelated third party. In the event that the Warrants are not
exercised prior to the Warrant Expiration Date, management will evaluate other plans to dispose of Great Universal upon the expiration of the Warrants.

In
June 1999, Great Universal effected a reorganization of itself and its subsidiaries. In this reorganization, Great Universal was merged into Great Universal LLC and operations
were spun-off into two separate businesses: Great Universal, Inc. and Modern Holdings Incorporated (formerly known as XSource Corporation). Great Universal, Inc. holds the
subsidiaries in teleservices, television and media and specialized electronics industries, and Modern Holdings Incorporated holds the subsidiaries in the integrated network services industries.

Great
Universal LLC holds 100% of common shares in Great Universal, Inc. and 52.7% of common shares in Modern Holdings Incorporated. Millicom also has a direct ownership of 11.6%
of the share capital of Modern Holdings. These investments are recorded as non-current available-for-sale securities. As of December 31, 2004 and 2003 the
shares in Modern Holdings were not listed on a public market. The carrying value of this investment is $2,950,000 as of December 31, 2004 (2003: $2,950,000). In 2004, Millicom's management
determined that no change in fair value should be recorded. Under IFRS, Millicom does not consolidate its investment in Great Universal and Modern Holdings since the restrictions on their ability to
distribute dividends is considered a severe long-term restriction that significantly impairs their ability to transfer funds to Millicom. Further, due to the existence of warrants enabling
the warrant holders to obtain control over Great Universal and Modern Holdings, Millicom considers that it does not control these companies. The warrants expire six months after the date of a
registration statement of Great Universal is declared effective by the U.S. Securities and Exchange Commission.

Following
this reorganization and under the Warrant agreement, each warrant entitles the holder to purchase one share of Great Universal, Inc. common stock and 2.0721 shares of
Modern Holdings Incorporated common stock at an exercise price of $1.30 per Warrant, subject to adjustment. Following this reorganization, the rights and obligations of MIC-USA arising
from the Warrant agreement and the Put Option and the Call Option agreement referred to above were assigned to Great Universal LLC. Under the terms of the Merger, Great Universal LLC continues to
indemnify Millicom against certain contingent liabilities.

On
December 31, 1999, MIC-USA transferred its 100% ownership and related rights in Great Universal, Inc. to Great Universal LLC 1999 Trust for a consideration
of $5,027,000, corresponding to the net book value of Millicom's investment in Great Universal, Inc. This amount is recorded in "Investment in other securities". During 2002, Millicom recorded
an impairment loss for 100% of this asset due to uncertainty concerning its recoverability.

Great
Universal, Inc. is contingently liable for any liabilities in respect of the representations and warranties made by Mil-Inc to Millicom under the Merger
Agreement and in respect of any United States federal, state and local income tax in excess of $13,544,000 which may be payable by Mil-Inc for 1993 and prior years.

The Cellular Telephone Industry

Cellular Telephone Industry Overview

Cellular Telephone Technology.Cellular telephone systems are capable of providing high quality, high capacity voice and data
communications to and from vehicle-mounted and hand-held

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radiotelephones.
Cellular telephone systems are capable of handling thousands of calls at any one time and providing service to hundreds of thousands of subscribers in any particular area.

Cellular
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 cellular telephones in that cell. Each cell is connected by
wire-line or microwave to a central switching point or Mobile Switching Center ("switch") that controls the routing of calls and which, in turn, is connected to the public switched
telephone network. It is the switch mobility software that allows cellular telephone users to move freely from cell to cell while continuing their calls through a process called hand-off.

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

A
cellular 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.

The
Company uses analog and digital technologies that are widely used throughout the world. GSM is a digital standard for cellular telephone systems that the majority of European Union
countries have adopted as a common standard. Commercial launch in several European countries commenced in 1992. 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 cellular telephones in any country where the GSM system has been adopted, providing
increased mobility and flexibility. GSM systems are being used in over 200 countries and territories. Advanced Mobile Phone System (AMPS) is the analog standard developed for and used in North
America. Total Access Communication System (TACS), or Time Division Multiple Access (TDMA), is the system most widely used in North and South America and works by dividing a radio frequency into time
slots and then allocating slots to multiple calls. TDMA is one of the world's most widely deployed digital wireless systems and it provides a common evolutionary path for analog AMPS networks. In the
United States, a number of digital standards have been developed and are being deployed in existing AMPS networks. One of them is CDMA or Code Division Multiple Access, 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 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. We
launched the first 3G/UMTS in Africa in our operation in Mauritius on November 29, 2004.

Operating Characteristics.The cellular telephone industry is typically characterized by high fixed costs and low variable
costs. Until technological limitations on total capacity are approached, additional cellular 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 has also seen declining equipment prices in real terms. Once revenues exceed fixed costs, incremental revenues are expected to

23

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yield
a high incremental operating profit, giving cellular telephone system operators an incentive to stimulate and satisfy demand for service 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 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 cards. Prepaid subscribers tend to have lower usage than credit subscribers, however, the operating margin is generally higher than with credit subscribers
as the risk of bad debt is eliminated and there is no subsidizing of handsets.

Development of the Cellular Telephone Industry

Cellular Telephony in Developed Countries.The first cellular 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, cellular telephony has grown rapidly. All developed countries now have cellular telephone service
and levels of penetration increased substantially in these countries. Worldwide subscribers at December 31, 2004 were nearly 1.4 billion according to EMC.

Given
the rapid growth of cellular 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 cellular telephone networks and the ability to access the Internet from handsets. In industrialized nations, cellular 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.

Cellular Telephony in Developing Countries.While the cellular telephone industry is well-established in the
developed world, the cellular telephone industry in the developing world is still in its infancy. Millicom believes that cellular telephony will continue to grow rapidly in developing countries
because of the poor quality of the existing wire-line service, the unsatisfied demand for basic telephone service and the increasing demand from users who want the convenience of cellular
telephones. In some countries the cellular telephone network provides
significantly improved access to the local and international wire-line network compared with the existing wire-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 substantially lower in developing countries than in developed countries. Consequently, Millicom believes that its markets offer high growth potential.

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

Financing of the Company's Business

The Company finances its operations at both the operational and parent entity level.

Operational Level 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 cellular 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

24

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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 from us, we seek, whenever possible, to fund such investment through shareholder loans
from Millicom. 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, 2004, approximately 55% of our debt at the operational level was denominated in local currency.

Millicom Level Entity Financing

Millicom's total consolidated indebtedness as of December 31, 2004 was $1,114,413,000 and our total consolidated net indebtedness (representing total
consolidated indebtedness after deduction of cash, cash equivalents and short-term time deposits) was $700,422,000. In 2003, we implemented a restructuring plan to improve our liquidity by
reducing our debt service obligations. This plan substantially decreased our annual interest payments. Our annual interest expense for the years ended December 31, 2004 and 2003 was
$109 million and $135 million, respectively. Our interest obligations of $15,490,000 per annum in respect of the 5% Mandatory Exchangeable Notes have been secured by U.S. Treasury
STRIPS, which we purchased with a portion of the net proceeds from the offering of the 5% Mandatory Exchangeable Notes, and which will be settled by their sale. In addition, of our consolidated
indebtedness, $365,006,000 relates to the 5% Mandatory Exchangeable Notes, which are mandatorily exchangeable into Tele2 AB B shares in respect of which no repayment in cash is required.

Management Structure

We operate in five major geographic regions of the world: South East Asia, South Asia, Central America, South America and Africa.

We
manage these regional operations through five cluster managers, each of whom typically is responsible for two to four countries and acts as company manager in the largest country in
the region. 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.

We
operate primarily through operations with prominent local business partners, over which we typically exercise management control. While the day-to-day
management of our operations is the responsibility of the local management, which implements the decision of Millicom's board of directors, the general manager and other key personnel of our
operations are appointed by us or in co-operation with our partners. In addition, members of senior management of our operations also typically receive Millicom stock options as part of
their compensation and incentive packages.

Operational and Financial Control

We actively manage our operations through:



25

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We
seek to obtain a controlling ownership of our operations. In most cases, where we hold less than a majority of the shares in an operation, we manage our operations through
stockholders' 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 stockholders' agreements contain buyout, arbitration or other procedures that can be invoked in the event of a fundamental disagreement among us and our partners.

License Acquisition

In obtaining our licenses, we generally establish a venture with one or more prominent local business partners to apply for a cellular telephone license. We
consider that the selection of the local partner, the technical and financial expertise that we provide to the license application and our successful track record as an international provider of
cellular telephone services are the critical factors for a successful license bid. In most cases, the local partner is instrumental in obtaining the license and maintaining contact with the local
telecommunications agency, post office, or relevant government department or otherwise plays an important role in ensuring the success of the venture company. In some markets, after the award of the
license, the local partner continues to take an active interest in the management of the venture.

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 cellular
telephone licenses. In some cases, our ventures pay royalties on revenue or income to governments, and all of our cellular ventures pay interconnection fees to other telecommunications operators
during the license period. Although the pursuit of cellular telephone licenses is usually highly competitive, our venture companies have been successful in obtaining licenses in preference to other
ventures whose participants have often included major international telecommunications companies.

Sales, Marketing and Distribution

We pursue low-cost, innovative and high-impact approaches to sales, marketing and distribution. In the majority of our markets, we
typically are not involved in the distribution of handsets and typically do not provide handset subsidies for our prepaid subscribers. As a result, we 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 outlets such as local convenience
stores, newspaper stands and street vendors. In some of our markets, we are also developing a number of non-traditional distribution channels such as freelance distributors, including
students and housewives. We believe that our focus on branded prepaid services and non-traditional distribution channels will enable us to expand our market share and reduce our operating
costs. We focus our advertising on cost-effective promotions.

Insurance

The Company believes that it holds sufficient levels of insurance for the prudent operation of its business.

26

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Operations and Investments

Descriptions of the operations of each of the ventures and other related businesses are provided below. The description of our cellular operations has been
divided into the following sub-sections:



As
of December 31, 2004, we also had an investment in high-speed cellular data services in Peru which we are planning to exit.

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

|                               |  | 2004 |  | 2003 |  | 2002
|------------------------------ |  | ---- |  | ---- |  | ----
|South East Asia                |  | 25%  |  | 27%  |  | 23% 
|South Asia                     |  | 12%  |  | 16%  |  | 14% 
|Central America                |  | 34%  |  | 27%  |  | 28% 
|South America                  |  | 12%  |  | 15%  |  | 18% 
|Africa                         |  | 16%  |  | 13%  |  | 10% 
|Other                          |  | 1%   |  | 2%   |  | 2%  
|MIC Systems (divested in 2002) |  | 0%   |  | 0%   |  | 5%  
|Total                          |  | 100% |  | 100% |  | 100%

In
the country descriptions of our ventures in "Business", we have indicated any instances where the operations of our ventures, or our relationships with our venture partners, are
different from the description given under the captions above.

27

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Cellular Operations

The following table shows certain information for each of Millicom's cellular operations as at December 31, 2004.

|Market                              |  | Ownership |  | Method of
Consolidation(1) |  | Start-Up
Date |  | Technology(2) |  | Estimated
Population
of Area
under
License(3) |  | Cellular
Penetration
as of
December 31,
2004(4) |  | Total
Number of
Subscribers
as of
December 31,
2004(5)
|----------------------------------- |  | --------- |  | -------------------------- |  | ------------- |  | ------------- |  | --------------------------------------------- |  | ----------------------------------------------- |  | ------------------------------------------------------
|
|South East Asia                     |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       
|Cambodia                            |  | 58.4%     |  | JV                         |  | 1997          |  | GSM           |  | 13.4                                          |  | 6.4                                             |  | 609.7                                                 
|Lao People's Democratic Republic(6) |  | 74.1%     |  | S                          |  | 2003          |  | GSM           |  | 6.1                                           |  | 5.1                                             |  | 40.3                                                  
|Vietnam(7)                          |  | 80.0%     |  | S                          |  | 1995          |  | GSM           |  | 82.7                                          |  | 5.3                                             |  | 1,849.4                                               
|South Asia                          |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       
|PakistanPakcom                     |  | 61.3%     |  | S                          |  | 1990          |  | TDMA/AMPS     |  |                                              |  | 4.5                                             |  | 534.7                                                 
|PakistanPaktel                     |  | 98.9%     |  | S                          |  | 1990          |  | GSM/TDMA/AMPS |  | 159.2                                         |  | 4.5                                             |  | 481.6                                                 
|Sri Lanka                           |  | 99.9%     |  | S                          |  | 1989          |  | GSM/TACS      |  | 19.9                                          |  | 10.9                                            |  | 442.5                                                 
|Central America                     |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       
|El Salvador(8)                      |  | 100.0%    |  | S                          |  | 1993          |  | GSM/TDMA/AMPS |  | 6.6                                           |  | 23.5                                            |  | 534.3                                                 
|Guatemala                           |  | 55.0%     |  | JV                         |  | 1990          |  | GSM/TDMA/AMPS |  | 14.3                                          |  | 18.8                                            |  | 672.7                                                 
|Honduras                            |  | 50.0%     |  | JV                         |  | 1996          |  | GSM/CDMA/AMPS |  | 6.8                                           |  | 9.3                                             |  | 490.0                                                 
|South America                       |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       
|Bolivia                             |  | 100.0%    |  | S                          |  | 1991          |  | TDMA/AMPS     |  | 8.7                                           |  | 20.3                                            |  | 414.1                                                 
|Paraguay                            |  | 96.0%     |  | S                          |  | 1992          |  | GSM/TDMA/AMPS |  | 6.2                                           |  | 18.0                                            |  | 523.3                                                 
|Africa                              |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       
|Ghana                               |  | 100.0%    |  | S                          |  | 1992          |  | GSM/TACS      |  | 20.8                                          |  | 6.5                                             |  | 277.0                                                 
|Mauritius                           |  | 50.0%     |  | JV                         |  | 1989          |  | GSM/3G        |  | 1.2                                           |  | 41.0                                            |  | 167.6                                                 
|Senegal                             |  | 75.0%     |  | S                          |  | 1999          |  | GSM           |  | 10.9                                          |  | 9.9                                             |  | 339.9                                                 
|Sierra Leone                        |  | 70.0%     |  | S                          |  | 2001          |  | GSM           |  | 5.9                                           |  | 2.7                                             |  | 33.4                                                  
|Tanzania(9)                         |  | 84.4%     |  | S                          |  | 1994          |  | GSM/TACS      |  | 36.6                                          |  | 4.8                                             |  | 302.7                                                 
|Chad                                |  | 87.5%     |  | S                          |  | 2004          |  | GSM           |  | 9.5                                           |  |                                                |  |                                                      
|                                    |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       
|Grand Total                         |  |           |  |                            |  |               |  |               |  | 408.8                                         |  |                                                 |  | 7,713.2                                               
|                                    |  |           |  |                            |  |               |  |               |  |                                               |  |                                                 |  |                                                       

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28

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29

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The following table shows certain estimated information regarding Millicom's competitive position in each of its markets as at December 31,
2004. This information was compiled based on data provided by EMC, an independent cellular market research firm. Millicom believes that the reliability of this information is uncertain. 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 Range of
Market Share Ranking
at December 31, 2004(1) |  |                               |  |                                                                                        |  |                    
|-------------------------------- |  | --------------------------------------------------------------- |  | ----------------------------- |  | -------------------------------------------------------------------------------------- |  | -------------------
|
|
|South East Asia                  |  |                                                                 |  |                               |  |                                                                                        |  |                    
|Cambodia                         |  | Millicom                                                        |  |                              |  | Cambodia
Shinawatra
CaSaCom                                                            |  | Camtel             
|Lao People's Democratic Republic |  | Lao Telecom                                                     |  |                              |  | Millicom                                                                               |  | LAT
ETL            
|Vietnam                          |  | Vinaphone                                                       |  | Millicom                      |  |                                                                                       |  | SLD Telecom
Viettel
|South Asia                       |  |                                                                 |  |                               |  |                                                                                        |  |                    
|PakistaPakcom                   |  | PMCL                                                            |  |                              |  | Millicom(2)
PTML                                                                       |  |                   
|PakistanPaktel                  |  | PMCL                                                            |  |                              |  | Millicom(2)
PTML                                                                       |  |                   
|Sri Lanka                        |  | MTN Networks                                                    |  |                              |  | Millicom
Mobitel                                                                       |  | Hutchison          
|Central America                  |  |                                                                 |  |                               |  |                                                                                        |  |                    
|El Salvador                      |  |                                                                |  | Millicom
CTE Telecom
Personal |  | Telefonica Moviles
Digicel                                                             |  |                   
|Guatemala                        |  |                                                                |  | Sercom                        |  | Millicom
Consultora de
Inversiones BSC
Communicacion es y
Cia Telefonica
Centroamerica |  |                   
|Honduras                         |  | Millicom                                                        |  | Megatel de
Honduras           |  |                                                                                       |  |                   
|South America                    |  |                                                                 |  |                               |  |                                                                                        |  |                    
|Bolivia                          |  | Movil de Entel                                                  |  |                              |  | Millicom
Nueva Tel                                                                     |  |                   
|Paraguay                         |  |                                                                |  | Millicom
Nucleo               |  | Hola Paraguay                                                                          |  | HT Paraguay        
|Africa                           |  |                                                                 |  |                               |  |                                                                                        |  |                    
|Ghana                            |  | Scancom                                                         |  |                              |  | Millicom
One Touch                                                                     |  | Kasapa             
|Mauritius                        |  | Cellplus                                                        |  | Millicom                      |  |                                                                                       |  |                   
|Senegal                          |  | Sonatel                                                         |  | Millicom                      |  |                                                                                       |  |                   
|Sierra Leone                     |  | Celtel                                                          |  | Millicom                      |  |                                                                                       |  |                   
|Tanzania                         |  | Vodacom                                                         |  |                               |  | Millicom
Celtel                                                                        |  | Zanzibar
Telecom   

---

30

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

|                                    |  | As at December 31,
|----------------------------------- |  | ------------------
|
|
|
|
|South East Asia                     |  |                   
|Cambodia                            |  | 609,704           
|Lao People's Democratic Republic(1) |  | 40,315            
|Vietnam(2)                          |  | 1,849,288         
|                                    |  |                   
|Subtotal South East Asia            |  | 2,499,307         
|South Asia                          |  |                   
|PakistanPakcom                     |  | 534,734           
|PakistanPaktel                     |  | 481,566           
|Sri Lanka                           |  | 442,546           
|                                    |  |                   
|Subtotal South Asia                 |  | 1,458,846         
|Central America                     |  |                   
|El Salvador(3)                      |  | 534,288           
|Guatemala                           |  | 672,734           
|Honduras                            |  | 490,014           
|                                    |  |                   
|Subtotal Central America            |  | 1,697,036         
|South America                       |  |                   
|Bolivia                             |  | 414,088           
|Paraguay                            |  | 523,309           
|                                    |  |                   
|Subtotal South America              |  | 937,393           
|Africa                              |  |                   
|Ghana                               |  | 277,045           
|Mauritius                           |  | 167,565           
|Senegal                             |  | 339,884           
|Sierra Leone                        |  | 33,409            
|Tanzania(4)                         |  | 302,712           
|                                    |  |                   
|Subtotal Africa                     |  | 1,120,615         
|                                    |  |                   
|Total                               |  | 7,713,201         
|                                    |  |                   

---

31

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The
following table presents, for the periods indicated, revenues for each of Millicom's cellular operations. These figures do not include Millicom's
non-cellular operations.

|                                    |  |    |  | Revenues
|----------------------------------- |  | -- |  | --------
|
|
|
|South East Asia                     |  |    |  |         
|Cambodia                            |  | JV |  | 56,631  
|Lao People's Democratic Republic(2) |  | S  |  | 3,734   
|Vietnam(3)                          |  | S  |  | 162,807 
|                                    |  |    |  |         
|Subtotal South East Asia            |  |    |  | 223,172 
|South Asia                          |  |    |  |         
|PakistanPakcom                     |  | S  |  | 54,337  
|PakistanPaktel                     |  | S  |  | 34,349  
|Sri Lanka                           |  | S  |  | 24,563  
|                                    |  |    |  |         
|Subtotal South Asia                 |  |    |  | 113,249 
|Central America                     |  |    |  |         
|El Salvador(4)                      |  | S  |  | 148,905 
|Guatemala                           |  | JV |  | 94,277  
|Honduras                            |  | JV |  | 61,852  
|                                    |  |    |  |         
|Subtotal Central America            |  |    |  | 305,034 
|South America                       |  |    |  |         
|Bolivia                             |  | S  |  | 41,962  
|Paraguay                            |  | S  |  | 72,043  
|                                    |  |    |  |         
|Subtotal South America              |  |    |  | 114,005 
|Africa                              |  |    |  |         
|Ghana                               |  | S  |  | 35,443  
|Mauritius                           |  | JV |  | 15,530  
|Senegal                             |  | S  |  | 43,785  
|Sierra Leone                        |  | S  |  | 10,681  
|Tanzania(5)                         |  | S  |  | 44,540  
|                                    |  |    |  |         
|Subtotal Africa                     |  |    |  | 149,979 
|                                    |  |    |  |         
|Total                               |  |    |  | 905,439 
|                                    |  |    |  |         

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Competitive Strengths

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



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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 and better network
quality and services. We believe that, given the low cellular penetration in our markets, we can continue to achieve growth in our subscriber base while continuing to improve our operating margins and
cash flows. We intend to accomplish this by:



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SOUTH EAST ASIA

Background

South East Asia comprises our Asian cellular telephone operations with interests in three cellular operations in three markets: Cambodia, Lao People's Democratic
Republic and Vietnam. In South East Asia we also operate an international gateway and a high-speed data business in Cambodia. Our South East Asia's license areas covered approximately
102.2 million people as of December 31, 2004.

Cambodia

1999 was Cambodia's first full year of peace in 30 years. Since then progress was made on economic reforms and growth. Cambodia's growth has averaged 6 to
7% been during 1999-2003 largely due to an agricultural jump due to favorable weather conditions. Real GDP grew by 5.2% in 2003 and was estimated to slow down to 4.3% in 2004 as the
agricultural sector slows down and structural weaknesses constrain non-agricultural growth. Tourism and garment export are now Cambodia's fastest growing industries. However, the
elimination of garment quotas under the World Trade Organization (WTO) rules starting in 2005 will put this part of growth at risk. The long-term development of the economy after decades
of war remains a challenge. The population lacks education and productive skills, particularly in the rural areas, which suffer from an undeveloped infrastructure and from land ownership issues. Lack
of good governance, lack of political commitment to judicial and legal reform, and lack of overall progress on structural reform continue to dampen foreign investment and delay foreign aid. The
government is addressing these issues with assistance from bilateral and multilateral donors. Cambodia joined the WTO in 2004. Cambodia's population was approximately 13.6 million in 2004.

We
have a 58.4% equity interest in CamGSM Company Limited ("CamGSM"). The remaining 41.6% of CamGSM is owned by a Cambodian company, Royal Group of Companies Ltd ("RGC") (38.5%)
and a private business partner, Mr. Muhammed Akhtar Zaman (3.1%), who is a senior vice president of
Millicom. Millicom and RGC entered into a joint agreement in November 1997 to operate a GSM mobile cellular telephony network throughout Cambodia. Under this agreement, Millicom and RGC appoint
four and three directors, respectively, and one director as Chairman and Vice-Chairman, respectively, of CamGSM. The board decides major issues such as approving the annual business plan,
approving any distribution of profits, the employment of senior officers, and termination and liquidation of CamGSM, subject to shareholder approval. RGC is responsible for the provision of business
facilities and assisting the joint venture in obtaining government licenses and approvals. Millicom is entitled to a 62.3% profit distribution with 34.4% to RGC and 3.3% to Mr. Muhammed Akhtar
Zaman, respectively. Because the shareholders' meeting requires minority shareholder participation, and because the board meeting requires the participation of the board representative of the minority
shareholder, the minority shareholder can effectively block the vote at both the shareholders' and board meetings by not participating in the meeting. Millicom therefore accounts for this operation as
a joint venture.

On
April 20, 1996, CamGSM was awarded a 25-year license to operate a nationwide GSM cellular network, the first such license granted in that country. In
July 1999 the license was extended to 35 years. The annual license fee payable to the Ministry of Posts and Telecommunications of Cambodia ("MPTC") for the years 1999 to 2001 was 10% of
gross revenue, net of interconnection and certain other charges. This fee increased to 15% from 2002 onwards.

The
operation commenced commercial service in Phnom Penh in 1997 and coverage has since then been expanded significantly to cover five regional capitals as well as all provinces and
major towns. We are the only operator with coverage in all provinces and major towns.

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CamGSM's
network is based upon the GSM standard. As of December 31, 2004, CamGSM's network consisted of 258 cell sites covering approximately 23% of the population.

Cambodia
has a calling party pays system.

CamGSM
has two principal competitors in the cellular telephony market in Cambodia, each of which operates a GSM network: Shinawatra; and CaSaCom, a joint venture between Samart and
Telecom Malaysia. According to EMC and independently verified incidence figures, as of December 31, 2004, CamGSM had the number one market position. Coverage in the provinces and major towns is
a principal area of competition relative to other market participants. MPTC functions as both a regulator and operator in Cambodia, and there have been recent efforts to revise the Law on
Telecommunications to provide for a separate and independent regulatory body.

In
addition to our cellular telephony operation, since November 2000, we also operate an international gateway in Cambodia, under the name Royal Telecam International Limited
("Telecam"), facilitating both incoming and outgoing international traffic. The license is for 25 years from November 2000, subject to renewal for an additional five-year
period. Millicom owns 57% of Telecam with the remaining 40% owned by a Cambodian company and 3% held by our private business partner, Mr. Muhammed Akhtar Zaman, who is a senior vice president
of Millicom. The license fee is 51% of gross revenues, net of interconnection and accounting/settlement rates. Telecam's joint venture arrangements are similar to those of CamGSM. Millicom accounts
for its operations in Cambodia as a joint venture.

Since
January 2001, we have also provided cellular broadband services in certain cities in Cambodia and, through a joint venture with the Cambodian Ministry of Information,
broadcast-to-air UHF television services.

Lao People's Democratic Republic

The government of Laos, one of the few remaining official Communist states, began decentralizing control and encouraging private enterprise in 1986. As a result,
growth averaged 6% in 1988-2003. Despite this high growth rate, Laos infrastructure remains less developed than neighboring countries. It has no railways, main highways are being surfaced
but the bulk of the network remains dirt tracks. There are now 5 licensed Telecom Companies operating 4 GSM networks, 2 fixed telephone networks and one WLL network. Internet remains very slow and
expensive, International calls are a state monopoly with high price and poor quality. Electricity supply is available in urban areas and is being deployed along roads and tracks in rural areas.
Subsistence agriculture accounts for 49% of GDP and provides 80% of total employment. The economy will continue to benefit from aid from international institutions (e.g., World Bank, Asian Development
Bank) as well as bilateral government aid. Significant foreign investment remains limited to large hydropower projects and mining.

Following
the restructuring of our holding in 2004, we now have a 74% equity interest in Millicom Lao Co. Ltd. ("Millicom Lao"), an operation providing GSM telephone services in
Lao PDR. The Government of Laos owns 22% of Millicom Lao. Mr. Zaman, a private business partner and senior executive vice-president of Millicom, owns 4% of Millicom Lao.

In
January 2002, we were awarded a 20-year license to operate in Laos. The annual license fee is $100,000 per year plus 2% of net airtime revenues. The joint venture
commenced operations in April 2003 under the TANGO brand and offers prepaid GSM mobile phone services for domestic customers and roaming services in Laos for the subscribers of more than 100
partner networks.

Millicom
Lao operates a digital network using the GSM 900/1800 standard, with coverage in 16 provinces (out of 18). National coverage was launched in early 2005. In the near future
Millicom Lao will continue increasing its capacity in Vientiane and further develop its nationwide coverage.

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Laos
has a calling party pays system.

We
compete with three other GSM operators in Laos. Laos Telecommunications Company, which is a joint venture between Shinawatra and the government of Laos, ETL, which is wholly owned by
the government of Laos, and LAT which is owned by the Laotian Ministry of Defense and operates a GSM 900 network. As of December 31, 2004, our Laos joint venture had the number two
market position behind Laos Telecommunications Company. The local regulator, MCPTC, functions as both regulator and operator.

Vietnam

Vietnam is an emerging market that is still recovering from times of war, the loss of financial support from the former Soviet bloc, and the rigidities of a
centrally planned economy. Growth has risen steadily since 2000, with a figure of 7.7% real GDP growth achieved in 2004 despite the background of global slow-down. These numbers still mask major
difficulties in economic performance. Many domestic industries have reported large stockpiles of inventory and tough competition from more efficient foreign producers. Meanwhile, Vietnamese
authorities have moved to implement the structural reforms needed to modernize the economy and to produce more competitive, export-driven industries. Entry by Vietnam into the World Trade
Organization, which the Vietnamese government hopes will occur by 2006, is a key goal of the Vietnamese government and many bi-lateral trade agreements have been, or are in the process of
being, signed with major trading partners. This includes a Market Access Agreement signed with the European Union on March 31, 2005 which includes a clause for all EU investors in the
telecommunications sector operating under Business Cooperation Contracts with Vietnamese operators to have the possibility to renew current agreements or to convert them into another form of
establishment with conditions no less favorable than those they now enjoy.

We
have an 80% equity interest in Comvik International (Vietnam) AB ("CIV"), which has entered into a business cooperation contract ("BCC") to operate a nationwide cellular GSM network
in Vietnam known as Mobifone. The remaining 20% interest in CIV is held by our private business partner, Mr. Muhammed Akhtar Zaman, who is a senior vice president of Millicom. Service commenced
in July 1995 and covers all provinces, including the important cities of Hanoi, Ho Chi Minh City and Da Nang. Mobifone operates a digital network based upon the GSM standard. As of
December 31, 2004, Mobifone's network consisted of 1050 cell sites covering approximately 66.8% of the population.

CIV,
together with Millicom's controlling shareholder Kinnevik and Vietnam Mobile Services Co. ("VMS"), a government owned company, entered into the BCC in 1994. In 1995 the Vietnamese
State Committee gave final approval for this agreement, and a license to provide cellular service throughout the entire country was issued to VMS.

The
BCC has a 10-year term, provides for revenue sharing between CIV and VMS, and sets out certain obligations of the parties, including CIV's obligations to make certain
investments in network infrastructure and to provide training and other services to Mobifone. The BCC provides for extension negotiations to commence after eight years of operation, i.e., in 2003.
Since then, CIV has held extensive discussions with VNPT and VMS with the aim of securing a long-term business relationship. We proposed extending the BCC for a ten-year period
which was refused by the Vietnamese government because an extension of the BCC in its current form is not the form of co-operation preferred by the Vietnamese government going forward. In
February 2004 and in November 2004, CIV and VMS signed two Memoranda of Understanding to continue their long term cooperation under the form of a Joint Stock Company ("JSC"). CIV and
VMS/VNPT are in the process of negotiating an agreement that would allow CIV to become a shareholder of VMS once it is equitized. We have received no assurance from the Vietnamese government as to
when or whether such an agreement will

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be
signed, nor do we know which terms and conditions such an agreement may be subject to. We may not be successful in achieving any interim solution that allows us to continue our business in Vietnam.

The
BCC originally provided that CIV would be entitled to receive 50% of Mobifone's net revenues for the first five years of operation and 40% thereafter. In October 2000, the BCC
received an amended investment license which increased CIV's contribution to the BCC and provided for a 50:50 revenue sharing arrangement. CIV initially contracted to invest $128 million in the
venture and the full amount of this commitment was met as of December 31, 2003. In connection with the amendments to the BCC in 2000, 2002 and 2003, CIV committed to invest an additional
minimum amount of $75 million, of which approximately $56.7 million was disbursed as of December 31, 2004. In October 2004, CIV agreed to convert $6,700,000 of investments
into billing and customer care systems, itemized in the original BCC contract as a CIV contribution to the BCC, into additional network investments. As a result of this amendment, CIV's minimum agreed
contribution to the venture over the term of the license to May 2005 amounts to $209.5 million.

Upon
expiration of the BCC on May 18, 2005, legal title to all equipment will be transferred to VMS at the depreciated book value of those assets on such date, which will equal
$1. If the revenue sharing agreement is not extended or CIV is unable to maintain its operations in Vietnam through another agreement, its telecommunications services will cease on May 18,
2005. In such event, CIV would no longer generate any revenues from cellular operations in Vietnam. CIV's revenues for the year ended December 31, 2004 were $162,807,000 (18% of Millicom's
total revenues) and operating profit was $68,183,000 (27%% of Millicom's total operating profits). CIV still needs to disburse, before the end of the revenue sharing agreement on May 18, 2005,
approximately $27,639,000 of outstanding capital commitments under the BCC. An impairment charge of $16.6 million has been recorded in the first
quarter of 2005 in the consolidated Group accounts to account for the write-down of property, plant and equipment in Vietnam as the BCC expires on May 18. The Vietnam asset impairment is due to
a late approval of investments required under the BCC which prevented CIV from generating revenues on these fixed assets. Please refer to the following risk factor in the Risk Factor section:
"The agreement under which we conduct our operations in Vietnam, which is our largest contributor to revenue, expires on May 18, 2005, unless extended. We do not
exercise management control over Mobifone."

Under
the terms of the BCC, Millicom does not exercise management control over Mobifone. Certain management decisions, such as the decision to make certain capital expenditures and other
business policy decisions, are made by an advisory committee comprised of eight members (four of which are appointed by CIV and four of which are appointed by VMS). Although the advisory committee has
in the past made decisions based on our recommendations, we cannot assure you that the advisory committee will make decisions based on our recommendations in the future or that it will act in a manner
consistent with our interests. In addition, CIV and VMS must agree in writing to amend the BCC, sell all or substantially all of the business assets or terminate any business license. If a dispute
occurs between us and VMS and we are unable to resolve it satisfactorily, our results of operations and financial condition would be adversely affected.

Vietnam
is a highly regulated market. The ministry which regulates telecommunications services in Vietnam ("MPT") recently issued a telecommunications ordinance outlining its regulatory
policy. The MPT has introduced the concept of "significant market power" (i.e., greater than 30% market share) and adopted regulations which favor competition, including the regulation of
end-user tariffs for operators with "significant market power" such as Mobifone. Two new markets entrants are S-Fone, which operates a CDMA network, in July 2003, and
Vietel, which operates a GSM network and started operations in October 2004. These operators are allowed to offer tariffs approximately 15%-20% below those operators with
significant market power such as Mobifone. The impact of these new operators has been to drive down the tariffs of the existing operators, including Mobifone, which in turn has stimulated market
demand. The total market grew by about 80% in 2004, with Mobifone growing by over 800,000 subscribers and maintaining its market share at around 39% of the total market.

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Mobifone
has three competitors in the cellular telephony market in Vietnam, the most important one being VinaPhone, which launched GSM services in 1996 and is wholly owned by the
Vietnamese government. According to EMC, as of December 31, 2004, Mobifone had the number two market position behind VinaPhone. We anticipate increased competition as the number of GSM and CDMA
nationwide operators grows, which is expected to spur further market growth. We attempt to differentiate ourselves from our competitors in the areas of marketing and distribution. The telecoms
regulator, MPT, has recently issued a further two new licenses, a CDMA 800MHz license to Hanoi Telecom and a CDMA 450 limited wireless local loop license to VP Telecom. We do not expect that MPT will
issue further licenses. MPT is also expected to issue new regulations governing mergers and acquisitions among operators emerging as dominant players over the coming years.

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SOUTH ASIA

Background

South Asia comprises our Asian cellular telephone operations with interests in three cellular operations in two markets: Pakistan (two operations) and Sri Lanka.
Our South Asia's license areas covered approximately 179.1 million people as of December 31, 2004.

Pakistan

Pakistan suffers from internal political disputes, low levels of foreign investment, and a costly ongoing confrontation with neighboring India over the disputed
border region of Kashmir. Pakistan's economic prospects, although still marred by poor human development indicators, continued to improve in 2004 following unprecedented inflows of foreign assistance
beginning in 2002-2003. Foreign exchange reserves have grown to record levels, supported largely by fast growth in recorded worker remittances. Trade levels rebounded after a sharp decline
in late 2001. The Pakistani government has made significant inroads in macroeconomic reform since 2000. Although it is in the second year of its $1.3 billion IMF Poverty Reduction and Growth
Facility, the government continues to require waivers for politically difficult reforms. Long-term prospects remain uncertain as development spending remains low, regional tensions remain
high, and political tensions weaken Pakistan's commitment to lender-recommended economic reforms. GDP growth will continue to depend on crop performance, dependence on foreign oil leaves the import
bill vulnerable to fluctuating oil prices, and efforts to open and modernize the economy remain uneven. Pakistan had a population of about 160 million in 2004.

Pakistan
is our largest market in terms of population. We have two distinct cellular operations in Pakistan, Pakcom Limited ("Pakcom") which we formed in 1990, and Paktel Limited
("Paktel"), which we acquired in November 2000. We manage these operations separately, addressing different market segments with different brands. We have consolidated our support and
infrastructure functions to take advantage of available synergies. Following Paktel's receipt of a GSM license and the allocation of the
necessary frequency in October 2004, GSM service was launched and Pakcom had about 340,000 GSM subscribers as of March 31, 2005. We expect a significant increase in competition following
the launch of GSM services by 2 new entrants. Telenor launched operations on 15 March 2005 and Warid is expected to launch during May 2005. Such competition is likely to result in price
erosion, increased acquisition costs as well as increased levels of churn among subscribers.

Pakcom
has experienced a decline in subscribers and will launch a more aggressive acquisition campaign based on the rollout of a CDMA network which is expected to start in 2005. On
April 18, 2005 Pakcom reached agreement with the Pakistan Telecommunications Authority (PTA) for the renewal of its license for 15 years. The license is for CDMA services. The payment
terms are similar to those agreed in 2004 by Paktel, Millicom's other venture in Pakistan. Pakcom will pay a license fee of $291 million, of which 50% is payable over the first three years and
the remaining 50% over 10 years. Pakcom is still in negotiations with the PTA regarding the allocation of the spectrum.

Subject
to our agreement with the other shareholders, we may have to reduce our current ownership interest in Paktel and increase our current ownership interest in Pakcom to 70% in each
operation.

In
2004 the government auctioned regional CDMA wireless local loop (WLL) licenses in 14 regions. In each region three sets of licenses using the 1900 Mhz spectrum and one set using the
450 Mhz spectrum were awarded. Four companies used 1900 Mhz licenses to build an almost nation-wide footprint. Operators are moving to use CDMA on WLL to create a parallel mobile network.
However, Pakistani regulations establish a limit in that mobility is limited to single cell. WLL was intended to be a technology that competes with fixed line operators. It is possible that these
operators will obtain

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exemptions
to permit full mobility and will become competitors in the mobile sector, similar to what has occurred in India.

In
December 2000, the government of Pakistan implemented calling party pays. End-user tariffs in Pakistan are subject to price caps set by the PTA.

Pakcom
and Paktel have four competitors in the cellular telephony market in Pakistan: Telenor (launched in March 2005); Warid Telecom (expected to launch in May 2005);
Pakistan Mobile Communications (Private) Limited (PMCL); and Pakistan Telecommunications Mobile Limited (PTML), a subsidiary of PTCL; each operate GSM networks. PTCL is expected to be privatized in
2005. It is expected that 26% of its equity will be sold in exchange for full management control.

As
of December 31, 2004, Pakcom and Paktel had two other competitors: PMCL and PTML. As of December 31, 2004, Pakcom and Paktel had a combined number three market position.



We have a 61.3% equity interest in Pakcom. Millicom's partners in Pakcom are Grand Canyon Corporation, Arfeen International and members of the Arfeen family,
which together own 38.7% of the equity.

In
early 1990, Pakcom was granted a license to operate a cellular telephone network throughout Pakistan. In 1999, Pakcom received regulatory approval to operate digital services under
its existing license. In April 2004, the government issued two new 15 year licenses with frequencies of 13.6 MHZ to two new entrants, Telenor and Warid Telecom, by public auction for
$291 million each.

Pakcom
pays a royalty to the PTA at the rate of 2.5% of gross sales revenues (net of leased circuit and public switched telephone network charges paid to Pakistan Telecommunications
Company Limited ("PTCL")), which is payable quarterly in arrears.

We
are in the process of reconsidering our strategy on Pakcom, in part as a result of the entry of these new competitors into the market including a possible exit of the business.

Pakcom's
license was due to expire on April 18, 2005. On the same date Pakcom reached agreement with the Pakistan Telecommunications Authority (PTA) for the renewal of its license
for 15 years. The payment terms are similar to the terms agreed in 2004 by Paktel, Millicom's other subsidiary in Pakistan. Pakcom will pay a license fee of $291 million, with 50%
payable over three years and the remaining 50% payable over the following 10 years. Pakcom is still in negotiations with the PTA with regard to the allocation of spectrum.

Pakcom
launched commercial service, providing analog services, in 1990. Pakcom implemented the digitalization of its cellular network and launched TDMA services in Karachi in 2000. As of
December 31, 2004, Pakcom's network consisted of 217 cell sites, covering approximately 45% of the population.

Pakcom
competes primarily on the basis of network coverage.



We have a 98.9% equity interest in Paktel, which we acquired in November 2000. Paktel launched commercial service in 1990. In April 2001, Paktel
commenced offering prepaid services under the brand name Tango. In October 2004, Paktel obtained the necessary frequencies and launched GSM services. As of March 31, 2005, Paktel had
about 340,000 GSM subscribers and its network consisted of 300 cell sites, covering approximately 45% of the population.

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Paktel
was granted a license in early 1990 to operate a cellular telephone network throughout Pakistan. In October 2002, Paktel was granted a modification to its license, allowing
it to operate a GSM network and the Frequency Allocation Board of Pakistan awarded Paktel the necessary frequency.

Paktel
pays a royalty to the PTA of 2.5% of gross revenues (net of leased circuit and public switched telephone network charges paid to PTCL, another government entity), which is payable
in arrears.

On
October 23, 2004, Paktel, signed agreements with the PTA to operate its GSM network with immediate effect and to renew its license for 15 years from October 23,
2004 for a license fee of $291,000,000. Paktel and the PTA have agreed deferred payment terms under which 50% of the license fee will be paid in installments over the first three years of the license.
The second 50% of the license fee will be payable in ten yearly payments from 2008 through to 2017. Payments already made by Paktel for the GSM migration since 2002, totaling approximately
$14 million, have been treated as payments towards Paktel's new license fee. Paktel has been awarded additional 1800 spectrum, increasing its total spectrum for its GSM network from 10MHz to
13.6MHz. The agreement followed an earlier failure by the PTA to comply with an agreement to operate Paktel's GSM network.

Sri Lanka

In 1977, Sri Lanka abandoned statist economic policies and its import substitution trade policy for market-oriented policies and export-oriented trade. Sri
Lanka's most dynamic sectors now are food processing, textiles and apparel, food and beverages, telecommunications, and insurance and banking. By 1996 plantation crops made up only 20% of exports
(compared with 93% in 1970), while textiles and garments accounted for 63%. Growth was about 3.2% in 2002 and 5.5% in 2003. Sri Lanka's economy continued to grow in 2004 amidst several adverse
internal and external shocks. 2004 growth
was about 5.5%. Major domestic shocks that had an impact on the economy were the election related uncertainties in early 2004 and the drought that adversely affected a large extent of agricultural
areas and hydropower generation. Escalating oil prices were the most significant external shock while the global economic recovery had a beneficial effect in 2004. A growth of 5-6% is
estimated for 2005 despite the tsunami that hit Sri Lanka on December 26, 2004. Sri Lanka had a population of almost 20 million in 2004.

Tensions
between the Sinhalese majority and Tamil separatists erupted in violence in the mid-1980s, and the ethnic war continues to fester. After two decades of fighting, the
government and Liberation Tigers of Tamil Eelam ("LTTE") began a ceasefire in December 2001, with Norway brokering peace negotiations, and a joint ceasefire accord was entered into in 2002.
This ceasefire agreement remains unbroken to date. However, the peace discussions that started with the signing of the ceasefire accord came to a halt in 2003 with the LTTE demanding that an interim
self-governing authority be set up until the finalization of the peace discussions, which the government refused.

We
have a 99.99% equity interest in Celltel Lanka (Private) Limited ("Celltel"). The remaining equity interest in Celltel is held by four local individuals. A process has been initiated
to purchase these shares.

Celltel
has a license to operate a cellular telephone network, which expires in 2008, covering the entire country. This license was a renewal of Celltel's initial license that was
granted in 1988 and expired in 1995. An annual license fee is payable to the Telecommunications Regulatory Commission of Sri Lanka ("TRCSL").

Celltel
operates an analog and a digital network. It launched GSM services in 2000. The GSM network covers greater Colombo and almost all primary and most of the secondary and tertiary
towns in the country, other than in the North and East areas where coverage is limited to Trincomalee and Ampari. We provide coverage of the main roads from Colombo to Kandy, Colombo to Puttlam,

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Colombo
to Kataragama, Colombo to Habarana and other key roads. As of December 31, 2004, Celltel's network consisted of 152 GSM cell sites covering about 40% of the population..

Sri
Lanka has a mobile party pays system and is moving to adopt a calling party pays ("CPP") system, the timing of which is uncertain due to a political stalemate.

Celltel
has three competitors in the cellular telephony market in Sri Lanka: Dialog-MTN Networks, which operates a GSM network and in which Telekom Malaysia
is a shareholder; Mobitel, which operates an AMPS and GSM network and in which Sri Lanka Telecom, the national fixed line operator is a shareholder; and Lanka Cellular, which operates both an analog
and a GSM network and in which Hutchison Whampoa is a shareholder. In 2004 Celltel held the number two market position behind Dialog-MTN Networks. Celltel competes with the other operators
primarily on the basis of branding and distribution. Celltel anticipates that the introduction of CPP will boost market growth, although it is uncertain when this will occur given the lack of will of
the government towards moving to CPP primarily due to the increase of telephony costs to the fixed telephone user that CPP introduction would cause.

In
addition to our cellular telephony operation, since early 2003 we have also operated an international gateway in Sri Lanka, facilitating both incoming and outgoing international
traffic. The license is for 10 years from 2003.

Sri
Lanka was devastated due to the tsunami that hit the island on December 26, 2004 with more than 40,000 lives lost and hundreds of thousands persons being displaced. Celltel
signed a Memorandum of Understanding with the Ministry of Health to reconstruct 40 damaged Gramodaya Health Centers (primary healthcare centers for pregnant women and infants) in the tsunami hit
areas. The project is estimated to cost approximately $1,800,000.

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CENTRAL AMERICA

Background

Central America consists of Millicom's cellular operations in Guatemala, Honduras, El Salvador,. Millicom Central America's licenses cover approximately
27.7 million people as of December 31, 2004.

El Salvador

A 12-year civil war, which cost about 75,000 lives, was brought to a close in 1992 when the government and leftist rebels signed a treaty that
provided for military and political reforms. In recent years, this Central American economy has been suffering from a weak tax collection system, factory closings, the aftermaths of Hurricane Mitch of
1998, the devastating earthquakes of early 2001, and weak world coffee prices. On the other hand, inflation has fallen to single digit levels, and total exports have grown substantially. El Salvador's
main natural resources are geothermal power, hydro power and petroleum. The trade deficit is being offset by annual remittances from Salvadorans living abroad and by external aid. The US dollar is now
the legal tender. Because competitor countries have fluctuating exchange rates, El Salvador faces the challenge of raising productivity and lowering costs. During 2004 the Salvadoran Congress passed
legislation to reform the tax code to achieve higher government revenues and coffee prices improved. El Salvador had a population of about 6.5 million in 2004.

On
September 15, 2003, Millicom's operation in El Salvador, Telemóvil, entered into a share purchase agreement with the minority shareholders of
Telemóvil. The agreement provides for the acquisition by Telemóvil of 30% of its own shares for a consideration of $70 million payable over a period of a maximum
of 6 years and an annual dividend premium of $1 million, with a corresponding net present value of $67,371,000. Of this amount $16 million was paid in cash at the closing of the
transaction. The payment of the acquisition price is guaranteed by Millicom. During this period Telemóvil has an ownership interest in 30% of its own shares, while the record title
remains with an escrow agent for the benefit of the minority shareholders pending the final settlement date. Based on this agreement,
Millicom regained control and began consolidating Telemóvil at 100% since September 15, 2003. The legal ownership interest of Millicom remained at 70% until the final settlement
date. In December 2004, Millicom settled the full acquisition price, bringing its legal ownership interest in the operation in El Salvador to 100%.

Telemóvil's
license contract was signed in September 1991 for a 15-year period. On December 3, 2004, Telemóvil extended its
cellular license in El Salvador for approximately $10 million. This license which was due for renewal in 2006 will now expire in 2018.

Telemóvil
operates a GSM network while maintaining its analog and TDMA digital networks. As of December 31, 2004, Telemóvil's network consisted of
190 sites covering approximately 90% of the population. Telemóvil inaugurated its full overlay GSM network in August 2004. As of December 31, 2004 Telemóvil
had 79,500 GSM users.

El
Salvador has a calling party pays system.

Telemóvil
has three competitors in the cellular telephony market in El Salvador: Telefónica Móviles El Salvador, which operates a digital
network based on the CDMA standard and is controlled by Telefónica Móviles; CTE Telecom Personal, which operates a GSM network and in which America Móvil
acquired a majority stake; and Digicel which operates a GSM network. In addition, another license was granted to a potential entrant to deploy a digital trunking network (iDen technology) and is
expected to begin operations before the second half of 2005. According to EMC, as of December 31, 2004, Telemóvil had the number one market position. El Salvador has a fairly
liberalized telecommunications market. Regulation of access charges and interconnect prices by the national telecommunications regulator are in place using a price cap system. Access charges are
negotiated among operators.

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Guatemala

During the second half of the 20th century, Guatemala experienced a variety of military and civilian governments as well as a 36-year guerrilla war.
In 1996, the government signed a peace agreement formally ending the conflict which caused the death of more than 100,000 people and created some 1 million refugees. The agricultural sector
accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. Former President Arzu
(1996-2000) worked to implement a program of economic liberalization and political modernization, which President Portillo has largely continued. The 1996 signing of the peace accords,
which ended the civil war, removed a major obstacle to foreign
investment, but investor confidence has not yet been fully restored. The distribution of income remains unequal, with approximately 75% of the population below the poverty line. Ongoing challenges
include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, and narrowing the trade deficit. Guatemala
had a population of about 14.5 million in 2004.

We
have a 55% equity interest in Comunicaciones Celulares S.A. ("Comcel Guatemala"). Comcel Guatemala's other stockholders are Miffin Associates Corp., owning 35%, and Arkade
International Inc., owning 10%. Millicom does not have a controlling interest in Comcel Guatemala since a number of operating decisions require the approval of the minority shareholders.
Therefore, Millicom accounts for its operation in Guatemala as a joint venture.

Since
1990 Comcel Guatemala has had a concession to operate a cellular telephone network, and in March 2003 it purchased a license for a period of 15 years ending in 2018,
which is renewable thereafter. Comcel Guatemala also has a license to offer international long-distance services, Internet Service Provider and local telephony services.

Comcel
Guatemala launched commercial service in 1990. Comcel Guatemala operates both an analog network and a digital network based on the TDMA and GSM standards. As of December 31
2004 Comcel's network consisted of 618 cells in approximately 340 sites. As of December 31, 2004 Comcel had about 127,500 GSM users.

Guatemala
has a calling party pays system. Comcel Guatemala has entered into interconnection arrangements with Telgua, the former PTT, and with 18 other local and international
operators. The local PTT regulates access charges and interconnection costs.

After
the merger of Telefonica and Bellsouth in October 2004, Comcel Guatemala had two competitors in the cellular telephony market in Guatemala: Sercom, which operates a GSM and
a CDMA network and is controlled by América Movil; and Telefónica Centroamérica Guatemala, which operates a digital network based on the CDMA standard and
is wholly owned by Telefónica Móviles. During the course of 2004, Telefonica also migrated to GSM in Guatemala. During the first quarter of 2003, two new licenses were
granted, including a license to operate a network in the GSM 900 MHz frequency band. The licenses allow the purchaser to provide cellular services nationwide. Neither of the operators who were awarded
these licenses commenced operations during 2004. According to EMC, as of December 31, 2004, Comcel Guatemala had the number two market position behind Sercom. Comcel competes primarily in the
areas of marketing and distribution.

Honduras

After two and one-half decades of mostly military rule, a freely elected civilian government came to power in 1982. During the 1980s, Honduras was a
haven for anti-Sandinista contras fighting the Marxist Nicaraguan Government and an ally to Salvadoran Government forces fighting against leftist guerrillas. The country was devastated by
Hurricane Mitch in 1998, which killed about 5,600 people and caused about $2 billion in damages. Honduras is negotiating to obtain expanded trade privileges, such

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as
a suspension in import tariffs for certain manufactured goods, under the Enhanced Caribbean Basin Initiative and debt relief under the Heavily Indebted Poor Countries initiative. While the country
has met most of its macroeconomic targets, it failed to meet the IMF's goals to liberalize its energy and telecommunications sectors. By the end of 2005 the current monopoly privileges for Hondutel
(the state-owned telecoms operator) are expected to expire, which may allow private other companies to participate in the local and long distance telephony markets. Honduras' natural resources are
timber, gold, silver, copper, lead, iron ore, zinc, antimony, coal, fish and hydropower. Growth remains dependent on the status of the US economy, its major trading partner, on commodity prices, and
on reduction of its high crime rate. Honduras had a population of nearly 7 million in 2004.

We
have a 50% economic interest in Telefónica Celular S.A. ("Celtel"). The other shareholders are Motorola Inc. ("Motorola") and Proempres Panama S.A.
("Proempres"). On January 23, 1995, Millicom, Motorola and Proempres entered into a shareholders' agreement to provide a cellular-radio-telephone system in Honduras. Millicom now holds directly
25% of the shares in Celtel and another shareholder holds 25% on Millicom's behalf, with any risks and benefits accruing to Millicom. Although a majority vote is necessary to pass shareholder
decisions, the minority shareholders have substantive participation rights, including the right to appoint the president of the board in turn and to vote on certain operating and capital decisions.
Millicom therefore accounts for its operation in Honduras as a joint venture.

Celtel
acquired 49% of Metrored in February 2005. Metrored is an important data transmission company in Honduras with a fiber optic network totaling 750 kilometers.

In
1996 Celtel was awarded a 10-year cellular license for the Republic of Honduras. Celtel paid a license fee of $5.1 million to the Honduran government for the
license. The license was extended in March 2005 for a period of 17 years at a cost of $4.8 million.

The
operation commenced commercial service in September 1996. Celtel operates both an analog network and a digital network based on the CDMA standard. As of December 31
2004 Celtel's network consisted of 256 cells over approximately 112 sites. As of December 31, 2004 Celtel had about 86,500 GSM users.

Honduras
has a calling party pays system. In December 2004 and in light of the governmental program calledTelefonia para todos,
which allows new entrants in certain fixed telephony services, Celtel launched fixed telephony services based on the CDMA technology. As of 31 March 2005, Celtel had about 4,836 fixed telephony
customers.

Megatel,
majority owned by a local Honduras investor launched a GSM network in October 2003 in urban areas. During 2004, America Movil acquired full control of Megatel. In
addition, a third operator may enter the market in early 2006, following the award of a license by the Honduran government. We consider our distribution network to be a competitive advantage compared
to our competitors. The international access monopoly in Honduras continues to date and regulation of access charges and interconnection rates by the national telecommunications regulator are in
place.

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SOUTH AMERICA

Background

South America consists of Millicom's cellular operations in Bolivia and Paraguay. Our South American licenses covered approximately 14.9 million people as
of December 31, 2004.

Bolivia

Bolivia made considerable progress in the 1990s toward the development of a market-oriented economy. Successes under President Sanchez de Lozada
(1993-97) included the signing of a free trade agreement with Mexico and becoming an associate member of the Southern Cone Common Market, as well as the privatization of the state airline,
telephone company, railroad, electric power company, and oil company. Growth slowed in 1999, in part due to government budget policies which limited appropriations for anti-poverty
programs and the fallout from the Asian financial crisis. 2003 saw protests and loss of confidence in the government. At the end of 2001, the market was deregulated and local and long distance
services were opened to competition. As a result, the competence in the long distance market had grown up and the prices are lower. The cellular market was also opened to competition. 2004 was marked
by social conflict. The new Telecommunications Law project, planned to be issued at the time the market was deregulated, will be delayed probably until the end of 2006. Bolivia will remain dependent
on foreign aid unless and until it can develop its substantial natural resources which include tin, petroleum, natural gas, zinc, tungsten, antimony, iron, silver, lead gold and timber. Bolivia had a
population of about 8.7 million in 2004.

We
have a 100% equity interest in Telefonica Celular de Bolivia S.A. ("Telecel"), which has two licenses, one to operate a nationwide cellular telephone network and the second one to
operate a national and international long distance network. The licenses are valid until November 2015 and December of 2042 respectively. In December 2001 Telecel signed a
40-year concession to provide long-distance services throughout the country. Telecel started offering national and international long-distance services in
February 2002. Although the cellular license
was initially awarded to cover only La Paz, Telecel received an extension of the license in 1997 to cover the entire country. The license establishes a "price cap" mechanism for interconnection
charges and services between telecommunications operators and provides for charges on the use of frequencies. Telecel pays a concession fee for access to the fixed-line network equal to 1%
of the monthly net recurring subscriber revenue generated from the three main cities of La Paz, Cochabamba and Santa Cruz and a regulatory fee to the telecommunications regulatory authority equal to
1% of the total monthly gross recurring revenue.

Telecel
operates both an analog network and a digital network based on the TDMA standard. Telecel's cellular coverage includes the nine districts in the country, including La Paz, Santa
Cruz (including Puerto Suarez), Cochabamba, Sucre, Beni, Potosi, Tarija, Pando and Oruro. As of December 31, 2004, Telecel's network consisted of 161 cell sites, covering approximately 60% of
the population. Telecel is migrating to GSM during 2005.

Bolivia
has a calling party pays system.

Telecel
has two principal competitors in the cellular telephone market in Bolivia: Movil de Entel, the mobile subsidiary of Entel, which is a joint venture (50%-50%) between
Telecom Italia and the Bolivian government; and NuevaTel, a joint venture between All Tel of USA (72%) and a local telephone company (28%). Movil de Entel began providing cellular service in the last
quarter of 1996. It operates a GSM network as well as a TDMA network. In 2000, NuevaTel won a license for GSM services which it started providing in 2001. According to EMC, as of December 31,
2003, Telecel had the number two market position behind Movil de Entel. Telecel's distribution and sales network are its primary areas of competition with the other market participants. The
telecommunications market in

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Bolivia
was opened to competition in 2001 when long distance and local services were deregulated. Mobile cellular and personal communications services have been open to competition since 1996. New
telecommunications and competition regulations are under discussion and are expected to be issued in late 2006.

Telecel
is no longer in breach of financial covenants under its financing agreements. To date, Telecel has made all installment repayments due under these financing agreements.

Paraguay

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. Paraguay has a market economy marked by a large informal sector. The informal sector features both re-export of imported consumer goods to neighboring
countries as well as the activities of thousands of micro-enterprises and urban street vendors. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. A
large percentage of the population derives their living from agricultural activity, often on a subsistence basis. The formal economy grew by an average of about 3% annually in 1995-97; but
GDP declined slightly in 1998, 1999, and 2000, rose slightly in 2001, falling again in 2002, but recovering growth observed in 2003 (2.9%) and 2004 (2.5%). On a per capita basis, real income has
stagnated at 1980 levels. Most observers attribute Paraguay's poor economic performance to political uncertainty, corruption, lack of progress on structural reform, substantial internal and external
debt, and deficient infrastructure. The current President, Nicanor Duarte, elected in 2003, has begun a series of reforms to alleviate these weaknesses. Paraguay had a population of about
6.2 million in 2004.

We
have a 96% equity interest in Telefónica Celular del Paraguay S.A. ("Telecel Paraguay") and a local partner owns the remaining 4%.

In
1991 Telecel Paraguay was awarded a 800 Mhz license to build, maintain and operate a cellular telephone network. The license now covers the entire country. Telecel Paraguay's license
was originally for a 10-year period ending in 2001. In 2000 the license was renewed for a further five years until October 1, 2006, and it is renewable for successive
5-year periods subject to Telecel Paraguay's commitment to further investments. Telecel Paraguay also has a license in the 1900 Mhz spectrum for digital personal communications services
(PCS), which covers the whole of Paraguay. The license expires in November 2007. Telecel Paraguay's wireless local loop (WLL) license for data transmission services was renewed on
April 20, 2005 and runs until April 2010.

Telecel
Paraguay launched its GSM service in 2004 under the regional brand TIGO with strong emphasis on multimedia and data services available on GSM networks.

Telecel
Paraguay operates a GSM network while maintaining its analog and TDMA digital networks. As of December 31, 2004, Telecel Paraguay's network consisted of 180 cell sites
covering approximately 60% of the population.

Paraguay
has a free market in terms of prices for telecommunications services to end users. Interconnection charges between telephone operators, fixed and mobile are negotiated among
operators according to specific rules (LRIC, or long run incremental costs) and subject to prior approval from the telecommunications authority. The regulator established a plan for semiannual
reductions to interconnection charges up to July 2005, but the impact on Telecel was offset by higher volumes.

The
Telecommunications Law of 1995, which governs Paraguay's telecommunications market, provides for the deregulation of telecommunications services. However, there is only one fixed
line telephone operator which also holds the exclusive license for international services including telephone

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and
data. In 2004 the regulator established mandatory registration of all prepaid subscribers by June 2005.

Telecel
Paraguay has three competitors in the cellular telephony market in Paraguay: Núcleo, which launched GSM services by the end of 2004 and maintains operational a
digital network in the TDMA standard. Telecom Argentina (a subsidiary of TIM) is the largest shareholder; Hola Paraguay (a subsidiary of KDDI Corporation), which operates a GSM network; and Porthable,
which operates a GSM network and in which Hutchison Whampoa is the main shareholder. As at December 31, 2004, Telecel Paraguay had the number one market position.

There
are also two other licenses that were issued to provide cellular services. The PTT announced that some fixed cellular telephony services would have to be provided in rural areas.
The other license is not considered to become used because due to market size and penetration levels the market is not attractive to new entrants.

Telecel
Paraguay also provides broadband and dial-up Internet as well as data transmission services in Paraguay under the brand Telesurf.

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AFRICA

Background

Africa consists of Millicom's cellular operations in Senegal, Tanzania, Ghana, Mauritius, Sierra Leone and Chad. Our African licenses covered approximately
84.9 million people as of December 31, 2004.

Senegal

In 1994 Senegal undertook an economic reform program with the support of the international donor community. This reform began with a 50% devaluation of Senegal's
currency, the CFA franc, which was linked at a fixed rate to the French franc. Government price controls and subsidies have been steadily dismantled. As a result of the reform program, real growth in
GDP averaged 5% annually during 1995-2003. Annual inflation was an estimated 3% in 2002-2003 and 2.5% in 2004. Foreign investment was about 16.5% of GDP in 2003. As a member of
the West African Economic and Monetary Union, Senegal is working toward greater regional integration with a unified external tariff. Senegal realized full Internet connectivity in 1996, creating a
small boom in information technology-based services. Private activity accounted for about 82% of GDP in 2003. In 2005 GDP is expected to grow at about 5%. Senegal still faces a high unemployment rate
of nearly 50%. Senegal had a population of nearly 11 million in 2004.

We
have a 75% equity interest in SentelGSM. The remaining 25% of SentelGSM is owned by a local businessman, Mr. Pape Abdoul Ba.

In
1998 SentelGSM was awarded a GSM license for the Republic of Senegal. The license, awarded for a period of 20 years, is renewable every five years thereafter. The license
required no initial payment but an annual administrative fee of approximately $100,000, in addition to a $10,000 annual fee per used channel frequency, must be paid. Since the telecommunications
decree of July 2004, backbone
utilization fees per used bandwidth and fees relating to the numbering plan have been added, making fees payable to the regulator add up to more than 5% of our revenues.

Our
operations commended in 1999 and we offer mainly a prepaid product. The overall penetration rate rose to about 13.5% during 2004 and we expect it to reach about 16% during 2005.

SentelGSM
operates a digital network based upon the GSM standard. As of December 31, 2004, SentelGSM's network consisted of 120 cell sites covering approximately 80% of the
population.

Senegal
has a calling party pays system.

SentelGSM
has only one other competitor in the cellular telephony market in Senegal, Sonatel Mobiles, which is operated by Sonatel Mobile, a branch of Sonatel, the local privatized PTT,
and in which France Telecom is a shareholder. Sonatel, the parent of Sonatel Mobiles, is 40% owned by France Telecom, 27.7% by the government of Senegal, 10% by its employees, and 20% of the capital
is publicly traded on the Abidjan Stock Exchange (Ivory Coast). Sonatel Mobiles operates a GSM network. According to EMC, as of December 31, 2004, SentelGSM had the number two market position.
A third license has been granted. We attempt to differentiate ourselves from our competitors on the basis of price, distribution, and customer service. Since 2002 the government has been offering
additional licenses for sale. Changes in interconnection rates were partly implemented in April 2004, unifying almost all interconnection tariffs applicable to Sentel to the same amount.

Tanzania

Shortly after independence, Tanganyika and Zanzibar merged to form the nation of Tanzania in 1964. 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

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elections
since 1995, which the ruling party won despite international observers' claims of voting irregularities. In 2005 the ruling party will choose a candidate to run in the presidential elections
upon the anticipated retirement of the current president. The Tanzanian economy depends heavily on agriculture, which accounts for half of GDP, provides 85% of exports, and employs 80% of the work
force even though topography and climatic conditions limit cultivated crops to only 4% of the land area. Industry was traditionally based on the processing of agricultural products and light consumer
goods. The World Bank, the International Monetary Fund, and bilateral donors have provided funds to rehabilitate Tanzania's economic infrastructure and to alleviate poverty. Growth in
1991-2002 included a pickup in industrial production and a substantial increase in output of minerals, led by gold. Oil and gas exploration and development played an important role in this
growth. Recent banking reforms have helped increase private sector growth and investment. Continued donor support and solid macroeconomic policies supported GDP growth of 5% in 2003 and an estimated
6% in 2004. Tanzania had a population of about 36.5 million in 2004.

As
of December 31, 2004 we had a 84.4% equity interest in Millicom Tanzania Limited ("Millicom Tanzania"). Our joint venture partners are Ultimate Communications Ltd., a
private Tanzanian company, and a government entity. In February 2004, Millicom acquired an additional 25% equity interest in Millicom Tanzania from the Tanzanian state and subsequently 1% of
our holding in Millicom Tanzania was sold to Ultimate Communications Ltd.

In
1993, Millicom Tanzania acquired a 15 year license to operate a cellular telephone network in the United Republic of Tanzania. In November 2003 the term of the license
was changed to 25 years. The modified license expires in 2018. Millicom Tanzania pays a royalty of 1% of airtime revenue (reduced from 5% in 2002) and cellular frequency fees based on the
allocated number of frequencies, which are dependent upon the number of cell sites. The license was re-issued in 2001 with additional frequency ranges.

Analog
cellular service started in 1994 and in September 2000 Millicom Tanzania launched its GSM network. Millicom Tanzania operates both an analog network and a digital network
based upon the GSM standard. As of December 31, 2004, Millicom Tanzania's network consisted of 196 cell sites, covering approximately 15% of the population. Millicom Tanzania provides coverage
to all major urban areas, a substantial number of rural areas, and the island of Zanzibar. In 2004 coverage was increased in the northern part of the country and the Lake Victoria region.

Tanzania
has a calling party pays system.

Millicom
Tanzania has two principal competitors in the cellular telephony market in Tanzania: Vodacom Tanzania which operates a GSM network; and Celtel Tanzania, which also operates a
GSM network and is a subsidiary of Tanzania Telecommunications Company Limited ("TTCL"), the privatized former PTT. According to EMC, as of December 31, 2004, Millicom Tanzania
had the number two market position behind Vodacom Tanzania. We compete with other operators principally on pricing, competitive coverage, and distribution.

The
Tanzanian Communications Regulatory Authority ("TCRA") established new interconnection rates in August 2004. This change reduced the interconnection rate for mobile
termination until April 1, 2005 when a further reduction was scheduled. Further reductions are scheduled to take place by January 2007. In February 2005 the TCRA introduced a
converged licensing framework expected to significantly change the existing regulatory regime. However, current operators received assurances from the TCRA that their current rights would not be
adversely affected by the new regulations.

Millicom
Tanzania recently won a claim against TTCL in the amount of $13,000,000 for interconnection charges accrued but not paid prior to the privatization of TTCL. As of
December 31, 2004, Millicom had received $1,400,000 of this amount. Although discussions are continuing regarding payment of the remaining amount, we may never be able to recover the full
amount owed to us.

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Ghana

Well endowed with natural resources, Ghana has roughly twice the per capita output of the poorer countries in West Africa. Even so, Ghana remains dependent on
international financial and technical assistance. Gold, cocoa, timber, industrial diamonds, bauxite, manganese, fish, rubber, and cocoa production are major sources of foreign exchange. The domestic
economy continues to revolve around subsistence agriculture, which accounts for 36% of GDP and employs 60% of the work force, mainly small landholders. Ghana opted for debt relief under the Heavily
Indebted Poor Country program in 2002. Policy priorities of the current government include tighter monetary and fiscal policies, accelerated privatization, and improvement of social services. After
political instability in the 1960s, a new constitution restoring multi-party politics was approved in 1992. Mostly free and fair elections have been held since the 1980s. Ghana had a population of
about 20 million in 2004.

We
have a 100% equity interest in Millicom (Ghana) Ltd., having increased our shareholding from 70% to 100% in mid-2002. We granted a call option regarding the 30%
equity stake, which may be exercised between June 2005 to June 2007 at an exercise price of $190,000.

Millicom
(Ghana) Ltd, operating under the trade name "Mobitel", has a license to operate analog cellular services throughout Ghana. In 2002 Mobitel obtained a license to operate
GSM cellular services throughout the country. In December 2004, the government of Ghana and the country's telecommunications operators signed new license agreements. Our new mobile license has
a term of 15 years and is renewable at expiration for 10 more years. The license fee amounts to $22.5 million payable over six years.

Mobitel
commenced operations in 1992 by providing analog cellular services and in June 2002 it successfully launched its GSM network. Mobitel operates both an analog network and a
GSM network, which as of December 31, 2004 consisted of a total of 110 cell sites covering approximately 55% of the population.

New
interconnection agreements were entered into with Ghana Telecom and all other telecoms operators effective from October 1, 2003, providing for new rates effective from that
date. Ghana uses the calling party pays system.

Mobitel
has three competitors in the cellular telephony market in Ghana: Ghana Telecom, which operates a GSM network; Scancom Ltd., which also operates a GSM network; and Kasapa
(Hutchinson), which operates an analog network. As of December 31, 2004, Mobitel had the number two market position behind Scancom Ltd. Mobitel competes with the other market
participants principally on price, value-added services and operating costs.

The
liberalization of the Ghanian telecommunications market occurred in February 2002, following a partial privatization in 1996. The market was further liberalized in 2004 by the
award of International Gateway licenses to all eligible operators. The local PTT, Ghana Telecom, is partially privatized, with 30% owned by Telecom Malaysia and the remaining share held by the
government. In late 2003, a management contract of Ghana Telecom was awarded to Telenor of Norway.

Mauritius

Since independence in 1968, Mauritius has developed into a middle-income diversified economy with growing industrial, financial, and tourist sectors. For most of
the period, annual growth has been about 5% to 6%. This achievement has resulted in more equitable income distribution, increased life expectancy, lowered infant mortality, and improved
infrastructure. Sugarcane is grown on about 90% of the cultivated land area and accounted for 25% of export earnings in 2004. The government's development strategy centers on foreign investment.
Mauritius has attracted more than 14,000 offshore entities, many aimed at commerce in India and South Africa, and investment in the banking sector alone has reached over $1 billion. Mauritius
also has a significant textile sector and has enjoyed good

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fiscal
management on the part of its governments. Mauritius hopes to take advantage of the Africa Growth and Opportunity Act. The government is further encouraging foreign investment in the
information technology field.

We
have a 50% equity interest in Emtel Limited ("Emtel"). A local partner, Currimjee Jeewanjee & Co. Ltd., owns the remaining 50% of the share capital.

In
1989, Emtel was granted a license, which allows it to operate a cellular telephone system covering the entire island. The license was renewed in 1998 and expires in
November 2014.

Emtel
commenced operations in 1989 by providing analog cellular services and in 1999 it launched GSM services. Emtel launched the first 3G/UMTS network in Mauritius and Africa on
November 29, 2004. Following deregulation, Emtel launched its International Gateway services in April 2004.

As
of December 31, 2004, Emtel's GMS and GPRS networks consisted of 97 cell sites covering approximately 98% of the population. Its 3G/UMTS network consisted of 36 sites covering
the urban areas of Mauritius, with island-wide coverage to be achieved during 2005.

Emtel
pays interconnection charges to Mauritius Telecom and license fees to the regulatory authority, the Information and Communications Technologies Authority ("ICTA"). Emtel's pricing
structure is subject to the ICTA's prior approval.

Mauritius
introduced the calling party pays system in October 2004.

Emtel
has only one other competitor in the cellular telephony market in Mauritius, Cellplus Mobile Communications, a government owned telecommunications company that commenced operations
in 1996 and operates a GSM network. A new player, Mahanager Telecom Mauritius Ltd, is expected to start its operations during 2005 and has been awarded licenses for mobile services, fixed line
telephony and international gateway services. According to EMC, as of December 31, 2004, Emtel had the number two market position. Emtel aims to strengthen its product and distribution network
relative to the other operators.

Sierra Leone

Since 1991, civil war between the government and the Revolutionary United Front ("RUF") has resulted in the displacement of more than 2 million people
(well over one-third of the population), many of whom are now refugees in neighboring countries. After several setbacks, the end of the civil war in Sierra Leone was reached in 1999. With
the support of the United Nations peacekeeping force and contributions from the World Bank and international donors, demobilization and disarmament of the RUF and Civil Defense Forces combatants was
completed. National elections were held in May 2002 and the government continues to slowly reestablish its authority. However, gradual withdrawal of most of the United Nations peacekeepers from
Sierra Leone starting in 2004 and to be completed in 2005, deteriorating political and economic conditions in nearby Guinea, and the difficult security situation in nearby Liberia will present
challenges to the continuation of Sierra Leone's stability. Sierra Leone had a population of nearly 6 million in 2004.

Sierra
Leone has substantial mineral, agricultural, and fishery resources. However, the economic and social infrastructure is poor and serious social disorders continue to impede
economic development following the civil war. 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. Plans continue to reopen bauxite and rutile mines shut down during the conflict. The major source of hard currency consists of the
mining of diamonds. Other natural resources are titanium ore, bauxite, iron ore and gold. The economic outlook is dependent 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 to supplement government revenues.

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We have a 70% equity interest in Millicom Sierra Leone Limited ("MSL ") with the remaining 30% owned by a number of investors.

In
August 2000, MSL acquired a nationwide license to provide GSM cellular telephony in Sierra Leone. The license expires in August 2015.

MSL
commenced operations in 2001 and operates a prepaid service in all major provinces.

As
of December 31, 2004, MSL's network consisted of 15 cell sites covering approximately 35% of the population.

Sierra
Leone uses the calling party pays system.

MSL
has only one other competitor in the cellular telephony market in Sierra Leone, Celtel Sierra Leone. Additional licenses have been issued and the company expects two new competitors
to enter the market in 2005. According to EMC, as of December 31, 2004, MSL had the number two market position. Our present coverage in the major provinces and our extensive dealer network are
primary sources of competition relative to other market participants. We believe there is growth potential as the security situation stabilizes.

Chad

Chad endured three decades of ethnic warfare after decolonization as well as invasions by Libya before a semblance of peace was restored in 1990. The government
eventually suppressed or came to terms with most political-military groups, settled a territorial dispute with Libya on terms favorable to Chad, drafted a democratic constitution, and held multiparty
presidential elections in 1996 and 1997. In 1998, a new rebellion broke out in northern Chad, which sporadically flares up despite two peace agreements signed in 2002 and 2003 between the government
and the rebels. Despite movement toward democratic reform, power remains in the hands of a northern ethnic oligarchy. Chad's territory comprises vast desert areas. Its natural resources include
petroleum, uranium, kaolin and fish (Lake Chad). Chad had a population of about 9.5 million in 2004.

On
November 8, 2004, Mobitel Tchad S.A. (thereafter renamed Millicom Tchad S.A.) was awarded a 10-year license to operate a GSM 900 wireless telephony network in the
Republic of Chad. The license is renewable at expiration for another 10-year period. Millicom Tchad is planning to start service in the summer of 2005 and initial coverage will be of the
capital city of N'Djamena and its suburbs and the other main cities, such as Moundou, Kome, Abeche.

Chad
uses the calling party pays system.

Excluding
the national post and telecommunications operator, which also offers GSM services, the only other GSM license has been awarded in 2000 to Celtel.

OTHER INVESTMENTS

Tele2 AB (formerly named NetCom AB)

Tele2 AB is an alternative pan-European telecommunications company offering fixed and mobile telephony, as well as data network and Internet services.
In August 2003, Millicom Telecommunications, our wholly owned subsidiary through which we hold our interest in Tele2 AB, issued 5% Mandatory Exchangeable Notes which are exchangeable on or
before August 7, 2006 into substantially all of our shares of Tele2 AB. For a more detailed description of the offering and the terms of the 5% Mandatory Exchangeable Notes and the related
securities lending arrangement entered into in connection with the offering of the 5% Mandatory Exchangeable Notes, see "Operating and Financial Review and ProspectsLiquidity and Capital
ResourcesMillicom Telecommunications S.A.'s 5% Mandatory Exchangeable Notes".

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As
at December 31, 2004, the Company held 6.1% (2003: 6.1%) of Tele2 AB with a market value of $351,882,000 (2003: $479,040,000).

The
Tele2 AB series B shares underlying the 5% Mandatory Exchangeable Notes have been lent to Deutsche Bank AG London under a securities lending arrangement. Millicom
Telecommunications S.A. is obligated to deliver Tele2 AB series B shares upon exchange of the 5% Mandatory Exchangeable Notes even in the event of a failure of Deutsche Bank AG London to
redeliver to Millicom Telecommunications S.A. Tele2 AB series B shares.

Tele2
AB is listed on the Stockholm Stock Exchange under TEL2A and TEL2B.

Argentina

In 1998, Millicom obtained a license to provide fixed wireless data, Internet access and fixed telephony services in Argentina. Millicom Argentina SA ("Millicom
Argentina"), in which Millicom had a 65% equity interest, launched services in May 2000. The license covers the six largest cities in Argentina, covering approximately 90% of the urban
population. Millicom Argentina is focused on providing Internet access and communications for bandwidth intensive applications such as high-speed data transmission and Internet access to
small, medium and large sized businesses and home office workers. Millicom sold its 65% equity interest in Millicom Argentina on September 22, 2004.

Peru

In July 2000, Millicom was awarded a 3.5 Ghz license to provide fixed wireless access for data transmission, Internet Access and fixed telephony in Peru.
The license covers the main coastal cities and is valid for a 20-year period with renewal for a similar period. This 3.5 GHz frequency is one of three assigned in Peru, leaving one
available.

Millicom
is focused on providing Internet Access and Data Transmission for businesses and home office workers. Services were launched in January 2001 in Lima and now cover
Chiclayo and Trujillo.

Millicom
entered into a concession agreement with the Peruvian government in 2002 to provide domestic and international long-distance carrier services in the same cities as
the previous concession and the new concession is valid for a 20-year period. We intend to exit our business in Peru.

Management Contracts

In the fourth quarter of 2003 and the first quarter of 2004, Millicom entered into a management agreement and an option agreement with the Rafsanjan Industrial
Complex ("RIC") of Iran. Under the management agreement, Millicom provides management services for a network developed and owned by RIC under a build, operate and transfer agreement between RIC and
the Telecommunications Company of Iran ("TCI"), an entity controlled by the Iranian government. Under the build, operate and transfer agreement, RIC will build and operate an Iran-wide GSM
network for 2 million prepaid customers. During an agreed period which commences on February 9, 2005 and expires on February 9, 2015, RIC will pay a majority of revenues generated
by the network to TCI. At the end of the agreed period, ownership of the network will be transferred to TCI without charge. Millicom is paid for its management services by receiving 2.2% of the gross
revenues generated by the network. From February 9, 2007, Millicom will receive a minimum annual payment of $8 million per year. Under to the option agreement, Millicom has an option to
acquire from RIC up to 47% before February 9, 2007 of the equity ownership of the company that will operate the network at book value. This company has not yet been formed. Between
February 9, 2007 and February 9, 2009, the maximum percentage of equity ownership that Millicom can acquire will be 30% in addition to any shares acquired before that date, provided that
the total percentage acquired never exceeds 47%. From February 9, 2007 until February 9, 2009, Millicom will have the right to sell to RIC an amount of

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shares
not to exceed 17% of the company that will operate the network at the average exercise price paid by Millicom to acquire shares through the exercise of call options.

Other licenses

Millicom has been actively pursuing further licenses in countries where it has existing cellular networks and strong brand recognition. A fixed wireless license
has also been awarded in Venezuela. We do not intend to commence providing services in Venezuela.

Organizational Structure

Below is a list of Millicom's significant subsidiaries and joint ventures as of December 31, 2004, including the name, country of incorporation or
residence and proportion of ownership interest.

|Name                                |  | Country of residence             |  | Proportion of
ownership
interest |  
|----------------------------------- |  | -------------------------------- |  | -------------------------------- | -
|Cam GSM Company Limited             |  | Cambodia                         |  | 58.4                             | %
|Royal Telecam International Limited |  | Cambodia                         |  | 57.0                             | %
|Millicom Lao Co., Ltd.              |  | Lao People's Democratic Republic |  | 74.1                             | %
|Pakcom Limited                      |  | Pakistan                         |  | 61.3                             | %
|Paktel Limited                      |  | Pakistan                         |  | 98.9                             | %
|Celltel Lanka Limited               |  | Sri Lanka                        |  | 99.9                             | %
|Comvik International (Vietnam) AB   |  | Vietnam                          |  | 80.0                             | %
|Telefonica Celular de Bolivia SA    |  | Bolivia                          |  | 100.0                            | %
|Telemóvil El Salvador SA            |  | El Salvador                      |  | 100.0                            | %
|Comunicaciones Celulares SA         |  | Guatemala                        |  | 55.0                             | %
|Telefónica Cellular SA              |  | Honduras                         |  | 50.0                             | %
|Telefonica Celular del Paraguay SA  |  | Paraguay                         |  | 96.0                             | %
|Millicom Peru SA                    |  | Peru                             |  | 100.0                            | %
|Millicom (Ghana) Limited            |  | Ghana                            |  | 100.0                            | %
|Emtel Limited                       |  | Mauritius                        |  | 50.0                             | %
|Sentel GSM                          |  | Senegal                          |  | 75.0                             | %
|Millicom (SL) Limited               |  | Sierra Leone                     |  | 70.0                             | %
|Millicom Tanzania Limited           |  | Tanzania                         |  | 84.4                             | %
|Milicom Tchad SA                    |  | Chad                             |  | 87.5                             | %

Property, Plant and Equipment

We and our operating companies own, or control through long-term leases or licenses, properties consisting of plant and equipment used to provide
cellular 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 cellular telephone services. The leased properties are owned by private
and municipal entities.

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



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Millicom's
principal executive offices are located in Bertrange, the Grand Duchy of Luxembourg, where it leases approximately 522 square meters from a related party, 3C Communications
International S.A. The lease is automatically renewable from year to year unless terminated by Millicom or the lessor upon three months advance written notice. The current monthly rent is $19,450
resulting in an annual total of $233,400. Water, electricity, heating, cleaning and maintenance and security expenses are included in the rent. Millicom believes that the terms of the lease are no
less beneficial than those it would have been able to negotiate with a third party. Millicom believes its principal executive offices are suitable and adequate for its operations.

Insurance

We and our operations maintain the types and amounts of insurance customary in the industries and countries in which we and our operations operate, including
coverage for employee related accidents and injuries and property damage. We consider our insurance coverage and that of our operations to be adequate both as to risks and amounts for the business
conducted by us and our operating companies.

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. See Note 32 of the "Notes to the Consolidated Financial Statements" for certain reconciliations between IFRS and U.S. GAAP.

Overview

Introduction

We are a global telecommunications operator with a portfolio of investments in the world's emerging markets over which we typically exercise management and voting
control. Our strategy of being the 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 17 cellular systems in 16 countries, focusing on emerging markets in South and South East Asia, Central and South America and Africa. As of December 31, 2004,
the countries where we had cellular operations had a combined population of approximately 408.8 million people which were covered by our licenses (representing the number of people who could
receive cellular services under the term of the licenses if the networks covered the entire population). As of December 31, 2004, Millicom had 7,713,201 total cellular subscribers (5,332,259 on
a proportional basis) and over 60% of them were GSM subscribers as of December 31, 2004.

As
we have 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. For example, the price for the renewal of the licenses of our
two operations in

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Pakistan
was recently set at $291 million per license. We operate primarily with prominent local business partners through companies over which we typically exercise management control.

Our
markets are attractive for cellular services due to the low wireline and cellular penetration. Usage of cellular services has historically been low in the countries in which we
operate due to poor or insufficient infrastructure, the high costs of such services and low levels of disposable income. We
believe there is a significant opportunity for further growth of cellular services in our markets due to the reduction in the cost of providing cellular services to the consumer, and due to rising
disposable personal income levels.

Subscriber Base

We have consistently achieved strong subscriber growth across our operations. As of December 31, 2004, we had total cellular subscribers of 7,713,201. This
represents an increase of 36% from 5,690,542 as of December 31, 2003.

As
of December 31, 2004, we had a proportional subscriber base of 5,332,259 which represents an increase of 32% from December 31, 2003.

Revenues

Our revenues were $921,466,000 for the year ended December 31, 2004 as compared to $647,104,000 for the year ended December 31, 2003. Included in
total revenues for the year ended December 31, 2004 are revenues of $148,905,000 (2003: $39,052,000) from our operation in El Salvador which is reconsolidated since September 15, 2003.
Included in total revenues for the year ended December 31, 2003 are revenues of $5,926,000 from our operation in Colombia which was disposed of in February 2003.

Revenues
from our continuing operations increased by 42% during the year ended December 31, 2004 compared with the year ended December 31, 2003, reflecting the continued
expansion of the subscriber base in continuing operations and the reconsolidation of El Salvador. Increases occurred most significantly in airtime revenue.

We
derive revenues from the provision of telecom services (such as monthly subscription fees, airtime usage fees, roaming fees, interconnect fees and other telecommunications services),
connection fees and equipment sales. In addition, in Vietnam, we derive our revenue through a revenue sharing agreement with a Vietnamese government owned entity that also generates its revenues from
the above-described revenue. This revenue-sharing agreement is set to expire on May 18, 2005. We expect our revenues from Vietnam to cease from May 19, 2005. See
"Expiration of BCC in Vietnam" below.

Revenues
from the provision of telecom services increased to 884.2 million in 2004 from $621.7 million in 2003. This was due to a combination of factors. Firstly, the
subscriber base in continuing operations continued to grow. Secondly, the total number of minutes of airtime increased. However, airtime per
subscriber decreased as the proportion of prepaid subscribers, whose usage and airtime tends to be lower than that of postpaid subscribers, increased. Thirdly, the average price per minute decreased
in 2004. Connection revenues increased to $11.1 million in 2004 from $10.2 million in 2003 due to the increase in the number of new subscribers, though in some cases connection fees were
reduced to zero as a spur to subscriber growth. Revenues from equipment sales increased to $26.1 million in 2004 from $15 million in 2003 following the launch of GSM in certain
operations.

We
note that a number of our 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. Nonetheless, we believe that lower cost to customers may have the effect of expanding our markets over time.

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We
believe there is a significant opportunity for rapid growth in our markets due to low cellular 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 ventures to expand our market share and reduce our operating costs. There is, however, a risk
that, as new competitors enter our prepaid markets and price competition intensifies, our prepaid customers may be more likely to move from one cellular operator to another than our postpaid
customers. 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.

Expiration of BCC in Vietnam

The BCC in Vietnam will expire on May 18, 2005. Vietnam is our largest contributor to revenue. Although we are in negotiations to extend our presence in
Vietnam for a significant period of time in the form of a joint stock company, our presence may not be extended on equivalent or similar terms as the current BCC, or our presence may not be extended
at all.

It
is unlikely that we will be able to consolidate revenues from our Vietnam business after May 18, 2005.

If
our presence is not extended on equivalent or satisfactory terms, or at all, our results of operations and financial condition would be adversely affected. If CIV, our Vietnamese
subsidiary, is unable to maintain its operations in Vietnam through an agreement or the participation in a joint stock company,
its telecommunications services would cease on May 18, 2005. In such event, CIV would no longer generate any revenues from cellular operations in Vietnam. CIV's revenues for the year ended
December 31, 2004 and 2003 were $162,807,000 and $129,936,000 (18% and 20% of total revenues respectively) and operating profit was $68,183,000 and $51,292,000 (27% and 32% of total operating
profits respectively). At present, all equipment recorded in CIV's financial statements will be fully amortized on May 18, 2005, at which date legal title to all equipment will be transferred
to VMS at a price of $1. As of December 31, 2004, CIV still needs to disburse, before the end of the revenue sharing agreement on May 18, 2005, approximately $27.6 million of
outstanding capital commitments to VMS under the BCC. An impairment charge of $16.6 million has been recorded in the first quarter of 2005 to account for the write-down of property,
plant and equipment in Vietnam as the BCC expires on May 18. The Vietnam asset impairment is due to a late approval of investments required under the BCC which prevented CIV from generating
revenues on these fixed assets.

Costs

The primary cost of sales incurred by us in relation to the provision of telecommunication services relate to interconnection costs, roaming costs, depreciation
and impairment of network equipment.

Our
other main operating costs include commissions payable to agents for obtaining customers on our behalf, commissions for selling prepaid cards, advertising and promotion costs, staff
costs and depreciation of non-network equipment.

We
will continue to seek ways to further reduce our overall cost base by rationalizing our operations. In addition, we expect to realize additional synergies across our multi country
operations, such as sharing information, human resources, best practices and technologies and centralized negotiations of financing and of supply contracts for network and equipment handsets.

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Effect of Tele 2 AB Shares

Our net profit (loss) has experienced significant fluctuations in recent years. This fluctuation resulted primarily from gains or losses in the market price
valuation of Tele 2 AB series B shares that we hold or disposed of in recent years. See Note 8 of the "Notes to the Consolidated Financial Statements" for information on Millicom's
holdings and dispositions of Tele 2 AB series B shares. The variation in the share price of the Tele 2 AB series B shares held by Millicom is recorded under the caption "gain (loss) and
valuation movement on investment securities." The Tele 2 AB shares are listed onStockholmsbörsenand have a history of high volatility. Accordingly, we do not believe it is possible to estimate any trend in the future price of the Tele 2 AB shares.

On
August 7, 2003, Millicom Telecommunications S.A., Millicom's wholly-owned subsidiary, issued for an aggregate value of SEK 2,555,994,000 (approximately $310 million)
Mandatory Exchangeable Notes which are exchangeable into a maximum of 8,968,400 Tele2 AB series B shares. Millicom Telecommunications S.A. could retain up to 30% of the increase in value of the
Tele2 AB series B shares over the designated reference price of SEK 285 per share. Unless otherwise previously redeemed and exchanged or purchased and cancelled, each 5% Mandatory Exchangeable
Note will be mandatorily exchanged by Millicom Telecommunications S.A. on August 7, 2006.

The
5% Mandatory Exchangeable Notes include an embedded derivative, which is valued separately. The variation in the value of the embedded derivative is recorded under the caption "fair
value movement on financial instruments." The embedded derivative, which reflects Millicom's limited right to participate in the increase in value of the Tele2 AB series B shares, is recorded
at fair value, taking into account time and volatility factors. Because the Tele 2 AB series B share price is a primary determinant in the value of the embedded derivative, any valuation
movement on the Tele2 share price will be partially offset by a corresponding movement in the value of the embedded derivative.

Upstreaming of Cash

The continued improvement in the operating and financial performance of our ventures has allowed us to continue to upstream excess cash from our ventures to
Millicom. During the years ended December 31, 2002, we upstreamed $96.7 million, of which $8.8 million was from divested operations. For the year ended December 31, 2003,
we upstreamed $129.3 million from 14 of the 16 countries in which we operate. For the year ended December 31, 2004, we upstreamed $171.0 million from 13 of the 15 countries in
which we operate.

Divestitures

We made a significant divestitures in 2004 as part of our debt reduction plan and focus on delivering profitable growth over recent years. These divestitures
included our operation in Argentina which was sold in September 2004. We are also in the process of selling our operation in Peru. See "Investments, Capital Expenditures and
Divestments".

Debt Restructuring Plan

In 2003, we implemented a restructuring plan to substantially improve our liquidity by reducing our net indebtedness and debt service obligations. As of
December 31, 2002, we had total consolidated indebtedness of $1,228,575,000, and our total consolidated net indebtedness (representing total consolidated indebtedness after deduction of cash,
cash equivalents and short-term time deposits) was $1,141,924,000 which required a substantial amount of cash from operations to service our debt. In addition to divesting selected assets
(for example, we divested MIC Systems (including Mach), Tele2 AB shares, our operations in the Philippines and our operation in Colombia and Liberty Broadband

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Limited),
we have undertaken a balance sheet restructuring plan. The restructuring plan included the following steps:



Millicom's
total consolidated indebtedness as of December 31, 2004 was $1,114,413,000 and our total consolidated net indebtedness (representing total consolidated indebtedness
after deduction of cash, cash equivalents and short-term time deposits) was $700,422,000. Of such indebtedness, $365,006,000 relates to the 5% Mandatory Exchangeable Notes, which are
mandatory exchangeable into Tele2 AB B shares and in respect of which no repayment in cash of principal is required. In addition, our interest obligations in respect of the 5% Mandatory Exchangeable
Notes have been secured by U.S. Treasury STRIPS, which we purchased with a portion of the net proceeds from the offering of the 5% Mandatory Exchangeable Notes. Our restructuring plan, implemented in
2003, has enhanced our balance sheet and significantly improved our liquidity levels by reducing our debt service obligations.

El Salvador Operations

On September 15, 2003, Millicom's operation in El Salvador, Telemovil, entered into a share purchase agreement (the "Agreement") with the minority
shareholders of Telemovil. The Agreement provided for the acquisition by Telemovil of 30% of its own shares for a consideration of $70 million (the "Acquisition price") payable over a period of
a maximum of 6 years and an annual dividend premium of $1 million, with a corresponding net present value of $67,371,000. Of this amount $16 million was paid in cash at the
closing of the transaction. Before full settlement, Telemovil had the ownership interest of 30% of its own shares, whilst the record title remained with an escrow agent for the benefit of the minority
shareholders pending final settlement. Based on this Agreement, Millicom regained control and started reconsolidating Telemovil at 100% since September 15, 2003.

On
December 1, 2004, Telemovil, Millicom's subsidiary in El Salvador, extended its cellular license in El Salvador. This license which was due for renewal in 2006 will now expire
in 2018. The license in El Salvador is amortised over 14 years.

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The
reconsolidation of El Salvador has positively impacted revenues and we expect that it will continue to contribute to our revenue growth, as Telemóvil is a significant
contributor to the revenues generated
in Central America. During 2004, the revenues of Telemóvil represented 16% of our total revenues. We have taken steps to increase the profitability of Telemóvil and to
bring Telemóvil's operating margin in line with the operations of the Group.

Like
other Millicom operations in Central and South America, this year, Telemóvil began changing its network technology to the GSM standard. The aggregate cost of building
out this new network, together with capital investments relating to the migration of certain of our existing customers to GSM networks, will be principally financed through operating cash flow and
supplier financing.

Completing our Migration to the GSM Standard

Our GSM subscribers exceeded 60% of our total subscriber base as of December 31, 2004. Our African businesses are fully GSM-based. In Sri
Lanka, we operate in parallel a GSM and an ETACS network. In Pakistan Paktel operates GSM and TDMA/AMPS networks in parallel and Pakcom operates only a TDMA/AMPS network. In Latin America we
introduced GSM systems in Paraguay, Guatemala, Honduras and El Salvador in 2004. The equipment costs relating to GSM have decreased significantly over the last few years. We believe that GSM will
increase our revenues from prepaid minutes and roaming services while lowering our infrastructure and maintenance costs. GSM will also offer our customers greater choice of handsets at a lower cost
with improved functionality.

Effect of Exchange Rate Fluctuations

Exchange rates for currencies of the countries in which our operations 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 venture 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
loss for the year ended December 31, 2004 of $26,796,000 compared to a loss of $45,602,000 for the year ended December 31, 2003. In 2004 and 2003, the exchange loss was mainly due to the
revaluation at the period-end exchange rate of the 5% Mandatory Exchangeable Notes.

Expiration of Telephone Licenses

In each of our markets we may face competition for business arrangements or licenses from major international telecommunications entities as well as from local
competitors. While we have not typically paid significant amounts in connection with our business arrangements or for cellular licenses, the competition for the granting or renewal of business
arrangements or licenses is increasingly intense. As such, we anticipate that we may have to pay substantial renewal fees in certain markets, as well as meet specified network build out requirements.
We cannot assure you that we will be successful in obtaining or renewing any profit sharing arrangement or cellular telephone licenses, or if they are awarded that they are on terms acceptable to us.
In addition, we may need to seek future funding through additional borrowings or equity offerings, and we cannot assure you that such funding will be obtained on satisfactory terms or at all.

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Economic and Political Environments in the Emerging Markets in which we operate

We have interests in 16 countries in emerging markets around the world and are subject to government regulation in each market. The governments of the 16
countries differ widely with respect to structure, constitution and stability, but most of these countries lack mature legal and regulatory systems. In the normal course of business, we are involved
in discussions regarding taxation, interconnection and tarif arrangements, which may have a significant impact on the long-term economic viability of our operations. To the extent that our
operations depend on governmental approval and regulatory decisions, the operations may be adversely affected by changes in the political structure or government representatives in each of the markets
in which we operate. Recent political and economic changes have resulted in political and regulatory uncertainty in certain countries in which we operate. We cannot assure you that factors such as
these will not have a material adverse effect on our operations in particular countries. For a more complete description of the economic and political environments in the markets in which we operate,
see "Information on the Company."

Risk of Liquidation

Under Luxembourg company law, when companies have accumulated losses equal to or greater than half the amount of their subscribed share capital, a shareholders'
meeting must be convened for the shareholders to determine whether or not to liquidate the company. As of December 31, 2003, we had accumulated losses equal to more than half our subscribed
share capital. At the shareholders' meeting held on July 7, 2004, the shareholders voted to continue our operations. As of December 31, 2004 we had losses equal to more than half our
subscribed share capital. At the next shareholders meeting expected to be held on May 31, 2005, the shareholders will vote on whether to continue or to dissolve the Company.

We
may have accumulated losses equal to or greater than half the amount of our subscribed share capital in future years. In such event, our shareholders may vote to dissolve the Company,
in which case a liquidator would be appointed. Under Luxembourg law, such liquidator could be any person appointed by our shareholders, including for instance our board of directors. In the event that
no liquidator is appointed, the Company's board of directors would be deemed to be the liquidator. The liquidator would be responsible to liquidate the Company in the best possible way. The
realization of assets might be in the form of disposal of all of our business collectively, individual ventures, groups of ventures, licenses or any other type of liquidation intended to realize the
best value for our shareholders. The realization of assets might in the case of dissolution and liquidation not achieve as high a value as could be obtained if disposed of in the normal course of
business.

Critical Accounting Policies

The consolidated financial statements of Millicom and its subsidiaries have been prepared in accordance with IFRS. In compiling these 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

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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.

Although
Millicom owns 70% of the share capital of its operation in El Salvador, due to a dispute which arose with local shareholders, management determined in May 2001 that it
was no longer able to exercise a significant influence in the operation and thus that it was more appropriate to show its investment as a long-term asset in the balance sheet under the
caption "Investment in securities". As a result of the resolution of this dispute, management determined in September 2003 that it will begin to fully consolidate the operation in El Salvador
effective from September 15, 2003 onwards. See "Results of Operations".

Collectability of Assets

Management is required to estimate the collectability of trade debtors. As of December 31, 2004, these totaled $178,656,000, of which management estimated
that $36,684,000 was unlikely to be collected.
These estimates are based on knowledge of the local markets, prior credit history and estimates of future cash flows generated from these receivables. The basis for the impairment made will vary
between subscribers and amounts due from other telephone companies and are management's best estimates.

Impairment of Non-current Assets

Millicom records significant intangible and tangible assets relating to cellular and non-cellular operations. Intangible assets mainly relate to
goodwill and license values and tangible assets mainly relate to network value recorded as property, plant and equipment. Significant estimates, assumptions and judgments are required to decide the
useful expected lives of these assets and whether these assets are impaired. These estimates are made on a regular basis throughout the year as they can be significantly affected by changes in
competition, technology and other similar factors. When certain operational, financial or other factors indicate an impairment of value, management evaluates the carrying value of property, plant and
equipment as well as other assets including licenses and goodwill, in relation to the operating performance and future cash flows of the underlying assets. When indicated, the impairment losses are
measured based on the difference between the estimated recoverable amount and the carrying amount of the asset. Management's estimates of recoverable amounts for the individual asset or, if not
possible, the cash-generating unit, are based on prices of similar assets, to the extent available in the circumstances, and the result of valuation techniques. These include net present
values of estimated future cash flows and valuations based on market transactions in similar circumstances. 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. Any negative change in relation to the operating performance or the expected future cash flow of
individual assets or of a cash generating unit will change the expected recoverable amount of the underlying assets and therefore will decrease the fair value of the underlying assets.

During
2003 and 2004, Millicom entered into and extended discussions concerning the sale of its high-speed wireless data operation in Peru. Following these discussions,
Millicom recognized an impairment charge in 2003 of $3,073,000 in the carrying value of the license in Peru. No additional impairment was booked during the year ended December 31, 2004.

Due
to the rollout of GSM networks in Millicom's operations in Latin America and Pakistan as well as the decrease in usage of analog equipment in certain operations in Africa, management
assessed the existing equipment for impairment in 2004, recognizing the impairment of assets of $7,237,000.

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Due
to revised anticipated lower revenues from non-digital equipment, Millicom recognized an impairment loss of $4,097,000 over certain network equipment in Africa in 2003.
In addition Millicom reversed an impairment loss in South America for an amount of $1,579,000.

In
the year ended December 31, 2002, management identified an impairment of its licenses to operate high-speed wireless data services in Peru and Venezuela and, as a
consequence, made a write-down of $3,034,000 in the value of these licenses. Also, in 2002, Millicom recognized an impairment on both goodwill and license value in its operations in
Colombia and Argentina, for respectively $77,456,000 and $2,496,000.

Investments in Securities

Millicom holds significant investments in marketable and non-marketable securities. Marketable securities are carried at fair value with unrealized
changes in market value being recorded within the statement of profit and loss under the heading "Gain (loss) and valuation movement on investment in securities". See Note 2 of the consolidated
financial statements as of December 31, 2004Change in Accounting Policy in 2003". Prior to the change in accounting policy for available-for-sale securities
on January 1, 2003, where securities classified as available-for-sale were sold or impaired or when there was a significant or prolonged decline in the fair value below
acquisition cost, the accumulated fair value adjustments were included in the profit and loss statement as "Gain (loss) and valuation movement on investment in securities". Prior to the change in
accounting policy for available-for-sale securities on January 1, 2003, on a regular basis the Company compared the market value of its investments to their cost in
order to identify potential impairment issues. In considering whether the investment has been impaired, the Company considered all available evidence such as, among other things, significant financial
difficulties of the issuer, breaches or default in loan agreements, the recognition of prior impairment losses on that asset or the extent and duration of a decline in fair value below cost. In 2004,
Millicom recorded an unrealized loss of $127,158,000 (2003: gain of $246,760,000) resulting from the change in fair value of the Tele 2 AB shares. In 2002, Millicom recorded a loss of $168,818,000
resulting from the sale of shares and recorded a loss of $119,138,000 resulting from the prolonged decline in value of the Tele 2 AB shares. During 2002, Millicom recognized an impairment on its
investment in Great Universal, Inc. and Modern Holdings Incorporated of $5,027,000 and $7,050,000, respectively.

During
the period from December 31, 2002 to September 15, 2003, Millicom accounted for its investment in Telemóvil El Salvador as an
available-for-sale financial asset because management determined that during that period it did not have control or significant influence over Telemóvil El
Salvador as a result of a dispute with local shareholders. Because the shares of Telemóvil El Salvador are not quoted on a public market and management had not been able to obtain
reliable financial information since May 2001, management made different estimates to value this investment using different valuation techniques that resulted in a wide range of fair values.
Management therefore concluded that estimating a fair value in these conditions was inappropriate. Consequently, the investment in Telemóvil El Salvador was carried at its
December 31, 2002 carrying amount until September 15, 2003. On September 15, 2003, Millicom resolved the shareholders dispute
with the minority shareholders in Telemovil and as a result, recommenced consolidating Telemovil as from that date.

Revenue Recognition

Our revenue comprises the following:



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Functional Currency

Millicom's functional currency is the U.S. dollar because of the significant influence of the U.S. dollar on its operations. Millicom is located in Luxembourg and
its subsidiaries, joint ventures and associated companies operate in different currencies. The functional currency of each subsidiary, joint venture and associated company, where these are foreign
entities, is determined in accordance with the requirements of Standing Interpretation Committee No. 19 (SIC 19) "Reporting
CurrencyMeasurement and Presentation of Financial Statements under IAS 21 and IAS 29".

Derivatives

IAS 39 requires that all financial assets and financial liabilities, including derivatives, be recognized on the balance sheet. Derivatives are initially recorded
at cost either in other current assets or other financial liabilities as applicable and then are subsequently measured to fair value through the statement of profit and loss under the caption "Fair
value result on financial instruments". Upon adoption of IAS 39 on January 1, 2001, the Company recorded a cumulative negative adjustment related to these derivatives, reflected in
shareholders' equity of $45,264,000.

A
derivative embedded in a financial instrument, such as the embedded derivative on the 5% Mandatory Exchangeable Notes in Tele2 AB series B shares, is treated as a separate
derivative when its economic risks and characteristics are not closely related to those of the host contract, a separate instrument with the same terms as the embedded derivative would qualify as a
derivative, and the combined instrument (derivative and host contract) is not carried at fair value with unrealized gains and losses reported in the profit and loss.

Goodwill

The excess of cost of an acquisition over our interest in the fair value of the identifiable net assets of the acquired subsidiary, associate or joint venture at
the date of transaction is recorded as goodwill and recognized as an intangible asset in the balance sheet. Goodwill is amortized using the straight-line method over its estimated useful
life but not longer than 20 years.

At
each balance sheet date, we assess whether there is any indication of impairment. If such indications exist an analysis is performed to assess whether the carrying amount of goodwill
is fully recoverable. A write-down is made if the carrying amount exceeds the recoverable amount.

Negative
goodwill represents the excess of the fair value of our share of the identifiable net assets acquired over the cost of acquisition. Negative goodwill is presented in the same
balance sheet classification as goodwill. To the extent that negative goodwill relates to expectations of future losses and expenses that are identified in our plan for the acquisition and can be
measured reliably, but which do not represent identifiable liabilities, that portion of negative goodwill is recognized in the income statement when the future losses and expenses are recognized. Any
remaining negative goodwill, not exceeding the fair values of the identifiable non-monetary assets acquired, is recognized in the income statement over the remaining weighted average
useful life of the identifiable acquired depreciable/

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amortizable
assets; negative goodwill in excess of the fair values of those assets is recognized in the income statement immediately.

Equity Compensation Benefits

Share options are granted to Directors, management and key employees. Options in 2004 were granted at an exercise price equal to the market price at date of grant
plus a mark-up of 10%. Options granted in 2003 and before were granted at an exercise price equal to the market price at date of grant. Options are exercisable in tranches beginning either
one year or three years from the date of grant and have either an indefinite term or a contractual option term of a maximum of six years. When the options are exercised, the proceeds received net of
any transaction costs are credited to share capital (par value) and share premium. The Group does not make a charge to staff costs in connection with share options

Recent U.S. GAAP Developments

In December 2004, the FASB issued Statement 123 (revised 2004) ("SFAS 123(R)"), "Share-Based Payment." Statement 123(R) replaces FASB Statement 123,
"Accounting for Stock-Based Compensation", supersedes APB Opinion 25, "Accounting for Stock Issued to Employees" and amends FASB Statement No. 95, "Statement of Cash Flows." SFAS 123(R)
requires all share-based awards to employees, including grants of employee stock options, to be recognized in the financial statements based on their grant-date fair values. The related
compensation costs are to be recognized over the period during which an employee is required to provide service in exchange for the award. Excess tax benefits are to be recognized as an addition to
paid-in capital and reflected as financing cash inflows in the statement of cash flows. We will adopt the prospective provisions of SFAS 123(R) to new and existing plans as of
January 1, 2006. The grant-date fair values of unvested awards that are outstanding on the date of adoption will be charged to expense over their remaining vesting periods. We are
assessing the impact that the implementation of SFAS 123(R) will have on our consolidated financial position or results of operations.

In
December 2004, the Financial Accounting Standards Board ("FASB") issued Statement 153 ("SFAS 153"), "Exchanges of Nonmonetary Assetsan amendment of APB
Opinion 29." The guidance in Accounting Principles Board Opinion 29 ("APBO 29"), "Accounting for Nonmonetary Transactions," is based on the general principle that exchanges of non-monetary
assets should be measured based on the fair value of the assets exchanged. The guidance in APBO 29 included certain exceptions to that principle. SFAS 153 amends APBO 29 to eliminate the narrow
exception for nonmonetary exchanges of similar productive assets and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance (that is,
transactions where future cash flows are not expected to significantly change as a result of the exchange). We will adopt the provisions of SFAS 153 for non-monetary asset exchange
transactions after December 31, 2005. We do not expect the adoption of SFAS 153 to have a material impact on our consolidated financial position or results of operations.

In
March 2004, the EITF reached a consensus on EITF Issue 03-1 ("EITF 03-1"), "The Meaning of Other-Than-Temporary Impairment and
its Application to Certain Investments." EITF 03-1 addresses the meaning of other-than-temporary impairment and its application to investments in debt and equity
securities accounted for under Statement of Financial Accounting Standards ("SFAS") 115, "Accounting for certain Investments in Debt and Equity Securities," and to investments in equity securities
accounted for using the cost method, as well as new disclosure requirements for investments that are deemed to be temporarily impaired. EITF 03-1 provides a multi-step model
for determining whether an impairment of an investment is other-than-temporary, and requires that an impairment charge be recognized in earnings in the period in which an
other-than-temporary impairment has occurred based on the difference between the adjusted cost basis of the investment and its fair value at the balance-sheet date. EITF
03-1 requires certain quantitative and qualitative disclosures about unrealized losses

68

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pertaining
to certain investments and beneficial interests, in addition to certain disclosures about cost method investments when the fair value of such investments is not estimable at present. While
the disclosure requirements for specified debt and equity securities and cost method investments are effective for annual periods ending after December 15, 2003, the FASB has delayed the
effective date for the application of multi-step measurement and recognition guidance until issuance of implementation guidance contained in FSP EITF 03-1-1,
"Effective Date of Paragraphs 10-20 of EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments.' "Since we have recorded a significant impairment on our Tele2 shares as of December 31, 2002, the current cost of these securities is significantly lower than their market value,
therefore we do not expect the adoption of EITF No. 03-1 to have a material impact on our consolidated financial position or results of operations.

Results of Operations

Prior to May 1, 2001, our results of operations included our proportionate share of the results of our operation in El Salvador. As of May 1, 2001,
due to a dispute with our local partners, we determined that proportional consolidation was no longer appropriate and we began accounting for our operation in El Salvador under the equity method and
recorded our investment on the balance sheet under the caption "Investment in associated companies". As of December 31, 2002, the dispute was still ongoing and we determined that we could no
longer exercise significant control over our operation in El Salvador and recorded our investment as a long-term asset in the balance sheet under the caption "Investment in other
Securities". Accordingly, while our results of operations prior to May 1, 2001 include our proportionate share of the results of our operation in El Salvador, our results of operations for the
periods from May 1, 2001 to September 15, 2003 do not include the results of our operation in El Salvador.

On
September 15, 2003, Millicom's operation in El Salvador, Telemóvil, entered into a share purchase agreement with the minority shareholders of
Telemóvil. The agreement provides for the acquisition by Telemóvil of 30% of its own shares for a consideration of $70 million payable over a period of a maximum
of six years and an annual dividend premium of $1 million. Of this amount $16 million was paid in cash at the closing of the transaction. The payment of the acquisition price was
guaranteed by Millicom. During this period Telemóvil had an ownership interest in 30% of its own shares, while the record title remained with an escrow agent for the benefit of the
minority shareholders pending the final settlement date. Based on this agreement, Millicom regained control and began consolidating Telemóvil at 100% since September 15, 2003. In
December 2004, Millicom settled the full acquisition price bringing its legal ownership interest to 100%.

This
change in accounting treatment relating to our operation in El Salvador, together with our selected divestitures over recent periods and the implementation of our debt restructuring
program as well as the effects of the accounting for the embedded derivative and the valuation movements in investment securities, may limit the comparability of our financial information and
operating data. Thus, our historical financial information and operating data may not be indicative of what our results of operations, financial position or cash flows will be in the future.



Millicom regained control and began consolidating Telemóvil El Salvador at 100% since September 15, 2003. In 2004, our results of operation
include 100% of the results of our operation in El Salvador for the entire year ended December 31, 2004 and for 2003, for the period from September 15, 2003 to December 31, 2003
only.

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

|                                                               |  |          |   |          |   | Impact on Comparative
Results for Period |  
|-------------------------------------------------------------- |  | -------- | - | -------- | - | ---------------------------------------- | -
|
|
|
|
|Revenues                                                       |  | 921,466  |   | 647,104  |   | 274,362                                  |  
|Cost of sales                                                  |  | (388,334 | ) | (258,002 | ) | (130,332                                 | )
|Sales and marketing                                            |  | (122,705 | ) | (87,575  | ) | (35,130                                  | )
|General and administrative expenses                            |  | (127,400 | ) | (108,449 | ) | (18,951                                  | )
|Gain(loss) from sale of subsidiaries and joint ventures, net   |  | (2,207   | ) | 2,213    |   | (4,420                                   | )
|Other operating expenses                                       |  | (35,225  | ) | (32,776  | ) | (2,449                                   | )
|Other operating income                                         |  | 3,287    |   |         |   |                                         |  
|Operating profit                                               |  | 248,882  |   | 162,515  |   | 86,367                                   |  
|Gain (loss) and valuation movement on investment in securities |  | (126,957 | ) | 246,760  |   | (373,717                                 | )
|Interest expense                                               |  | (108,534 | ) | (135,172 | ) | 26,638                                   |  
|Other financial income                                         |  |         |   | 96,748   |   | (96,748                                  | )
|Fair value result on financial instruments                     |  | 148,816  |   | (84,578  | ) | 233,394                                  |  
|Exchange loss, net                                             |  | (26,796  | ) | (45,602  | ) | 18,806                                   |  
|Charge for taxes                                               |  | (58,900  | ) | (52,369  | ) | (6,531                                   | )
|Net profit for the year                                        |  | 68,241   |   | 178,823  |   | (110,582                                 | )

Subscribers.Our worldwide total cellular subscribers increased by 36% to 7,713,201 as of December 31, 2004 from
5,690,542 as of December 31, 2003. Of the total subscribers as of December 31, 2004, 6,739,559, or 87%, were prepaid, an increase of 36% over the 4,956,257 prepaid subscribers as of
December 31, 2003. Our proportional subscribers increased by 32% to 5,332,259 as of December 31, 2004 from 4,025,577 as of December 31, 2003. The four largest contributors to
subscriber growth in the year ended 2004 were the operations in Vietnam, Ghana, Tanzania and Paktel with a total of 1,255,181 net new subscribers.

Revenues.Total revenues for the year ended 2004 were $921,466,000, an increase of 42% over $647,104,000 for the year ended
December 31, 2003. The increase is mainly due to revenue growth throughout the Group's operations, the reconsolidation of El Salvador since September 15, 2003 offset by the divestment of
our operation in Colombia in February 2003. Included in total revenues for the year ended December 31, 2004 are revenues of $148,905,000 (2003: $39,052,000) from our operation in El
Salvador, and included in total revenues for the year ended December 31, 2003 are revenues of $5,926,000 from our divested operation in Colombia. The four largest contributors to revenues
during the year ended December 31, 2004 were our operations in Vietnam, El Salvador, Guatemala and Pakistan.

Cost of sales.Cost of sales increased by 51% for the year ended December 31, 2004 to $388,334,000 from $258,002,000
for the year ended December 31, 2003. The increased cost of sales is mainly explained by the growth throughout the operations and the reconsolidation of El Salvador.

Sales and marketing.Sales and marketing expenses increased by 40% for the year ended December 31, 2004 to
$122,705,000 from $87,575,000 for the year ended December 31, 2003. This increase was largely due to the reconsolidation of El Salvador from September 15, 2003 and the growth in
operations. Sales and marketing expenses as a percentage of total revenues were 13% and 14% for the years ended December 31, 2004 and 2003 respectively.

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General and administrative expenses.General and administrative expenses increased by 17% for the
year ended
December 31, 2004 to $127,400,000. The increase is largely due to the reconsolidation of El Salvador in September 2003 which had general and administrative expenses of $14,236,000 for
the year ended December 31, 2004 (December 31, 2003: $4,773,000).

Gain from sale of subsidiaries and joint ventures, net.For the year ended December 31, 2004, we made a net loss of
$2,207,000, reflecting mainly the loss on the sale of our operation in Argentina, down from the net gain of $2,213,000 for the year ended December 31, 2003, resulting from the disposal of our
operation in Colombia.

Other operating expenses.Other operating expenses increased by 7% for the the year ended December 31, 2004 to
$35,225,000 from $32,776,000 for the year ended December 31, 2003.

Operating profit.Total operating profit for the year ended December 31, 2004 was $248,882,000, compared with
$162,515,000 for the year ended December 31, 2003 for the reasons stated above.

Valuation movement on investment in securities.For the year ended December 31, 2004 valuation movement on investment
in securities was a loss of $126,957,000 representing the variation in the share price of the Tele2 AB shares and the variation in the exchange rate SEK/USD since December 31, 2003. For the
year ended December 31, 2003 valuation movement on securities was a gain of $246,760,000.

Fair value result on financial instruments.For the year ended December 31, 2004, the fair value result on financial
instruments was a gain of $148,816,000 representing the change in fair value of the embedded derivative on the 5% Mandatory Exchangeable Notes. For the year ended December 31, 2003, the fair
value result on financial instruments was a loss of $84,578,000.

Interest expense.Interest expense for the year ended December 31, 2004 decreased by 20% to $108,534,000 from
$135,172,000 for the year ended December 31, 2003. This decrease arose primarily from the debt reduction plan that was implemented in 2003.

Other financial income.For the year ended December 31, 2003, Millicom realized a gain on the debt restructuring of
$96,748,000 (see Note 18 to the consolidated financial statements as of December 31, 2004).

Exchange loss, net.Millicom had a net exchange loss for the year ended December 31, 2004 of $26,796,000 compared to a
loss of $45,602,000 for the year ended December 31, 2003. In 2004 and 2003, the exchange loss was mainly due to the revaluation at the period-end exchange rate of the 5% Mandatory
Exchangeable Notes.

Charge for taxes.The net tax charge for the year ended December 31, 2004 increased to $58,900,000 from $52,369,000 in
the year ended December 31, 2003. This increase is mainly due to the increased profitability of our operations in 2004. The Group's effective tax rate increased from 21% in 2003 to 41% in 2004,
mainly as a result of higher non deductible items.

Net profit for the year.The net profit for the year ended December 31, 2004 was $68,241,000 compared to a profit of
$178,823,000 for the year ended December 31, 2003 for the other reasons stated above. For the year ended December 31, 2004, the net profit was mainly affected by the valuation movement
on securities of $(126,957,000) and the fair value result on financial instruments of $148,816,000. For the year ended December 31, 2003 the net profit was mainly affected by the valuation
movement on securities of $246,760,000 and the other financial income of $96,748,000 as a result of debt restructuring.

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For the year ended December 31, 2002, our results of operations do not include the results of our operation in El Salvador for the entire 2002 period. For
2003, the results of our operation in El Salvador are included for the period from September 15, 2003 to December 31, 2003. Indeed, Millicom regained control and began consolidating
Telemóvil at 100% since September 15, 2003. See "Results of Operations" above.

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

|                                                               |  |          |   |          |   | Impact on Comparative
Results for Period |  
|-------------------------------------------------------------- |  | -------- | - | -------- | - | ---------------------------------------- | -
|
|
|
|
|Revenues                                                       |  | 647,104  |   | 605,186  |   | 41,918                                   |  
|Cost of sales                                                  |  | (258,002 | ) | (259,530 | ) | 1,528                                    |  
|Sales and marketing                                            |  | (87,575  | ) | (80,941  | ) | (6,634                                   | )
|General and administrative expenses                            |  | (108,449 | ) | (186,491 | ) | 78,042                                   |  
|Gain from sale of subsidiaries and joint ventures, net         |  | 2,213    |   | 88,814   |   | (86,601                                  | )
|Other operating expenses                                       |  | (32,776  | ) | (44,725  | ) | 11,949                                   |  
|Operating profit                                               |  | 162,515  |   | 122,313  |   | 40,202                                   |  
|Gain (loss) and valuation movement on investment in securities |  | 246,760  |   | (299,963 | ) | 546,723                                  |  
|Interest expense                                               |  | (135,172 | ) | (185,959 | ) | 50,787                                   |  
|Other financial income                                         |  | 96,748   |   | 42,247   |   | 54,501                                   |  
|Fair value result on financial instruments                     |  | (84,578  | ) | (7,858   | ) | (76,720                                  | )
|Exchange loss, net                                             |  | (45,602  | ) | (23,483  | ) | (22,119                                  | )
|Charge for taxes                                               |  | (52,369  | ) | (22,734  | ) | (29,635                                  | )
|Net profit (loss) for the year                                 |  | 178,823  |   | (385,143 | ) | 563,966                                  |  

Subscribers.Our worldwide total cellular subscribers increased by 42% to 5,690,542 as of December 31, 2003 from
4,002,911 as of December 31, 2002. Of the total subscribers as of December 31, 2003, 4,956,257, or 87%, were prepaid, an increase of 44% over the 3,448,269 prepaid subscribers as of
December 31, 2002. Excluding El Salvador, Millicom's total subscriber base increased by 31% from December 31, 2002. Our proportional subscribers increased by 45% to 4,025,577 as of
December 31, 2003 from 2,784,187 as of December 31, 2002. Excluding El Salvador, Millicom's proportional subscriber base increased by 28%. The three largest contributors to subscriber
growth in the year ended December 31, 2003 were the operations in Pakistan, Vietnam and Guatemala with a total of 738,319 new subscribers. All of our operations experienced growth, except for
Bolivia, where the number of subscribers fell due to a delay in our investment.

The
subscriber data above excludes subscribers of our divested operations.

Revenues.Total revenues for the year ended December 31, 2003 were $647,104,000, an increase of 7% over the year ended
December 31, 2002. The increase is due to revenue growth throughout the Group's operations and the reconsolidation of El Salvador since September 15, 2003, and is offset in part by the
divestment of certain operations in the second half of 2002, notably our cellular operation in the Philippines and our interest in Millicom Systems, and the divestment of Colombia in
February 2003. Included in total revenues for the year ended December 31, 2003 are revenues of $5,926,000 from our divested operation in Colombia, and included in total revenues for the
year ended December 31, 2002 are revenues of $31,456,000 from operations divested in 2002 and $50,506,000 from

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our
divested operation in Colombia. The three largest contributors to revenues during the year ended December 31, 2003 were our operations in Vietnam, Guatemala and Paraguay.

Cost of sales.Cost of sales decreased by 1% for the year ended December 31, 2003 to $258,002,000. The lower cost of
sales is explained by the divestments referred to above but also by lowering costs as a result of the impact of our cost reduction program in 2002 and is, on the other hand, increased by the
reconsolidation of El Salvador since September 15, 2003. For the year ended December 31, 2003, our divested operation in Colombia had cost of sales of $3,725,000, and for the year ended
December 31, 2002, our operations divested in 2002 had cost of sales of $17,596,000 and our divested operation in Colombia had consolidated cost of sales of $13,763,000. As a percentage of
total revenues, cost of sales for operations decreased from 44.7% for the year ended December 31, 2002 to 39.1% for the year ended December 31, 2003.

Sales and marketing.Sales and marketing expenses increased by 8% for the year ended December 31, 2003 to $87,575,000.
This increase reflects the reconsolidation of El Salvador since September 15, 2003, the increase in sales and marketing expenses in Millicom's operations and the decrease due to the divestments
referred to above, which had consolidated sales and marketing expenses of $13,956,000 for the year ended December 31, 2002. Sales and marketing expenses as a percentage of total revenues were
13.5% for the year ended December 31, 2003 compared to 13.4% for the year ended December 31, 2002.

General and administrative expenses.General and administrative expenses decreased by 42% for the year ended
December 31, 2003 to $108,449,000. The decrease is largely due to the divestments referred to above, which had consolidated general and administrative expenses of $61,906,000 for the year ended
December 31, 2002, including $41,733,000 related to a license impairment in Colombia.

Gain from sale of subsidiaries and joint ventures, net.For the year ended December 31, 2003, we made a net gain of
$2,213,000 from the sale of subsidiaries and joint ventures, down from $88,814,000 for the
year ended December 31, 2002. The net gain in the year ended December 31, 2003 was due almost entirely to the sale of our operation in Colombia.

Other operating expenses.Other operating expenses decreased by 27% for the year ended December 31, 2003 to
$32,776,000 from $44,725,000 for the year ended December 31, 2002. The decrease was mainly due to lower goodwill impairment and amortization in 2003 compared to 2002.

Operating profit.Total operating profit for the year ended December 31, 2003 was $162,515,000, compared to
$122,313,000 for the year ended December 31, 2002 for the reasons stated above.

Gain (loss) and valuation movement on investment in securities.The gain and valuation movement on investment in securities
for the year ended December 31, 2003 was $246,760,000 (relating to the change in market price of the Tele2 AB shares). This compares to a loss of $299,963,000 for the year ended
December 31, 2002.

Interest expense.Interest expense for the year ended December 31, 2003 decreased by 27% to $135,172,000 from
$185,959,000 for the year ended December 31, 2002. This decrease arose primarily from the debt reduction plan that was implemented in 2003, as well as the divestment of Millicom's highly
leveraged operations in Colombia and the Philippines.

Exchange loss, net.Millicom had net exchange losses for the year ended December 31, 2003 of $45,602,000 compared to
losses of $23,483,000 for the year ended December 31, 2002. In 2003, the exchange loss was mainly due to the revaluation at the year-end exchange rate of the 5% Mandatory
Exchangeable Notes resulting in an exchange loss of $41,820,000. In 2002, the exchange loss was mainly a result of the weakening of the U.S. dollar against the majority of currencies used by the
group.

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Charge for taxes.The net tax charge for the year ended December 31, 2003 increased to $52,369,000 from $22,734,000 in
the year ended December 31, 2002. This increase is due to the increased profitability of our operations in 2003.

Net profit (loss) for the year.The net profit for the year ended December 31, 2003 was $178,823,000 compared to a
loss of $385,143,000 for the year ended December 31, 2002. This improvement was mainly as a result of the gain (loss) and valuation movement on investment securities (relating mainly to the
change in market price of the Tele2 AB shares), which was a gain of $246,760,000 in 2003
compared to a loss of $299,963,000 in 2002. The increase in revenues in 2003 and subsequent improved operating profit also had an impact on improving net profit from 2002 to 2003.

Geographical Segment Information

The table below sets forth our revenue by geographical segment for the periods indicated.

|                               |                   | Year Ended December 31, |      
|------------------------------ | ----------------- | ----------------------- | -----
|
|
|South East Asia                |                   | 231,802                 |      
|                               | Of which divested |                         |     
|South Asia                     |                   | 113,249                 |      
|Central America                |                   | 305,034                 |      
|                               | Of which divested |                         |     
|South America                  |                   | 114,006                 |      
|Africa                         |                   | 149,979                 |      
|Other                          |                   | 7,396                   |      
|                               | Of which divested |                         | 2,213
|MIC Systems (divested in 2002) |                   |                        |      
|Unallocated items              |                   |                        |      
|Inter-segment eliminations     |                   |                        |      
|                               |                   |                         |      
|Total revenues                 |                   | 921,466                 |      
|                               |                   |                         |      

In
the first quarter of 2004 we changed our segmental reporting to reflect the five operational clusters in our group. These are South East Asia, South Asia, Central America, South
America and Africa.

Liquidity and Capital Resources



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

As
of December 31, 2004, Millicom's total consolidated outstanding debt and other financing was $1,114,413,000. Of this amount, $901,635,000 represented Millicom and Millicom
Telecommunications S.A. indebtedness and $212,778,000 represented our consolidated share of the indebtedness of our subsidiaries and joint ventures.

As
at December 31, 2003, we had a total consolidated outstanding debt and other financing of $1,173,408,000. As discussed below, our Bolivian subsidiary, Telecel, entered into
refinancing agreements in October and December of 2004 with respect to certain financing agreements that are guaranteed by Millicom. Prior to reaching agreement on these refinancings, Telecel had been
in breach of certain financial covenants contained in each of the three facilities and the outstanding balances had been re-classified as short-term financing. As of
December 31, 2003, the principal amount outstanding

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under
these financing agreements was $28,765,000, which represents approximately 2.25% of total consolidated indebtedness.

A
number of liquidity concerns prompted Millicom to take certain restructuring initiatives in 2003. The main liquidity concerns were:



Because
of these liquidity concerns, we implemented a restructuring plan in 2003 to reduce our debt service obligations. This plan substantially decreased our annual interest payments.
Our annual interest expense for the years ended December 31, 2004, 2003 and 2002, were $109 million, $135 million, and $186 million respectively.

Our
interest obligations of $15,490,000 per annum in respect of the 5% Mandatory Exchangeable Notes have been secured by U.S. Treasury STRIPS, which we purchased with a portion of the
net proceeds from the offering of the 5% Mandatory Exchangeable Notes, and which will be settled by their sale. STRIPS are securities issued by the Department of the Treasury backed by the credit of
the United States of America that represent either interest components or principal components stripped from underlying U.S. treasury obligations under the program of the Department of the Treasury
called Separate Trading of Registered Interest and Principal Securities (STRIPS).

In
addition, of our consolidated indebtedness, $365,006,000 ($327,635,000 in 2003) relates to the 5% Mandatory Exchangeable Notes, which are mandatorily exchangeable into Tele2 AB B
shares and in respect of which no repayment in cash is required.

The
restructuring program resulted in the debt restructuring described in "Operating and Financial Review and ProspectsOverviewDebt Restructuring Plan" and the
sale of certain assets described in the section "Operating and Financial Review and ProspectsLiquidity and Capital ResourcesInvestments, Capital Expenditures and
Divestments".

As
at December 31, 2004, we had total consolidated outstanding debt and other financing of $1,114,413,000 (2003: $1,173,408,000). Of this amount,



The
2% Senior Convertible PIK Notes were convertible at any time into Millicom common stock at a conversion price of $2.69 per share ($10.75 before the February 2004 stock split).
On April 26, 2004 Millicom called the entire outstanding amount of 2% Senior Convertible PIK Notes Due 2006 in an aggregate principal amount of approximately $160,000 for redemption in cash in
accordance with the terms of the Indenture covering the 2% Notes. An amount of $63,371,000 out of the total $63,531,000 2% Notes was converted into Millicom shares before April 26, 2004.
Following these conversions, the total number of outstanding Millicom shares is 89,638,927 shares with a par value of $1.50 each.

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We
expect to meet our payment obligations on our outstanding debt through operating income and cash flows from our operations.

At
the venture level, we seek, in the long term, to finance the costs of developing and expanding cellular operations on a project-by-project basis. Ventures 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 debt with third party financing, which after the
initial stages of a venture's development, is typically non-recourse to Millicom. Sources of financing at the venture 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"), bank lines of credit
and sales of equity and debt issued by the venture companies.

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

As
of December 31, 2003, Telecel, our Bolivian subsidiary, was in breach of debt covenants under financing agreements signed by Telecel and guaranteed by Millicom. As of
December 31, 2003, the principal amount outstanding under these financing agreements was $28,765,000.

On
October 7, 2004 and October 15, 2004, respectively, Telefónica Celular de Bolivia SA ("Telecel") entered into refinancing agreements with the
International Finance Corporation ("IFC") and the Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden, N.V. ("FMO"), also known as the Netherlands Development Finance Company, relating to
financing agreements having an original principal amount of $25,000,000 with IFC and $10,000,000 with FMO. In addition, as at December 2, 2004, Telecel reached agreement with Bayerische
Landesbank Girozentrale ("Bayerische") relating to a financing agreement in the original principal amount of approximately $10,000,000. All three of these financings are guaranteed by Millicom. Prior
to reaching agreement on these refinancings, Telecel had been in breach of certain financial covenants contained in each of the three facilities and the outstanding balances had been
re-classified as short-term financing. In
2004, the lenders agreed to amend the terms of the loan and Telecel is therefore no longer in breach of covenants.



For the year ended December 31, 2004, cash provided by operating activities was $303,243,000, compared to $184,322,000 for the year ended
December 31, 2003. The increase is mainly due to increased cash flows from operating profits and lower interest payments.

Cash
used by investing activities was $187,147,000 for the year ended December 31, 2004, compared to $95,551,000 for the year ended December 31, 2003. In the year ended
December 31, 2004 Millicom used cash to purchase $197,873,000 of property, plant and equipment compared to $86,452,000 for the same period in 2003. Time deposits decreased by $32,430,000 in
2004 compared to a decrease of $12,283,000 in 2003.

Financing
activities provided total cash of $149,842,000 for the year ended December 31, 2004, compared with a use of $(11,638,000) for the year ended December 31, 2003. In
the year ended December 31, 2004, we repaid debt of $155,071,000 while raising an additional $102,156,000 through financing and $205,920,000 through the issuance of shares.

The
net cash inflow in year ended December 31, 2004 was $264,552,000 compared to an inflow of $78,378,000 for the year ended December 31, 2003. Millicom had a closing cash
and cash equivalents balance of $413,381,000 as of December 31, 2004 compared to $148,829,000 as of December 31, 2003.

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For the year ended December 31, 2003, cash provided by operating activities was $184,322,000, compared to $67,279,000 for the year ended December 31, 2002. The increase is
mainly due to increased operating profits and lower interest payments.

Cash
used by investing activities was $95,551,000 for the year ended December 31, 2003, compared with cash generated by investing activities of $146,967,000 for the year ended
December 31, 2002. The decrease is mainly due to lower proceeds from the sale of subsidiaries and joint ventures and lower proceeds from the disposal of investments in securities in 2003 as
well as higher purchases of investment in securities and lower purchases of property, plant and equipment.

Financing
activities used total cash of $11,638,000 for the year ended December 31, 2003, compared with a use of $199,780,000 for the year ended December 31, 2002. In 2003,
as a result of the debt restructuring activities, we repaid debt of $899,008,000 while raising an additional $969,607,000 through the issuance of new debt and financing.

The
net cash inflow in the year ended December 31, 2003 was $78,378,000 compared with an inflow of $14,175,000 for the year ended December 31, 2002. Millicom had a closing
cash and cash equivalents balance of $148,829,000 as of December 31, 2003.



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

In
2004, we set up a subsidiary in Chad which obtained a 10 year GSM license.

On
February 5, 2004 Millicom acquired 25% of Millicom Tanzania Ltd from the Government of Tanzania, bringing its ownership to 84.4%. Millicom now fully controls Millicom
Tanzania Ltd. In 2003, due to the agreed cancellation of shares in the entity, Millicom increased its holding in its operation in Tanzania from 57% to 59.4%.

On
September 15, 2003, Millicom's operation in El Salvador, Telemovil, entered into a share purchase agreement (the "Agreement") with the minority shareholders of Telemovil. The
Agreement provided for the acquisition by Telemovil of 30% of its own shares for a consideration of $70 million (the "Acquisition price") payable over a period of a maximum of 6 years
and an annual dividend premium of $1 million, with a corresponding net present value of $67,371,000. Of this amount $16 million was paid in cash at the closing of the transaction. Before
full settlement, Telemovil had the ownership interest of 30% of its own shares, whilst the record title remained with an escrow agent for the benefit of the minority shareholders pending final
settlement. Based on this Agreement, Millicom regained control and started reconsolidating Telemovil at 100% since September 15, 2003. The legal ownership interest of Millicom remained at 70%
until the full settlement. In December 2004, Millicom settled the full acquisition price, bringing its legal ownership interest in the operation in El Salvador to 100%.

In
November 2002, we acquired the remaining 30% shareholding in Millicom (Ghana) Limited for a purchase price of $190,000. We also issued a call option to the former shareholder.
The option allows the holder to reacquire the 30% equity stake which he sold to Millicom in 2002. The option is exercisable from June 2005 to June 2007.

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During
2002, we increased our ownership in Celcaribe, the operation in Colombia to 95.4% as of December 31, 2002, through partial repayment of Celcaribe's debt, which was treated
as a capital increase, and through a capital increase. We subsequently sold our interest in Celcaribe in February 2003.



On September 22, 2004, Millicom completed the sale of Millicom Argentina S.A., its high speed wireless data joint venture in Argentina, realizing a loss of
$2,061,000 on net proceeds of $2,000,000.

Following
the restructuring of Millicom's holding in Millicom Lao Co., Ltd in December 2004, Millicom disposed of 3,9% of this operation realizing a net gain of $55,000.

In
2004, Millicom disposed or liquidated a number of subsidiaries realizing a loss of $201,000.

In
February 2003, we sold our interest in Celcaribe (Colombia) for consideration of $9,876,000, realizing a gain of $3,305,000.

In
the first half of 2003, we sold 1,044,129 B shares in Tele2 AB to Kinnevik realizing proceeds of $33,291,000.

Following
the sale of our interest in FORA Telecom BV during 2001, we received an additional $30 million in cash proceeds for the reasons described below. In addition, certain
loans for which we were liable were settled at less than their carrying value. The amount realized on these less costs incurred in the acquisition of the licenses, resulted in a net gain of
$30,859,000 in 2002.

In
December 2002, we sold our cellular operation in the Philippines for a nominal sum, recognizing a loss of $35,988,000.

In
November 2002, we completed the disposal of MIC Systems, including Mach, realizing a gain of $87,655,000.

In
May 2002, we sold a 17% interest in MIC Systems BV, the parent company of Mach, to Kinnevik for a total consideration of $17,000,000 in order to make a repayment on the Toronto
Dominion financing. In November 2002, we sold our remaining 83% interest in the subsidiaries of MIC Systems BV for a total consideration of approximately $97,000,000. These proceeds were mainly
used to meet our interest obligation on our outstanding 13.5% Senior Subordinated Notes.

During
the course of 2002, we sold 8,743,110 Tele2 AB class B shares, recognizing a loss of $168,818,000. The proceeds were used to make repayments on the Toronto-Dominion
financing and to meet our interest obligation on our outstanding 13.5% Senior Subordinated Notes.

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Capital Expenditure

Our capital expenditure by geographical region has been as follows during the periods indicated:

|                               |                   | For the Years Ended
December 31,
|------------------------------ | ----------------- | --------------------------------
|
|
|South East Asia                |                   | 32,879                          
|                               | Of which divested |                                 
|South Asia                     |                   | 291,761                         
|Central America                |                   | 65,656                          
|                               | Of which divested |                                 
|South America                  |                   | 23,483                          
|Africa                         |                   | 76,619                          
|                               | Of which divested |                                 
|Other                          |                   | 3,690                           
|                               | Of which divested |                                 
|MIC Systems (divested in 2002) |                   |                                
|Unallocated items              |                   | 4                               
|                               |                   |                                 
|Total                          |                   | 494,092                         
|                               |                   |                                 

The
main capital expenditures were for the migration to GSM in Central and South America and Pakistan and the expansion of existing networks both in terms of areas
covered and capacity as well as acquisition of licenses in Pakistan, Ghana and El Salvador.

We
expect to direct our capital expenditures towards the roll out of GSM in Central and South America and Pakistan in 2005, to provide additional capacity to meet expected subscriber
demand as well as acquiring and renewing licenses.



|Market                       |  | Ownership      |    | Approximate
Population
Covered |  | Number of
Subscribers |  | Price(3) |  | Debt
Assumed by
Purchaser |     | Date of Sale              
|---------------------------- |  | -------------- | -- | ------------------------------ |  | --------------------- |  | -------- |  | ------------------------- | --- | --------------------------
|
|Argentina                    |  | 100            | %  |                               |  |                      |  | 2.0      |  |                          |     | September 2004            
|Colombia                     |  | 95.4           | %  | 8.7                            |  | 237,686               |  | 99.0     |  | 86.5                      |     | February 2003             
|MIC Systems                  |  | 100            | %  |                               |  |                      |  | 114.0    |  |                          |     | May 2002 and November 2002
|Democratic Republic of Congo |  | 50.9           | %  | 55.2                           |  |                      |  | 1.5      |  |                          |     | September 2002            
|Philippines(1)               |  | 40.0           | %  | 84.0                           |  | 29,896                |  | Nominal  |  | 29.5                      | (2) | December 2002             
|Russia                       |  | From 20
to 100 | %% | 47.5                           |  | 236,516               |  | 110.0    |  |                          |     | November 2001             
|IndiaMadras                 |  | 24.5           | %  | 5.7                            |  | 99,023                |  | 21.1     |  |                          |     | September 2001            

---



At the venture level there are a number of significant debt financings, described in detail at "Description of Certain IndebtednessOperational
Financing".

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As of December 31, 2004, we had total consolidated outstanding debt and other financing of $1,114,413,000 (2003: $1,173,408,000). 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 $514,027,000 (2003: $644,651,000).

Of
the total consolidated outstanding debt and other financing,



The
2% Senior Convertible PIK Notes were convertible at any time into Millicom common stock at a conversion price of $2.69 per share ($10.75 before the February 2004 stock split).
On April 26, 2004 Millicom called the entire outstanding amount of 2% Senior Convertible PIK Notes Due 2006 (the
"2% Notes") in an aggregate principal amount of approximately $160,000 for redemption in cash in accordance with the terms of the Indenture covering the 2% Notes. An amount of $63,371,000 out of the
total $63,531,000 2% Notes was converted into Millicom common stock before April 26, 2004.



As of December 31, 2004, Millicom had other non-current liabilities of $194,774,000 mainly representing the unpaid portion of license fees of
Paktel, one of its operations in Pakistan and Millicom (Ghana) Ltd., its operation in Ghana amounting to $187,635,000 representing the non-current portion of the net present value
of the cash settlements agreed in these licenses.



As of December 31, 2004, Millicom had a total of $502,543,000 of current liabilities, including $88,511,000 of current debt and other financing. Management
expects a substantial portion of such short-term debt to be extended prior to maturity.

As
of December 31, 2003, Millicom had a total of $399,351,000 of current liabilities, including $132,664,000 of current debt and other financing. Management expects a substantial
portion of such short-term debt to be extended prior to maturity.



As of December 31, 2004, we had commitments to purchase network equipment, land and buildings and other fixed assets with a value of $91,848,000 from a
number of suppliers, of which $72,479,000 within one year.

As
of December 31, 2003, we had commitments to purchase within one year network equipment, land and buildings and other fixed assets with a value of $39,472,000 from a number of
suppliers.



As of December 31, 2004, Millicom's share of the carrying amount of total pledged assets held by operating entities securing Group debt and financing was
$267,391,000 (2003: $180,227,000) including pledged deposits for $10,529,000 (2003: $1,488,000).

The
carrying amount of pledged assets held by non-operating entities at December 31, 2004 securing Group debt and financing was $399,013,000 (2003: $546,650,000)
represented by Tele2 shares, pledged deposits and pledged US Treasury strips.

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As
of December 31, 2004 the guarantees issued by the Company to cover debt and financing in the operations amounted to $43,084,000 (2003: $74,087,000).

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, 2004.

|                                         |  | Within
1 year |  | Within
2-3 years |  | Within
4-5 years |  | After
5 years |  | Total    
|---------------------------------------- |  | ------------- |  | ---------------- |  | ---------------- |  | ------------- |  | ---------
|
|Debt (before unamortized financing fees) |  | 88,511        |  | 470,402          |  | 34,348           |  | 554,229       |  | 1,147,490
|Unpaid portion of license fees           |  | 32,347        |  | 100,171          |  | 24,667           |  | 62,797        |  | 219,982  
|Operating leases                         |  | 7,035         |  | 9,823            |  | 6,873            |  | 9,784         |  | 33,515   
|Financial leases                         |  | 214           |  | 409              |  | 428              |  |              |  | 1,051    
|Capital expenditure                      |  | 91,848        |  |                 |  |                 |  |              |  | 91,848   
|Total                                    |  | 219,955       |  | 580,805          |  | 66,316           |  | 626,810       |  | 1,493,886

The
following table summarizes our obligations under these contracts due by period as of December 31, 2003.

|                                         |  | Within
1 year |  | Within
2-3 years |  | Within
4-5 years |  | After
5 years |  | Total    
|---------------------------------------- |  | ------------- |  | ---------------- |  | ---------------- |  | ------------- |  | ---------
|
|Debt (before unamortized financing fees) |  | 132,664       |  | 505,640          |  | 15,565           |  | 573,074       |  | 1,226,943
|Operating leases                         |  | 5,992         |  | 8,364            |  | 7,369            |  | 7,637         |  | 29,362   
|Financial leases                         |  | 137           |  | 23               |  |                 |  |              |  | 160      
|Capital expenditure                      |  | 39,472        |  |                 |  |                 |  |              |  | 39,472   
|Total                                    |  | 178,265       |  | 514,027          |  | 22,934           |  | 580,711       |  | 1,295,937

Off-balance Sheet and Other Arrangements

The Tele2 AB class B shares underlying the 5% Mandatory Exchangeable Notes have been lent to Deutsche Bank AG London under a securities lending
arrangement. Deutsche Bank AG London may sell or on-lend the Tele2 AB class B shares it borrowed from Millicom Telecommunications under the securities lending agreement. Deutsche
Bank AG London is required to deliver to Millicom Telecommunications such Tele2 AB class B shares upon notice to Deutsche Bank AG London by Millicom Telecommunications, if:



Millicom
Telecommunications is obligated to deliver Tele2 class B shares upon exchange of the 5% Mandatory Exchangeable Notes even in the event of a failure of Deutsche Bank AG
London to redeliver to Millicom Telecommunications Tele2 class B shares. Millicom Telecommunications' obligations in respect of the delivery of those shares are not guaranteed by Millicom. See
"Operating and Financial Review and ProspectsDescription of Certain IndebtednessMillicom Telecommunications S.A.'s 5% Mandatory Exchangeable Notes".

Millicom
has a number of commitments and contingencies, as described in Note 29 to the consolidated financial statements.

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Description of Certain Indebtedness



In December 2004 and January 2005, Millicom raised $200 million aggregate principal amount of 4% Convertible Bonds due 2010 (the "4%
Convertible Bonds"). The closing and settlement date of the 4% Convertible Bonds was January 7, 2005.

The
4% Convertible Bonds are direct, unsecured obligations of Millicom. The rate of interest payable on the bonds is 4% per annum. Interest is payable semi-annually in arrear
in equal installments on January 7 and July 7 of each year commencing on July 7, 2005.

Unless
previously redeemed or converted, the bonds will be redeemed on January 7, 2010 at their principal amount.

Each
bond will entitle the holder to convert such bond into shares or SDRs at the then applicable conversion price at any time on or after February 17, 2005 and up to
December 28, 2010.

The
initial conversion price will be $34.86 per share.

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



As of December 31, 2004, the carrying amount of the 10% Senior Notes is $536,629,000.

On
November 24, 2003, Millicom issued $550 million aggregate principal amount of 10% Senior Notes due 2013. The 10% Senior Notes were issued under an indenture dated
November 24, 2003 between Millicom and The Bank of New York, as Trustee (the "10% Senior Notes Indenture").

The
10% Senior Notes are senior, unsecured obligations of Millicom. The 10% Senior Notes bear interest at 10% per annum, payable semiannually in arrears on June 1 and
December 1 of each year, with a final maturity on December 1, 2013. The interest on the 10% Senior Notes is payable in cash.

Under
a registration rights agreement dated November 24, 2003 we were under an obligation to offer to exchange the 10% Senior Notes issued on that date for notes with identical
terms that were registered under the Securities Act of 1933. Because the registration statement for the exchange offer was not declared effective by the date set in the registration rights agreement,
a special interest charge was added to the interest rate of 10% of 0.25% from May 23, 2004 to August 20, 2004, of 0.5% from August 21, 2004 to November 18, 2004 of 0.75%
from November 19, 2004 to February 16, 2005 and of 1% from February 17, 2005 until March 2, 2005 at which date the registration statement was declared effective and special
interest ceased to accrue. Upon closing of the exchange offer on April 4, 2005, Millicom exchanged approximately 99.9% of the 10% Senior Notes for notes with identical terms that were
registered under the Securities Act.

At
any time and from time to time on or after December 1, 2008, Millicom may redeem the 10% Senior Notes, in whole or in part, at a redemption price equal to the percentage of
principal amount set forth below plus accrued and unpaid interest to the redemption date.

|12-month period commencing December 1 in Year |  | Percentage |  
|--------------------------------------------- |  | ---------- | -
|2008                                          |  | 105.000    | %
|2009                                          |  | 103.333    | %
|2010                                          |  | 101.667    | %
|2011 and thereafter                           |  | 100.000    | %

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At any time and from time to time prior to December 1, 2006, Millicom may redeem 10% Senior Notes with the net cash proceeds received by it from any sale of its common stock at a
redemption price equal to 110% of the principal amount plus accrued and unpaid interest to the redemption date, in an aggregate principal amount for all such redemptions not to exceed 35% of the
original aggregate principal amount of the 10% Senior Notes (including additional notes, if any, issued under the 10% Senior Notes Indenture); provided that

(1)   in
each case the redemption takes place not later than 90 days after the closing of such sale, and

(2)   not
less than 65% of the original principal amount of the 10% Senior Notes (including additional notes, if any, issued under the 10% Senior Notes Indenture) remains
outstanding immediately thereafter.

The
10% Senior Notes may also be redeemed at Millicom's option in whole at any time at a price equal to the principal amount thereof, together with accrued and unpaid interest, and other
amounts due to the date of redemption, if Millicom (or its successor) becomes obligated to pay certain additional amounts as a result of any change in the laws of Luxembourg (or any successor's
jurisdiction) or their respective political subdivisions or taxing authorities, or any change in the application or official interpretation of such laws, which change or amendment becomes effective
after the issue date of the 10% Senior Notes (or the date on which the successor assumes Millicom's obligations under the 10% Senior Notes).

The
10% Senior Notes Indenture contains certain covenants that, among others, restrict our ability to:



Upon
the occurrence of a change of control triggering event, which is defined in the 10% Senior Notes Indenture as a rating decline and change of ownership, holders of the 10% Senior
Notes may require Millicom to purchase all or a portion of the 10% Senior Notes at a purchase price of 101% of the stated principal amount of the 10% Senior Notes, plus accrued and unpaid interest, if
any, on the 10% Senior Notes to the date of purchase.

Under
the 10% Senior Notes Indenture, Millicom may not incur indebtedness unless the "leverage ratio" would be less than 4 to 1. The leverage ratio is the ratio of the consolidated
principal amount of net debt outstanding to four times operating income. Even if Millicom ceases to meet the leverage ratio requirement, it may incur debt under several "debt baskets" as set forth in
the 10% Senior Notes Indenture.

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In June 1996, Millicom issued $962,000,000 principal amount at maturity of 13.5% Senior Subordinated Notes. Millicom redeemed the 13.5% Senior Subordinated
Notes in their entirety on December 29, 2003 in connection with the exchange offer and consent solicitation to holders of the 13.5% Senior Subordinated Notes. See "Recent
DevelopmentsResults of Tender Offer and Consent Solicitations" and "Operating and Financial Review and ProspectsLiquidity and Capital ResourcesCorporate
Financing" above.



In May 2003, Millicom issued $562 million of 11% Senior Notes due 2006 and approximately $64 million of 2% Senior Convertible PIK Notes due
2006 in exchange for $776 million of 13.5% Senior Subordinated Notes. The 11% Senior Notes were issued under an indenture dated May 8, 2003 between Millicom and The Bank of New York, as
Trustee, and the 2% Senior Convertible PIK Notes were issued under an indenture dated May 8, 2003 between Millicom and The Bank of New York, as Trustee (the "2% Senior Convertible PIK Notes
Indenture").

The
11% Senior Notes and the 2% Senior Convertible PIK Notes have been redeemed in full and are no longer outstanding. See "Recent DevelopmentsResults of Tender Offer and
Consent Solicitations" and "Operating and Financial Review and ProspectsLiquidity and Capital ResourcesOverview".

On
March 19, 2004 Millicom formally requested the Trustee of the 2% PIK Notes to call the entire outstanding amount of the 2% PIK Notes for redemption in cash in accordance with
the terms of the indenture covering the 2% PIK Notes. On April 26, 2004 Millicom called the entire outstanding amount of 2% Senior Convertible PIK Notes Due 2006 (the "2% Notes") in an
aggregate principal amount of
approximately $160,000 for redemption in cash in accordance with the terms of the Indenture covering the 2% Notes. An amount of $63,371,000 out of the total $63,531,000 2% Notes was converted into
Millicom shares before April 26, 2004.

Millicom Telecommunications S.A.'s 5% Mandatory Exchangeable Notes

As of December 31, 2004, the carrying amount of the 5% Notes was $365,006,000.

On
August 7, 2003, Millicom Telecommunications, Millicom's wholly owned subsidiary, issued for an aggregate value of SEK 2,555,994,000 (approximately $310 million) 5%
Mandatory Exchangeable Notes, which are exchangeable into Tele2 AB class B shares. The 5% Mandatory Exchangeable Notes may be exchanged either voluntarily at the option of the noteholders or
mandatorily by Millicom Telecommunications as described below. The 5% Mandatory Exchangeable Notes will be exchangeable for an aggregate of up to 8,968,400 of the 8,968,414 Tele2 AB class B
shares which Millicom beneficially owned through Millicom Telecommunications at the time of the offering of the 5% Mandatory Exchangeable Notes. The number of Tele2 AB class B shares that
Millicom Telecommunications is obligated to deliver upon exchange of the 5% Mandatory Exchangeable Notes is based on a formula that takes into account the market price of the Tele2 AB class B
shares prior to any exchange. Under the formula, Millicom Telecommunications could retain up to 30% of the increase in value of the Tele2 AB class B shares over the designated reference price
of SEK 285 per share. As a result, at August 6, 2006 or earlier, if all of the 5% Mandatory Exchangeable Notes have been redeemed and exchanged prior to that date, Millicom Telecommunications
could own up to approximately 23% of the 8,968,400 Tele2 AB class B shares underlying the 5% Mandatory Exchangeable Notes.

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The
5% Mandatory Exchangeable Notes bear interest on the U.S. dollar equivalent amount of each note at a rate of 5% per annum. The aggregate U.S. dollar equivalent amount at the time of
issuance of the 5% Mandatory Exchangeable Notes was approximately $310 million.

The
5% Mandatory Exchangeable Notes may be exchanged voluntarily at the option of the noteholder at any time during the period commencing on September 17, 2003 and ending on the
25th trading day prior to August 7, 2006, which is expected to be July 11, 2006. In addition, the 5% Mandatory Exchangeable Notes may be exchanged voluntarily at the option of the holder
in the event of certain changes in tax laws and in the event of a takeover offer in respect of Tele2 AB.

Unless
otherwise previously redeemed and exchanged or purchased and canceled, each 5% Mandatory Exchangeable Note will be mandatorily exchanged by Millicom Telecommunications on
August 7, 2006.
If an event of default occurs under the trust deed governing the 5% Mandatory Exchangeable Notes, Millicom Telecommunications will be required to redeem and exchange the outstanding 5% Mandatory
Exchangeable Notes in their entirety.

Millicom
Telecommunications' obligations in respect of the exchange of the 5% Mandatory Exchangeable Notes have been secured by, among other things:



Millicom
Telecommunications has secured its obligations in respect of interest payments under the 5% Mandatory Exchangeable Notes by granting a security interest in certain U.S. Treasury
STRIPS which were purchased by Millicom Telecommunications with a portion of the net proceeds of the offering. Millicom Telecommunications may not dispose of such securities without the consent of the
trustee under the trust deed governing the 5% Mandatory Exchangeable Notes. Millicom Telecommunications' obligations to pay interest on the 5% Mandatory Exchangeable Notes, including additional
amounts payable to noteholders if cash dividends or other cash distributions are made in respect of the Tele2 AB class B shares, have been guaranteed by Millicom. Under the terms of the 5%
Mandatory Exchangeable Notes, Millicom Telecommunications will be required to pay to the noteholders an amount equal to the amount of any cash dividend or distribution on the Tele2 AB class B
shares underlying the exchangeable notes.

Of
the net proceeds of the offering of 5% Mandatory Exchangeable Notes, which amounted to SEK 2,483 million ($300.3 million), Millicom Telecommunications used
$45.3 million to purchase U.S. Treasury STRIPS for purposes of securing the payment of interest on the 5% Mandatory Exchangeable Notes and approximately $60 million to repay borrowings
under a short-term credit facility which had been used to refinance Millicom Telecommunications' facility with Toronto Dominion Securities.

Based
on the securities lending agreement entered into with Deutsche Bank AG London (the "Securities Lending Agreement"), Millicom Telecommunications agreed to lend to and delivered to
Deutsche Bank AG London, on or about July 22, 2003, 8,968,414 Tele2 AB class B shares, of which 8,968,400 remain borrowed. Deutsche Bank AG London may sell or on-lend the
Tele2 AB class B shares it has borrowed from Millicom Telecommunications under the Securities Lending Agreement, subject to compliance with applicable securities laws. Millicom
Telecommunications may require

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Deutsche
Bank AG London to deliver to it Tele2 AB class B shares by providing requisite notice to Deutsche Bank AG London, if:



Under
the Securities Lending Agreement, Deutsche Bank AG London has agreed that if any dividends or other distributions are made in relation to the borrowed Tele2 AB class B
shares, it shall pay and deliver to Millicom Telecommunications a sum of money or property equivalent to the dividends or distributions. We have been informed by our advisors that, while the issue is
not free from doubt, the Securities Lending Agreement may have inadvertently resulted in a technical breach of certain negative covenants relating to transfers of assets contained in the respective
indentures governing the 11% Senior Notes and the 2% Senior Convertible PIK Notes. On November 13, 2003, we announced that, under a tender offer and consent solicitation in respect of the 11%
Senior Notes and a consent solicitation in respect of the 2% Senior Convertible PIK Notes, we had received the requisite consents of the holders of the relevant notes to the waiver of this possible
past default arising from the 5% Mandatory Exchangeable Notes and the Securities Lending Agreement. See "Recent DevelopmentsResults of Tender Offer and Consent Solicitations".

Other Debt

A portion of Millicom's share of the indebtedness of its operations is secured by pledged assets, pledged deposits issued to cover letters of credit and
guarantees. 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 $514,027,000
(2003: $644,651,000). As of December 31, 2004 the guarantees issued by the Company to cover debt and financing in the operations amounted to $43,084,000 (2003: $74,087,000).

Operational Financing



Telecel financed the expansion and further digitalization of its cellular network and refinanced existing debt by borrowings under:



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Millicom
has guaranteed each of these loans, and debt owed by Telecel to Millicom is subordinated in right of payment to the loans. As security for its obligations under these loans,
Telecel has also granted a security interest in respect of certain of its assets.

On
October 7, 2004 and October 15, 2004, respectively, Telecel entered into refinancing agreements with the International Finance Corporation ("IFC") and the Nederlandse
Financierings Maatschappij Voor Ontwikkelingslanden, N.V. ("FMO"), also known as the Netherlands Development Finance Company, relating to financing agreements having an original principal amount of
$25,000,000 with IFC and $10,000,000 with FMO. In addition, as at December 2, 2004, Telecel reached agreement with Bayerische Landesbank Girozentrale ("Bayerische") relating to a financing
agreement in the original principal amount of approximately $10,000,000. All three of these financings are guaranteed by Millicom. Among other things, the financing requires the company to maintain
certain financial covenants such as a debt ratio, long-term debt service coverage, and debt-to-equity ratio. As of December 31, 2003, the company was in
breach of certain covenants on the IFC, FMO and Bayerische loans and the outstanding balances had been reclassified as current financing. In 2004, the lenders agreed to amend the terms of the loan and
Telecel is therefore no longer in breach of any covenants and has accordingly reclassified the non-current portion of the outstanding balances to non-current other debt and
financing. The IFC and FMO financing bear interest at LIBOR plus 3.75% and the Bayerische financing bears interest at LIBOR plus 1.15%.

As
of December 31, 2004, $21,048,000 (2003: $28,765,000) was drawn down related to these financings. These financings have helped to fund the expansion and further digitalization
of the Group's mobile cellular telecommunications network in Bolivia. These financings are repayable in tranches until 2007.



In connection with the purchase of GSM equipment, Millicom's operation in Guatemala entered into a facility agreement in September 2003 with a syndicate of
banks led by Banco G&T Continental. The facility agreement provides for a seven-year term loan facility in a maximum aggregate principal amount of Quetzal 400,000,000 of which 320,000,000
were drawn down ($41,261,000). Amortization payments are payable semi-annually in the fixed amount of Quetzal 33,333,000 each and are scheduled to begin in March 2006. For the first
year of the loan interest was fixed at an annual rate of 8.00% after which it became subject to semi-annual adjustment and as at December 31, 2004 was 8.75%. As of
December 31, 2004, the Group share of debt was $22,694,000 (2003: $21,945,000).

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The
facility agreement contains financial covenants, including covenants to maintain minimum debt to earnings before interest, tax, depreciation an amortization and debt service coverage
ratio, as well as negative covenants that restrict Comcel's ability to, among others things, pay dividends.



In November 2004, Telemovil entered into a $40,000,000 five year loan from a syndicate consisting of ABN Amro, Citibank and Scotiabank. This loan bears
interest for the advances in U.S. dollars at 3 month LIBOR plus 2.5% and is repayable over 18 quarterly installments commencing in 2005. As of December 31, 2004 $40,000,000 of this
facility was outstanding.

As
of December 31, 2003 a loan of $51,517,000 was outstanding relating to the acquisition by Telemovil El Salvador of 30% of its own shares. This amount was fully repaid in 2004.



In 2003, Pakcom entered into a long-term financing agreement with National Bank of Pakistan for an amount of PKR 1,250 million ($21,035,000)
bearing interest at the six month Pakistani Treasury Bill plus 2.4% (approximately 6.2% for the year ended December 31, 2004) repayable in equal installments until 2007. In 2004, Pakcom signed
a three year loan agreement for PKR 250,000,000 ($4,207,000) from UBL Bank. The loan bears interest at the six month Pakistani Treasury Bill plus 2.5% (approximately 6.3% for the year ended
December 31, 2004). This loan is repayable in 2007.

During
2003 Paktel entered into a Sale and Purchase Agreement of its existing and future receivables with SPV Limited, a special purpose vehicle incorporated in Pakistan. The total
receivables sold amount to PKR 1,308 million ($22.9 million) and their acquisition price amounts to PKR 990 million ($17.3 million). SPV Limited has financed this
acquisition by the issuance of Term Finance Certificates ("TFC") that have been underwritten by financial institutions for an aggregate amount of PKR 840 million ($14.7 million) and by
Pakcom for an amount of PKR 150 million ($2.6 million). As Millicom bears the risks associated to this financing transaction, we consolidate SPV Limited. As of December 31, 2004,
the amount of TFC was $7,860,000 (2003: $15,612,000) and the corresponding net liability was $5,759,000 (2003: $10,555,000).

In
November 2002, Pakcom signed a syndicated finance agreement for an aggregate of Rupees 800 million (approximately $13,700,000). For this agreement, Faysal Bank Limited
acts as security agent and Standard Chartered Bank acts as facility agent. The facility is repayable in monthly installments until December 31, 2004 and bears interest at the State Bank of
Pakistan discount rate plus 1.75%, with a floor rate of 11.75%. As security for its obligations under the agreements, Pakcom has assigned certain receivables from PTCL and created a first charge by
way of hypothecation in favor of the security agent on certain of Pakcom's present fixed assets.



In 2004, ABN Amro arranged a six year syndicated loan of LKR 2,000,000,000 ($19,143,000) for Celltel Lanka Limited of which LKR 900,000,000 ($8,614,000) was drawn
down as of December 31, 2004. One tranche, representing LKR 427,000,000 is guaranteed and carries interest equal to the Sri Lankan Weighted Average Treasury Bill rate plus 0.75% (approximately
8.15% for the year ended at December 2004). The unsecured tranche carries interest equal to the Sri Lankan Weighted Average Treasury Bill rate plus 3%. The company will repay the loan between
2006 and 2009.



In June 2003, Millicom Tanzania entered into a syndicated term loan facility agreement with Standard Chartered Bank Tanzania Limited as arranger, under
which Millicom Tanzania may borrow up

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to
an aggregate of $15,000,000 ($6,000,000 million in U.S. dollars and $9,000,000 in Tanzania Shillings). This facility bears interest at, in the case of advances under the facility in U.S.
dollars, LIBOR plus 4.50% and, in the case of advances in Tanzania Shillings, at the Treasury Bill Rate plus 4.50%, provided that, in the case of advances under the facility in Tanzania Shillings, the
minimum applicable interest rate will be 12.00% per annum. As security for its obligations under the agreement, the agreement provides for a fixed and floating charge over Millicom Tanzania's assets.
In 2004, the aggregate amount of the facility was increased by $7,689,000 (TZS 8,000,000,000). As of December 31, 2004, $19,097,000 (2003: $13,173,000 representing a group share of
$7,819,000) of this facility was outstanding.

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
|--------------------- |  | -------- |  | ----------- |  | ------------ |  | --------------------------
|Vigo Carlund          |  | Member   |  | No          |  | 2002         |  | May 2005                  
|Donna Cordner         |  | Member   |  | Yes         |  | 2004         |  | May 2005                  
|Ernest Cravatte       |  | Member   |  | Yes         |  | 2003         |  | May 2005                  
|Lars-Johan Jarnheimer |  | Member   |  | No          |  | 2001         |  | May 2005                  
|Daniel Johannesson    |  | Chairman |  | Yes         |  | 2003         |  | May 2005                  
|Raymond Kirsch        |  | Member   |  | Yes         |  | 1994         |  | May 2005                  
|Michel Massart        |  | Member   |  | Yes         |  | 2003         |  | May 2005                  
|Cristina Stenbeck     |  | Member   |  | No          |  | 2003         |  | May 2005                  

Daniel Johannesson, age 62, non-executive Chairman of the Board, held a number of executive positions at major Swedish
companies including Senior Executive of the construction company Skanska, where he was responsible for their telecommunications and facilities management interests, and Chief Executive Officer of
Investment AB Kinnevik and national railway operator, SJ.. On March 8, 2004, Mr. Johannesson was elected as Chairman of the Board of Directors of Millicom.

Vigo Carlund, age 58, non-executive member, has worked for the Kinnevik Group since 1968. He previously was Vice President of
Investment AB Kinnevik and became CEO in May 1999. He is also Chairman of Transcom WorldWide S.A., Metro International S.A. and Korsnas AB. He was elected to the Board of Millicom in 2002 and
is also a director of Tele2 AB.

Donna Cordner, age 48, non-executive member, was appointed as Board member of Millicom in May 2004. She is the former
Managing Director and Global Head of Telecommunications and Media Structured Finance group at Citigroup. She has also held senior managment positions at Société
Générale and ABN AMRO Bank N.V. in U.S. and Europe, including as the Director of ABN's Latin America Telecommunications Project Finance and Advisory Group.
Mrs. Cordner is currently CEO of HOFKAM Limited, which is the largest rural microfinance company in Uganda.

Ernest Cravatte, age 55, non-executive member, is a practicing lawyer in Luxembourg and a former member of the Executive
Management of Banque Generale du Luxembourg. He has also held positions on various banking supervisory committees.

Lars-Johan Jarnheimer, age 45, non-executive member, was elected to the Board in May 2001. He has been
President and CEO of Tele2 AB since March 1999, and previously was Vice President of Investment AB Kinnevik.

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Raymond Kirsch, age 63, non-executive member, is the Chairman of the Luxembourg Stock Exchange and the former President and
Chief Executive Officer of Banque et Caisse d'Epargne de L'Etat Luxembourg. He became a director of Millicom in May 1994.

Michel Massart, age 53, non-executive member, was elected to the Board in May 2003. Up to June 2002, he was a
Partner of PricewaterhouseCoopers in Belgium, where he set up the corporate finance department in 1997, and was a former member of the Board of the Institute of Statutory Auditors. He is professor at
Solvay Business School in Brussels, Belgium.

Cristina Stenbeck, age 27, is Vice Chairwoman of the Board of Directors of Investment AB Kinnevik and Metro International, and a member of
the Board of Directors of Modern Times Group, Tele2 AB and Transcom WorldWide S.A.

Board Practices

The Board has developed and continuously evaluates its work procedure in line with the developments of good corporate governance in the United States and in the
European Union regarding reporting, disclosure and other requirements applicable to listed companies, particularly the listing rules of the NASDAQ National Market, OMX Stockholm
(Stockholmsbörsen, the Stockholm stock exchange) on which Millicom is listed since March 30, 2004) and the Luxembourg Stock
Exchange. The Board's work procedure also takes into account the requirements of the U.S. Sarbanes-Oxley Act of 2002 to the extent it applies to foreign private issuers.

At
the Annual General Meeting of Shareholders in May 2004, Mrs. Donna Cordner was elected as a new Board member. Mr. Hakan Ledin, former Chairman of the Board,
passed away in March 2004 and Mr. Daniel Johannesson was elected as his successor.

The
Board met 14 times during 2004.

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



The
Board has adopted work procedures to divide the work between the Board and the President and Chief Executive Officer (the "CEO"). The Chairman has discussions with each member of the
Board regarding the work procedures and the evaluation of the Board work. The other members of the Board evaluate the work of the Chairman each year. The Board also evaluates yearly the work of the
CEO. The main task of the Board committees is to work on behalf of the Board within their respective areas of responsibility. From time to time, the Board delegates authority to a committee so that it
may resolve a specific matter on its own without having to go before the full Board for approval.

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. Ernest Cravatte and Mr. Raymond Kirsch. 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 Millcom's auditors in that process. The Audit
Committee focuses particularly on compliance with legal requirements and accounting standards, the independence of external auditors, the audit fees, the internal audit function, the fraud risk
assessment and ensuring that an effective system of internal financial controls is maintained. The ultimate responsibility for reviewing and approving Millicom's annual and quarterly financial reports
and accounts remains with the Board. The Audit Committee met 10 times during 2004 and Millicom's auditors participated in each such meeting.

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Compensation Committee.Millicom's directors have established a Compensation Committee comprising Mr. Johannesson
(Chairman of the committee), Mrs. Cordner, Ms. Stenbeck and Mr. Carlund. This committee reviews and makes recommendations to the Board regarding the compensation of the CEO and
the other senior executives as well as the management succession planning. The grant of stock options are recommended by the CEO, reviewed by the Compensation Committee, the Nominations Committee and
the Board and approved by the shareholders at the AGM.

Nominations Committee.Following the Annual General Meeting of Shareholders of May 2004, a Nominations Committee was
established comprising Ms. Stenbeck (Chairwoman), Mr. Johannesson and Mr Carlund. This committee makes recommendations for the election of Directors to the AGM. At the AGM, Shareholders
may vote for or against the Directors proposed or may elect different directors. The Nominations Committee reviews and recommends the director's fees which are approved by the shareholders at the AGM.

Corporate Policy Manual.The Board has adopted the Corporate Policy Manual, Millicom's central reference for all matters
relating to its corporate governance policy. Regional policies that are more stringent or detailed than those set out in the Manual may be adopted if necessary. The Code of Ethics is a part of the
Corporate Policy Manual. All senior executives, as well as every member of the Board, must sign a statement acknowledging 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 employment.

Senior Management

|Name                  |  | Position                             
|--------------------- |  | -------------------------------------
|Marc Beuls            |  | President and Chief Executive Officer
|Mikael Grahne         |  | Chief Operating Officer              
|Muhammed Akhtar Zaman |  | Business DevelopmentAsia            
|Won-Suck Song         |  | Executive Vice PresidentOperations  
|Bruno Nieuwland       |  | Chief Financial Controller           
|Judy Tan              |  | Chief of FinanceGlobal Operations   
|Iain Williams         |  | ManagerSouth Asia                   
|Simon Perkins         |  | ManagerSouth East Asia              
|Mario Zanotti         |  | ManagerCentral America              
|Ricardo Maiztegui     |  | ManagerSouth America                

Marc Beuls, age 48, President and Chief Executive Officer, was promoted to his current position in January 1998 from his position
as Senior Vice President Finance. Mr. Beuls joined Millicom in March 1992. Prior to joining Millicom he held several positions with Generale Banque Belgium, both as branch manager and
senior trade finance manager for emerging markets. Mr. Beuls is also a non-executive director of Tele2 AB and a non-executive director at Banque Invik.

Mikael Grahne, age 52, joined Millicom in February 2002, having previously been President of Seagram Latin America. Prior to
joining Seagram, he held various senior management positions at PepsiCo and at Procter & Gamble. Mr. Grahne has an MBA from the Swedish School of Economics in Helsinki.

Muhammed Akhtar Zaman, age 50, has been serving as Senior Executive Vice President of Millicom since 1996 and is responsible for business
development for the Asia Pacific region. He joined Millicom in 1993 as President and CEO of Comvik International Vietnam AB.

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Won-Suck Song, age 38, was appointed to his current position in October 2002. 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.

Bruno Nieuwland, age 34, joined Millicom in December 2003. He was previously Senior Manager with Ernst & Young. He became a
chartered accountant in Luxembourg in 1998 and was a member of the quality control commission at the IRE (institute of chartered accountants in Luxembourg). He obtained a degree in finance at Solvay
Business School, Brussels.

Judy Tan, age 33, joined Millicom in 1998 with responsibility for the Asian operations. She was appointed to her current position in
November 2002 with responsibility for all operating ventures. She qualified as a Certified Public accountant with PricewaterhouseCoopers, Singapore and has an MBA from Imperial College, London.

Iain Williams, age 41,has been with Millicom since 1996, previously as Vice-President
Operations for Sanbao (Millicom Asia) and initially as the first CEO of Millicom's Cambodian operation, CamGSM. Prior to this he held various senior international commercial and general management
roles with Coats Viyella. Iain Williams is also our Country Manager in Pakistan and the CEO of Pakcom. He has a Masters in Economics from St Andrews University.

Simon Perkins,age 45, joined Millicom in May 2000 as CEO for Comvik Vietnam. Prior to this he held various senior operational
management positions within British Telecom with extensive experience gained in Asian countries. Simon Perkins is a chartered engineer, with an Honours degree in Electronic Engineering from
Loughborough University UK and an MBA from Warwick University UK.

Mario Zanotti,age 42,joined Millicom in 1992 as a General Manager of Telecel 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,age 42, joined Millicom in 1998 as Managing Director of Telecel Paraguay. Prior to joining the Company 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.

Remuneration of Directors and Senior Executives

Principles

The remuneration of the members of the board of directors of the Company (the "Board") is comprised of an annual fee and stock options. The annual fee and the
number of stock options granted are proposed by the Board and approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

The
remuneration of the President and Chief Executive Officer (the "CEO") and other senior executives comprises an annual base salary, bonuses, stock options, other benefits and social
security contributions. The CEO also receives a pension contribution. "Other senior executives" includes the Chief Operating Officer, the Senior Executive Vice President, the Executive Vice
President-Operations, the Chief Financial Controller, the Chief of Finance-Global Operations, the Cluster Managers for South East Asia, South Asia, Central America and South America. The bonus and
stock options programmes are based on actual performance (including individual and Company performance). Options are granted once a year by the Shareholders at the AGM following the recommendation of
the Board. For 2004, the annual base salary and other benefits of the CEO was approved by the Chairman

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of
the Board, and the annual base salary and other benefits of other senior executives was set by the CEO. The bonus for 2004 for senior executives was approved by the Compensation Committee. For
2005, the remuneration of all senior executives is approved by the Compensation Committee composed of four members of the Board.

Remuneration and Pensions



The remuneration charge for 2004 of the Chairman of the Board (the "Chairman") was $56,000 and a total of $315,000 for the other members of the Board. In 2004,
20,000 stock options were granted to the Chairman and 120,000 to the other members of the Board at an exercise price equal to the market price at date of grant plus a mark-up of 10%. As of
December 31, 2004, the Chairman held 20,000 stock options and the other members of the Board held 465,600 stock options.

The
total salary of the CEO in 2004 was $1,988,000, including a bonus of $497,300. The pension insurance charge of the CEO for 2004 amounted to $1,370,000 of which $396,000 related to
the 2004 service cost and interest and $974,000 represented the difference between the actuarial liability and the plan assets. Future contributions to the pension insurance of the CEO are based on a
service cost and interest paid to a third party insurance company. The yearly contribution is based on the projected entitlement at the time of retirement and is based on an average of the annual base
salary of previous years and length of service with the Company. As of December 31, 2004, the pension actuarial liability amounted to $3,827,000 and the pension plan assets amounted to
$2,853,000. The net pension liability of $974,000 is recorded under the caption "Other non-current liabilities". In 2004,
50,000 options were granted to the CEO at an exercise price equal to the market price at date of grant plus a mark-up of 10%. As of December 31, 2004, the CEO held 1,561,100 stock
options.

The
remuneration charge for the other senior executives (9 executives) for 2004 was a total of $3,612,300, which included bonuses totaling $953,700 and other benefits totaling $682,800.
No contributions to any pension funds were made for other senior executives. In 2004, 152,100 options were granted to the other senior executives at an exercise price equal to the market price at date
of grant plus a mark-up of 10%. As of December 31, 2004, the other senior executives held a total of 710,000 stock options.



The remuneration for 2003 of the Chairman was $96,000 and a total of $247,500 for the other members of the Board. In 2003, 34,000 stock options were granted to
the Chairman and 136,000 to the other members of the Board at an exercise price equal to the market price at date of grant. As of December 31, 2003, the Chairman held 634,000 stock options and
the other members of the Board held 368,700 stock options.

The
remuneration charge of the CEO during 2003 was $1,749,000 of which bonus amounted to $606,000. The pension insurance cost of the CEO for 2003 amounted to $1,636,000. In 2003, 600,000
options were granted to the CEO at an exercise price equal to the market price at date of grant. As of December 31, 2003, the CEO held 1,600,000 stock options.

The
remuneration charge for 2003 for the other senior executives (10 executives, including in 2003 the Cluster manager for Africa) was a total of $3,988,700 of which bonuses amounted to
$1,173,800 and other benefits of $662,400. No contributions to pension funds were made to other senior executives. 325,300 stock options were granted in 2003 to other senior executives at an exercise
price equal to the market price at date of grant. As of December 31, 2003, the other senior executives held 948,300 stock options.

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Severance Payments

If employment of senior executives is terminated by Millicom, severance payment of up to 12 months salary is payable.

Other

From time to time, Millicom has allowed its senior executives to participate in its operations. The following participations and options are held by senior
executives:

Share
options totaling 1% of the outstanding share capital in Millicom International BV are held by Mr. Beuls, President and Chief Executive Officer of Millicom (See
Note 17 to the Notes to the consolidated Financial Statements).

In
Millicom's operations in Vietnam, Mr. Muhammed Akhtar Zaman, a senior vice president of Millicom, owns 20% of Comvik International (Vietnam) AB. In Millicom's operations in
Cambodia, Mr. Zaman owns 3.1% of CamGSM Company Limited and 3% of Royal Telecam International Limited. In Laos, Mr. Zaman owns 3.9% of Millicom Laos. Mr. Zaman holds the right to
acquire an equity ownership in certain countries in the event he is able to obtain a license for Millicom.

Options

The following options to purchase shares of Millicom common stock with a par value of $1.50 each, issued to directors, officers and employees of Millicom were
outstanding as of December 31, 2004.

|Date issued                                                                                                                                |  | Number of
options |  | Exercise price $ |  | Terms of option                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|May 1994, May 1995, May 1996, May 1997, January 1998, May 1998, August 1999, May 2000, December 2001, December 2002, May 2003 and May 2004 |  | 2,643,151         |  | 3.32-35.906      |  | Exercisable over a three-year period in equal installments. Options have an indefinite life.                                                                                     
|December 2001, December 2002, May 2003 and May 2004                                                                                        |  | 1,252,932         |  | 3.32-25.047      |  | Exercisable over a three-year period in equal installments. Options expire after six years from date of grant.                                                                   
|August 1999, May 2000, June 2000                                                                                                           |  | 231,464           |  | 20.34-31.88      |  | Exercisable over a five-year period (1/3 vested after three years, 2/3 vested after four years, 100% vested after five years). Options expire after six years from date of grant.
|                                                                                                                                           |  |                   |  |                  |  |                                                                                                                                                                                  
|Balance as of December 31, 2004                                                                                                            |  | 4,127,547         |  |                  |  |                                                                                                                                                                                  
|                                                                                                                                           |  |                   |  |                  |  |                                                                                                                                                                                  

Of
the above options, 2,451,508 were exercisable at December 31, 2004. During the year ended December 31, 2004, 669,040 options were exercised. At December 31, 2003,
1,880,852 (2002: 1,956,204) were exercisable. No options were exercised during 2003 (2002: nil). In 2004, 264,236 (2003: 1,020,696) options, were forfeited.

In
February 2003, an Extraordinary General Meeting of Millicom passed a resolution approving a reverse share split whereby three existing shares with a par value of $2 each would
be exchanged for one share with a par value of $6 each. In February 2004, an Extraordinary General Meeting of Millicom passed a resolution approving a share split whereby one then existing
share with a par value

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of
$6 each would be exchanged for four new shares with a par value of $1.50 each. The number and exercise price of options referred to for periods prior to such date above have been restated to
reflect the share split.



The following table sets out, as at December 31, 2004, the total amount of Millicom common stock and options beneficially owned by the directors, the Chief
Executive Officer and the other members of senior management of Millicom. Options are granted once a year by the Board of Directors and are approved by the Board. The exercise price of options granted
before 2004 equals the market price at date of grant. In May 2004, 540,015 options were granted at a market value per option of $25.05, representing the market price at date of grant plus a
mark-up of 10%. In May 2003, 947,992 options were granted at a market value of USD 3.32.

|                                        |  | Common Stock |     | Total number of
options(1) |  | Of which Options
granted in 2004
|--------------------------------------- |  | ------------ | --- | -------------------------- |  | --------------------------------
|Chairman of the Board of Directors      |  | 0            |     | 20,000                     |  | 20,000                          
|Other members of the Board of Directors |  | 2,153,801    | (2) | 465,600                    |  | 120,000                         
|CEO                                     |  | 154,032      |     | 1,561,100                  |  | 50,000                          
|Other members of the senior management  |  | 363,700      |     | 710,000                    |  | 152,100                         

---

Employees

On a proportional basis, Millicom employed an average of 2,269 employees in 2004, of which 808 were employed in Asia, 1,068 in Latin America, 377 in Africa and 16
in Europe. On a proportional basis, Millicom employed an average of 1,917 employees during the year ended December 31, 2003. Of these, in 2003, 622 were employed in Asia, 911 in Latin America,
336 in Africa, 48 in Europe.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Principal Shareholders

The table below sets out certain information known to Millicom as of December 31, 2004, unless indicated otherwise, with respect to beneficial ownership of
Millicom common stock, par value $1.50 each (after the stock split effected in February 2004), by:



|Shareholder                  |  | Amount of Shares |  | Percentage |  
|---------------------------- |  | ---------------- |  | ---------- | -
|Investment AB Kinnevik(1)(2) |  | 35,142,535       |  | 35.6       | %
|The 1980 Stenbeck Trust(3)   |  | 2,032,932        |  | 2.1        | %

---

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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 stock options) is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

Related Party Transactions



The Company'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, 2004, Kinnevik owned approximately 35.6% of Millicom.

On
December 31, 1995 Millicom acquired 17.7% of MACH from Kinnevik. The consideration, which was to have a minimum present value of $5,000,000 at December 31, 1995,
consisted of:



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The final payment was made in Millicom common stock. In 2002 an amount of $3,958,000 due to Kinnevik was included in the balance sheet under the heading "Amounts due to shareholders". In
addition, as of December 31, 2002, Millicom owed $63,000 for additional charges. The balance was settled in 2003.

In
May 2002, Millicom sold a 17% interest in MIC Systems BV, the parent company of MACH to Kinnevik BV for $17,000,000.

During
2002, Kinnevik purchased Millicom 13.5% Notes (note 18) on the open market with a face value of $44,000,000. Millicom then exchanged these for $1,500,000 cash and 672,016
Tele2 AB series B shares at market prices.

During
the course of 2002, Millicom sold an additional 6,177,369 Tele2 AB series B shares at market prices to Kinnevik for a value of $104,295,000.

During
2004, Kinnevik purchased 5,600,000 Millicom shares of which 4,050,000 in the share offering on December 7, 2004 (see Note 17).

The
Group maintains corporate bank accounts at Banque Invik, a subsidiary of Kinnevik through which it makes payments and receives cash in the normal course of business. As of
December 31, 2004, the Group had current accounts, time deposits, blocked deposits and a bank facility of $3,000,000 at Banque Invik.



In November 2001, Millicom sold 100% of its interests in FORA Telecom BV, its Russian Cellular telephone operations to Tele2 AB for a consideration of
$80 million in Tele2 AB series "B' shares plus a maximum equivalent of $30 million in cash or additional Tele2 AB series "B" shares, depending on the outcome of GSM license applications
for three of Millicom's cellular telephone operations in Russia. The sale resulted in a $6,693,000 gain on the disposal in 2001 (Note 23). During 2002, Millicom
obtained the necessary GSM licenses referred to above and received the additional proceeds of $30 million in cash. In addition, certain loans for which Millicom was liable were settled at less
than their carrying value. The gain realized in obtaining the licenses and settling the loans net of costs incurred in the acquisition of the licenses, amounted to $30,859,000 in 2002.



As of December 31, 1998, the Group, through its subsidiary MIC-USA Inc. ("MIC-USA"), had a 100% temporary and restricted
shareholding in Great Universal. On December 31, 1999, MIC-USA transferred its 100% ownership and related rights in Great Universal to Great Universal LLC 1999 Trust for a
consideration of $5,027,000, corresponding to the net book value of Millicom's investment in Great Universal. During 2002, Millicom recorded an impairment loss for 100% of this asset due to
uncertainty concerning its recoverability (Note 9). The rights and obligations of MIC-USA toward Great Universal were assigned to Great Universal LLC. Great Universal continues to
indemnify Millicom against certain contingent liabilities. Great Universal and Modern Holdings are mainly engaged in the communications, information technology, teleservices and media industries
primarily.

In
June 1999, Great Universal effected a reorganization whereby it spun off its subsidiaries into two separate businesses being Great Universal Inc. and Modern Holdings.
Great Universal LLC holds 100% of common shares in Great Universal Inc. and 52.7% of common shares in Modern Holdings. Millicom also has a direct ownership of 11.6% of the share capital of
Modern Holdings. These investments are recorded as non-current available-for-sale security (note 9).

Millicom
does not consolidate its investments in Great Universal and Modern Holdings since the restrictions on their ability to distribute dividends is considered a severe
long-term restriction that significantly impairs their ability to transfer funds to Millicom. Further, due to the existence of warrants enabling the warrant holders to obtain control over
Great Universal and Modern Holdings, Millicom considers that it does not control these companies.

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The following sales and purchases and outstanding balances occurred with companies affiliated to Millicom. The services purchased and supplied covered fraud
detection, network and IT support, acquisition of assets and customer care systems.

Millicom
had the following payables to related parties and made purchases from related parties as follows:

|                                |  | Purchases in year |  | Amount payable
as of
December 31,
|------------------------------- |  | ----------------- |  | ---------------------------------
|
|
|Applied Sales Management        |  |                  |  |                                 
|Applied Value                   |  | 81                |  | 369                              
|AVI                             |  | 403               |  |                                 
|Banque Invik                    |  | 665               |  | 937                              
|Bassett                         |  | 376               |  | 451                              
|Ephibian                        |  |                  |  | 24                               
|Foreign Value                   |  | 1,859             |  | 730                              
|Fischer Partners                |  | 37                |  |                                 
|Great Universal                 |  | 192               |  |                                 
|Kinnevik                        |  | 5                 |  |                                 
|Metro                           |  | 21                |  |                                 
|Modern Treuhand                 |  | 569               |  |                                 
|Modern Times Group              |  | 5                 |  |                                 
|Netcom Consultants              |  | 1,129             |  | 352                              
|Praesidium                      |  | 13                |  | 50                               
|Procure-it-right                |  | 978               |  | 1,384                            
|Search Value                    |  | 257               |  | 159                              
|Shared Services                 |  | 146               |  |                                 
|Shared Value                    |  | 680               |  | 638                              
|Tele2 AB                        |  | 234               |  | 247                              
|3C Communications International |  | 233               |  | 182                              
|                                |  |                   |  |                                  
|                                |  | 7,883             |  | 5,523                            
|                                |  |                   |  |                                  

As
at December 31, 2004 and 2003, Millicom had the following receivables from related parties:

|                          |  | 2004  |  | 2003 
|------------------------- |  | ----- |  | -----
|
|Kinnevik                  |  | 154   |  | 154  
|Metro                     |  |      |  | 247  
|Millicom Technologies Ltd |  | 83    |  |     
|Modern Holdings           |  | 1,383 |  | 1,690
|Modern Times Group        |  | 265   |  | 265  
|Netcom                    |  | 8     |  | 16   
|Shared Value              |  | 18    |  | 18   
|Stonebrook Enterprises    |  | 156   |  | 156  
|Tele2 AB                  |  |      |  | 359  
|                          |  |       |  |      
|                          |  | 2,067 |  | 2,905
|                          |  |       |  |      

In
the opinion of management, the transactions described above have been entered on terms similar to those that would have been obtained from independent parties.

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ITEM 8. FINANCIAL INFORMATION

Financial Statements and Other Information

See Item 18 for the Company's Financial Statements.

Legal Proceedings

We are a party to various litigation 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 stock 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 stock since inception. Millicom anticipates that it will retain any earnings for use in the operation and expansion
of its business and does not anticipate paying any cash dividends on Millicom common stock in the foreseeable future. In addition, the ability of Millicom to make dividend payments or other payments
on its common stock is limited by the Indenture for Millicom's new Notes. Management will consider any tax consequences to Millicom before declaring a dividend.

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.

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 |       | Low
|---------------------------- |  | ---- | ----- | ---
|Year ended December 31, 2000 |  | $    | 61.12 |    
|Year ended December 31, 2001 |  | $    | 25.69 |    
|Year ended December 31, 2002 |  | $    | 10.44 |    
|Year ended December 31, 2003 |  |      |       |    
|First Quarter                |  | $    | 2.25  |    
|Second Quarter               |  | $    | 7.13  |    
|Third Quarter                |  | $    | 12.16 |    
|October 2003                 |  | $    | 15.58 |    
|November 2003                |  | $    | 19.94 |    
|December 2003                |  | $    | 19.88 |    
|Year ended December 31, 2004 |  |      |       |    
|First Quarter                |  | $    | 22.92 |    
|Second Quarter               |  | $    | 27.80 |    
|Third Quarter                |  | $    | 22.00 |    
|October 2004                 |  | $    | 20.53 |    
|November 2004                |  | $    | 23.30 |    
|December 2004                |  | $    | 24.05 |    
|January 2005                 |  | $    | 22.39 |    
|February 2005                |  | $    | 23.09 |    
|March 2005                   |  | $    | 23.15 |    

On
April 29, 2005, the closing market price for Millicom common stock on the NASDAQ National Market was $17.81.

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Our
shares are also traded on theStockholmsbörsenand the Luxembourg Stock Exchange.

There
are no Luxembourg decrees or regulations that restrict the import or export of capital or that affect the remittance of dividends or other payments to holders of Millicom common
stock who are non-residents of the Grand-Duchy of Luxembourg.

There
are no limitations relating only to non-residents of the Grand-Duchy of Luxembourg under Luxembourg law or the articles of incorporation of Millicom on the right to be
a holder and to vote in respect of Millicom common stock.

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 practices in Luxembourg.

ITEM 10. ADDITIONAL INFORMATION

Articles of Association

Registration and Object

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

The
articles of incorporation of Millicom define its purpose as follows:"[...] to engage in all transactions pertaining directly or
indirectly to the acquisition 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 will not be affected by a conflict of interest existing for 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 terms of their own employment contract with Millicom and on the amount of shares they
may be allotted under a share option scheme. Following the annual general meeting of shareholders of May 2004, a Nominations Committee was established comprising Ms. Stenbeck
(Chairwoman), Mr. Johannesson and Mr Carlund. This committee makes recommendations for the election of Directors to the AGM. At the AGM, shareholders may vote for or against the Directors
proposed or may elect different directors. The Nominations Committee reviews and recommends the director's 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.

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Age limitThere is no age limit for being a director of Millicom. Directors are elected for a maximum of six years and are
re-eligible.

Share ownership requirementsDirectors need not be shareholders.

Shares

Rights attached to the sharesMillicom has only one class of shares, each share entitling its holder
to (i) one vote at the general meeting of shareholders, (ii) receive dividends out of distributable profits when such distributions are decided, and (iii) share in any surplus
left after the payment of all the creditors in the event of liquidation. There is a preferential subscription right under any share or rights issue for cash, unless the board of directors restricts
the exercise thereof.

Redemption of sharesThe articles of incorporation provide for the possibility and the terms of the repurchase by Millicom of
its own shares, solely at Millicom's initiative.

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

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

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

Changes to Shareholder 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. 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 at 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. 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 general meeting of shareholders. An annual general meeting of shareholders must be convened every year on the date
provided for in the articles of incorporation, which is the last Tuesday in May each year. Other meetings can be convened as necessary.

Limitation on Securities Ownership

There are no limitations under Luxembourg law or the articles of incorporation on the rights for non-resident or foreign entities to own shares in
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.

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Disclosure of Shareholder Ownership

There are no provisions of the articles of incorporation by which a certain ownership threshold must be disclosed. However, Luxembourg laws provide that any
entity or person holding more than certain thresholds (10%, 20%, 331/3%, 50% and 662/3%) of a company listed on the Luxembourg Stock Exchange must declare such
shareholding to the Luxembourg Stock Exchange and to Millicom itself. Such disclosure is mandatory also in case of a decrease beyond such respective thresholds.

Material Contracts

In December 2004 and January 2005, Millicom raised $200 million aggregate principal amount of 4% Convertible Bonds due 2010 (the "4%
Convertible Bonds"). The closing and settlement date of the 4% Convertible Bonds was January 7, 2005.

The
4% Convertible Bonds are direct, unsecured obligations of Millicom. The rate of interest payable on the bonds is 4% per annum. Interest is payable semi-annually in arrear
in equal installments on January 7 and July 7 of each year commencing on July 7, 2005.

Unless
previously redeemed or converted, the bonds will be redeemed on January 7, 2010 at their principal amount.

Each
bond will entitle the holder to convert such bond into shares or SDRs at the then applicable conversion price at any time on or after February 17, 2005 and up to
December 28, 2010.

The
initial conversion price will be $34.86 per share.

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

In
November 2003, Millicom issued $550 million aggregate amount of 10% Senior Notes due 2013 (the "10% Notes") under an indenture dated November 24, 2003 between
Millicom and The Bank of New York.

The
10% Notes are senior, unsecured obligations of Millicom. The 10% Notes bear interest at 10% per annum, payable semiannually in arrears on June 1 and December 1 of each
year, with a final maturity on December 1, 2013. The interest on the 10% Notes is payable in cash.

At
any time and from time to time on or after December 1, 2008, Millicom may redeem the 10% Notes, in whole or in part, at a redemption price equal to the percentage of principal
amount set out below plus accrued and unpaid interest to the redemption date.

12-month period commencing December 1 in Year

Percentage2008

105.000
%2009

103.333
%2010

101.667
%2011 and thereafter

100.000
%


At
any time and from time to time prior to December 1, 2006, Millicom may redeem 10% Notes with the net cash proceeds received by it from any sale of its common
stock at a redemption price equal to 110% of the principal amount plus accrued and unpaid interest to the redemption date, in an aggregate principal amount for all such redemptions not to exceed 35%
of the original aggregate principal amount of the 10% Notes (including additional notes, if any, issued under the 10% Notes Indenture); provided that:

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The
10% Notes may also be redeemed at Millicom's option in whole, but not in part, at any time at a price equal to the principal amount thereof, together with accrued and unpaid
interest, if any, and other amounts due to the date of redemption, if Millicom (or its successor) becomes obligated to pay certain additional amounts as a result of any change in, or amendment to, the
laws (or any regulations or rulings promulgated thereunder) of Luxembourg (or such successor's jurisdiction) or their respective political subdivisions or taxing authorities, or any change in the
application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective after the issue date of the 10% Notes (or the date such successor assumes
Millicom's obligations under the 10% Notes).

The
indenture governing the 10% Notes contains certain covenants that, among others, restrict our ability to:



Upon
the occurrence of a change of control triggering event, which is defined in the indenture governing the 10% Notes as a rating decline and change of ownership, holders of the 10%
Notes may require Millicom to purchase all or a portion of the 10% Notes at a purchase price of 101% of the stated principal amount of the 10% Notes, plus accrued and unpaid interest, if any, on the
10% Notes to the date of purchase.

Under
the indenture governing the 10% Notes, Millicom may not incur indebtedness unless the "leverage ratio" would be less than 4 to 1. The leverage ratio is the ratio of the
consolidated principal amount of net debt outstanding to four times operating income. Even if Millicom ceases to meet the leverage ratio requirement, it may incur debt under several "debt baskets" set
out in the indenture governing the 10% Notes.

On
August 7, 2003, Millicom Telecommunications S.A., Millicom's wholly-owned subsidiary, issued for an aggregate value of SEK 2,555,994,000 (approximately $310 million)
Mandatory Exchangeable Notes (the "5% Mandatory Exchangeable Notes"), which are exchangeable into Tele2 AB series B shares. The 5% Mandatory Exchangeable Notes may be exchanged either
voluntarily at the option of the noteholders or mandatorily by Millicom Telecommunications S.A. as described below. The 5% Mandatory Exchangeable Notes will be exchangeable for an aggregate of up to
8,968,400 Tele2 AB series B shares which Millicom beneficially owned through Millicom Telecommunications. The number of Tele2 shares that Millicom Telecommunications is obligated to deliver is
based on a formula that takes into account the market price of the Tele2 shares prior to any exchange. Under the formula, Millicom Telecommunications could retain up to 30% of the increase in value of
the Tele2 shares over the designated reference price of SEK 285 per share. As a result, at August 6, 2006 or earlier if all of the 5% Mandatory Exchangeable Notes have been redeemed and
exchanged prior to that date, Millicom Telecommunications may own up to approximately 23% of the 8,968,400 Tele2 AB series B shares underlying the 5% Mandatory Exchangeable Notes.

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The 5% Mandatory Exchangeable Notes may be exchanged voluntarily at the option of the noteholders at any time during the period commencing on September 17, 2003 and ending on the
25th trading day prior to August 7, 2006, which is expected to be July 11, 2006. In addition, the 5% Mandatory Exchangeable Notes may be exchanged voluntarily at the option of the holder
in the event of certain changes in tax laws and in the event of a takeover offer in respect of Tele2 AB. Dividends, if any, paid by Tele2 AB would be attributed to the 5% Mandatory Exchangeable Notes
holders.

Unless
otherwise previously redeemed and exchanged or purchased and cancelled, each 5% Mandatory Exchangeable Note will be mandatorily exchanged by Millicom Telecommunications on
August 7, 2006.

The
5% Mandatory Exchangeable Notes bear interest on the U.S. dollar equivalent amount of each note at a rate of 5% per annum payable semi-annually on February 7 and
August 7 of each year. The effective interest rate is 8.45%. As of December 31, 2004 the carrying amount of the 5% Mandatory Exchangeable Notes net of unamortized financing fees was
$365,006,000 (2003: $327,635,000). In 2004, an exchange loss of $27,550,000 (2003: $41,820,000) was recognized on the 5% Mandatory Exchangeable Notes.

As
part of the financing, Millicom purchased U.S. treasury strips with a nominal value of $46,470,000 which will be used to settle the interest payments.

The
5% Mandatory Exchangeable Notes include an embedded derivative, which is valued separately. The embedded derivative, which reflects Millicom's limited right to participate in the
increase in value of the Tele2 shares, is recorded at fair value, taking into account time and volatility factors. As of December 31, 2004 and 2003, the fair value of the embedded derivative
amounted to an asset of $45,255,000 and a liability of $103,457,000 respectively, with the variation for the year ended December 31, 2004 amounting to a gain of $148,712,000 and for the period
from August 7, 2003 to December 31, 2003 amounting to a gain of $84,578,000, each recorded under the caption "Fair value result on financial instruments".

Exchange Controls

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



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, residents or domiciliaries of the United States. The following is intended merely as a general summary of the principal tax consequences of the receipt,
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.

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Luxembourg Taxation

Because the Company is a Luxembourg corporation, domestic Luxembourg law generally imposes a 20% withholding tax on dividends paid by the Company under certain
circumstances. Certain reduced rates of withholding tax, or exemptions from withholding tax, are available under provisions of domestic Luxembourg law and bilateral tax treaties entered into between
Luxembourg and various other
countries. Investors should consult their tax advisors with respect to the possible availability of such reduced rates or exemptions.

United States Investors



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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 to which we are exposed is principally a function of our long-term debt. To alleviate this risk, we obtain both
fixed-rate and floating-rate debt.

The
table below summarizes, as at December 31, 2004, our fixed rate debt and floating rate debt.

|                    |  | Amounts due within |  
|------------------- |  | ------------------ | -
|
|
|Fixed rate:         |  |                    |  
|US dollar           |  | 10,545             |  
|Av Int rate         |  | 5.7                | %
|MTSA (SEK)          |  |                   |  
|Mauritius           |  | 8                  |  
|Paraguay            |  | 11,543             |  
|Senegal             |  | 16,148             |  
|Local currency      |  | 27,699             |  
|Av Int rate         |  | 10.2               | %
|Total fixed rate    |  | 38,244             |  
|Floating rate:      |  |                    |  
|US dollar           |  | 21,125             |  
|Av Int rate         |  | 5.2                | %
|Guatemala           |  |                   |  
|Mauritius           |  | 1,436              |  
|Pakistan            |  | 13,345             |  
|Sri Lanka           |  | 485                |  
|Tanzania            |  | 5,213              |  
|Vietnam             |  | 8,663              |  
|Local currency      |  | 29,142             |  
|Av Int rate         |  | 8.7                | %
|Total floating rate |  | 50,267             |  
|Total               |  | 88,511             |  

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The table below summarizes, as at December 31, 2003, our fixed rate debt and floating rate debt.

|                    |  | Amounts due within |  
|------------------- |  | ------------------ | -
|
|
|Fixed rate:         |  |                    |  
|US dollar           |  | 45,019             |  
|Av Int rate         |  | 3.2                | %
|MTSA (SEK)          |  |                   |  
|Pakistan            |  | 8,944              |  
|Paraguay            |  | 3,551              |  
|Sri Lanka           |  | 876                |  
|Senegal             |  | 7,466              |  
|Local currency      |  | 20,837             |  
|Av Int rate         |  | 8.4                | %
|Total fixed rate    |  | 65,856             |  
|Floating rate:      |  |                    |  
|US dollar           |  | 38,823             |  
|Av Int rate         |  | 6.2                | %
|Guatemala           |  |                   |  
|Mauritius           |  | 2,163              |  
|Pakistan            |  | 4,984              |  
|Sri Lanka           |  | 7,661              |  
|Tanzania            |  | 709                |  
|Vietnam             |  | 12,468             |  
|Local currency      |  | 27,985             |  
|Av Int rate         |  | 7.7                | %
|Total floating rate |  | 66,808             |  
|Total               |  | 132,664            |  

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.

Included
in the total for U.S. dollar fixed-rate balances in 2004 above is $901,635,000 in respect of the book value of 10% Senior Notes and the 5% Mandatory Exchangeable
Notes for which the fair value as of December 31, 2004 is $892,823,000,. For all other amounts, the fair value is taken to be the book value as stated above.

Exchange Rate Risk

We are exposed to fluctuations of the U.S. dollar against certain other currencies. We publish our financial statements in U.S. dollars while a significant
proportion of our assets, liabilities, sales and costs are denominated in other currencies. We conduct our business in 16 different currencies.

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. For the years ended December 31, 2004, 2003 and 2002, we suffered exchange losses of $26,796,000, $45,602,000 and $23,483,000 respectively. In
2004 and 2003 the main portion of the exchange loss related to the revaluation of the 5% Mandatory Exchangeable Notes

109

---



which
are denominated in Swedish Krona. 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.

At
the venture level, we seek to reduce our foreign exchange exposure arising from transactions through a policy of matching, as far as possible, assets and liabilities. In some cases,
we may borrow in U.S. dollars either because it is advantageous for ventures to incur debt obligations in U.S. dollars or because dollar denominated borrowing is the only funding source available to a
venture. In these circumstances, we decided to accept the inherent currency risk, principally because of the relatively high cost of buying, or inability to buy, forward cover in currencies of the
countries in which we operate. See Note 2 of the "Notes to the Consolidated Financial Statements".

The
following table summarizes our debt detailing the balances at December 31, 2004, that were denominated in U.S. dollars and that in other local currencies.

|               |  | Amounts due within
|-------------- |  | ------------------
|
|
|US dollar      |  | 31,670            
|MTSA (SEK)     |  |                  
|Guatemala      |  |                  
|Mauritius      |  | 1,444             
|Pakistan       |  | 13,345            
|Paraguay       |  | 11,543            
|Senegal        |  | 16,148            
|Sri Lanka      |  | 485               
|Tanzania       |  | 5,213             
|Vietnam        |  | 8,663             
|Local currency |  | 56,841            
|Total          |  | 88,511            

The following table summarizes our debt detailing the balances at December 31, 2003, that were denominated in U.S. dollars and that in
other local currencies.

|               |  | Amounts due within
|-------------- |  | ------------------
|
|
|US dollar      |  | 83,842            
|MTSA (SEK)     |  |                  
|Guatemala      |  |                  
|Mauritius      |  | 2,163             
|Pakistan       |  | 13,928            
|Paraguay       |  | 3,551             
|Senegal        |  | 7,466             
|Sri Lanka      |  | 8,537             
|Tanzania       |  | 709               
|Vietnam        |  | 12,468            
|Local currency |  | 48,822            
|Total          |  | 132,664           

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

110

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PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15.    CONTROLS AND PROCEDURES

As of December 31, 2004, the Company, under the supervision and with the participation of the Company's management, including the Chief Executive Officer,
the Chief Financial Controller and the Chief of FinanceGlobal Operations, performed an evaluation of the effectiveness of the Company's disclosure controls and procedures. The Company'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 Company's
management to allow timely decisions regarding required disclosures. The Company'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 Company's Chief Executive Officer, Chief Financial Controller and
Chief of FinanceGlobal Operations concluded that the Company's disclosure controls and procedures are effective at the reasonable assurance level for recording, processing, summarizing
and reporting the information the Company 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.

There
has been no change in the Company'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.

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 Controller and Chief of FinanceGlobal Operations 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., 75 Route de Longwy,
L-8080 Bertrange, Grand-Duchy of Luxembourg, fax: + 352 27 759 359.

111

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ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table summarizes the aggregate amounts paid to Millicom's auditors for the years ended December 31, 2004 and 2003.

|                   |  | 2004      |  | 2003     
|------------------ |  | --------- |  | ---------
|Audit Fees         |  | 1,768,735 |  | 2,265,498
|Audit-Related Fees |  | 4,010     |  | 4,010    
|Tax Fees           |  | 41,724    |  | 90,952   
|All Other Fees     |  | 3,500     |  | 19,796   
|Total              |  | 1,817,969 |  | 2,380,256

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

Consistent with SEC policies regarding auditor independence, the Audit Committee has revised its policies and procedures relating to pre-approval of
audit and non-audit services. The policies and procedures now provide that no non-audit services can be rendered by Millicom's auditors without the prior consent of the Audit
Committee.

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

Not applicable.

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

Not applicable.

112

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PART III

ITEM 17.    FINANCIAL STATEMENTS

Not applicable.

ITEM 18.    FINANCIAL STATEMENTS

See pages F-1 through F-83.

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  |  | Trust Deed, dated August 7, 2003 between Millicom Telecommunications S.A., Millicom International Cellular S.A. and Deutsche Trustee Company Limited.*                                                                                                                                                                             
|2.3  |  | 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 13, 2005, respectively).
|4.1. |  | Business Co-Operation Contract dated June 2, 1994, as amended, among Vietnam Mobile Services Co., Industriforvaltnings AB Kinnevik and Comvik International Vietnam AB.**                                                                                                                                                          
|7.1  |  | Explanation of the calculation of (loss) earnings per share.*                                                                                                                                                                                                                                                                      
|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 Bruno Nieuwland required by Exchange Act Rule 13a-14(a).                                                                                                                                                                                                                                                          
|12.3 |  | Certification of Judy Tan required by Exchange Act Rule 13a-14(a).                                                                                                                                                                                                                                                                 
|13.1 |  | Certification of Marc Beuls, Bruno Nieuwland and Judy Tan required by Exchange Act Rule 13a-14(b).                                                                                                                                                                                                                                 
|14.1 |  | Consent of PricewaterhouseCoopers S. à r. l. to the incorporation by reference of their report dated May 2, 2005 in the Company's Registration Statement on Form F-3 (No. 333-111779).                                                                                                                                             

---

113

---





INDEX TO FINANCIAL STATEMENTS

|Audited Consolidated Financial Statements of Millicom and its Subsidiaries for the Years Ended December 31, 2004, 2003 and 2002 |  |    
|------------------------------------------------------------------------------------------------------------------------------- |  | ---
|Report of Independent Registered Public Accounting Firm                                                                         |  | F-2
|Consolidated Balance Sheets as of December 31, 2004 and 2003                                                                    |  | F-3
|Consolidated Statements of Profit and Loss for the Years ended December 31, 2004, 2003 and 2002                                 |  | F-5
|Consolidated Statements of Cash Flows for the Years ended December 31, 2004, 2003 and 2002                                      |  | F-6
|Consolidated Statements of Changes in Shareholders' Equity for the Years ended December 31, 2004, 2003 and 2002                 |  | F-7
|Notes to the Consolidated Financial Statements including reconciliation to U.S. GAAP (Note 32)                                  |  | F-8

F-1

---



LOGO

| |  | PricewaterhouseCoopers
Société à responsabilité limitée
Réviseur d'entreprises400, route d'Esch
B.P. 1443
L-1014 Luxembourg
Téléphone +352 494848-1
Facsimile +352 494848-2900
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Report of Independent Registered Public Accounting Firm

To
the shareholders of Millicom International Cellular S.A.

We
have audited the accompanying consolidated balance sheets of Millicom International Cellular S.A. and its subsidiaries as of December 31, 2004 and 2003, and the related consolidated
statements of profit and loss, changes in shareholders' equity and cash flows for the three years ended December 31, 2004, 2003 and 2002. These consolidated financial statements are the
responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Millicom International Cellular S.A. and its subsidiaries as
of December 31, 2004 and 2003, and the results of their operations, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2004, in
conformity with International Financial Reporting Standards as published by the International Accounting Standards Board.

International
Financial Reporting Standards vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and
effect of such differences is presented in Note 32 to the consolidated financial statements.

|                                                       |  |                        
|------------------------------------------------------ |  | -----------------------
|                                                       |  |                        
|PricewaterhouseCoopers S.à r.l.
Réviseur d'entreprises |  | Luxembourg, May 2, 2005

F-2

---





Millicom International Cellular S.A.        Consolidated balance sheets        As of December 31, 2004 and 2003

|                                                           |                                                            | Notes |    | 2004      |         | 2003     
|---------------------------------------------------------- | ---------------------------------------------------------- | ----- | -- | --------- | ------- | ---------
|
|ASSETS                                                     |                                                            |       |    |           |         |          
|NON-CURRENT ASSETS                                         |                                                            |       |    |           |         |          
|Intangible assets                                          |                                                            |       |    |           |         |          
|                                                           | Goodwill, net                                              |       | 4  |           | 37,702  |          
|                                                           | Licenses, net                                              |       | 5  |           | 277,705 |          
|                                                           | Other intangible assets, net                               |       | 6  |           | 2,561   |          
|Property, plant and equipment, net                         |                                                            | 7     |    | 575,649   |         | 489,543  
|Financial assets                                           |                                                            |       |    |           |         |          
|                                                           | Investment in Tele2 AB shares                              |       | 8  |           | 351,882 |          
|                                                           | Investment in other securities                             |       | 9  |           | 10,540  |          
|                                                           | Investments in associates                                  |       | 3  |           | 2,220   |          
|                                                           | Embedded derivative on the 5% Mandatory Exchangeable Notes |       | 18 |           | 45,255  |          
|                                                           | Pledged deposits                                           |       | 11 |           | 25,544  |          
|Deferred taxation                                          |                                                            | 24    |    | 5,883     |         | 5,226    
|                                                           |                                                            |       |    |           |         |          
|TOTAL NON-CURRENT ASSETS                                   |                                                            |       |    | 1,334,941 |         | 1,108,149
|                                                           |                                                            |       |    |           |         |          
|CURRENT ASSETS                                             |                                                            |       |    |           |         |          
|Financial assets                                           |                                                            |       |    |           |         |          
|                                                           | Investment in other securities                             |       | 9  |           | 15,327  |          
|Inventories                                                |                                                            | 12    |    | 16,304    |         | 10,941   
|Trade receivables, net                                     |                                                            | 13    |    | 141,972   |         | 113,750  
|Amounts due from joint ventures and joint venture partners |                                                            | 3     |    | 11,715    |         | 13,137   
|Amounts due from other related parties                     |                                                            | 30    |    | 2,067     |         | 2,905    
|Prepayments and accrued income                             |                                                            |       |    | 36,875    |         | 19,739   
|Other current assets                                       |                                                            | 14    |    | 62,377    |         | 49,583   
|Pledged deposits                                           |                                                            |       |    | 9,260     |         | 7,745    
|Time deposits                                              |                                                            | 15    |    | 610       |         | 32,880   
|Cash and cash equivalents                                  |                                                            | 16    |    | 413,381   |         | 148,829  
|                                                           |                                                            |       |    |           |         |          
|TOTAL CURRENT ASSETS                                       |                                                            |       |    | 709,888   |         | 414,800  
|                                                           |                                                            |       |    |           |         |          
|TOTAL ASSETS                                               |                                                            |       |    | 2,044,829 |         | 1,522,949
|                                                           |                                                            |       |    |           |         |          

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

F-3

---



|                                           |                                                            | Notes |    | 2004      |          | 2003      |         
|------------------------------------------ | ---------------------------------------------------------- | ----- | -- | --------- | -------- | --------- | --------
|
|SHAREHOLDERS' EQUITY
AND LIABILITIES       |                                                            |       |    |           |          |           |         
|SHAREHOLDERS' EQUITY                       |                                                            | 17    |    |           |          |           |         
|                                           | Share capital and premium                                  |       |    |           | 513,782  |           | 239,876 
|                                           | Treasury stock                                             |       |    |           | (8,833   | )         | (8,833  
|                                           | 2% PIK Notesequity component                              |       |    |           |         |           | 16,006  
|                                           | Legal reserve                                              |       |    |           | 13,577   |           | 4,256   
|                                           | Retained losses brought forward                            |       |    |           | (276,608 | )         | (446,110
|                                           | Net profit for the year                                    |       |    |           | 68,241   |           | 178,823 
|                                           | Currency translation reserve                               |       |    |           | (71,116  | )         | (69,198 
|                                           |                                                            |       |    |           |          |           |         
|TOTAL SHAREHOLDERS' EQUITY                 |                                                            |       |    | 239,043   |          | (85,180   | )       
|                                           |                                                            |       |    |           |          |           |         
|Minority interest                          |                                                            |       |    | 43,351    |          | 26,571    |         
|                                           |                                                            |       |    |           |          |           |         
|LIABILITIES                                |                                                            |       |    |           |          |           |         
|NON-CURRENT LIABILITIES                    |                                                            |       |    |           |          |           |         
|                                           | 10% Senior Notes                                           |       | 18 |           | 536,629  |           | 536,036 
|                                           | 2% PIK Notesdebt component                                |       | 18 |           |         |           | 50,923  
|                                           | 5% Mandatory Exchangeable Notesdebt component             |       | 18 |           | 365,006  |           | 327,635 
|                                           | Embedded derivative on the 5% Mandatory Exchangeable Notes |       | 18 |           |         |           | 103,457 
|                                           | Other debt and financing                                   |       | 18 |           | 124,267  |           | 126,150 
|                                           | Other non-current liabilities                              |       | 19 |           | 194,774  |           |        
|                                           | Deferred taxation                                          |       | 24 |           | 39,216   |           | 38,006  
|                                           |                                                            |       |    |           |          |           |         
|TOTAL NON-CURRENT LIABILITIES              |                                                            |       |    | 1,259,892 |          | 1,182,207 |         
|                                           |                                                            |       |    |           |          |           |         
|CURRENT LIABILITIES                        |                                                            |       |    |           |          |           |         
|                                           | Other debt and financing                                   |       | 18 |           | 88,511   |           | 132,664 
|                                           | Trade payables                                             |       |    |           | 173,969  |           | 107,424 
|                                           | Amounts due to joint ventures                              |       | 3  |           | 7,760    |           | 5,340   
|                                           | Amounts due to other related parties                       |       | 30 |           | 975      |           | 608     
|                                           | Accrued interest and other expenses                        |       |    |           | 55,203   |           | 44,673  
|                                           | Other current liabilities                                  |       | 19 |           | 176,125  |           | 108,642 
|                                           |                                                            |       |    |           |          |           |         
|TOTAL CURRENT LIABILITIES                  |                                                            |       |    | 502,543   |          | 399,351   |         
|                                           |                                                            |       |    |           |          |           |         
|TOTAL LIABILITIES                          |                                                            |       |    | 1,762,435 |          | 1,581,558 |         
|                                           |                                                            |       |    |           |          |           |         
|TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES |                                                            |       |    | 2,044,829 |          | 1,522,949 |         
|                                           |                                                            |       |    |           |          |           |         

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

F-4

---





Millicom International Cellular S.A.        Consolidated statements of profit and loss        for the years ended December 31, 2004, 2003 and 2002

|                                                                    |  | Notes |  | 2004     |   | 2003     |   | 2002     |  
|------------------------------------------------------------------- |  | ----- |  | -------- | - | -------- | - | -------- | -
|
|Revenues                                                            |  | 20    |  | 921,466  |   | 647,104  |   | 605,186  |  
|Cost of sales                                                       |  | 20,23 |  | (388,334 | ) | (258,002 | ) | (259,530 | )
|                                                                    |  |       |  |          |   |          |   |          |  
|GROSS PROFIT                                                        |  |       |  | 533,132  |   | 389,102  |   | 345,656  |  
|Sales and marketing                                                 |  |       |  | (122,705 | ) | (87,575  | ) | (80,941  | )
|General and administrative expenses                                 |  | 23    |  | (127,400 | ) | (108,449 | ) | (186,491 | )
|Gain (loss) from sale of subsidiaries and joint ventures, net       |  | 23    |  | (2,207   | ) | 2,213    |   | 88,814   |  
|Other operating expenses                                            |  | 4, 23 |  | (35,225  | ) | (32,776  | ) | (44,725  | )
|Other operating income                                              |  | 29    |  | 3,287    |   |         |   |         |  
|                                                                    |  |       |  |          |   |          |   |          |  
|OPERATING PROFIT                                                    |  |       |  | 248,882  |   | 162,515  |   | 122,313  |  
|Gain (loss) and valuation movement on investment in securities      |  | 8,9   |  | (126,957 | ) | 246,760  |   | (299,963 | )
|Interest expense                                                    |  | 18    |  | (108,534 | ) | (135,172 | ) | (185,959 | )
|Interest income                                                     |  |       |  | 7,706    |   | 4,836    |   | 12,726   |  
|Other financial income                                              |  | 18    |  |         |   | 96,748   |   | 42,247   |  
|Fair value result on financial instruments                          |  | 10,18 |  | 148,816  |   | (84,578  | ) | (7,858   | )
|Exchange loss, net                                                  |  | 18    |  | (26,796  | ) | (45,602  | ) | (23,483  | )
|Profit from associates                                              |  | 3     |  | 814      |   | 380      |   | 62       |  
|                                                                    |  |       |  |          |   |          |   |          |  
|PROFIT (LOSS) BEFORE TAX                                            |  |       |  | 143,931  |   | 245,887  |   | (339,915 | )
|Charge for taxes                                                    |  | 24    |  | (58,900  | ) | (52,369  | ) | (22,734  | )
|                                                                    |  |       |  |          |   |          |   |          |  
|PROFIT (LOSS) AFTER TAX                                             |  |       |  | 85,031   |   | 193,518  |   | (362,649 | )
|Minority interest                                                   |  |       |  | (16,790  | ) | (14,695  | ) | (22,494  | )
|                                                                    |  |       |  |          |   |          |   |          |  
|NET PROFIT (LOSS) FOR THE YEAR                                      |  |       |  | 68,241   |   | 178,823  |   | (385,143 | )
|                                                                    |  |       |  |          |   |          |   |          |  
|Earnings per share for the year (expressed in US$ per common share) |  | 31    |  |          |   |          |   |          |  
|Basic                                                              |  |       |  | 0.82     |   | 2.74     |   | (5.90    | )
|                                                                    |  |       |  |          |   |          |   |          |  
|Diluted                                                            |  |       |  | 0.77     |   | 2.26     |   | (5.90    | )
|                                                                    |  |       |  |          |   |          |   |          |  

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

F-5

---





Millicom International Cellular S.A.        Consolidated statements of cash flows        for the years ended December 31, 2004, 2003 and 2002

|                                                                                    |  | Notes |  | 2004     |   | 2003     |   | 2002     |  
|----------------------------------------------------------------------------------- |  | ----- |  | -------- | - | -------- | - | -------- | -
|
|Cash flows from operating activities                                                |  |       |  |          |   |          |   |          |  
|Net cash provided by operating activities                                           |  | 25    |  | 303,243  |   | 184,322  |   | 67,279   |  
|                                                                                    |  |       |  |          |   |          |   |          |  
|Cash flow from investing activities                                                 |  |       |  |          |   |          |   |          |  
|Acquisition of subsidiaries and joint ventures, net of cash acquired                |  | 26    |  | (1,006   | ) | 1,028    |   | (2,000   | )
|Cash impact of change in consolidation method                                       |  |       |  | 12       |   | 112      |   |         |  
|Proceeds from the disposal of subsidiaries and joint ventures, net of cash disposed |  | 27    |  | 961      |   | 8,848    |   | 135,071  |  
|Purchase of intangible assets                                                       |  |       |  | (38,891  | ) | (3,569   | ) | (5,205   | )
|Purchase of financial assets                                                        |  | 9     |  |         |   | (45,328  | ) | (186     | )
|Proceeds from the disposal of financial assets                                      |  | 8, 9  |  | 15,490   |   | 41,036   |   | 167,082  |  
|Purchase of property, plant and equipment                                           |  |       |  | (197,873 | ) | (86,452  | ) | (135,818 | )
|Proceeds from the sale of property, plant and equipment                             |  |       |  | 82       |   | 3,296    |   | 307      |  
|Advances made to joint ventures and joint venture partners                          |  |       |  | (4,153   | ) | (1,893   | ) | (7,436   | )
|Repayment of advances to joint ventures and joint venture partners                  |  |       |  | 5,752    |   | 2,758    |   | 305      |  
|Advances from joint ventures                                                        |  |       |  | 2,420    |   | 38       |   | 5,302    |  
|Purchase of pledged deposits                                                        |  |       |  | (9,045   | ) | (9,228   | ) | (30,958  | )
|Disposal of pledged deposits                                                        |  |       |  | 6,686    |   | 11,599   |   | 14,452   |  
|Purchase of time deposits                                                           |  |       |  | (12      | ) | (30,079  | ) | (11,890  | )
|Disposal of time deposits                                                           |  |       |  | 32,430   |   | 12,283   |   | 17,941   |  
|                                                                                    |  |       |  |          |   |          |   |          |  
|Net cash (used) provided by investing activities                                    |  |       |  | (187,147 | ) | (95,551  | ) | 146,967  |  
|                                                                                    |  |       |  |          |   |          |   |          |  
|Cash flow from financing activities                                                 |  |       |  |          |   |          |   |          |  
|Proceeds from issuance of shares                                                    |  |       |  | 205,920  |   |         |   |         |  
|Proceeds from issuance of debt and financing                                        |  |       |  | 102,156  |   | 969,607  |   | 182,828  |  
|Repayment of debt and financing                                                     |  |       |  | (155,071 | ) | (899,008 | ) | (363,584 | )
|Cash outflows related to debt restructuring                                         |  |       |  |         |   | (68,068  | ) |         |  
|Payment of dividends to minority interests                                          |  |       |  | (3,163   | ) | (12,541  | ) | (16,536  | )
|Payments to shareholders                                                            |  |       |  |         |   | (1,628   | ) |         |  
|Net purchase of treasury stocks                                                     |  |       |  |         |   |         |   | (2,488   | )
|                                                                                    |  |       |  |          |   |          |   |          |  
|Net cash (used) provided by financing activities                                    |  |       |  | 149,842  |   | (11,638  | ) | (199,780 | )
|                                                                                    |  |       |  |          |   |          |   |          |  
|Exchange gains/(losses) on cash and cash equivalents                                |  |       |  | (1,386   | ) | 1,245    |   | (291     | )
|Net increase in cash and cash equivalents                                           |  |       |  | 264,552  |   | 78,378   |   | 14,175   |  
|Cash and cash equivalents at beginning of year                                      |  |       |  | 148,829  |   | 70,451   |   | 56,276   |  
|                                                                                    |  |       |  |          |   |          |   |          |  
|Cash and cash equivalents at end of year                                            |  |       |  | 413,381  |   | 148,829  |   | 70,451   |  
|                                                                                    |  |       |  |          |   |          |   |          |  

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

F-6

---





Millicom International Cellular S.A.        Consolidated statements of changes in shareholders' equity        for the years ended December 31, 2004, 2003 and 2002

|                                                      |  | Number of shares(iv) |   | Number
of shares held in the Group(iv) |   | Share capital |   | Share premium |   | Treasury stock |   | 2% PIK Notes(ii) |   | Accumulated
profit and
loss account |   | Other reserves(i) |   | Total    |  
|----------------------------------------------------- |  | -------------------- | - | -------------------------------------- | - | ------------- | - | ------------- | - | -------------- | - | ---------------- | - | ----------------------------------- | - | ----------------- | - | -------- | -
|
|Balance as of January 1, 2002                         |  | 94,833               |   | (29,180                                | ) | 142,249       |   | 139,740       |   | (52,033        | ) |                 |   | (57,719                             | ) | (103,343          | ) | 68,894   |  
|Shares purchased during the year                      |  |                     |   | (515                                   | ) |              |   |              |   | (2,488         | ) |                 |   |                                    |   |                  |   | (2,488   | )
|Loss for the year                                     |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   | (385,143                            | ) |                  |   | (385,143 | )
|Prolonged decrease in market value of Tele2 AB shares |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   |                                    |   | 61,325            |   | 61,325   |  
|Movement in currency translation reserve              |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   |                                    |   | (37,847           | ) | (37,847  | )
|                                                      |  |                      |   |                                        |   |               |   |               |   |                |   |                  |   |                                     |   |                   |   |          |  
|Balance as of December 31, 2002                       |  | 94,833               |   | (29,695                                | ) | 142,249       |   | 139,740       |   | (54,521        | ) |                 |   | (442,862                            | ) | (79,865           | ) | (295,259 | )
|Effect of consolidation of El Salvador                |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   | (3,248                              | ) |                  |   | (3,248   | )
|Profit for the year                                   |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   | 178,823                             |   |                  |   | 178,823  |  
|Issuance of 2% PIK Notesequity component             |  |                     |   |                                       |   |              |   |              |   |               |   | 16,248           |   |                                    |   |                  |   | 16,248   |  
|Disposal/Cancellation of treasury stock               |  | (28,863              | ) | 29,040                                 |   | (43,294       | ) |              |   | 45,688         |   |                 |   |                                    |   |                  |   | 2,394    |  
|Conversion of 2% PIK Notes                            |  | 350                  |   |                                       |   | 524           |   | 657           |   |               |   | (242             | ) |                                    |   |                  |   | 939      |  
|Movement in currency translation reserve              |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   |                                    |   | 14,923            |   | 14,923   |  
|                                                      |  |                      |   |                                        |   |               |   |               |   |                |   |                  |   |                                     |   |                   |   |          |  
|Balance as of December 31, 2003                       |  | 66,320               |   | (655                                   | ) | 99,479        |   | 140,397       |   | (8,833         | ) | 16,006           |   | (267,287                            | ) | (64,942           | ) | (85,180  | )
|Profit for the year                                   |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   | 68,241                              |   |                  |   | 68,241   |  
|Conversion/Redemption of 2% PIK Notes                 |  | 23,230               |   |                                       |   | 34,845        |   | 33,141        |   |               |   | (16,006          | ) |                                    |   |                  |   | 51,980   |  
|Issuance of shares(iii)                               |  | 9,000                |   |                                       |   | 13,500        |   | 195,660       |   |               |   |                 |   |                                    |   |                  |   | 209,160  |  
|Shares issued via the exercise of stock options       |  | 669                  |   |                                       |   | 1,004         |   | 1,864         |   |               |   |                 |   |                                    |   |                  |   | 2,868    |  
|Transaction costs on issuance of shares               |  |                     |   |                                       |   |              |   | (6,108        | ) |               |   |                 |   |                                    |   |                  |   | (6,108   | )
|Transfer to legal reserve                             |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   | (9,321                              | ) | 9,321             |   |         |  
|Movement in currency translation reserve              |  |                     |   |                                       |   |              |   |              |   |               |   |                 |   |                                    |   | (1,918            | ) | (1,918   | )
|                                                      |  |                      |   |                                        |   |               |   |               |   |                |   |                  |   |                                     |   |                   |   |          |  
|Balance as of December 31, 2004                       |  | 99,219               |   | (655                                   | ) | 148,828       |   | 364,954       |   | (8,833         | ) |                 |   | (208,367                            | ) | (57,539           | ) | 239,043  |  
|                                                      |  |                      |   |                                        |   |               |   |               |   |                |   |                  |   |                                     |   |                   |   |          |  

---

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

F-7

---





Millicom International Cellular S.A.    Notes to the consolidated financial statements    As of December 31, 2004, 2003 and 2002

1. ORGANIZATION

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 cellular telephone services in the world's emerging markets. As of December 31, 2004, Millicom has interests in 17 cellular
systems in 16 countries, focusing on emerging markets in South East Asia, South Asia, Central America, South America and Africa. The Company's shares are traded on the NASDAQ National Market under the
symbol MICC, on Stockholmsbörsen (the Stock Exchange in Stockholm, Sweden) and on the Luxembourg stock exchange under the symbol MIC. The Company has its registered office at
75, Route de Longwy, L-8080, Bertrange, Grand-Duchy of Luxembourg and is registered with the Luxembourg Register of Commerce under the number
RCS B 40 630.

Millicom's
cellular telephone interests operate through strategic entities in the following geographic regions of the world (Note 3):



In
2004, Millicom sold its interest in its operation in Argentina and in 2003 its interest in its operation in Colombia. In 2002, Millicom disposed of MIC Systems, including MACH, its
GSM clearing-house, and disposed of its operation in the Philippines.

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 cellular joint ventures to form
the Group. During 1992, the Group was restructured under a new ultimate parent company, maintaining the same name. On December 31, 1993, Millicom Inc. was merged ("the Merger") into a
wholly owned subsidiary of Millicom, MIC-USA Inc. ("MIC-USA") a Delaware corporation, and the outstanding shares of Millicom Inc.'s common stock were exchanged
for approximately 46.5% of Millicom's common stock outstanding at that time.

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES

Basis of preparation

The consolidated financial statements of the Group are presented in U.S. dollars and have been prepared in accordance with International Financial Reporting
Standards ("IFRS") as published by the International Accounting Standards Board ("IASB"). The consolidated financial statements have been prepared under the historical cost convention as modified by
the revaluation of certain financial assets and liabilities. These consolidated financial statements are not prepared for the purposes of statutory filing.

The
preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets

F-8

---



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 those estimates.

Changes in accounting policies in 2003

The consolidated financial statements as of December 31, 2004 are prepared in accordance with consolidation and accounting policies consistent with the
consolidated financial statements as of December 31, 2003 and December 31, 2002, except for the accounting policy with respect to the unrealised gains and losses of
available-for-sale securities. Prior to January 1, 2003 these gains or losses were recorded within shareholders' equity under a caption "revaluation reserve". When the
securities were sold, impaired or there was a significant and prolonged decline in the fair value below acquisition cost, the accumulated fair value adjustments were included in the consolidated
statements of profit and loss as gains or losses on investment securities.

As
from January 1, 2003 management determined that it was more appropriate to record the change in fair value of available-for-sale securities in the
consolidated statements of profit and loss. Accordingly the Board of Directors decided to change the accounting policy for fair value adjustments of available-for-sale
securities and to record these adjustments in the consolidated statement of profit and loss as from January 1, 2003. Millicom adopted the allowed alternative treatment for change in accounting
policy as defined in IAS 8"Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies", which requires any adjustment
resulting from retrospective application of the change in accounting policy to be included in the determination of the net profit or loss for the current period. Because Millicom recorded an
impairment loss in the statement of profit and loss based on the value of available-for-sale securities as of December 31, 2002, only the change in value from
January 1 to December 31, 2003 has been recorded to reflect the change in accounting principle at December 31, 2003. Had Millicom applied the same accounting principle in prior
years the retained losses and losses for the year ended December 31, 2002 would have been as follows:

2002US$ '000Net loss as reported for the year

(385,143
)Effect of change in accounting policy with respect to the fair value adjustments of available-for-sale securities

61,325Net loss as adjusted for the year

(323,818
)Adjusted basic earnings per share for the year (expressed in U.S.$ per share)

(4.96
)


The
reconciliation between retained losses as previously reported and retained losses as adjusted is as follows:

2002US$ '000Retained losses as reported as of January 1, 2002

(57,719
)Effect of change in accounting policy with respect to the fair value adjustments of available-for-sale securities

(61,325
)Retained losses as adjusted as of January 1, 2002

(119,044
)Net loss as adjusted for the year

(323,818
)Retained losses as of December 31, 2002

(442,862
)


F-9

---



Consolidation and accounting policies

The consolidated financial statements are prepared in accordance with the following significant consolidation and accounting policies:

a) Group accounting



Subsidiaries, which are those entities (including Special Purpose Entities) controlled by the Group are consolidated. Control is presumed to exist when the Group
has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies.

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 consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase 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, shares issued or liabilities undertaken at the date
of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the Group's share of the fair value of the net assets of the subsidiary acquired is
recorded as goodwill. See Note 2(c) and Note 2(x) for the accounting policy on goodwill and business combinations that occurred on or after March 31, 2004.
Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated; unrealized losses are also eliminated unless cost cannot be recovered. Where necessary,
accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group.



Entities that are jointly controlled are consolidated using the proportional method which combines the Group's assets, liabilities, income and expenses with the
Group's share of the assets, liabilities, income and expenses of the joint ventures in which the Group has an interest.

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 recognize its share of profits or losses from the joint venture 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 recognized immediately.



Investments in associates are accounted for using the equity method of accounting. Under this method the Company's share of the post-acquisition
profits or losses of associates is recognized in the consolidated statements of profit and loss. The cumulative post-acquisition movements are adjusted against the cost of the investment.
Associates are entities over which the Group generally holds between 20% and 50% of the voting rights, or in which the Group has significant influence, but which it does not control. Unrealized gains
on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates; unrealized losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. The Group's investment in associates includes goodwill (net of accumulated amortization) on acquisition. When the Group's share of losses in an
associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the associates.

F-10

---



b) Foreign currency translation



The presentation currency of the Group is the U.S. dollar. The Company is located in Luxembourg and its subsidiaries, joint ventures and associates operate in
different currencies. The measurement currency of the Company is the U.S. dollar because of the significant influence of the U.S. dollar on its operations. The measurement currency of each subsidiary,
joint venture and associates reflects the economic substance of the underlying events and circumstances of these entities and is determined in accordance with the requirements of SIC 19 'Reporting
CurrencyMeasurement and Presentation of Financial Statements under IAS 21 and IAS 29'.



In the financial statements of the Group's entities, transactions denominated in currencies other than the measurement currency are recorded in the measurement
currency at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in currencies other than the measurement currency are reported at the exchange rates
prevailing at the year-end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the consolidated
statements of profit and loss.

For
the purposes of consolidating joint ventures and subsidiaries with measurement currencies other than U.S. dollars, the 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 rate during the year. Foreign exchange gains and losses arising from the translation of financial
statements are recorded as a separate component of shareholders' equity under the caption "Currency translation reserve".

The
following is a table of the principal currency translation rates to the U.S. dollar as of December 31, 2004 and 2003 and the average rates for the year ended
December 31, 2004.

Country

Currency

2004
Average rate

2004
Year-end rate

2003
Year-end rateArgentina

Pesos

2.94

2.97

2.93Bolivia

Bolivianos

7.93

8.04

7.80Chad

CFA franc

526.00

482.73

520.04Ghana

Cedi

8,982.52

9,002.00

8,850.00Guatemala

Quetzal

7.95

7.76

8.02Honduras

Lempira

18.20

18.63

17.74Lao

Kip

10,733.85

10,496.00

10,599.00Luxembourg

Euro

0.80

0.74

0.79Mauritius

Rupee

27.52

28.18

26.20Pakistan

Rupee

58.41

59.43

57.25Paraguay

Guarani

5,986.35

6,115.00

6,100.00Senegal

CFA franc

526.00

482.73

520.04Sierra Leone

Leone

2,464.69

2,406.00

2,450.00Sri Lanka

Rupee

101.09

104.48

96.95Sweden

Kroner

7.31

6.65

7.19Tanzania

Shilling

1,087.74

1,040.50

1,057.54


Unrealized
gains and losses arising from changes in foreign currency exchange rates are not cash flows. However, 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 period.

F-11

---





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 U.S. dollars because it is either advantageous for joint ventures and subsidiaries to incur debt obligations in U.S. dollars or because U.S. dollar-denominated
borrowing is the only funding source available to a joint venture or subsidiary. In these circumstances, Millicom normally accepts the remaining currency risk associated with the financing of its
joint ventures and subsidiaries, principally because of the relatively high cost of forward cover in the currencies of the countries in which the Group operates.

c) Intangible assets



The excess of cost of an acquisition over the Group's share in the fair value of the net identifiable assets of the acquired subsidiary, joint venture or
associate at the date of transaction is recorded as goodwill and recognized as an asset in the balance sheet. The resulting goodwill is allocated to the cash-generating unit acquired.
Goodwill is amortized using the straight-line method over its estimated useful life but not longer than 20 years. Goodwill on associates is included in their carrying value in the
caption "Investments in associates".

At
each balance sheet date the Group assesses whether there is any indication of impairment of its recorded goodwill. Impairment is determined by assessing the recoverable amount of the
cash-generating unit to which the goodwill relates. An impairment is recorded if the carrying amount exceeds the recoverable amount, as measured by reference to the fair value of the
cash-generating unit.

Negative
goodwill represents the excess of the fair value of the Group's share of the net assets acquired over the cost of acquisition. Negative goodwill is presented in the same balance
sheet classification as goodwill. To the extent that negative goodwill relates to expectations of future losses and expenses that are identified in the Group's plan for the acquisition and can be
measured reliably, but which do not represent identifiable liabilities, that portion of negative goodwill is recognized in the income statement
when the future losses and expenses are recognized. Any remaining negative goodwill, not exceeding the fair values of the identifiable non-monetary assets acquired, is recognized in the
consolidated statements of profit and loss over the remaining weighted average useful life of the identifiable acquired depreciable/amortizable assets; negative goodwill in excess of the fair values
of those assets is recognized in the consolidated statements of profit and loss immediately.

See
Note 2x for a discussion on IFRS 3 "Business Combinations".



The carrying value of licenses for the right to provide mobile cellular, wireless and other telephone services as well as related ancillary services held by joint
ventures and subsidiaries is disclosed in Note 5.

The
Group operates in an industry that is subject to changes in competition, regulation, technology and subscriber base evolution. In addition, the terms of the licenses, which have been
awarded for various periods, are subject to periodic review for, amongst other things, rate making, frequency allocation and technical standards. Licenses are initially measured at cost and are
amortized using the straight-line basis over periods of five to 20 years depending on the term of the license. Licenses held, subject to certain conditions, are usually renewable
and are generally non-exclusive. Under the terms of the respective licenses, the joint ventures and subsidiaries are entitled to enter into interconnection agreements with operators of
both landline and other cellular networks.

F-12

---





The Group capitalizes internal software development costs. The capitalization of these costs begins when a software package's technological feasibility has been
established and the costs can be measured reliably and ends when the software package is completed and ready for use. On completion of each software package, such costs are amortized on a
straight-line basis over three to five years with a periodic evaluation as to their ultimate realization.

d) Property, plant and equipment

(i)Property, plant and equipment is stated at cost and depreciated 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 virtually certain. All repairs and maintenance expenditures
are expensed as they occur.

Maximum
estimated useful lives are:

Buildings

40 years or life of lease if lowerNetworks

five to ten yearsOther

two to seven years


Construction
in progress consists of the cost of assets, labor and other direct costs associated with property, plant and equipment being constructed by the Group. Once the assets become
operational, the related costs are transferred from construction in progress to the appropriate asset category and start to be amortized.

Costs
directly associated with the establishment of new networks primarily relate to engineering and design work for the installation of the network and systems integral to its
operation.

The
cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of
performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.

A
liability for the present value of the cost to remove an asset on both owned and leased sites is recognized when a present obligation for the removal is established. The corresponding
cost of the obligation is included in the cost of the asset and depreciated over the useful life of the asset.



Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset when it
is probable that such costs will result in future economic benefits for the Group and the costs can be measured reliably.

e) Impairment of long lived assets

The recoverability of the Group's assets, including its intangible assets, is subject to the future profitability of the Group's operations and the evolution of
the business in accordance with its plans. In evaluating the recoverability of its assets, the value and future benefits of the Group's operations are periodically reviewed by management based on
technological, regulatory and market conditions. When certain operational and financial factors indicate an impairment of value, the Group evaluates the carrying value of property, plant and equipment
as well as other assets including licenses and goodwill, in relation to the operating performance, and future cash flows of the underlying assets. When indicated, the impairment losses are measured
based on the difference between the estimated recoverable amount and the carrying amount of the asset. Management's estimates of recoverable amounts for the individual asset or, if appropriate, the
cash-generating unit, are based on prices of

F-13

---



similar
assets, to the extent available in the circumstances, and the result of valuation techniques. These include net present values of estimated future cash flows and valuations based on market
transactions in similar circumstances. For new product launches 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. Management also
review on a regular basis the terms and conditions for license renewal and when the latter is virtually certain, determine accordingly the useful live of the assets associated with the license. In
2004, 2003 and 2002, management recorded an impairment loss on certain assets (Note 23).

f) Financial instruments

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another
enterprise.

After
initial recognition, the Group revalues financial assets held as available-for-sale and derivatives to fair value.

Fair
value is defined as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm's length transaction, other than
in a forced or liquidation sale. Fair values are obtained from quoted market prices, discounted cash flow models and option-pricing models using management's estimates as appropriate.

The
derecognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument, which is normally the case when
the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.



The Group classified its investments in debt and equity securities into the following categories: held-to-maturity and
available-for-sale. The classification is dependent on the purpose for which the investments were acquired. Management determines the classification of its investments at the
time of the purchase and re-evaluates such designation on a regular basis. Investments with a fixed maturity that management has the intent and ability to hold to maturity are classified
as held-to-maturity and are included in non-current assets, except for maturities within 12 months from the balance sheet date, which are classified as
current assets. Investments intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, are classified as
available-for-sale; and are included in non-current assets unless management has the express intention of holding the investment for less than 12 months from
the balance sheet date or unless they will need to be sold to raise operating capital, in which case they are included in current assets.

Available-for-sale
securities are reported at fair value. Prior to January 1, 2003, net unrealized gains or losses were recorded within shareholders'
equity under the caption
"Revaluation reserve". When the securities were sold, impaired or there was a significant and prolonged decline in the fair value below acquisition cost, the accumulated fair value adjustments were
included in the consolidated statements of profit and loss as gains and losses on investment securities. As from January 1, 2003, management determined that it was appropriate to record the
change in fair market value of available-for-sale securities in the consolidated statements of profit and loss. Accordingly, the Board of Directors decided to change the
accounting policy for fair value adjustments of available-for-sale securities and to record these adjustments in the consolidated statements of profit and loss as from
January, 1, 2003. Millicom adopted the allowed alternative treatment for change in accounting policy as defined in IAS 8 'Net profit or Loss for the Period, Fundamental Errors and
Changes in Accounting Policies' which requires any adjustment resulting from retrospective application of the change in accounting policy to be included in the determination of the net profit or loss
for the current period (Note 2Changes in accounting policies).

F-14

---



The Group determines the fair value of its available-for-sale securities based on quoted market prices if available. The fair value of non-marketable
securities is based on management's best estimate of the amount at which the securities could be sold in a current transaction.

Unquoted
available-for-sale equity investments are reviewed for impairment losses every balance sheet date and whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable amount is assessed by reference to the net present value of expected future cash
flows. The discount rate applied is based upon current market assessments of the time value of money and the risks specific to the investment. When the level of information available to calculate the
net present value of expected future cash flows makes this exercise unworkable, management use different valuation techniques to estimate whether there is objective evidence of impairment and to
determine the likely amount of impairment, if any.

Held-to-maturity
investments are carried at amortized cost using the effective yield method.



Borrowings are initially recognized at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the
effective yield method; any difference between proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statements of profit and loss as interest charge or income
over the period of the borrowings.

Gains
or losses on restructuring of borrowings are recorded in "Other financial income".

Other
debt and financing is primarily comprised of bank loans bearing market rates of interest that vary on a regular basis.

When
convertible bonds are issued, the fair value of the liability portion is determined using a market interest rate for an equivalent non-convertible bond; this amount is
recorded as a non-current liability based on the amortized cost until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion
option, which is recognized and included in shareholders' equity; the value of the conversion option is not changed in subsequent periods.



International Accounting Standard No.39 "Financial Instruments: Recognition and Measurement" requires that all financial assets and financial liabilities,
including derivatives, be recognized on the balance sheet. Derivatives are initially recorded at cost and then re-measured to fair value through the consolidated statements of profit and
loss under the caption "Fair value result on financial instruments".

A
derivative embedded in a financial instrument, such as the embedded derivative on the 5% Mandatory Exchangeable Notes in Tele2 AB series B shares (Note 18), 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 unrealized gains and losses reported in the
statements of profit and loss.



Trade receivables are carried at original invoice amount less provision made for impairment of these receivables. A provision for impairment of trade receivables
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. The amount of the provision is the difference
between the carrying amount and the

F-15

---



recoverable
amount, being the present value of expected cash flows, discounted at the market rate of interest for similar borrowers.

g) Leases

Operating lease rentals are charged to the statement of profit and loss on a straight-line basis over the life of the lease.

Leases
of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the
inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the
finance cost is charged to the statement of profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the lease term.

h) Inventories

Inventories consist of cellular telephone equipment and related accessories, which are classified as trading inventory, and network equipment spares, which are
classified as non-trading inventory. Inventory is stated at the lower of cost or net realisable value, with cost determined on a first-in, first-out basis.

i) Time and pledged deposits

Time deposits represent cash deposits with banks that earn interest at market rates.

Pledged
deposits represent contracted cash deposits with banks that are held as security for debts either at the corporate or operational entity level. Millicom is unable to access these
funds until either the relevant debt is repaid or alternative security is arranged with the lender.

j) Cash and cash equivalents

Highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Cash
and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call
with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are included within "other debt and financing" in current
liabilities on the balance sheet.

k) Share capital

Common shares are classified as equity. The portion of a convertible bond representing the fair value of the conversion option at the time of issue is included in
equity (see Borrowings in Note 2 f).

Where
the Company or its subsidiaries purchases the Company's equity share capital, the consideration paid including any attributable incremental external costs net of income taxes is
deducted from total shareholders' equity as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued, any consideration received is included in shareholders'
equity.

F-16

---



l) Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources
will be required to settle the obligation, and a reliable estimate of the amount can be made. The amount recognised as a provision is the best estimate of the expenditure required to settle the
present obligation at the balance sheet date.

m) Revenue recognition

The Group revenue sources in the consolidated statements of profit and loss comprise the following:



These recurring revenues consist of monthly subscription fees, airtime usage fees, interconnection fees, roaming fees, revenues from the provision of data
clearing services (until November 2002, when Millicom disposed of MACH, Note 23) and other telecommunications services such as data services and short message services. Recurring
revenues are recognized on an accrual basis, i.e. as the related services are rendered. Unbilled revenues for airtime usage and subscription fees resulting from services provided from the billing
cycle date to the end of each month are estimated and recorded.



Initial connection fees are recognized when charged, i.e. upon initial signing of the contract with customers.



These revenues consist of the sale of handsets and accessories. Revenues from these sales are recognized at the time that the item is delivered to the customer.

n) Prepaid cards

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

o) 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 channel, 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 (Note 2 e).

p) Customer acquisition costs

Specific customer acquisition costs, including handset subsidies and free phone promotions, are charged to sales and marketing when the subscriber is activated.
Advertising costs are charged to sales and marketing when incurred and amount to $29,803,000 for the year ended December 31, 2004 (2003: $22,932,000; 2002: $24,914,000).

q) Equity compensation benefits

Share options are granted to Directors, management and key employees. Options in 2004 were granted at an exercise price equal to the market price at date of grant
plus a mark-up of 10%. Options

F-17

---



granted
in 2003 and before were granted at an exercise price equal to the market price at date of grant. Options are exercisable in tranches beginning either one year or three years from the date of
grant and have either an indefinite term or a contractual option term of a maximum of six years. When the options are exercised, the proceeds received net of any transaction costs are credited to
share capital (par value) and share premium. The Group does not make a charge to staff costs in connection with share options (see also Note 2 x).

r) Taxation

The companies of the Group are subject to taxation in the countries in which they operate. Corporate tax, including deferred taxation where appropriate, is
applied at the applicable current rates on their taxable profits. Deferred income taxes are determined using the liability method whereby the future expected consequences of temporary differences
between the tax bases of assets and liabilities and their reported amounts in the financial statements are recognized as deferred tax assets and liabilities. Currently enacted tax rates are used in
the determination of deferred income tax.

Deferred
tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred
income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, except where the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

s) Earnings (loss) per common share

Basic earnings (loss) per common share are based on the profit (loss) for the year divided by the weighted average number of common shares outstanding during the
year taking into account, stock splits up to the date of approval of the financial statements. Diluted earnings (loss) per share is calculated by dividing the net income attributable to ordinary
shareholders by the sum of the weighted average number of common shares outstanding during the year and the weighted average number of shares, which would be issued on the conversion of all the
dilutive potential common shares into common shares. The Company has two categories of dilutive potential ordinary shares: convertible debt and share options.

t) Amounts due from/to joint ventures

In the ordinary course of business, the Company advances and receives cash from the joint ventures. Upon consolidation of the Group's financial statements, part
of these advances are eliminated based on the Company's ownership percentage in each joint venture. The remaining amount represents the partner's share of the joint venture's balance with the Company
and is recorded under the captions "Amounts due from joint ventures" and "Amounts due to joint ventures".

u) Risk management



The Group has incurred significant indebtedness but evaluates its ability to meet its obligations on an ongoing basis. Based on these evaluations, the Group
devises strategies to manage its liquidity risk, including the designation of certain assets as available-for-sale.



Financial instruments that potentially subject the Group to concentrations of credit risk are primarily cash and cash equivalents, time and pledged deposits,
letters of credit, available-for-sale securities and accounts receivable. The counter-parties to the agreements relating to the Group's cash

F-18

---



and
cash equivalents, time deposits, pledged deposits and available-for-sale securities are reputable financial institutions. Management does not believe there is a significant
risk of non-performance by these counter-parties. Accounts receivable are derived from the provision of telecom services to a large number of customers, including businesses and
individuals as well as local telecommunications companies and the related concentration of credit risk is therefore limited. The Group maintains a provision for impairment of trade receivables based
upon the expected collectability of all trade accounts receivable.

v) Segment reporting

Business segments provide products or services that are subject to risks and returns that are different from those of other business segments. Geographical
segments provide products or services within a
particular economic environment that is subject to risks and returns that are different from those of components operating in other economic environments.

w) Comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

x) New and revised accounting standards

On February 19, 2004 the IASB issued International Financial Reporting Standard No. 2 ("IFRS 2"),Share-based
payments. Amongst others, IFRS 2 requires companies to recognize a charge in the income statement for share-based awards to employees over the period from the grant date
to the vesting date. The charge is assessed on a fair value basis, with measurement at the grant date. The fair value of share awards will be assessed using an option-pricing model. IFRS 2
applies to share-based awards granted after November 7, 2002 and that have not vested before January 1, 2005, the effective date of IFRS 2. Upon adoption of IFRS 2 on
January 1, 2005, Millicom will restate its statements of profit and loss for the years ended December 31, 2003 and 2004 to record an estimated compensation expense of approximately
$0.4 million and $1.9 million, respectively, and will also adjust the opening balance of retained earnings as of January 1, 2004 for an estimated cumulative compensation expense
of approximately $0.4 million.

On
March 31, 2004 the IASB issued International Financial Reporting Standard No. 3 ("IFRS 3"),Business Combinations.
Amongst others, IFRS 3 requires reporting enterprises to account for all business combinations as acquisitions, to recognize intangible assets arising from business combinations separately from
goodwill, to recognize acquired measurable contingent liabilities, to allocate goodwill to cash-generating units, to cease amortization of goodwill and to test goodwill for impairment on
an annual basis. IFRS 3 is mandatory for business combinations that are agreed on or after March 31, 2004. Millicom has elected to apply IFRS 3 prospectively. Therefore the
accounting for past acquisitions will not change until January 1, 2005, when amortization of goodwill will cease and any existing negative goodwill will be recognized in the opening balance of
equity. Goodwill amortization for the year 2004, 2003 and 2002 was $8,242,000, $6,695,000 and $7,865,000 respectively. Negative goodwill as of December 31, 2004 is $8,202,000. No business
combinations have taken place within the Group since March 31, 2004.

On
March 31, 2004, the IASB issued International Financial Reporting Standard No. 5 ("IFRS 5"),Non-current Assets Held for Sale
and Discontinued Operations.IFRS 5 prescribes the measurement and presentation requirements for non-current assets "held for sale". Companies affected by
IFRS 5 will be required to have new balance sheet line items, both for assets
held for sale and associated liabilities. IFRS 5 applies to accounting periods beginning on or after January 1, 2005. Millicom expects to apply IFRS 5 to its operation in Peru as
from that date.

F-19

---



In 2004, the IASB also issued International Financial Reporting Standard No. 4 ("IFRS 4"),Insurance contracts.
IFRS 4, which is applicable as from January 1, 2005, specifies the financial reporting for insurance by an entity that issues such contracts. Millicom does not believe that IFRS 4
will have an impact on its consolidated financial statements.

Finally,
during 2003 and 2004 the IASB released 15 revised standards and further amendments, including IAS 32 and IAS 39. Millicom is currently assessing the impact on its
consolidated financial statements of adopting these revised standards, which will come into force on January 1, 2005.

Millicom
has not elected to early adopt any of the revised IAS or other new IFRS standards.

3. SUBSIDIARIES, JOINT VENTURES, INVESTMENTS IN ASSOCIATES AND MANAGEMENT CONTRACT

a) Subsidiaries

The Group has the following significant subsidiaries:

Holding
December 31, 2004

Holding
December 31, 2003Name of the company

Country

% of
ownership
interest

% of
ownership
interestSouth East AsiaMillicom Lao Co. Ltd.(i)

Lao People's Democratic Republic

74.1

78.0Comvik International (Vietnam) AB(ii)

Vietnam

80.0

80.0South AsiaPakcom Limited

Pakistan

61.3

61.3Paktel Limited

Pakistan

98.9

98.9Celltel Lanka Limited

Sri Lanka

99.9

99.9Central AmericaTelemovil El Salvador SA(iii)

El Salvador

100.0

70.0South AmericaTelefonica Celular de Bolivia SA

Bolivia

100.0

100.0Telefonica Celular del Paraguay SA

Paraguay

96.0

96.0AfricaMillicom (Ghana) Limited

Ghana

100.0

100.0Sentel GSM

Senegal

75.0

75.0Millicom Sierra Leone Limited

Sierra Leone

70.0

70.0MIC Tanzania Limited(iv)

Tanzania

84.4

Millicom Tchad S.A.

Chad

87.5

OtherMillicom Peru SA

Peru

100.0

100.0UnallocatedMillicom International Operations SA

Luxembourg

100.0

100.0MIC-USA Inc

United States

100.0

100.0Millicom Holding BV

Netherlands

100.0

100.0Millicom International Operations BV

Netherlands

100.0

100.0Millicom Telecommunications BV

Netherlands

100.0

100.0Millicom Telecommunications SA

Luxembourg

100.0

100.0MIC Latin America BV

Netherlands

100.0

100.0Millicom International BV

Netherlands

100.0

100.0


---

F-20

---



b) Joint ventures

The Group has the following significant joint venture companies, which have been proportionally consolidated:

Holding
December 31,
2004

Holding
December 31,
2003Name of the company

Country

% of ownership
interest

% of ownership
interestSouth East AsiaCam GSM Company Limited

Cambodia

58.4

58.4Royal Telecam International Limited

Cambodia

57.0

57.0Central AmericaComunicaciones Celulares SA

Guatemala

55.0

55.0Telefonica Celular

Honduras

50.0

50.0AfricaEmtel Limited(i)

Mauritius

50.0

50.0MIC Tanzania Limited(ii)

Tanzania



59.4OtherMillicom Argentina SA(iii)

Argentina



65.0


---

F-21

---



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
the above ventures.

The
following amounts have been consolidated into the Group accounts representing the Group's share of assets, liabilities, income and expenses in the above joint ventures, excluding
divested operations.

2004

2003

2002US$ '000

US$ '000

US$ '000Revenues

239,800

205,788

185,619Total operating expenses

(155,071
)
(141,770
)
(137,909
)Operating profit

84,729

64,018

47,710Property, plant and equipment, net

133,044

123,163

132,751Goodwill, net

252

(90
)
(296
)Licenses, net

9,060

8,382

2,531Other intangible assets, net

963

2,176

2,292Total non-current assets

146,411

138,552

141,277Current assets

72,681

77,087

67,992Amounts due from joint ventures to Millicom

11,715

9,052

10,629Amounts due to joint ventures from Millicom

(7,760
)
(5,340
)
(5,302
)Liabilities due after more than one year

(33,638
)
(42,578
)
(40,340
)Liabilities due within one year

(74,589
)
(73,487
)
(65,002
)Cash flow:Cash provided by operating activities

103,309

83,262

61,965Cash flow from investing activities

(47,420
)
(25,389
)
(42,921
)Cash flow from financing activities

(255
)
(6,530
)
957


c) Investments in associates

The movements in investments in associates were as follows:

2004

2003US$ '000

US$ '000Opening balance

1,340

1,013Share of results(i)

814

380Exchange differences

66

(53
)Closing balance

2,220

1,340


---

As
at December 31, 2004 and 2003, the principal associated company, which is unlisted, was Navega S.A. This company is 45% owned by Millicom's joint venture in Guatemala.

F-22

---



d) Management contract

In the first quarter of 2004, Millicom finalised a management agreement and an option agreement (Note 10) with the Rafsanjan Industrial Complex ("RIC") in
Iran. Pursuant to the management agreement, Millicom will provide management services for a network to be developed and owned by RIC under a build, operate and transfer agreement between RIC and the
Telecommunications Company of Iran ("TCI"), an entity controlled by the Iranian Government. Under the build, operate and transfer agreement, RIC will build and operate a country-wide GSM
network for 2 million prepaid customers. During the period from February 9, 2005 to February 9, 2015, RIC will pay a majority of revenues generated by the network to TCI. At the
end of this period, ownership of the network will be transferred to TCI without charge. As from the date of operation, Millicom will be paid for its management services by receiving 2.2% of the gross
revenues generated by the network, subject to a minimum annual payment of $8 million per year for periods beginning from February 9, 2007.

4. GOODWILL

The movements in goodwill, including negative goodwill, were as follows:

2004

2003US$ '000

US$ '000CostOpening balance(ii)

71,951

35,562Additions(i)

(3,660
)
46,101Change in consolidation method

26

Disposals

(107
)
(9,712
)Closing balance

68,210

71,951AmortizationOpening balance

(22,373
)
(25,390
)Charge for the year(iii)(iv)

(8,242
)
(6,695
)Disposals

107

9,712Closing balance

(30,508
)
(22,373
)Net book valueClosing balance

37,702

49,578Opening balance

49,578

10,172


---

2004

2003US$ '000

US$ '000Acquisition price

1,025

67,371Less: Fair value of net assets acquired

(4,685
)
(21,270
)Goodwill

(3,660
)
46,101


F-23

---



The
movements in negative goodwill included in the above figures were as follows:

2004

2003US$ '000

US$ '000CostOpening balance

(11,384
)
(11,384
)Additions

(3,660
)
Closing balance

(15,044
)
(11,384
)AmortizationOpening balance

4,832

3,441Income for the year

2,010

1,391Closing balance

6,842

4,832Net book valueClosing balance

(8,202
)
(6,552
)Opening balance

(6,552
)
(7,943
)


5. LICENSES

Licenses comprise the amortized cost of licenses purchased by joint ventures and subsidiaries. The movements in licenses were as follows:

2004

2003US$ '000

US$ '000CostOpening balance

95,945

184,832Additions

258,740

1,137Impairment for the year (Note 23)(i)(ii)



(3,073
)Effect of change in ownership percentage

222

1,276Disposal of subsidiaries and joint ventures

(3,281
)
(95,174
)Transfers



6,121Exchange rate movements

(4,025
)
826Closing balance

347,601

95,945AmortizationOpening balance

(65,056
)
(100,361
)Charge for the year(ii)

(8,296
)
(6,122
)Disposal of subsidiaries and joint ventures

3,281

43,701Transfers



(1,461
)Exchange rate movements

175

(813
)Closing balance

(69,896
)
(65,056
)Net book valueClosing balance

277,705

30,889Opening balance

30,889

84,471


---

F-24

---





Additions
are primarily due to the acquisition and/or renewal of licenses in Pakistan, Chad, Ghana and El Salvador.

In
October 2004, Millicom's subsidiary in Pakistan, Paktel, signed agreements with the Pakistan Regulator (the "PTA") to operate its GSM network with immediate effect and to renew
its license for 15 years from October 23, 2004. Paktel and the PTA have agreed deferred payment terms under which 50% of the license fee will be paid in installments over the first three
years of the license. The second 50% of the license fee will be payable in ten yearly payments from 2008 through to 2017. Payments already made by Paktel for the GSM migration, totaling approximately
$14 million, are treated as payments towards Paktel's new license fee. The Paktel license was recorded at the present value of the total cash outflows payable until 2017 of a gross amount of
$291,000,000, resulting in a license cost of $216,539,000. The Paktel license is amortised over 15 years. The discount rates used to compute the net present value ranged from 4.74% to 7.24%.

The
license of Pakcom Limited expires in April 2005. Management received a letter from the Pakistan Telecommunication Authority ("PTA") stating that the license of Pakcom would be
renewed. The terms and conditions of the license are currently being finalised. As of December 31, 2004, Millicom determined that the renewal of the license is virtually certain and therefore
that the carrying amount of the network equipment held by Pakcom Limited is appropriately determined based on useful lives that carry on over the maturity of the existing license.

On
November 8, 2004, Millicom was awarded a 10 year license to operate a GSM 900 wireless telephony network in the Republic of Chad. The license in Chad will be amortised
over 10 years upon commencement of the operations.

On
December 2, 2004, Mobitel, Millicom's subsidiary in Ghana signed a new GSM license agreement replacing the previous agreement. The new license has a term of 15 years and
is renewable at expiration for a 10 year period. The payments for the license fee amount to $22,500,000 payable over 6 years resulting in an initial license value recorded at the present
value of cash outflows of $18,537,000. The license in Ghana is amortised over 15 years. The discount rates used to compute the net present value was 10%.

On
December 1, 2004, Telemovil, Millicom's subsidiary in El Salvador, extended its cellular license in El Salvador. This license which was due for renewal in 2006 will now expire
in 2018. The license in El Salvador is amortised over 14 years.

The
estimated aggregate amortization expense for amortizable intangible assets for each of the five succeeding fiscal years is shown in the table below:

Estimated amortization expense

US$ '000For the year ending December 31, 2005

20,715For the year ending December 31, 2006

20,572For the year ending December 31, 2007

20,367For the year ending December 31, 2008

19,739For the year ending December 31, 2009

19,087


F-25

---



6. OTHER INTANGIBLE ASSETS, NET

The movements in other intangible assets were as follows:

Software
development
costs

Other

Total
2004

Total
2003US$ '000

US$ '000

US$ '000

US$ '000Opening balance, net

1,031

2,320

3,351

3,122Additions

1,192

205

1,397

2,432Disposals



(790
)
(790
)
(782
)Amortization for the year(i)

(1,145
)
(127
)
(1,272
)
(1,369
)Effect of change in ownership percentage







(165
)Exchange rate movements

(53
)
(72
)
(125
)
113Closing balance, net

1,025

1,536

2,561

3,351


---

7. PROPERTY, PLANT AND EQUIPMENT

The movements in 2004 were as follows:

Land and
Buildings

Networks

Construction
in progress

Other(ii)

Total
2004US$ '000

US$ '000

US$ '000

US$ '000

US$ '000CostOpening balance

23,555

800,624

36,548

104,309

965,036Additions

3,042

34,669

185,120

14,784

237,615Disposals

(30
)
(2,403
)


(889
)
(3,322
)Transfers(i)

4,195

127,479

(141,933
)
10,259

Impairment of assets



(7,237
)




(7,237
)Exchange rate movements

(471
)
(8,910
)
90

(573
)
(9,864
)Effect of change in ownership percentage

147

11,298

1,536

867

13,848Disposal of subsidiaries and joint ventures

(60
)
(3,940
)




(4,000
)Closing balance

30,378

951,580

81,361

128,757

1,192,076DepreciationOpening balance

(6,930
)
(398,221
)


(70,342
)
(475,493
)Charge for the year

(1,904
)
(127,968
)


(23,312
)
(153,184
)Disposals



1,985



809

2,794Transfers(i)



(5,852
)


5,852

Exchange rate movements

269

5,950



1,341

7,560Disposal of subsidiaries and joint ventures

60

1,836





1,896Closing balance

(8,505
)
(522,270
)


(85,652
)
(616,427
)Net book valueClosing balance

21,873

429,310

81,361

43,105

575,649Opening balance

16,625

402,403

36,548

33,967

489,543Leased assets included In the above

707

131





838


---

F-26

---



The
movements in 2003 were as follows:

Land and
Buildings

Networks

Construction
in progress

Other(ii)

Total
2003US$ '000

US$ '000

US$ '000

US$ '000

US$ '000CostOpening balance

19,140

725,794

24,150

105,380

874,464Additions

1,208

31,374

62,542

8,704

103,828Disposals

(16
)
(7,296
)
(2,638
)
(6,904
)
(16,854
)Transfers(i)

1,368

40,605

(49,915
)
1,821

(6,121
)Impairment of assets



(2,518
)




(2,518
)Exchange rate movements

1,287

15,210

1,071

2,412

19,980Effect of change in ownership percentage

653

67,420

2,613

3,827

74,513Disposal of subsidiaries and joint ventures

(85
)
(69,965
)
(1,275
)
(10,931
)
(82,256
)Closing balance

23,555

800,624

36,548

104,309

965,036DepreciationOpening balance

(4,903
)
(344,910
)


(63,921
)
(413,734
)Charge for the year

(1,733
)
(93,554
)


(19,096
)
(114,383
)Disposals

10

7,296



4,764

12,070Transfers(i)







1,461

1,461Exchange rate movements

(308
)
(7,989
)


(1,370
)
(9,667
)Disposal of subsidiaries and joint ventures

4

40,936



7,820

48,760Closing balance

(6,930
)
(398,221
)


(70,342
)
(475,493
)Net book valueClosing balance

16,625

402,403

36,548

33,967

489,543Opening balance

14,237

380,884

24,150

41,459

460,730Leased assets included In the above



919





919


---

The
amount of pledged assets is described in Note 18Borrowings

8.     INVESTMENT IN TELE2 AB SHARES

As of December 31, 2004 and 2003, Millicom had the following investments in Tele2 AB ("Tele2") shares:

2004

2003US$ '000

US$ '000Non-current available-for-sale securities

351,882

479,040351,882

479,040


F-27

---



Transactions in Tele2 shares have been summarized in the table below:

|                                                          |  | Number of Shares held |   |            |   |       |    |         |   |          |  
|--------------------------------------------------------- |  | --------------------- | - | ---------- | - | ----- | -- | ------- | - | -------- | -
|
|
|Balance as of January 1, 2002                             |  | 5,384,316             |   | 13,371,337 |   | 12.73 | %  | (61,325 | ) |         |  
|Sale of shares                                            |  |                      |   | (8,743,110 | ) | (5.94 | )% |        |   | (168,818 | )
|Exchange of A shares for B shares                         |  | (5,384,316            | ) | 5,384,316  |   |      |    |        |   |         |  
|Change in fair value                                      |  |                      |   |           |   |      |    |        |   | (57,813  | )
|Prolonged decline in value transferred to profit and loss |  |                      |   |           |   |      |    | 61,325  |   | (61,325  | )
|                                                          |  |                       |   |            |   |       |    |         |   |          |  
|Balance as of December 31, 2002                           |  |                      |   | 10,012,543 |   | 6.79  | %  |        |   |         |  
|Sale of shares                                            |  |                      |   | (1,044,129 | ) | (0.71 | )% |        |   |         |  
|Change in fair value                                      |  |                      |   |           |   |      |    |        |   | 246,760  |  
|                                                          |  |                       |   |            |   |       |    |         |   |          |  
|Balance as of December 31, 2003                           |  |                      |   | 8,968,414  |   | 6.08  | %  |        |   |         |  
|Change in fair value                                      |  |                      |   |           |   |      |    |        |   | (127,158 | )
|                                                          |  |                       |   |            |   |       |    |         |   |          |  
|Balance as of December 31, 2004                           |  |                      |   | 8,968,414  |   | 6.08  | %  |        |   |         |  
|                                                          |  |                       |   |            |   |       |    |         |   |          |  

Tele2
is a leading and profitable alternative pan-European telecom operator providing fixed and mobile telephony, internet services, data network, cable TV and content
services to 28 million customers in 24 countries. Tele2 is listed on Stockholmsbörsen and the NASDAQ National Market.

In
2001, the Group classified its investment in Tele2 as non-current as it considered it to be a strategic investment. However, the Group sold certain of these shares during
the course of 2002 in order to meet liquidity needs and therefore re-classified the portion of its holding that was not pledged against financing (Note 18) as a current asset in the
consolidated balance sheet as of December 31, 2002. Following the issuance of the 5% Mandatory Exchangeable Notes due 2006 (Note 18), Millicom reclassified its investment in Tele2 from
current to non-current assets.

The
Tele2 shares underlying the 5% Mandatory Exchangeable Notes have been lent by Millicom Telecommunications S.A. to Deutsche Bank AG London pursuant to a securities lending
arrangement. Deutsche Bank AG London may sell or on-lend such Tele2 shares under the securities lending agreement. Deutsche Bank AG London is contractually required to deliver to Millicom
Telecommunications S.A. such Tele2 shares upon requisite notice to Deutsche Bank AG London by Millicom Telecommunications S.A., if (1) Millicom Telecommunications S.A. requires such Tele2
shares to satisfy its obligations from time to time to deliver Tele2 shares upon exchange of the 5% Mandatory Exchangeable Notes by the noteholders or (2) specified bankruptcy-related events
with respect to Deutsche Bank AG London or defaults in the performance by Deutsche Bank AG London of its obligations under the securities lending agreement have occurred. Millicom Telecommunications
S.A. is obligated to deliver Tele2 shares upon exchange of the 5% Mandatory Exchangeable Notes even in the event of a failure of Deutsche Bank AG London to redeliver to Millicom Telecommunications
S.A. the Tele2 shares. Millicom Telecommunications S.A.'s obligation in respect of the delivery of those shares has not been guaranteed by the Group. Millicom has pledged 8,968,400 Tele2 shares (2003:
8,968,400) for a fair value of $351,882,000 (2003: $479,040,000) in order to settle the exchange of the 5% Mandatory Exchangeable Notes in Tele2 shares.

In
2004, Tele2 distributed a dividend of approximately $0.40 (SEK 3) per share which was directly paid to the holders of the 5% Mandatory Exchangeable Notes.

F-28

---



9. INVESTMENT IN OTHER SECURITIES

As of December 31, 2004 and 2003, Millicom had the following investments in other securities:

2004

2003US$ '000

US$ '000Non-currentAvailable-for-saleOther investments(ii)

3,011

3,120Held-to-maturityU.S. Treasury strips(i)

7,529

22,27710,540

25,397CurrentHeld-to-maturityU.S. Treasury strips(i)

15,327

15,29115,327

15,291


(i) U.S. Treasury strips

On August 7, 2003, $45,294,000 of the net proceeds of the 5% Mandatory Exchangeable Notes was used to purchase U.S. Treasury strips, with a nominal amount
of $46,470,000 to provide for payment of the interest under the 5% Mandatory Exchangeable Notes.

As
of December 31, 2004, the outstanding U.S. Treasury strips, which have effective interest rates ranging from 1.6% to 2.1%, have the following maturity dates:

US$ '000Non-currentMay 15, 2006

7,529CurrentNovember 15, 2005

7,626May 15, 2005

7,70115,327Total

22,856


(ii) Other investments in available-for-sale securities

Other investments in available-for-sale securities mainly represent investments in Great Universal and Modern Holdings. In
June 1999, Great Universal effected a reorganization where it spun off its subsidiaries into two separate businesses being Great Universal Inc. and Modern Holdings. Great Universal LLC
holds 100% of common shares in Great Universal Inc. and 52.7% of common shares in Modern Holdings. Millicom also has a direct ownership of 11.6% of the share capital of Modern Holdings. These
investments are recorded as non-current available-for-sale securities. As of December 31, 2004 and 2003 the shares of Modern Holdings were not quoted on a
public market. In 2002, following a restructuring of Modern Holdings and an independent valuation, Millicom recognized an impairment loss of $7,050,000 on its investment in Modern Holdings. The
carrying value of this investment is $2,950,000 as of December 31, 2004 (2003: $2,950,000). In 2004, management determined that no change in fair value should be recorded. During the course of
2002, Millicom recorded a full impairment loss of $5,027,000 on its investment in Great Universal due to uncertainty concerning its recoverability.

F-29

---



As
indicated in Note 30, under IFRS, Millicom does not consolidate its investment in Great Universal and Modern Holdings since the restrictions on their ability to distribute
dividends is considered a severe long-term restriction that significantly impairs their ability to transfer funds to Millicom. Further, due to the existence of warrants, enabling the
warrant holders to obtain control over Great Universal and Modern Holdings, Millicom considers that it does not control these companies. The warrants will expire six months after the date a
registration statement of Great Universal is declared effective by the U.S. Securities and Exchange Commision.

In
addition, the Group holds other available-for-sale securities for a total fair value of $61,000 as of December 31, 2004 (2003: $170,000).

10. DERIVATIVES ARISING FROM BUSINESS COMBINATIONS

Millicom or its partners have agreements to purchase or sell interests in certain operations according to fixed conditions. These agreements qualify as
derivatives under the prescribed accounting treatment in IAS 39. Details of the agreements are described as follows:

ColombiaThe holders of the Celcaribe Ordinary Share Trust Certificates ("Certificates") had an option to put their
certificates to the Company at an exercise price providing the holders with
an internal rate of return of 15%. These put rights were cancelled in December 2002 when Millicom entered into a conditional agreement to sell its interest in Celcaribe S.A., whereby holders of
the Certificates were required, under the provision of a "drag-along" clause, to sell their Certificates to the buyer on the same terms and conditions as Millicom. Accordingly, the fair
value of the option was reduced to $nil as at December 31, 2002. The disposal of Celcaribe S.A. was declared effective on February 13, 2003. The change in fair value of the option during
the period starting January 1, 2002 to the date of the conditional sale agreement for an amount of $6,684,000 was recorded in the statement of profit and loss under the caption "Fair value
result on financial instruments".

Express Telecommunications Co. IncAs part of the sale agreement for Express Telecommunications Co. Inc. ("Extelcom"),
Millicom's operation in the Philippines, signed in December 2002, Millicom was granted, for the price of $1, the option to purchase 47.9% of the issued share capital of Extelcom at various
prices up to ten years after issuance. The exercise price is $1,000,000 if exercised within 12 months of the sale agreement increasing by an additional $1,000,000 for each year afterwards. If
exercised between five and ten years after the option is issued, the purchase price is $8,000,000. Due to the history of losses incurred by the operation and based on the financial statements of
Extelcom as of December 31, 2004, management considers that the option has nil value (2003: nil). The option is not exercisable in part. As of December 31, 2004, the option has not been
exercised.

VietnamIn July 2002, the option granted per the shareholders' agreement to CIV's minority shareholder, which gave
right to purchase an additional 10% equity interest in CIV, was exercised at a price of $24,000. As a result the Company reversed the liability of $23,125,000 (see Note 23), resulting from the
measurement at fair value of the option until the date of exercise, by crediting the caption "Gain (loss) from sale of subsidiaries and joint ventures, net" in the consolidated statements of profit
and loss. The change in fair value to the date of exercise was $1,174,000 in 2002 and was recorded as a "Fair value result on financial instruments" in the consolidated statements of profit and loss,

GhanaIn June 2002, Millicom issued a call option to a former shareholder. The option allows the holder to reacquire
the 30% equity stake which he sold to Millicom in 2002. The option is exercisable from June 2005 to June 2007 at an exercise price of $190,000. As of December 31, 2004, the fair
value of the option is $993,000 (2003: $nil) and is recorded under the caption "Other current liabilities".

F-30

---



IranMillicom has an option to acquire an equity ownership of the company that will operate the network in Iran from
Rafsanjan
Industrial Complex at book value. The company that will operate the network has not yet been formed. Between February 9, 2004 and February 9, 2007 Millicom can acquire up to 47% of the
equity. Between February 9, 2007 and February 9, 2009, the maximum percentage of equity ownership that Millicom can acquire will be 30% in addition to any shares acquired before that
date, provided that the total percentage acquired never exceeds 47%. From February 9, 2007 until February 9, 2009, Millicom will have the right to sell to RIC an amount of shares not to
exceed 17% of the company that will operate the network at the average exercise price paid by Millicom to acquire shares through the exercise of call options. As of December 31, 2004, the fair
value of the option is $1,097,000 and is recorded under the caption "Other current assets". (See also Note 3d).

11. PLEDGED DEPOSITS

Pledged deposits represent interest bearing collateral for certain debts of Group companies (Note 18).

The
effective interest rate on pledged deposits as at December 31, 2004, was 1.98% (2003: 1.75%).

12. INVENTORIES

The Group carries the following inventories, measured at lower of cost and net realizable value:

2004

2003US$ '000

US$ '000Trading inventories

14,754

8,754Non-trading inventories

1,550

2,187Total inventories

16,304

10,941


F-31

---



13. TRADE RECEIVABLES, NET

The movements in trade receivables were as follows:

2004

2003US$ '000

US$ '000Trade receivables, grossOpening balance

149,949

140,785Additions, net

34,039

2,804Write-offs

(13,523
)
(3,328
)Effect of change in ownership percentage/disposals

4,844

(18,051
)Change in consolidation method

3,284

23,963Exchange rate movement

63

3,776Closing balance

178,656

149,949Provision for doubtful receivablesOpening balance

(36,199
)
(27,564
)Impairment charge

(13,207
)
(8,090
)Write-offs

13,523

3,328Effect of change in ownership percentage/disposals

(630
)
4,639Change in consolidation method

(393
)
(7,996
)Exchange rate movement

222

(516
)Closing balance

(36,684
)
(36,199
)Trade receivables, netClosing balance

141,972

113,750Opening balance

113,750

113,221


Included
in the net trade receivables balance above is $74,303,000 (2003: $83,870,000) related to amounts due from national telecommunication companies in respect of interconnection.

These
amounts are expected to be recovered within one year.

14. OTHER CURRENT ASSETS

Other current assets are comprised as follows:

2004

2003US$ '000

US$ '000Taxes paid in advance

12,479

6,416Receivable from VMS, net(i)

32,156

16,940Advances paid to suppliers

4,330

12,061Iran option (see Note 10)

1,097

Other

12,315

14,16662,377

49,583


---

F-32

---



15. TIME DEPOSITS

Time deposits as of December 31, 2004 of $610,000 (2003: $32,880,000) represent cash deposits with banks, remunerated at market interest rates. They have
original maturity periods of between three to twelve months.

As
of December 31, 2004, the effective interest rate on short-term bank deposits was approximately 1.1% (2003: 3.4%).

16. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised as follows:

2004

2003US$ '000

US$ '000Cash and cash equivalents in US dollars

354,237

86,871Cash and cash equivalents in other currencies

59,144

61,958Total cash and cash equivalents

413,381

148,829


17. SHAREHOLDERS' EQUITY

On February 16, 2004 an extraordinary general meeting of shareholders approved a stock split of the issued shares of the Company, by which each share with
a par value of $6 was split into four new ordinary shares with a par value of $1.50 each. The stock split became effective on February 20, 2004. All figures in this note have been updated to
reflect the stock split for all years presented.

a) Share capital and premium

The authorized share capital of the Company totals 133,333,200 registered shares. At December 31, 2004, the total subscribed and fully paid-in
share capital and premium amounts to $513,782,000 (2003: $239,876,000) consisting of 99,219,079 (2003: 66,319,940) registered common shares at a par value of $1.50 (2003: $1.50) each.

In
2003, the Company issued convertible notes (see c) 2% PIK Notes below) which were convertible into 23,639,108 common shares. In 2003, the Company issued 349,760 common shares
to holders of 2% PIK Notes who converted their 2% PIK Notes. From January 1, 2004 to April 26, 2004, holders of 2%
PIK Notes converted an aggregate amount of $62,431,000 of 2% PIK Notes into 23,230,099 common shares of the Company.

In
2004, the Company issued 669,040 shares following the exercise of stock options by employees and directors of Millicom.

In
the fourth quarter of 2004, the Company raised $209,160,000 in equity through the offering of 9 million shares (the "Share Offering") in the form of Ordinary Shares or Swedish
Depository Receipts (SDRs). The shares were issued at a price of $23.24. The net proceeds from the Share Offering were $203,620,000.

b) Treasury stock

As a result of the Merger, 28,862,794 shares of Millicom's common shares, previously held by Millicom Inc., were held by subsidiaries of
MIC-USA, and accounted for as treasury stock for consolidated reporting purposes. In February 2003, an Extraordinary General Meeting of Millicom passed a resolution approving the
reduction of $43,294,192 of the share capital of the Company by means of the cancellation of the 28,862,794 shares with a par value of $1.50 each.

F-33

---



In
2004, nil (2003: nil; 2002: 515,133) own shares were acquired by the Company and accounted for as treasury stock.

In
2003, Millicom granted 177,428 shares from its holding of treasury stock to Kinnevik International AB as final payment on the partial acquisition of MACH in 1995 (Note 30).

As
of December 31, 2004, the total number of treasury shares held was 654,852 (2003: 654,852) shares.

c) 2% PIK Notesequity component

As of December 31, 2004, none of the 2% PIK Notes were outstanding.

In
May 2003, Millicom announced the closure of the exchange offer for its 13.5% Senior Subordinated Notes. As a result of the exchange, Millicom issued $63,531,000 of Millicom's
2% Senior Convertible PIK (payment-in-kind) Notes due 2006 ("2% PIK Notes") (Note 18). Millicom's 2% PIK Notes were convertible at any time at the holder's option into
Millicom common stock at a conversion price of $2.69 per share (price after stock split). Millicom has apportioned part of the value of these notes to equity and part to debt (Note 18).

The
outstanding notes which had not been converted were redeemed on April 26, 2004 for an amount of $160,000. The value allocated to equity as at December 31, 2003, was
$16,006,000.

d) Legal and consolidation reserves

On an annual basis, if the Company reports a net profit for the year, 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. A consolidation reserve is required for consolidated
profits that are not available for distribution.

At
the annual general meeting of shareholders held on May 25, 2004, the shareholders decided to allocate an amount of $9,321,000 to the legal reserve from the profit of the
Company for the year ended December 31, 2003.

See
Note 18 for other restrictions relating to dividend payments.

e) Options outstanding

The following table summarizes information about stock options outstanding at December 31, 2004, which have been issued to Directors, management, officers
and employees of the Group. Shares issued when stock options are exercised benefit from the same rights as common shares. The Company has elected to not record the expense associated with the issuance
of stock options as permitted under
IFRS until December 31, 2004 (see also Note 2 x). The market price of the Company's shares as at December 31, 2003 and December 31, 2004 was respectively $17.5 and $22.73.

Options Outstanding

Options ExercisableRange
of
Exercise Prices $

Number
outstanding at
Dec. 31, 2004

Weighted
Average Exercise
Price $

Number
exercisable at
Dec. 31, 2004

Weighted
Average Exercise
Price $3.32 - 3.75

1,461,498

3.44

370,613

3.499.0

627,544

9.00

627,544

9.0016.78 - 20.34

651,048

18.73

651,048

18.7325.047 - 29.745

633,993

25.79

99,996

29.7531.875 - 35.906

753,464

33.21

702,307

33.313.32 - 35.906

4,127,547

15.56

2,451,508

18.56


F-34

---



The
following table summarizes the terms of options outstanding as of December 31, 2004:

|Date issued                                                                                                                                |  | Number of options |  | Exercise price
$ |  | Terms of option                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|May 1994, May 1995, May 1996, May 1997, January 1998, May 1998, August 1999, May 2000, December 2001, December 2002, May 2003 and May 2004 |  | 2,643,151         |  | 3.32 - 35.906    |  | Exercisable over a three-year period in equal installments. Options have an indefinite life.                                                                                     
|December 2001, December 2002, May 2003 and May 2004                                                                                        |  | 1,252,932         |  | 3.32 - 25.047    |  | Exercisable over a three-year period in equal installments. Options expire after six years from date of grant.                                                                   
|August 1999, May 2000, and June 2000,                                                                                                      |  | 231,464           |  | 20.34 - 31.88    |  | Exercisable over a five-year period (1/3 vested after three years, 2/3 vested after four years, 100% vested after five years). Options expire after six years from date of grant.

A
summary of the Company's stock options as of December 31, 2004, 2003 and 2002, and changes during the years then ended is as follows:

|                                 |  | 2004      |   | 2003  |  | 2002      
|-------------------------------- |  | --------- | - | ----- |  | ----------
|
|Outstanding at beginning of year |  | 4,520,808 |   | 13.26 |  | 4,221,004 
|Granted(1)                       |  | 540,015   |   | 25.05 |  | 1,320,500 
|Exercised                        |  | (669,040  | ) | 4.29  |  |          
|Forfeited                        |  | (264,236  | ) | 23.68 |  | (1,020,696
|                                 |  |           |   |       |  |           
|Outstanding at end of year       |  | 4,127,547 |   | 15.56 |  | 4,520,808 
|                                 |  |           |   |       |  |           
|Exercisable at end of year       |  | 2,451,508 |   | 18.56 |  | 1,880,852 

---

Other
options in subsidiary companies, outstanding at December 31, 2004, have been issued to officers and employees of the Group as follows:

Millicom International BVAn option plan was established on December 15, 2000 for the President and Chief Executive
Officer of the Company and certain employees and officers to purchase a total of 1% and 0.7% respectively of the share capital of Millicom International BV, an indirect wholly-owned subsidiary of the
Company, holding investments in operating entities of the Group. The strike price of these options is calculated as the corresponding share of Millicom's historic total investment in Millicom
International BV. These options are exercisable in tranches until December 31, 2005 and were all issued in 2000. During 2002 the right to exercise options over 0.7% of the share capital granted
to certain employees was cancelled. As of December 31, 2004, none of the remaining options were exercised.

F-35

---



18. BORROWINGS

Borrowings comprise:



2004

2003US$ '000

US$ '000Corporate debt at amortized cost10% Senior Notes(d)

536,629

536,0362% PIK Notesdebt component(e)



50,9235% Mandatory Exchangeable Notes(f)

365,006

327,635901,635

914,594Other debt and financing:Equipment financing facilities

6,370

8,484Bank financing facilities

152,893

173,553Total long-term other debt and financing

159,263

182,037Less: portion payable within one year

(34,996
)
(55,887
)Total other debt and financing due after more than one year

124,267

126,150




2004

2003US$ '000

US$ '000Other debt and financing:Equipment financing facilities



3,848Bank financing facilities

53,515

72,929Total short term other debt and financing

53,515

76,777Portion of long-term debt payable within one year

34,996

55,887Total other debt and financing due within one year

88,511

132,664


a) Company borrowings

Borrowings mainly comprise notes, including corporate debt, term loans and revolving credit facilities in various countries and are mainly denominated in U.S.
dollars. Average interest on these facilities is approximately 7.6% (2003: 7.3%, 2002: 12.5%). Average interest on short-term borrowings is approximately 8.2% (2003: 6.8%, 2002: 10.2%).
Also included in "Other debt and financing" is $1,051,000 (2003: $160,000) in respect of finance leases (Note 29).

As
of December 31, 2004, Millicom's share of the carrying amount of total pledged assets held by operating entities securing Group debt and financing was $267,391,000 (2003:
$180,227,000) including pledged deposits for $10,529,000 (2003: $1,488,000).

The
carrying amount of pledged assets held by non-operating entities at December 31, 2004 securing Group debt and financing was $399,013,000 (2003: $546,650,000)
represented by Tele2 shares, pledged deposits and pledged US Treasury strips. Millicom pledged 8,968,400 Tele2 AB series B shares (2003: 8,968,400) for a fair value of $351,882,000 (2003:
$479,040,000) in order to settle the exchange of the 5% Mandatory Exchangeable Notes in Tele2 AB shares. Furthermore, the U.S. treasury strips amounting to 22,856,000 (2003: $37,568,000) which are
recorded under the caption "Investment in other securities" non-current and current as well as $7,745,000 (2003: 7,745,000), which are recorded

F-36

---



under
the caption "Pledged deposits" resulting from the proceeds of a U.S. treasury strip which expired on November 2004 are pledged in order to settle the payment of the interest on the 5%
Mandatory Exchangeable Notes. The total amount of pledged deposits held by non-operating entities totaled $24,275,000 (2003: $30,042,000). $13,243,000 of these pledged deposits covered
outstanding standby letters of credit issued by a bank in order to secure debt and financing granted to the operations and $3,000,000 represented cash deposited as security for a loan granted to an
operating entity by Bank Invik (see Note 30).

As
of December 31, 2004 the guarantees issued by the Company to cover debt and financing in the operations amounted to $43,084,000 (2003: $74,087,000).

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 Group is $514,027,000
(2003: $644,651,000).

The
total interest charged for the year is $108,534,000 (2003: $135,172,000, 2002: $185,959,000).

In
the normal course of business, Millicom Group Companies have issued guarantees to secure the obligations of some operations under bank and suppliers' financing agreements. The tables
below describe the outstanding amount under the guarantees and the remaining terms of the guarantees. Amounts identified as outstanding exposure of bank guarantees are recorded in the Consolidated
balance sheet under the caption "Other debt and financing'. Amounts identified as outstanding exposure of suppliers' guarantees are recorded in the Consolidated balance sheet under the caption "Trade
payable".

As of December 31, 2004:

|                  |  | Bank and other financing guarantees(1) |  | Suppliers' guarantees(2) |  | Total     
|----------------- |  | -------------------------------------- |  | ------------------------ |  | ----------
|
|0 - 1 year        |  |                                       |  | 2,000,000                |  | 2,701,743 
|1 - 3 years       |  | 23,247,755                             |  | 23,247,755               |  | 9,289,734 
|3 - 5 years       |  | 3,752,660                              |  | 3,752,660                |  |          
|More than 5 years |  | 4,091,888                              |  | 10,000,000               |  |          
|                  |  |                                        |  |                          |  |           
|Total             |  | 31,092,303                             |  | 39,000,415               |  | 11,991,477
|                  |  |                                        |  |                          |  |           

As of December 31, 2003:

|                  |  | Bank and other financing guarantees(1) |  | Suppliers' guarantees(2) |  | Total     
|----------------- |  | -------------------------------------- |  | ------------------------ |  | ----------
|
|0 - 1 year        |  | 1,470,000                              |  | 16,168,630               |  | 2,935,338 
|1 - 3 years       |  | 15,878,268                             |  | 15,878,268               |  | 17,989,648
|3 - 5 years       |  | 17,381,000                             |  | 17,381,000               |  | 1,010,000 
|More than 5 years |  | 89,681,000                             |  | 109,902,587              |  |          
|                  |  |                                        |  |                          |  |           
|Total             |  | 124,410,268                            |  | 159,330,485              |  | 21,934,986
|                  |  |                                        |  |                          |  |           

---

F-37

---



b) Debt restructuring

In 2003, Millicom implemented a restructuring plan to reduce its indebtedness and debt service obligations. As of December 31, 2002, Millicom had total
consolidated indebtedness of $1.23 billion, which required a substantial amount of cash from operations to service. Millicom had also divested selected assets (MIC Systems (including MACH),
certain Tele2 AB shares, its operation in the Philippines, its operation in Colombia and Liberty Broadband Limited).

In
May 2003, $776 million or 85%, of the outstanding amount of Millicom's Senior Subordinated 13.5% Notes due 2006 (the "Old Notes") had been tendered in Millicom's private
exchange offer. Holders of the tendered Old Notes also consented to certain amendments to the indenture covering the Old Notes.

Upon
closure of the exchange offer referred to above, Millicom issued $562 million of Millicom's 11% Senior Notes due 2006 (the "11% Senior Notes") and $64 million of
Millicom's 2% Senior Convertible PIK (payment-in-kind) Notes due 2006 ("2% PIK Notes") in exchange for the $776 million of Old Notes tendered. In addition, Millicom also
paid to holders of the Old Notes,
who consented to the amendments of the Old Notes' indenture, $50 per $1,000 of Old Notes so consented (excluding affiliates of Millicom), or approximately $38 million in aggregate. Millicom's
2% PIK Notes were convertible at any time at the holder's option into Millicom common stock at a conversion price of $2.69 per share (price after stock split). The total aggregate amount of 2% PIK
Notes was converted or redeemed in 2004. The debt exchange resulted in a gain of $96,748,000. This gain is recorded under the caption "Other financial income".

On
August 7, 2003, Millicom's subsidiary, Millicom Telecommunications S.A., issued for an aggregate value of SEK 2,555,994,000 (the equivalent of approximately
$310 million) mandatory exchangeable notes, which are mandatorily exchangeable into shares of Tele2 AB (the "5% Mandatory Exchangeable Notes").

On
August 15, 2003 and September 30, 2003, Millicom repurchased in private transactions $57 million and redeemed $110 million, respectively, in aggregate
principal amount of the 11% Senior Notes. In August 2003, Millicom also repaid the outstanding amount of the Toronto Dominion facility of $64 million Millicom had entered into 2001.

On
November 7, 2003, Millicom commenced a cash tender offer and consent solicitation relating to all of the $395 million outstanding principal amount of the 11% Senior
Notes, which expired on December 8, 2003.

On
November 24, 2003, Millicom issued $550 million principal amount of 10% Senior Notes due 2013 (the "10% Senior Notes") and issued a notice of redemption in respect of
the total remaining outstanding amount of Old Notes. Millicom used approximately $273 million of the proceeds of the offering of the 10% Senior Notes to acquire the outstanding amount of 11%
Senior Notes tendered on or prior to December 8, 2003. Millicom issued a notice of redemption with respect to the total remaining outstanding amount of 11% Senior Notes on December 5,
2003, with a redemption date of December 10, 2003. Millicom used $143.8 million of the proceeds from the 10% Senior Notes to redeem in full the remaining outstanding amount of 11% Senior
Notes. Finally, Millicom redeemed the Old Notes in their entirety on December 29, 2003.

c) Senior Subordinated 13.5% Notes

On June 4, 1996, the Company raised $483,433,000 (after deducting discount and estimated expenses) through a private offering of Senior Subordinated 13.5%
Notes due 2006 (the "Old Notes"). The Old Notes were issued at 52.075% of their principal amount of $962,000,000 and the purchase discount on the Old Notes accretes from issuance at an effective
interest rate of 14.4%. Cash interest

F-38

---



began
to accrue on the Old Notes on June 1, 2001 at a rate of 13.5% per annum, payable semi-annually in arrears on June 1 and December 1, until maturity on
June 1, 2006.

During
2002, the Company re-purchased Old Notes for a value of $44,000,000 at market prices at the time, realizing a gain of $28,676,000 recorded in the consolidated
statement of profit and loss under the heading "Other financial income".

The
Old Notes have been exchanged or repaid in 2003 (see b above).

d) 10% Senior Notes

On November 24, 2003, Millicom issued $550 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, beginning on June 1, 2004. The effective interest
rate is 10.4%.

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 or affiliates, and as a result are structurally subordinated in right of payment to all indebtedness of such subsidiaries and affiliates.

Due
to the fact that the registration statement of the 10% Senior Notes was not declared effective, a special interest charge was added to the interest rate of 10% of 0.25% from
May 23, 2004 to August 20, 2004, of 0.5% from August 21, 2004 to November 18, 2004, of 0.75% from November 19, 2004 to February 16, 2005 and of 1% from
February 17, 2005 until March 2, 2005 the date the registration statement was declared effective..

Other
than out of the proceeds of certain public equity offerings prior to December 1, 2006, or for certain tax reasons, Millicom may not redeem the 10% Senior Notes prior to
December 1, 2008. On or after December 1, 2008, Millicom may redeem all or a portion of the 10% Senior Notes at prices ranging from 105% to 100%.

If
Millicom experiences a Change of Control Triggering Event, defined as a rating decline and 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.

The
indenture contains certain covenants that, among other things, limit Millicom's ability to incur additional indebtedness, make certain payments, including dividends or other
distributions, with respect to Millicom's share capital and the share capital of Millicom's subsidiaries, make certain investments, prepay subordinated debt, create certain liens, engage in certain
transactions with affiliates, engage in certain asset sales, consolidate, merge or transfer all or substantially all Millicom's assets and enter into other lines of business. Certain of these
covenants will no longer apply if the 10% Senior Notes are rated above a certain level by the rating agencies or if Millicom meets certain financial criteria after three years following their issuance
date.

As
of December 31, 2004, the carrying amount of the 10% Senior Notes is $536,629,000.

e) 2% PIK Notesdebt component

As of December 31, 2004 none of the 2% PIK Notes are outstanding.

In
2003, Millicom issued convertible notes which were convertible into 23,639,108 Millicom's common shares. In 2003, Millicom issued 349,760 common shares to holders of 2% PIK Notes who
converted their 2% PIK Notes. During the first half of 2004, holders of 2% PIK Notes converted an aggregate amount of $62,431,000 of 2% PIK Notes into 23,230,099 common shares of Millicom. The
remaining $160,000 2% PIK Notes were redeemed on April 26, 2004.

F-39

---



The
2% PIK Notes initially matured on June 1, 2006. The 2% PIK Notes had interest at a rate of 2%, payable at the option of Millicom, in either additional 2% PIK Notes or in cash,
semi-annually in arrears on June 1 and December 1. The difference between the initial
carrying amount of the debt component of the 2% PIK Notes and its nominal amount accreted at an effective interest rate of 11%.

The
2% PIK Notes were convertible at any time, at the option of the holder, into Millicom common stock at a conversion price of $2.69 (price after stock split) per share of common stock.
At the maturity of the 2% PIK Notes, Millicom could, at its option, pay all or a portion of the then outstanding principal amount in cash or in shares of its common stock. Millicom could redeem the 2%
PIK Notes at any time, in whole or in part, prior to June 1, 2004, at a price equal to 102.25% of their principal amount, and thereafter at a price equal to their principal amount. The 2% PIK
Notes were senior unsecured obligations and ranked senior in right of payment to all Millicom's subordinated indebtedness. The 2% PIK Notes were unconditionally and irrevocably guaranteed by Millicom
International Operations B.V.

f) 5% Mandatory Exchangeable Notes

On August 7, 2003, Millicom Telecommunications S.A., Millicom's wholly-owned subsidiary, issued for an aggregate value of SEK 2,555,994,000 (approximately
$310 million) Mandatory Exchangeable Notes (the "5% Mandatory Exchangeable Notes"), which are exchangeable into Tele2 AB series B ("Tele2") shares. The 5% Mandatory Exchangeable Notes
may be exchanged either voluntarily at the option of the noteholders or mandatorily by Millicom Telecommunications S.A. as described below. The 5% Mandatory Exchangeable Notes will be exchangeable for
an aggregate of up to 8,968,400 Tele2 AB series B shares (Note 8) which Millicom holds through Millicom Telecommunications S.A. The number of Tele2 shares that Millicom
Telecommunications S.A. is obligated to deliver is based on a formula that takes into account the market price of the Tele2 shares prior to any exchange. Under the formula, Millicom Telecommunications
S.A. could retain up to 30% of the increase in value of the Tele2 shares over the designated reference price of SEK 285 per share. As a result, on August 7, 2006 or earlier if all of the 5%
Mandatory Exchangeable Notes have been redeemed and exchanged prior to that date, Millicom Telecommunications S.A. could own up to approximately 23% of the 8,968,400 Tele2 AB series B shares
underlying the 5% Mandatory Exchangeable Notes.

The
5% Mandatory Exchangeable Notes may be exchanged voluntarily at the option of the noteholders at any time during the period commencing on September 17, 2003 and ending on the
25th trading day prior to August 7, 2006, which is expected to be July 11, 2006. In addition, the 5% Mandatory Exchangeable Notes may be exchanged voluntarily at the option of the holder
in the event of certain changes in tax laws and in the event of a takeover offer in respect of Tele2 AB. Dividends, if any, paid by Tele2 AB would be attributed to the 5% Mandatory Exchangeable Notes
holders.

Unless
otherwise previously redeemed and exchanged or purchased and cancelled, each 5% Mandatory Exchangeable Note will be mandatorily exchanged by Millicom Telecommunications S.A. on
August 7, 2006.

The
5% Mandatory Exchangeable Notes bear interest on the U.S. dollar equivalent amount of each note at a rate of 5% per annum payable semi-annually on February 7 and
August 7 of each year. The effective interest rate is 8.45%. As of December 31, 2004, the carrying amount of the 5% Mandatory Exchangeable Notes net of unamortized financing fees was
$365,006,000. In 2004, an exchange loss of $27,550,000 (2003: $41,820,000) was recognized on the 5% Mandatory Exchangeable Notes.

In
2003, as part of the financing, Millicom purchased U.S. treasury strips with a nominal value of $46,470,000 which will be used to settle the interest payments (Note 9).

F-40

---



The 5% Mandatory Exchangeable Notes are secured by 8,968,400 Tele2 shares. Millicom Telecommunications S.A.'s obligations in respect of the interest payments of the 5% Mandatory
Exchangeable Notes are secured by U.S. Treasury strips and are guaranteed by Millicom. Whilst there are Notes or interest outstanding Millicom Telecommunications S.A. will not pledge, transfer, lend
or sell any of the secured Tele2 shares or U.S. Treasury strips.

The
5% Mandatory Exchangeable Notes include an embedded derivative, which is valued separately. The embedded derivative, which reflects Millicom's limited right to participate in the
increase in value of the Tele2 shares, is recorded at fair value, taking into account time and volatility factors. As of December 31, 2004, the fair value of the embedded derivative was an
asset of $45,255,000 (2003: a liability of $103,457,000), with the change in fair value for the year 2004 of $148,712,000 (for the period from August 7, 2003 to December 31, 2003 a loss
of $84,578,000) recorded under the caption "Fair value result on financial instruments".

g) Other debt and financing

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

2004

2003US$ '000

US$ '000Bolivia(i)

26,722

35,487El Salvador(ii)

40,000

75,714Guatemala(iii)

22,694

21,945Pakistan(iv,v)

31,000

45,745Paraguay

17,693

9,963Senegal

18,236

17,585Sri Lanka(vi)

8,626

16,548Tanzania(vii)

19,097

7,819Vietnam

8,663

12,468Other

19,982

15,180Total

212,713

258,454Corporate

65

360Total other debt and financing

212,778

258,814Of which:due after more than 1 year

124,267

126,150due within 1 year

88,511

132,664212,778

258,814


Significant
individual financing facilities are described below:



F-41

---





F-42

---





h) Fair value of financial liabilities

The financial liabilities are recorded at amortised cost. The fair value of the financial liabilities as at December 31, 2004 disclosed above is as
follows:

US$ '000Corporate debt at amortized cost10% Senior Notes(d)

564,1295% Mandatory Exchangeable Notes(f)

328,694892,823Other debt and financing

212,548Fair value of total debt

1,105,371


F-43

---



i) Analysis of borrowings by maturity

The total amount repayable at December 31, 2004 and 2003 is as follows:

Corporate
2004

Operations
2004

Total
2004

Corporate
2003

Operations
2003

Total
2003US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Due within:1 year

65

88,446

88,511

360

132,304

132,6641 - 2 years

384,239

48,302

432,541



51,622

51,6222 - 3 years



37,861

37,861

418,129

35,889

454,0183 - 4 years



18,975

18,975



13,964

13,9644 - 5 years



15,373

15,373



1,601

1,601Due after 5 years

550,000

4,229

554,229

550,000

23,074

573,074Total repayable

934,304

213,186

1,147,490

968,489

258,454

1,226,943Unamortized difference between carrying amount and nominal amount

(32,604
)
(473
)
(33,077
)
(53,535
)


(53,535
)Total debt, net

901,700

212,713

1,114,413

914,954

258,454

1,173,408


19.  OTHER NON-CURRENT LIABILITIES AND OTHER CURRENT LIABILITIES

Other non-current liabilities are mainly comprised of unpaid portion of license fees of Paktel and Millicom (Ghana) Ltd. amounting to
$187,635,000 as of December 31, 2004, asset retirement obligations and the net pension liability of the CEO (see Note 30).

Other
current liabilities are comprised as follows:

2004

2003US$ '000

US$ '000Taxes payable

78,926

43,218Deferred revenue

41,416

31,915Subscriber deposits

5,368

5,265Ghana option (see Note 10)

993

Unpaid portion of license fees(i)

32,347

Other

17,075

28,244176,125

108,642


---

20.  ANALYSIS OF GROUP REVENUES AND COSTS

The Group's revenues comprise the following:

2004

2003

2002US$ '000

US$ '000

US$ '000Provision of telecom services

884,214

621,728

581,321Connection revenues

11,138

10,212

7,982Revenues from equipment sales

26,114

15,164

15,883Total revenues

921,466

647,104

605,186


F-44

---



The
Group's cost of sales comprise the following:

2004

2003

2002US$ '000

US$ '000

US$ '000Costs from the provision of telecom services

(357,602
)
(239,910
)
(238,983
)Connection costs

(4,458
)
(3,564
)
(3,554
)Costs from equipment sales

(26,274
)
(14,528
)
(16,993
)Total cost of sales

(388,334
)
(258,002
)
(259,530
)Included in cost of sales:Depreciation

(134,695
)
(93,593
)
(87,990
)Impairment charges

(7,237
)
(2,518
)
(6,833
)


Included
in the Group's operating costs are the following:

2004

2003

2002US$ '000

US$ '000

US$ '000Personnel charges (Note 22)

(46,217
)
(34,176
)
(48,199
)Employee benefit expenses (Note 30)

(1,370
)
(1,636
)
Depreciation and amortization

(36,298
)
(34,979
)
(51,328
)Impairment charges



(3,073
)
(82,986
)


21. SEGMENTAL REPORTING

The Group operates mainly in one reportable business segment, telecommunications services. The Group's primary format for reporting segmental information is
geographical segments and reflects the measures of segmental profit and loss and financial position reviewed by management. On January 1, 2004 Millicom changed its segmental reporting to
reflect the five operational clusters in the Group. The strategic segments are defined in Notes 1 and 3.

Other
than financing arrangements, there are no significant transactions between the segments. For the purposes of this presentation, corporate expenses are recorded in Unallocated.

2004

2003

2002US$ '000

US$ '000

US$ '000South East AsiaRevenues

231,802

175,354

140,607of which divested





1,113Depreciation and amortization

(54,677
)
(42,584
)
(34,609
)of which divested





(4,812
)Operating profit

83,357

59,345

46,032of which divested





(5,601
)Non-cash income (expenses)

9

(506
)
199of which divested





199Profit before minority interest

68,279

51,047

31,894of which divested





(13,318
)Assets

214,716

157,678

133,954Capital expenditure

32,879

44,839

25,663of which divested





4Liabilities

(79,651
)
(84,239
)
(42,995
)


F-45

---





2004

2003

2002US$ '000

US$ '000

US$ '000South Asia(i)Revenues

113,249

105,602

83,133Depreciation and amortization

(29,999
)
(22,178
)
(16,161
)Operating profit

11,455

31,817

24,504Non-cash (expenses) income

(4,939
)
97

Profit (loss) before minority interest

2,399

17,721

13,746Assets

429,557

115,927

139,657Capital expenditure

291,761

13,558

18,777Liabilities

(392,849
)
(144,197
)
(145,238
)


---

2004

2003

2002US$ '000

US$ '000

US$ '000Central AmericaRevenues

305,034

171,321

166,409of which divested



5,926

50,506Depreciation and amortization

(41,977
)
(24,519
)
(36,320
)of which divested



(2,058
)
(16,441
)Operating profit (loss)

113,828

66,319

(33,166
)of which divested



(256
)
(35,294
)Profit from associated companies

814

380

62Non-cash income (expenses)

219

(381
)
(79,422
)Profit (loss) before minority interest

79,269

52,615

(14,397
)of which divested



(2,218
)
(40,498
)Assets

362,105

275,909

293,670of which divested





110,711Capital expenditure

65,656

60,762

16,994of which divested





3,307Liabilities

(143,404
)
(158,223
)
(61,542
)of which divested





(7,919
)


|                                |  | 2004     |   | 2003     |   | 2002     |  
|------------------------------- |  | -------- | - | -------- | - | -------- | -
|
|South America(i)                |  |          |   |          |   |          |  
|Revenues                        |  | 114,006  |   | 99,343   |   | 111,145  |  
|Depreciation and amortization   |  | (24,790  | ) | (22,485  | ) | (21,336  | )
|Operating profit                |  | 16,146   |   | 18,571   |   | 22,299   |  
|Non-cash (expenses) income      |  | (312     | ) | 4,208    |   | (5,141   | )
|Profit before minority interest |  | 3,425    |   | 7,739    |   | 12,749   |  
|Assets                          |  | 157,920  |   | 134,574  |   | 158,327  |  
|Capital expenditure             |  | 23,483   |   | 9,841    |   | 18,514   |  
|Liabilities                     |  | (113,399 | ) | (123,560 | ) | (143,650 | )

---

F-46

---



|                                |                   | 2004     |   | 2003     |   | 2002     |     
|------------------------------- | ----------------- | -------- | - | -------- | - | -------- | ----
|
|Africa                          |                   |          |   |          |   |          |     
|Revenues                        |                   | 149,979  |   | 84,858   |   | 62,011   |     
|Depreciation and amortization   |                   | (18,314  | ) | (13,855  | ) | (10,129  | )   
|                                | of which divested |          |  |          |  |          | (20 
|Operating profit                |                   | 45,661   |   | 17,006   |   | 2,172    |     
|                                | of which divested |          |  |          |  |          | (392
|Non-cash expenses               |                   | (1,833   | ) | (4,239   | ) | (745     | )   
|Profit before minority interest |                   | 24,644   |   | 6,600    |   | (5,351   | )   
|                                | of which divested |          |  |          |  |          | (500
|Assets                          |                   | 221,582  |   | 119,630  |   | 102,972  |     
|Capital expenditure             |                   | 76,619   |   | 24,028   |   | 16,681   |     
|                                | of which divested |          |  |          |  |          | 12  
|Liabilities                     |                   | (195,218 | ) | (123,386 | ) | (110,257 | )   

|                              |                   | 2004   |       | 2003    |         | 2002    |        
|----------------------------- | ----------------- | ------ | ----- | ------- | ------- | ------- | -------
|
|Other                         |                   |        |       |         |         |         |        
|Revenues                      |                   | 7,396  |       | 10,626  |         | 15,671  |        
|                              | of which divested |        | 2,213 |         | 2,529   |         | 4,936  
|Depreciation and amortization |                   | (1,237 | )     | (2,516  | )       | (8,088  | )      
|                              | of which divested |        | (358  | )       | (518    | )       | (4,081 
|Operating loss                |                   | (1,320 | )     | (3,622  | )       | (18,366 | )      
|                              | of which divested |        | 2,319 |         | 12      |         | (14,764
|Non-cash expenses             |                   | 65     |       | (3,184  | )       | (12,545 | )      
|                              | of which divested |        | (59   | )       |        |         | (9,329 
|Loss before minority interest |                   | (2,573 | )     | (3,699  | )       | (24,483 | )      
|                              | of which divested |        | 914   |         | (18     | )       | (21,556
|Assets                        |                   | 10,335 |       | 9,648   |         | 15,604  |        
|                              | of which divested |        |      |         | 1,804   |         | 2,927  
|Capital expenditure           |                   | 3,690  |       | 17      |         | 9,978   |        
|                              | of which divested |        | 1,164 |         |        |         | 8,208  
|Liabilities                   |                   | (8,377 | )     | (11,085 | )       | (14,485 | )      
|                              | of which divested |        |      |         | (10,564 | )       | (10,732

---

F-47

---



|                                |  | 2004 |  | 2003 |  | 2002   |  
|------------------------------- |  | ---- |  | ---- |  | ------ | -
|
|MIC Systems (divested in 2002)  |  |      |  |      |  |        |  
|Revenues                        |  |     |  |     |  | 28,186 |  
|Depreciation and amortization   |  |     |  |     |  | (6,814 | )
|Operating profit                |  |     |  |     |  | 7,275  |  
|Non-cash expenses               |  |     |  |     |  | (53    | )
|Profit before minority interest |  |     |  |     |  | 3,892  |  
|Capital expenditure             |  |     |  |     |  | 774    |  

|                                       |                   | 2004       |   | 2003       |   | 2002       |       
|-------------------------------------- | ----------------- | ---------- | - | ---------- | - | ---------- | ------
|
|Unallocated items                      |                   |            |   |            |   |            |       
|Revenues                               |                   |           |   |           |   | 41         |       
|Depreciation and amortization          |                   |           |   | (432       | ) | (5,861     | )     
|Operating (loss) profit                |                   | (20,245    | ) | (26,921    | ) | 71,563     |       
|                                       | of which divested |            |  |            |  |            | (1,410
|Non-cash expenses                      |                   |           |   | (1,854     | ) | (464       | )     
|Profit (loss) before minority interest |                   | (90,412    | ) | 61,495     |   | (380,699   | )     
|                                       | of which divested |            |  |            |  |            | (6,914
|Assets                                 |                   | 2,921,158  |   | 3,608,671  |   | 1,857,632  |       
|Capital expenditure                    |                   | 4          |   | 453        |   | 1,254      |       
|Liabilities                            |                   | (1,888,076 | ) | (2,350,741 | ) | (2,365,170 | )     

|                           |  | 2004       |   | 2003       |   | 2002       |  
|-------------------------- |  | ---------- | - | ---------- | - | ---------- | -
|
|INTER-SEGMENT ELIMINATIONS |  |            |   |            |   |            |  
|Revenues                   |  |           |   |           |   | (2,017     | )
|Assets                     |  | (2,272,544 | ) | (2,899,088 | ) | (1,498,697 | )
|Liabilities                |  | 1,058,539  |   | 1,413,873  |   | 1,408,692  |  

|                                       |                   | 2004       |       | 2003       |         | 2002       |        
|-------------------------------------- | ----------------- | ---------- | ----- | ---------- | ------- | ---------- | -------
|
|TOTAL                                  |                   |            |       |            |         |            |        
|Revenues                               |                   | 921,466    |       | 647,104    |         | 605,186    |        
|Of which divested                      |                   | 2,213      |       | 8,455      |         | 84,741     |        
|Depreciation and amortization          |                   | (170,994   | )     | (128,569   | )       | (139,318   | )      
|Of which divested                      |                   | (358       | )     | (2,576     | )       | (32,168    | )      
|Operating profit                       |                   | 248,882    |       | 162,515    |         | 122,313    |        
|Of which divested                      |                   | 2,319      |       | (244       | )       | (50,186    | )      
|Profit (loss) from associates          |                   | 814        |       | 380        |         | 62         |        
|Non-cash expenses                      |                   | (6,791     | )     | (5,859     | )       | (98,171    | )      
|                                       | of which divested |            | (59   | )          |        |            | (9,183 
|Profit (loss) before minority interest |                   | 85,031     |       | 193,518    |         | (362,649   | )      
|                                       | of which divested |            | 914   |            | (2,236  | )          | (78,894
|Assets                                 |                   | 2,044,829  |       | 1,522,949  |         | 1,203,119  |        
|                                       | of which divested |            |      |            | 1,804   |            | 113,638
|Capital expenditure                    |                   | 494,092    |       | 153,498    |         | 108,635    |        
|                                       | of which divested |            | 1,164 |            |        |            | 12,305 
|Liabilities                            |                   | (1,762,435 | )     | (1,581,558 | )       | (1,474,645 | )      
|                                       | of which divested |            |      |            | (10,564 | )          | (18,651

F-48

---



Non-cash
expenses other than depreciation and amortization comprise write-downs of assets disclosed in Note 23.

22. PERSONNEL CHARGES

The following personnel charges are included in sales and marketing expenses, general and administrative expenses and other operating expenses:

|                   |                            | 2004   |        | 2003   |        | 2002  
|------------------ | -------------------------- | ------ | ------ | ------ | ------ | ------
|
|Wages and salaries |                            |        |        |        |        |       
|                   | Sales and marketing        |        | 8,817  |        | 6,784  |       
|                   | General and administrative |        | 21,883 |        | 19,320 |       
|                   | Other operating expenses   |        | 12,443 |        | 5,285  |       
|                   |                            |        |        |        |        |       
|                   |                            | 43,143 |        | 31,389 |        | 43,331
|                   |                            |        |        |        |        |       
|Social security    |                            |        |        |        |        |       
|                   | Sales and marketing        |        | 626    |        | 499    |       
|                   | General and administrative |        | 2,320  |        | 2,168  |       
|                   | Other operating expenses   |        | 128    |        | 120    |       
|                   |                            |        |        |        |        |       
|                   |                            | 3,074  |        | 2,787  |        | 4,868 
|                   |                            |        |        |        |        |       
|                   |                            | 46,217 |        | 34,176 |        | 48,199
|                   |                            |        |        |        |        |       

The
average number of permanent employees on a proportional basis during 2004 was 2,269 (2003: 1,917; 2002: 2,080).

Stock-based
compensation offered to officers and employees are disclosed in Note 17.

23. DISPOSAL AND IMPAIRMENT OF ASSETS, NET

a) Disposal and impairment of assets, net

2004Goodwill(i)

Licenses(ii)

Equipment(iii)

Other

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000South East Asia







(9
)
(9
)South Asia





5,058

(119
)
4,939Central America







(219
)
(219
)South America





287

25

312Africa





1,892

(59
)
1,833Unallocated









Other







(65
)
(65
)



7,237

(446
)
6,791


---

F-49

---





The
recoverable amounts of the equipment were determined based on their value in use. The discount rates used ranged from 12.0% to 13.2% (2003: 11.9% to 12.0%)

2003Goodwill(i)

Licenses(ii)

Equipment(iii)

Other

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000South East Asia







506

506South Asia







(97
)
(97
)Central America







381

381South America





(1,579
)
(2,629
)
(4,208
)Africa





4,097

142

4,239Unallocated







1,854

1,854Other



3,073



111

3,184

3,073

2,518

268

5,859


---

During
2003, Millicom entered into discussions concerning the sale of its high-speed wireless data operation in Peru. Following these discussions, Millicom has recognized an
impairment charge of $3,073,000 in the carrying value of the license in Peru (Note 5).

Due
to revised anticipated lower revenues from non-digital equipment, Millicom recognized an impairment loss of $4,097,000 over certain network equipment in Africa in 2003.
In addition Millicom reversed an impairment loss in South America for an amount of $1,579,000.

2002Goodwill(i)

Licenses(ii)

Equipment(iii)

Other

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000South East Asia







(199
)
(199
)South Asia









Central America

35,723

41,733



1,966

79,422South America







5,141

5,141Africa







745

745MIC Systems







53

53Unallocated







464

464Other

585

4,945

6,833

182

12,54536,308

46,678

6,833

8,352

98,171


---

F-50

---



During 2002, Millicom entered into discussions concerning the sale of Celcaribe, its cellular operation in Colombia. Following the signing of a sale and purchase agreement in
December 2002, management recognized an impairment loss corresponding to the difference between the recoverable amount and the carrying value of its intangibles in Celcaribe. Other impairments
have also been identified and recorded as disclosed in the table above by reporting segment.

b) Gain (loss) from sale of subsidiaries and joint ventures, net



In September 2004, Millicom completed the sale of Millicom Argentina S.A., its broadband operation in Argentina, for net total proceeds of $2,000,000
realizing a net loss of $2,061,000.

Following
the restructuring of Millicom's holding in Millicom Lao Co. Ltd in December 2004, Millicom disposed of 3.9% of this operation realizing a gain of $55,000.

In
2004, Millicom disposed or liquidated a number of subsidiaries realizing a loss of $201,000.



In February 2003, Millicom completed the sale of Celcaribe, its cellular operation in Colombia, realizing total proceeds of $10,932,000 and a net gain of
$3,305,000.

Following
the sale of a number of operations in 2002 and based on certain contractual provisions the Group recorded a net decrease in sales prices of $1,092,000.



Following the sale of the Company's interest in FORA Telecom BV in 2001 and after subsequently obtaining in 2002 certain GSM licenses, Millicom received
additional proceeds of $30 million in cash. In addition, certain loans for which Millicom was liable were settled at less than their carrying value. The gain realized in obtaining the licenses
and settling the loans, net of costs incurred was $30,859,000 in 2002.

In
July 2002, Millicom's minority shareholder in its cellular operation in Vietnam exercised his option to purchase 10% of the share capital of that operation. Millicom recognized
a gain of $16,603,000 in 2002.

In
September 2002, Millicom sold its interest in its cellular operation in the Democratic Republic of Congo recognizing a loss of $21,000.

In
September 2002, the Group sold its 100% interest in Liberty Broadband Ltd. recognizing a loss of $10,294,000.

In
May 2002, Millicom sold 17% of its interest in MIC Systems BV, the direct parent company of MACH SA, for $17,000,000 to Kinnevik BV. Further, in November 2002, MIC
Systems BV sold its 100% interest in Mach SA for a sum of Euro 95 million, approximately $97,000,000. These two transactions resulted in the recognition of a gain of $87,655,000 for the Group.

In
December 2002, the Group completed the sale of its cellular operation in the Philippines for a nominal sum, recognizing a loss of $35,988,000.

24. TAXES

Group taxes are 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

F-51

---



Anonyme.
Due to losses incurred and brought forward, no taxes based on Luxembourg-only income have been computed for 2004, 2003 or 2002.

The
effective tax burden on profitable operations is approximately 23% (2003: 27%, 2002: 25%). Currently profitable operations are in jurisdictions with tax rates of 15% to 37% (2003:
15% to 41%, 2002: 13% to 35%). The utilization of tax loss carry forwards or tax holidays had an impact of decreasing the effective tax rate on profitable operations by approximately nil% in 2004
(2003: 1%, 2002: 1%). The operations currently incurring losses operate in tax jurisdictions with rates ranging from 20% to 37% (2003: 25% to 27%, 2002: 25% to 35%).

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

2004

2003

2002%

%

%Weighted average statutory tax rates(i)

24

26

19Items taxed at other than weighted average rate

3

15

10Changes in tax law Guatemala

(4
)


Non taxable/deductible items

18

(19
)
(35
)Utilization of tax loss carry forwards



(1
)
(1
)Effective tax rate

41

21

(7
)


---

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

2004

2003

2002US$ '000

US$ '000

US$ '000Current income tax charge

58,347

38,369

21,143Deferred income tax charge

553

14,000

1,591Charge for taxes

58,900

52,369

22,734


F-52

---



The
tax effects of significant items comprising the Group's net deferred income tax liability as of December 31, 2004 and 2003 are as follows:

2004

2003US$ '000

US$ '000Deferred income tax liabilities:Temporary differences between book and tax basis of assets and liabilities

(39,216
)
(38,006
)Deferred income tax assets:Tax credit carryforwards

2,734

2,734Other temporary differences

96

926Provision for doubtful debtors

1,983

424Net operating and other loss carryforwards

1,070

1,142Net deferred income tax assets

5,883

5,226Net deferred income tax liability

(33,333
)
(32,780
)Amount included in balance sheet as non-current deferred tax liability

(39,216
)
(38,006
)Amount included in balance sheet as non-current deferred tax asset

5,883

5,226


Deferred
income tax liabilities reflect temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax
purposes. Deferred income tax assets are comprised of tax credit carry forwards and operating losses in joint ventures and subsidiaries.

The
Company has not recorded deferred income tax liabilities applicable to undistributed earnings of foreign joint ventures and subsidiaries that will be reinvested in foreign
operations. Undistributed earnings amounted to $441,650,000 at December 31, 2004 (2003: $338,052,000, 2002: $279,883,000).

Net
operating and other loss carryforwards amounting to $20,105,000 (2003: $10,849,000, 2002: $189,080,000) are present in the Group. These have expiry periods depending on their
jurisdiction of greater than one year. $nil (2003: $2,479,000, 2002: $177,271,000) of these net operating and other loss carryforwards are not anticipated to be used within expiry periods.

F-53

---



25. CASH FLOW FROM OPERATING ACTIVITIES

|                                          |                                                                        | 2004    |          | 2003    |          | 2002     |        
|----------------------------------------- | ---------------------------------------------------------------------- | ------- | -------- | ------- | -------- | -------- | -------
|
|Profit (loss) after taxes for the year    |                                                                        | 68,241  |          | 178,823 |          | (385,143 | )      
|Adjustments for non-cash items:           |                                                                        |         |          |         |          |          |        
|                                          | Depreciation and amortization                                          |         | 170,994  |         | 128,569  |          | 139,318
|                                          | Interest accretion on borrowings (effective rate)                      |         | 16,262   |         | 9,727    |          | 1,938  
|                                          | Write-down of assets                                                   |         | 6,791    |         | 5,859    |          | 78,167 
|                                          | Gain on exchange and disposal of assets                                |         | 2,207    |         | (2,213   | )        | (88,814
|                                          | Loss (Gain) and valuation movement on investment securities            |         | 126,957  |         | (246,760 | )        | 299,963
|                                          | Fair value result on financial instruments                             |         | (148,816 | )       | 84,578   |          | 7,858  
|                                          | (Profit) loss from operations in associated companies                  |         | (814     | )       | (380     | )        | (62    
|                                          | Exchange loss on 5% Mandatory Exchangeable Notes                       |         | 27,550   |         | 41,820   |          |       
|                                          | Increase in the provision for doubtful receivables                     |         | (316     | )       | 5,794    |          | 2,558  
|                                          | Increase in other provisions                                           |         | 2,975    |         |         |          |       
|                                          | Minority interest                                                      |         | 16,790   |         | 14,695   |          | 22,494 
|                                          | Other non-cash gain                                                    |         |         |         | (533     | )        |       
|                                          | Other financial income                                                 |         |         |         | (96,748  | )        | (42,247
|Adjustment to reconcile working capital:  |                                                                        |         |          |         |          |          |        
|                                          | Decrease/(increase) in trade debtors, prepaid and other current assets |         | (52,049  | )       | 16,463   |          | 5,790  
|                                          | (Increase) decrease in inventories                                     |         | (5,358   | )       | (1,387   | )        | 5,386  
|                                          | Increase in trade and other payables                                   |         | 52,807   |         | 1,001    |          | 25,928 
|                                          | Increase (decrease) in accrued interest                                |         | 110      |         | 2,828    |          | (8,841 
|                                          | Increase in accrued taxation                                           |         | 18,912   |         | 27,720   |          | 2,986  
|Reclassification to financing activities  |                                                                        |         |          |         |          |          |        
|                                          | Early redemption penalties on debt restructuring                       |         |         |         | 14,466   |          |       
|                                          |                                                                        |         |          |         |          |          |        
|Net cash provided by operating activities |                                                                        | 303,243 |          | 184,322 |          | 67,279   |        
|                                          |                                                                        |         |          |         |          |          |        

Interest
paid during the year amounted to $92,162,000 (2003: $135,346,000, 2002: $197,297,000). Interest received during the year amounted to $7,169,000 (2003: $4,235,000, 2002:
$12,726,000). Taxes paid amounted to $39,988,000 (2003: $20,305,000, 2002: $21,582,000).

F-54

---



26. ACQUISITION OF SUBSIDIARIES AND JOINT VENTURES

The Group has, from time to time, acquired or increased its share in certain subsidiaries and joint ventures. The fair value of the assets acquired and
liabilities assumed during the year were as follows:

2004

2003

2002US$ '000

US$ '000

US$ '000Property, plant and equipment

8,531

22,464

Goodwill

(3,660
)
46,101

2,268Intangible assets

116

468

Pledged deposits

586



Current assets

5,061

29,178

390Amounts due in more than one year

(3,447
)
(70,501
)
Amounts due within one year

(6,162
)
(11,177
)
Minority interest





(658
)1,025

16,533

2,000Non cash gain



(533
)
Total purchase price paid in cash

1,025

16,000

2,000Less: Cash acquired

(19
)
(17,028
)
Cash paid (received) for acquisitions net of cash acquired

1,006

(1,028
)
2,000


In
2004, Millicom increased its holding in its operation in Tanzania from 59.4% to 84.4% and in 2003 from 57% to 59.4%.

In
2003, Millicom regained control and started reconsolidating Telemovil its operation in El Salvador (Note 3).

In
2002, the Company increased its ownership in Celcaribe throughout the year to arrive at an ownership percentage of 95.4% as of December 31, 2002. In addition, in
November 2002, Millicom purchased the remaining 30% interest in Millicom (Ghana) Limited. Both operations were fully consolidated at December 31, 2002.

F-55

---



27. DISPOSAL OF SUBSIDIARIES AND JOINT VENTURES

The Group has, from time to time, disposed of or reduced its share in certain subsidiaries and joint ventures. The impact of the change in consolidation method
and the carrying amount of the assets and liabilities disposed of during the year were as follows:

|                                               |  |                                                            |   | 2004    |   | 2003    |   | 2002   |  
|---------------------------------------------- |  | ---------------------------------------------------------- | - | ------- | - | ------- | - | ------ | -
|
|Property, plant and equipment                  |  | 2,104                                                      |   | 33,496  |   | 11,396  |  
|Intangible assets                              |  |                                                           |   | 51,473  |   | 26,332  |  
|Pledged deposits                               |  |                                                           |   | (997    | ) | 30,989  |  
|Current assets                                 |  | 944                                                        |   | 15,300  |   | 72,553  |  
|Amounts due in more than one year              |  |                                                           |   | (33,883 | ) | (2,125  | )
|Amounts due within one year                    |  | (2,398                                                     | ) | (56,240 | ) | (86,899 | )
|Currency translation adjustment                |  | (1,708                                                     | ) |        |   |        |  
|Loans written-off                              |  | 5,285                                                      |   |        |   |        |  
|Disposal of minority interest                  |  |                                                           |   |        |   | 5,594   |  
|                                               |  |                                                            |   |         |   |         |   |        |  
|                                               |  |                                                            |   | 4,227   |   | 9,149   |   | 57,840 |  
|(Loss) profit on sale                          |  | (2,207                                                     | ) | 2,213   |   | 57,955  |  
|                                               |  |                                                            |   |         |   |         |   |        |  
|Total sale price, in cash and cash equivalents |  | 2,020                                                      |   | 11,362  |   | 115,795 |  
|Add:                                           |  | Additional proceeds on sale of FORA less expenses incurred |   |        |   |        |   | 27,547 |  
|Less:                                          |  | Cash disposed                                              |   | (59     | ) | (2,514  | ) | (8,271 | )
|                                               |  | Deferred sales proceeds                                    |   | (1,000  | ) |        |   |       |  
|                                               |  | Available-for-sale securities received                     |   |        |   |        |   |       |  
|                                               |  |                                                            |   |         |   |         |   |        |  
|Cash flow on disposal net of cash              |  | 961                                                        |   | 8,848   |   | 135,071 |  
|                                               |  |                                                            |   |         |   |         |   |        |  

The
results, assets and liabilities of divested operations are summarized in Note 21.

In
2004, Millicom sold its interest in its operation in Argentina and in 2003 its interest in its operation in Colombia. In 2002, Millicom disposed of MIC Systems, including MACH, its
GSM clearing-house, and disposed of its operation in the Philippines.

28. NON-CASH INVESTING AND FINANCING ACTIVITIES

2004

2003

2002US$ '000

US$ '000

US$ '000Investing activities:Revaluation of marketable securities

(127,158
)
246,760

(57,813
)Acquisition of El Salvador



51,371

Acquisition of licenses

221,246



Financing activities:Redemption of debt



(150,350
)
(42,247
)Issuance of capital

67,986

1,181

Payment of debt to shareholders



2,394




29. COMMITMENTS AND CONTINGENCIES

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, 2004, Millicom's consolidated share of these matters that have not been provided totaled $72,635,000 of which $438,000 relate to joint ventures. Management is of the opinion that
while it is impossible to ascertain the ultimate legal and

F-56

---



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.

Tele2 AB series B shares

The Tele2 AB series B ("Tele2") shares underlying the 5% Mandatory Exchangeable Notes (Note 18) have been lent to Deutsche Bank AG London pursuant
to a securities lending arrangement. Millicom Telecommunications S.A. is obligated to deliver Tele2 shares upon exchange of the 5% Mandatory Exchangeable Notes even in the event of a failure of
Deutsche Bank AG London to redeliver to Millicom Telecommunications S.A. Tele2 shares.

MACH

In November 2002, Millicom completed the sale of Multinational Automated Clearing House S.A. ("MACH"). Following examination of the books and records of
MACH subsequent to purchase, the buyers have claimed a reduction in the purchase price to reflect a claimed lower balance sheet value, as per the terms of the purchase agreement. Millicom's management
is still examining this claim and does not expect there to be a significant impact on the Group's consolidated financial statements.

Debt pledges and guarantees

Details of debt pledges and guarantees are contained in Note 18.

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.

Lease commitments



The Group has the following annual operating lease commitments as of December 31, 2004 and 2003.

2004

2003US$ '000

US$ '000Operating lease commitmentsWithin:

one year

7,035

5,992Between:

one - two years

4,877

4,501two - three years

4,946

3,863three - four years

3,641

4,186four - five years

3,232

3,183After:

five years

9,784

7,637Total

33,515

29,362


Operating
lease expense was $12,471,000 in 2004 (2003: $8,624,000, 2002: $10,527,000).

F-57

---





Future minimum payments on the finance leases are as follows:

2004

2003US$ '000

US$ '000Finance lease repaymentsWithin:

one year

214

137Between:

one - two years

202

22two - three years

207

1three - four years

214

four - five years

214

After:

five years



Total

1,051

160


The
finance 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 a fixed commitment to purchase network equipment, land and buildings and other fixed assets for a value
of $91,848,000 (2003: $39,472,000) of which $13,939,000 (2003: $10,779,000) relate to joint ventures, from a number of suppliers.

As
of December 31, 2004, as part of the 2002 and 2003 amendments (Note 3) Comvik International (Vietnam) AB still needs to disburse, before the end of the revenue sharing
agreement on May 18, 2005, approximately $27,639,000, of which $21,908,000 are already ordered and included in the commitment described above.

Dividends

The ability of the Company to make dividend payments is subject to, among other things, the terms of the indebtedness, local legal restrictions and the ability to
repatriate funds from Millicom's various joint ventures.

Contingent assets

Due to the late delivery by a supplier of network equipment in Central and South America, Millicom is entitled to a total compensation for suffered damages
amounting to approximately $9.8 million. This compensation is in the form of discount vouchers on future purchases of network equipment. The recognition of the compensation as "other operating
income" occurs when the network equipment purchased is delivered. As of December 31, 2004, approximately $6.5 million of compensation is expected to be recognized as other operating
income in the first and second quarters of 2005. In 2004, Millicom recognized as "other operating income" compensation of $3.3 million.

30. RELATED PARTY TRANSACTIONS

a) Remuneration of the directors and senior executives



The remuneration of the members of the board of directors of the Company (the "Board") is comprised of an annual fee and stock options. The annual fee and the
number of stock options granted are proposed by the Board and approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

F-58

---



The remuneration of the President and Chief Executive Officer (the "CEO") and other senior executives comprises an annual base salary, bonuses, stock options, other benefits and social
security contributions. The CEO also receives a pension contribution. "Other senior executives" includes the Chief Operating Officer, the Senior Executive Vice President, the Executive Vice
President-Operations, the Chief Financial Controller, the Chief of Finance-Global Operations, the Cluster Managers for South East Asia, South Asia, Central America and South America. The bonus and
stock options programmes are based on actual performance (including individual and Company performance). Options are granted once a year by the Shareholders at the AGM following the recommendation of
the Board. For 2004, the annual base salary and other benefits of the CEO was approved by the Chairman of the Board, and the annual base salary and other benefits of other senior executives was set by
the CEO. The bonus for 2004 for senior executives was approved by the Compensation Committee. For 2005, the remuneration of all senior executives is approved by the Compensation Committee composed of
four members of the Board.

Remuneration and pensions

2004

The remuneration charge for 2004 of the Chairman of the Board (the "Chairman") was $56,000 and a total of $315,000 for the other members of the Board. In 2004,
20,000 stock options were granted to the Chairman and 120,000 to the other members of the Board at an exercise price equal to the market price at date of grant plus a mark-up of 10%. As of
December 31, 2004, the Chairman held 20,000 stock options and the other members of the Board held 465,600 stock options.

The
remuneration charge of the CEO for 2004 was $1,988,000 of which bonus amounted to $497,300. The pension insurance charge of the CEO for 2004 amounted to $1,370,000 of which $396,000
related to the 2004 service cost and interest and $974,000 represented the difference between the actuarial liability and the plan assets. Future contributions to the pension insurance of the CEO are
based on a service cost and interest paid to a third party insurance company. The yearly contribution is based on the projected entitlement at the time of retirement and is based on an average of the
annual base salary of previous years and length of service with the Company. As of December 31, 2004, the pension actuarial liability amounted to $3,827,000 and the pension plan assets amounted
to $2,853,000. The net pension liability of $974,000 is recorded under the caption "Other non-current
liabilities". In 2004, 50,000 options were granted to the CEO at an exercise price equal to the market price at date of grant plus a mark-up of 10%. As of December 31, 2004, the CEO
held 1,561,100 stock options.

The
remuneration charge for the other senior executives (9 executives) for 2004 was a total of $3,612,300 of which bonuses amounted to $953,700 and other benefits amounted to $682,800.
No contributions to pension funds were made for other senior executives. In 2004, 152,100 options were granted to the other senior executives at an exercise price equal to the market price at date of
grant plus a mark-up of 10%. As of December 31, 2004, the other senior executives held 710,000 stock options.

2003

The remuneration for 2003 of the Chairman was $96,000 and a total of $247,500 for the other members of the Board. In 2003, 34,000 stock options were granted to
the Chairman and 136,000 to the other members of the Board at an exercise price equal to the market price at date of grant. As of December 31, 2003, the Chairman held 634,000 stock options and
the other members of the Board held 368,700 stock options.

The
remuneration charge of the CEO during 2003 was $1,749,000 of which bonus amounted to $606,000. The pension insurance cost of the CEO for 2003 amounted to $1,636,000. In 2003, 600,000

F-59

---



options
were granted to the CEO at an exercise price equal to the market price at date of grant. As of December 31, 2003, the CEO held 1,600,000 stock options.

The
remuneration charge for 2003 for the other senior executives (10 executives, including in 2003 the Cluster manager for Africa) was a total of $3,988,700 of which bonuses amounted to
$1,173,800 and other benefits of $662,400. No contributions to pension funds were made to other senior executives. 325,300 stock options were granted in 2003 to other senior executives at an exercise
price equal to the market price at date of grant. As of December 31, 2003, the other senior executives held 948,300 stock options.

Severance payments

If employment of senior executives is terminated by Millicom, severance payment of up to 12 months salary is payable.

Other

From time to time, Millicom has allowed its senior executives to participate in its operations. The following participations and options are held by senior
executives:

Share
options totaling 1% of the outstanding share capital in Millicom International BV are held by Mr. Beuls, President and Chief Executive Officer of Millicom (See
Note 17).

In
Millicom's operations in Vietnam, Mr. M.A. Zaman, a senior vice president of Millicom, owns 20% of Comvik International (Vietnam) AB. In Millicom's operations in Cambodia,
Mr. Zaman owns 3.1% of CamGSM Company Limited and 3% of Royal Telecam International Limited. In Laos, Mr. Zaman owns 3.9% of Millicom Laos. Mr. Zaman holds the right to acquire an
equity ownership in certain countries in the event he is able to obtain a license for Millicom.



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, 2004, Kinnevik owned approximately 35.6% of Millicom.

On
December 31, 1995 Millicom acquired 17.7% of MACH from Kinnevik. The consideration, which was to have a minimum present value of $5,000,000 at December 31, 1995,
consisted of (i) an initial payment of $1,000,000 plus interest, at the ruling market rate, for the month of January 1996, (ii) seven additional payments for each of the financial
years 1996 to 2002, calculated as 17.7% of MACH's pre-tax profit for the relevant year and payable in April of the following year, and (iii) a final payment payable in
April 2003, calculated as the higher of (a) the sum of the seven additional payments multiplied by a factor of 1.3 minus the initial payment or (b) the amount required to make the
present value of all payments at December 31, 1995 equal to $5,000,000. The final payment was made in common stock of Millicom. In 2002 an amount of $3,958,000 due to Kinnevik was included in
the balance sheet under the heading "Amounts due to shareholders". In addition, as of December 31, 2002, Millicom owed $63,000 for additional charges. The balance was settled in 2003.

In
May 2002, Millicom sold a 17% interest in MIC Systems BV, the parent company of MACH to Kinnevik BV for $17,000,000.

During
2002, Kinnevik purchased Millicom 13.5% Notes (Note 18) on the open market with a face value of $44,000,000. Millicom then exchanged these for $1,500,000 cash and 672,016
Tele2 AB series B shares at market prices.

During
the course of 2002, Millicom sold an additional 6,177,369 Tele2 AB series B shares at market prices to Kinnevik for a value of $104,295,000.

F-60

---



During
2004, Kinnevik purchased 5,600,000 Millicom shares of the Company of which 4,050,000 in the Share Offering on December 7, 2004 (see Note 17).

The
Group maintains corporate bank accounts at Banque Invik, a subsidiary of Kinnevik, through which it makes payments and receives cash in the normal course of business. As of
December 31, 2004, the Group had current accounts, time deposits, blocked deposits and a bank facility of $3,000,000 at Banque Invik.



In November 2001, Millicom sold 100% of its interests in FORA Telecom BV, its Russian Cellular telephone operations to Tele2 AB for a consideration of
$80 million in Tele2 AB series "B' shares plus a maximum equivalent of $30 million in cash or additional Tele2 AB series "B" shares, depending on the outcome of GSM license applications
for three of Millicom's cellular telephone operations in Russia. The sale resulted in a $6,693,000 gain on the disposal in 2001 (Note 23). During 2002, Millicom obtained the necessary GSM
licenses referred to above and received the additional proceeds of $30 million in cash. In addition, certain loans for which Millicom was liable were settled at less than their carrying value.
The gain realized in obtaining the licenses and settling the loans net of costs incurred in the acquisition of the licenses, amounted to $30,859,000 in 2002.



As of December 31, 1998, the Group, through its subsidiary MIC-USA inc. ("MIC-USA"), had a 100% temporary and restricted
shareholding in Great Universal. On December 31, 1999, MIC-USA transferred its 100% ownership and related rights in Great Universal to Great Universal LLC 1999 Trust for a
consideration of $5,027,000, corresponding to the net book value of Millicom's investment in Great Universal. During 2002, Millicom recorded an impairment loss for 100% of this asset due to
uncertainty concerning its recoverability (Note 9). The rights and obligations of MIC-USA toward Great Universal were assigned to Great Universal LLC. Great Universal continues to
indemnify Millicom against certain contingent liabilities. Great Universal and Modern Holdings are mainly engaged in the communications, information technology, teleservices and media industries
primarily.

In
June 1999, Great Universal effected a reorganization where it spun off its subsidiaries into two separate businesses being Great Universal Inc. and Modern Holdings.
Great Universal LLC holds 100% of common shares in Great Universal Inc. and 52.7% of common shares in Modern Holdings. Millicom also has a direct ownership of 11.6% of the share capital of
Modern Holdings. These investments are recorded as non-current available-for-sale security (note 9).

Millicom
does not consolidate its investments in Great Universal and Modern Holdings since the restrictions on their ability to distribute dividends is considered a severe
long-term restriction that significantly impairs their ability to transfer funds to Millicom. Further, due to the existence of warrants, enabling the warrant holders to obtain control over
Great Universal and Modern Holdings, Millicom considers that it does not control these companies.



The following sales and purchases and outstanding balances occurred with companies affiliated to Millicom. The services purchased and supplied covered fraud
detection, network and IT support, acquisition of assets and customer care systems.

F-61

---



Millicom
had the following payables to related parties and made purchases from related parties as follows:

Purchases in year

Amount payable as
of December 31,2004

2003

2004

2003US$ '000

US$ '000

US$ '000

US$ '000Applied Sales Management







Applied Value

81

369



24AVI

403



70

Banque Invik

665

937

57

348Bassett

376

451

130

40Ephibian



24



14Foreign Value

1,859

730



Fischer Partners

37





Great Universal

192



78

Kinnevik

5





Metro

21





Modern Treuhand

569



415

Modern Times Group

5



1

Netcom Consultants

1,129

352



Praesidium

13

50



Procure-it-right

978

1,384

8

72Search Value

257

159



38Shared Services

146



34

Shared Value

680

638

5

41Tele2 AB

234

247

177

313C Communications Intl

233

182



7,883

5,523

975

608


As
of December 31, 2004 and 2003, Millicom had the following receivables from related parties:

2004

2003US$ '000

US$ '000Kinnevik

154

154Metro



247Millicom Technologies Ltd

83

Modern Holdings

1,383

1,690Modern Times Group

265

265Netcom

8

16Shared Value

18

18Stonebrook Enterprises

156

156Tele2 AB



3592,067

2,905


F-62

---



31. EARNINGS (LOSS) PER COMMON SHARE

Earnings (loss) per common share are comprised as follows (i):

2004

2003

2002Net profit (loss) attributable to shareholders (US$`000)

68,241

178,823

(385,143
)Weighted average number of shares outstanding during the year (in `000)

83,335

65,312

65,272Basic (loss) earnings per share (US$)

0.82

2.74

(5.90
)Net profit (loss) attributable to shareholders (US$`000)

68,241

178,823

(385,143
)Interest expense on convertible debt (US$`000)

1,217

3,476

Net profit (loss) used to determine diluted earnings per share (US$`000)

69,458

182,299

(385,143
)Weighted average number of shares outstanding during the year (in `000)

83,335

65,312

65,272Adjustments for:Assumed conversion of convertible debt (in `000)(ii)

6,462

15,186

Share options (in `000)(iii)

515

2

Weighted average number of shares and potential dilutive shares outstanding during the year (in `000)

90,312

80,500

65,272Diluted earnings (loss) per common share (US$)

0.77

2.26

(5.90
)


---

32. RECONCILIATION TO U.S. GAAP

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS"). If the consolidated
financial statements had been prepared under accounting principles generally accepted in the United States of America ("U.S. GAAP") the following principal differences would arise:



F-63

---







Under IFRS

Revenues

Operating
Profit

Total assets

Maximum
Exposure to
lossU.S.$ '000

U.S.$ '000

U.S.$ '000

U.S.$ '000Telefonica Celular (Honduras)

123,704

58,605

83,364

29,103




F-64

---





Telefonica Celular

Emtel limitedU.S.$ '000

U.S.$ '000Non-current assets

41,556

29,341Current assets

41,808

10,726Non-current liabilities

3,024

6,872Current liabilities

22,134

14,273Revenues

124,472

31,060Gross profit

98,206

29,430Net profit

40,940

14,832




Telefonica Celular

Emtel limitedU.S.$ '000

U.S.$ '000Non-current assets

37,286

20,284Current assets

41,935

8,855Non-current liabilities

2,476

1,630Current liabilities

19,620

19,273Revenues

95,716

24,004Gross profit

78,526

15,652Net profit

34,476

5,390






F-65

---





December 31,
2004

December 31,
2003

December 31,
2002U.S.$ '000

U.S.$ '000

U.S.$ '000Additional losses in excess of investment value and subsequent reversal

21

(1,052
)
(3,805
)Discontinued share of losses





(416
)21

(1,052
)
(4,221
)






F-66

---





Pro forma under IFRS

2003

2002U.S.$ '000
(Unaudited)

U.S.$ '000
(Unaudited)Total revenues

727,989

703,760Net profit (loss)

188,741

(379,483
)Basic net profit (loss) per share

2.89

(5.81
)Diluted net profit (loss) per share

2.39

(5.81
)Shares used to compute basic profit (loss) per share

65,312

65,272Shares used to compute diluted profit (loss) per share

80,500

65,272






F-67

---









F-68

---







F-69

---









2004

2003

2002US$ '000

US$ '000

US$ '000Adjustments to impairment / (reversal of impairment) recorded for IFRS

5,345

(1,579
)
2,234Additional impairment for U.S. GAAP



(2,011
)
(2,571
)Reversal of/ (Incremental) depreciation charge

526

(223
)
(936
)Total adjustment to profit/(loss) in year

5,871
(a)
(3,813
)
(1,273
)






F-70

---







F-71

---





Adjustments to profit for the year ended December 31, 2004

Adjustments to profit for the year ended December 31, 2003US$ '000

US$ '000Amortization of BCF on the 2% PIK Notes(ii)

(10,695
)
(4,257
)Adjustment to interest expenses on the 2% PIK Notes(iii)

1,217

4,579Increase in gain realized on the debt exchange(iv)



16,002Amortization of incremental deferred costs(v)

(1,276
)
(14,726
)(10,754
)
1,598




F-72

---





Net profit (loss) from component qualifying as discontinued operations:

|                                                                                     |                                                                | Year ended December 31, |        |       
|------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ----------------------- | ------ | ------
|
|
|
|Loss from discontinued operations, net of taxes                                      |                                                                |                         |        |       
|                                                                                     | Colombian operations                                           |                         |       |       
|                                                                                     | Peruvian operations                                            |                         | (113   | )     
|                                                                                     | MIC Systems                                                    |                         |       |       
|                                                                                     | Liberty Broadband Ltd                                          |                         |       |       
|                                                                                     | Argentinean operations                                         |                         | (1,940 | )     
|                                                                                     |                                                                |                         |        |       
|Net loss from discontinued operations, excluding Great Universal and Modern Holdings |                                                                | (2,053                  | )      | (7,758
|                                                                                     | Certain operations held by Great Universal and Modern Holdings |                         | (24    | )     
|                                                                                     |                                                                |                         |        |       
|Profit (loss) from discontinued operations(b)                                        |                                                                | (2,077                  | )      | (4,300
|Gain on disposal, net of taxes(a)                                                    |                                                                | 2,812                   |        | 5,882 
|                                                                                     |                                                                |                         |        |       
|Profit from discontinued operations                                                  |                                                                | 735                     |        | 1,582 
|                                                                                     |                                                                |                         |        |       

---



December 31, 2003

December 31, 2002US$ '000

US$ '000Revenues from continuing operations

425,241

331,007Cost of sales from continuing operations

(176,605
)
(137,772
)Operating expenses from continuing operations

(147,232
)
(167,534
)Operating profit from continuing operations

101,404

25,701Net loss reported from continuing operations

(47,910
)
(327,959
)




F-73

---







F-74

---





F-75

---





The above items give rise to the following differences in the statement of profit and loss for the year ended December 31, 2004 recorded under U.S. GAAP:

|Year ended
December 31, 2004                                                                 |  | Item     |  | Per
Profit and Loss
Group |   | Consolidation of
VIEs and
Proportional
Consolidation
Adjustment(a)
(Item 1) |   | Other
Adjustments |   | Discontinued
operations
(Item 14) |   | Under U.S. GAAP
Group |  
|-------------------------------------------------------------------------------------------- |  | -------- |  | ------------------------- | - | --------------------------------------------------------------------------- | - | ----------------- | - | --------------------------------- | - | --------------------- | -
|
|Revenues                                                                                     |  | 7        |  | 921,466                   |   | 98,573                                                                      |   | (3,742            | ) | (6,520                            | ) | 1,009,777             |  
|Cost of sales                                                                                |  | 7, 8, 10 |  | (388,334                  | ) | (48,886                                                                     | ) | (75,105           | ) | 3,277                             |   | (509,048              | )
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Gross profit                                                                                 |  |          |  | 533,132                   |   | 49,687                                                                      |   | (78,847           | ) | (3,243                            | ) | 500,729               |  
|Sales and marketing                                                                          |  | 7        |  | (122,705                  | ) | (15,897                                                                     | ) | 83,606            |   | 1,059                             |   | (53,937               | )
|General and administrative expenses                                                          |  | 4, 6     |  | (127,400                  | ) | (24,406                                                                     | ) | 852               |   | 2,491                             |   | (148,463              | )
|Gain (loss) from sale of subsidiaries and joint ventures, net                                |  | 14       |  | (2,207                    | ) |                                                                            |   | 5,019             |   | (2,812                            | ) |                      |  
|Other operating expenses                                                                     |  | 10       |  | (35,225                   | ) | (7,725                                                                      | ) | (8,292            | ) |                                  |   | (51,242               | )
|Other operating income                                                                       |  |          |  | 3,287                     |   | 1,260                                                                       |   |                  |   |                                  |   | 4,547                 |  
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Operating profit                                                                             |  |          |  | 248,882                   |   | 2,919                                                                       |   | 2,338             |   | (2,505                            | ) | 251,634               |  
|Valuation movement on investment in securities                                               |  | 12       |  | (126,957                  | ) |                                                                            |   | 127,158           |   |                                  |   | 201                   |  
|Fair value result on financial instruments                                                   |  |          |  | 148,816                   |   |                                                                            |   |                  |   |                                  |   | 148,816               |  
|Profit from associates                                                                       |  | 2, 7     |  | 814                       |   | 28,712                                                                      |   | 4                 |   |                                  |   | 29,530                |  
|Interest expense                                                                             |  | 13       |  | (108,534                  | ) | (1,501                                                                      | ) | (10,754           | ) | 1,282                             |   | (119,507              | )
|Interest income                                                                              |  |          |  | 7,706                     |   | 2,010                                                                       |   |                  |   | (9                                | ) | 9,707                 |  
|Exchange loss, net                                                                           |  |          |  | (26,796                   | ) | (443                                                                        | ) |                  |   | 946                               |   | (26,293               | )
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Profit before taxes and minority interest                                                    |  |          |  | 143,931                   |   | 31,697                                                                      |   | 118,746           |   | (286                              | ) | 294,088               |  
|Charge for taxes                                                                             |  | 7, 8     |  | (58,900                   | ) | 978                                                                         |   | (1,650            | ) | (449                              | ) | (60,021               | )
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Profit before minority interest                                                              |  |          |  | 85,031                    |   | 32,675                                                                      |   | 117,096           |   | (735                              | ) | 234,067               |  
|Minority interest                                                                            |  | 7, 8     |  | (16,790                   | ) | (31,662                                                                     | ) | (344              | ) |                                  |   | (48,796               | )
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Profit from continuing operations before cumulative effect of change in accounting principle |  |          |  | 68,241                    |   | 1,013                                                                       |   | 116,752           |   | (735                              | ) | 185,271               |  
|Profit from discontinued operations, net of tax                                              |  | 14       |  |                          |   |                                                                            |   |                  |   | 735                               |   | 735                   |  
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Profit before cumulative effects of changes in accounting principles                         |  |          |  | 68,241                    |   | 1,013                                                                       |   | 116,752           |   |                                  |   | 186,006               |  
|Cumulative effect of change in accounting principle                                          |  | 1        |  |                          |   | 33                                                                          |   | 2,832             |   |                                  |   | 2,865                 |  
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  
|Net profit for the year                                                                      |  |          |  | 68,241                    |   | 1,046                                                                       |   | 119,584           |   |                                  |   | 188,871               |  
|                                                                                             |  |          |  |                           |   |                                                                             |   |                   |   |                                   |   |                       |  

---

F-76

---



The above items give rise to the following differences in net profit (loss) for the years ended December 31, 2004, 2003 and 2002 recorded
under U.S. GAAP:

|                                                                                                      |                                                                                                     | Item  |       | 2004    |         | 2003    |          | 2002     |        
|----------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ----- | ----- | ------- | ------- | ------- | -------- | -------- | -------
|
|Net profit (loss) for the period reported under IFRS                                                  |                                                                                                     |       |       | 68,241  |         | 178,823 |          | (385,143 | )      
|Items increasing(decreasing) reported profit (loss):                                                  |                                                                                                     |       |       |         |         |         |          |          |        
|                                                                                                      | Consolidation of GU and Modern                                                                      |       | 1, 15 |         | 1,013   |         | 4,603    |          | (1,630 
|                                                                                                      | Application of equity method of accounting                                                          |       | 2     |         | 21      |         | (1,052   | )        | (4,221 
|                                                                                                      | Application of equity method of accounting for Telemovil El Salvador                                |       | 3     |         |        |         | 5,830    |          | 7,887  
|                                                                                                      | Adjustments to initial step-up in the value of licenses                                             |       | 4     |         | 2,108   |         | 2,273    |          | 2,273  
|                                                                                                      | Valuation of Vietnam option                                                                         |       | 5     |         |        |         |         |          | (16,817
|                                                                                                      | Compensation cost for stock options granted to employees                                            |       | 6     |         | (1,256  | )       | (1,157   | )        | 1,308  
|                                                                                                      | Adjustments to connection revenues and connection costs, net of tax                                 |       | 7     |         | (1,496  | )       | (2,994   | )        | (337   
|                                                                                                      | Adjustments to impairment of intangible assets                                                      |       | 8     |         | 3,127   |         | (3,813   | )        | (1,273 
|                                                                                                      | Reversal of goodwill amortization                                                                   |       | 10    |         | 8,242   |         | 6,695    |          | 7,865  
|                                                                                                      | Additional goodwill impairment                                                                      |       | 10    |         | (16,534 | )       |         |          | (3,136 
|                                                                                                      | Reversal of incremental depreciation charge                                                         |       | 10    |         | 1,117   |         |         |          |       
|                                                                                                      | Reclassification to shareholders' equity of fair value adjustments on available-for-sale securities |       | 12    |         | 127,158 |         | (241,163 | )        |       
|                                                                                                      | Impairment of securities, other than temporary                                                      |       | 12    |         |        |         |         |          | 61,325 
|                                                                                                      | Adjustments related to debt exchange                                                                |       | 13    |         | (10,754 | )       | 1,598    |          |       
|                                                                                                      | Disposal of Millicom Argentina                                                                      |       | 14    |         | 5,019   |         |         |          |       
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        
|Profit (loss) after taxes before cumulative effect of change in accounting principle                  |                                                                                                     |       |       | 186,006 |         | (50,357 | )        | (331,899 | )      
|Cumulative effect of change in accounting principle                                                   |                                                                                                     | 1, 10 |       | 2,865   |         |        |          | 9,336    |        
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        
|Net profit (loss) under U.S. GAAP                                                                     |                                                                                                     |       |       | 188,871 |         | (50,357 | )        | (322,563 | )      
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        
|Presented as:                                                                                         |                                                                                                     |       |       |         |         |         |          |          |        
|Net profit (loss) from continuing operations                                                          |                                                                                                     |       |       | 185,271 |         | (51,939 | )        | (335,831 | )      
|Discontinued operations:                                                                              |                                                                                                     | 14    |       |         |         |         |          |          |        
|                                                                                                      | Loss from discontinued operations, net of taxes(a)                                                  |       |       |         | (2,077  | )       | (4,300   | )        | (77,013
|                                                                                                      | Gain on disposal, net of taxes(a)                                                                   |       |       |         | 2,812   |         | 5,882    |          | 80,945 
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        
|Profit from discontinued operations                                                                   |                                                                                                     |       |       | 735     |         | 1,582   |          | 3,932    |        
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        
|Profit (loss) after taxes, before cumulative effect of change in accounting principle under U.S. GAAP |                                                                                                     |       |       | 186,006 |         | (50,357 | )        | (331,899 | )      
|Cumulative effect of change in accounting principle                                                   |                                                                                                     |       |       | 2,865   |         |        |          | 9,336    |        
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        
|Net profit (loss) under U.S.GAAP                                                                      |                                                                                                     |       |       | 188,871 |         | (50,357 | )        | (322,563 | )      
|                                                                                                      |                                                                                                     |       |       |         |         |         |          |          |        

---

F-77

---



|Basic profit (loss) per common share                                                                   |                                                               | 2004 |        | 2003 |   | 2002   |      
|------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ---- | ------ | ---- | - | ------ | -----
|Profit (loss) per common share under U.S. GAAP:                                                        |                                                               |      |        |      |   |        |      
|                                                                                                       | from continuing operations                                   |      | $      | 2.22 |   | $      | (0.79
|                                                                                                       | from discontinuing operations                                |      | $      | 0.01 |   | $      | 0.02 
|                                                                                                       |                                                               |      |        |      |   |        |      
|Profit (loss) per common share after taxes, before cumulative effect of change in accounting principle |                                                               | $    | 2.23   |      | $ | (0.77  | )    
|                                                                                                       | Impact of cumulative effect of change in accounting principle |      | $      | 0.04 |   |        |     
|                                                                                                       |                                                               |      |        |      |   |        |      
|Basic profit (loss) per common share under U.S. GAAP                                                   |                                                               | $    | 2.27   |      | $ | (0.77  | )    
|                                                                                                       |                                                               |      |        |      |   |        |      
|Weighted average number of shares outstanding in the period (in '000)                                  |                                                               |      | 83,335 |      |   | 65,312 |      
|                                                                                                       |                                                               |      |        |      |   |        |      

|Diluted profit (loss) per common share                                                                 |                                                               | 2004 |        | 2003 |   | 2002   |      
|------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ---- | ------ | ---- | - | ------ | -----
|Profit (loss) per common share under U.S. GAAP:                                                        |                                                               |      |        |      |   |        |      
|                                                                                                       | from continuing operations                                   |      | $      | 2.05 |   | $      | (0.79
|                                                                                                       | from discontinuing operations                                |      | $      | 0.01 |   | $      | 0.02 
|                                                                                                       |                                                               |      |        |      |   |        |      
|Profit (loss) per common share after taxes, before cumulative effect of change in accounting principle |                                                               | $    | 2.06   |      | $ | (0.77  | )    
|                                                                                                       | Impact of cumulative effect of change in accounting principle |      | $      | 0.03 |   |        |     
|                                                                                                       |                                                               |      |        |      |   |        |      
|Diluted profit (loss) per common share under U.S. GAAP                                                 |                                                               | $    | 2.09   |      | $ | (0.77  | )    
|                                                                                                       |                                                               |      |        |      |   |        |      
|Weighted average number of shares and potential dilutive shares outstanding during the year (in '000)  |                                                               |      | 90,312 |      |   | 65,312 |      
|                                                                                                       |                                                               |      |        |      |   |        |      

F-78

---



Impact of consolidation of Great Universal and Modern Holdings

As explained in U.S. GAAP adjustment item No. 15, above, both Great Universal ("GU") and Modern Holdings ("Modern") are consolidated under U.S. GAAP.
Presented in the table below are the main line items of GU and Modern consolidated profit and loss statements from continuing operations:

|                                    |  | 2003    |   | 2002    |  
|----------------------------------- |  | ------- | - | ------- | -
|
|Revenues                            |  | 36,865  |   | 32,912  |  
|Cost of sales                       |  | (21,236 | ) | (21,664 | )
|Operating expenses                  |  | (15,178 | ) | (23,906 | )
|Operating profit (loss)             |  | 451     |   | (12,658 | )
|Net loss from continuing operations |  | (4,029  | ) | (7,872  | )
|Net profit (loss)                   |  | 4,603   |   | (1,630  | )

---

The
following disposals by GU and Modern have been classified as discontinued operations and have been excluded from continuing operations in the table above:



F-79

---





Balance Sheet Reconciliation:

The following significant balance sheet differences arise under U.S. GAAP as of December 31, 2004:

|Balance sheet as of December 31, 2004                             |                                                | Item                     |       | Per Balance
Sheet Group |         | Consolidation
of VIEs and
Proportional
Consolidation
Adjustments(a)
(Item 1) |        | Other
Adjustments |        | Held for sale
assets and
liabilities
(Item 14) |        | Under
U.S. GAAP
Group |        
|----------------------------------------------------------------- | ---------------------------------------------- | ------------------------ | ----- | ----------------------- | ------- | ---------------------------------------------------------------------------- | ------ | ----------------- | ------ | ---------------------------------------------- | ------ | --------------------- | -------
|
|Assets                                                            |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Non-Current Assets                                                |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Intangible assets                                                 |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  | Goodwill, net                                  |                          | 3, 10 |                         | 37,702  |                                                                              | 12,293 |                   | 34,914 |                                                |       |                       | 84,909 
|                                                                  | Licenses, net                                  |                          | 4     |                         | 277,705 |                                                                              | 4,349  |                   | (5,523 | )                                              | (174   | )                     | 276,357
|                                                                  | Other intangibles net                          |                          | 9     |                         | 2,561   |                                                                              | (308   | )                 | 19,005 |                                                | (27    | )                     | 21,231 
|Property, plant and equipment, net                                |                                                | 8, 10                    |       | 575,649                 |         | 43,823                                                                       |        | 1,783             |        | (1,469                                         | )      | 619,786               |        
|Financial assets                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  | Investment in Tele2 AB shares                  |                          |       |                         | 351,882 |                                                                              |       |                   |       |                                                |       |                       | 351,882
|                                                                  | Investment in other securities                 |                          |       |                         | 10,540  |                                                                              | (2,111 | )                 |       |                                                |       |                       | 8,429  
|                                                                  | Investments in associates                      |                          | 7     |                         | 2,220   |                                                                              | 42,492 |                   | (66    | )                                              |       |                       | 44,646 
|Embedded Derivative on the 5% Mandatory Exchangeable Notes        |                                                |                          |       | 45,255                  |         |                                                                             |        |                  |        |                                               |        | 45,255                |        
|                                                                  | Pledged deposits                               |                          |       |                         | 25,544  |                                                                              | 488    |                   |       |                                                | (24    | )                     | 26,008 
|Deferred taxation(b)                                              |                                                |                          |       | 5,883                   |         | 2,857                                                                        |        | (274              | )      | (972                                           | )      | 7,494                 |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  |                                                | Total Non-Current Assets |       |                         |         | 1,334,941                                                                    |        | 103,883           |        | 49,839                                         |        | (2,666                | )      
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Current Assets                                                    |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Financial assets                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  | Investment in other securities                 |                          |       |                         | 15,327  |                                                                              |       |                   |       |                                                |       |                       | 15,327 
|Inventories                                                       |                                                |                          |       | 16,304                  |         | 1,028                                                                        |        |                  |        | (42                                            | )      | 17,290                |        
|Trade receivable, net                                             |                                                |                          |       | 141,972                 |         | 14,001                                                                       |        |                  |        | (80                                            | )      | 155,893               |        
|Amounts due from joint ventures and joint venture partners        |                                                |                          |       | 11,715                  |         | (11,715                                                                      | )      |                  |        |                                               |        |                      |        
|Amounts due from other related parties                            |                                                |                          |       | 2,067                   |         | 630                                                                          |        |                  |        | (3                                             | )      | 2,694                 |        
|Prepayments and accrued income                                    |                                                | 7                        |       | 36,875                  |         | 7,528                                                                        |        | 4,431             |        | (354                                           | )      | 48,480                |        
|Other current assets(b)                                           |                                                |                          |       | 62,377                  |         | 7,960                                                                        |        | 274               |        |                                               |        | 70,611                |        
|Pledged deposits                                                  |                                                |                          |       | 9,260                   |         |                                                                             |        |                  |        |                                               |        | 9,260                 |        
|Time deposits                                                     |                                                |                          |       | 610                     |         |                                                                             |        |                  |        | (610                                           | )      |                      |        
|Cash and cash equivalents                                         |                                                |                          |       | 413,381                 |         | 14,873                                                                       |        |                  |        | (178                                           | )      | 428,076               |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  | Total Current Assets                           |                          |       |                         | 709,888 |                                                                              | 34,305 |                   | 4,705  |                                                | (1,267 | )                     | 747,631
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Total assets from disposal group classified as held for sale      |                                                |                          |       |                        |         |                                                                             |        |                  |        | 3,933                                          |        | 3,933                 |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Total Assets                                                      |                                                |                          |       | 2,044,829               |         | 138,188                                                                      |        | 54,544            |        |                                               |        | 2,237,561             |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Shareholders' Equity and Liabilities                              |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Shareholders' equity                                              |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Share capital and premium                                         |                                                | 4, 6, 13                 |       | 513,782                 |         |                                                                             |        | (41,467           | )      |                                               |        | 472,315               |        
|Treasury stock                                                    |                                                |                          |       | (8,833                  | )       |                                                                             |        |                  |        |                                               |        | (8,833                | )      
|Legal reserve                                                     |                                                |                          |       | 13,577                  |         |                                                                             |        |                  |        |                                               |        | 13,577                |        
|Accumulated losses brought forward                                |                                                |                          |       | (276,608                | )       | (5,129                                                                       | )      | (168,346          | )      |                                               |        | (450,083              | )      
|Net profit for the year                                           |                                                |                          |       | 68,241                  |         | 1,046                                                                        |        | 119,584           |        |                                               |        | 188,871               |        
|Currency translation reserve                                      |                                                |                          |       | (71,116                 | )       | 1,528                                                                        |        |                  |        |                                               |        | (69,588               | )      
|Deferred compensation costs                                       |                                                | 6                        |       |                        |         |                                                                             |        | (194              | )      |                                               |        | (194                  | )      
|Revaluation reserve                                               |                                                | 12                       |       |                        |         |                                                                             |        | 114,005           |        |                                               |        | 114,005               |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Total Shareholders' Equity                                        |                                                |                          |       | 239,043                 |         | (2,555)                                                                      |        | 23,582            |        |                                               |        | 260,070               |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Minority Interest                                                 |                                                | 7, 8                     |       | 43,351                  |         | 60,800                                                                       |        | (553              | )      |                                               |        | 103,598               |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Liabilities                                                       |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Non-current liabilities                                           |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  | 10% Senior Notes                               |                          | 9     |                         | 536,629 |                                                                              |       |                   | 13,371 |                                                |       |                       | 550,000
|                                                                  | 5% Mandatory Exchangeable Notesdebt component |                          | 9     |                         | 365,006 |                                                                              |       |                   | 5,634  |                                                |       |                       | 370,640
|                                                                  | Other debt and financing                       |                          |       |                         | 124,267 |                                                                              | 18,125 |                   |       |                                                |       |                       | 142,392
|Other non current liabilities                                     |                                                |                          |       | 194,774                 |         | (111                                                                         | )      |                  |        |                                               |        | 194,663               |        
|                                                                  | Deferred taxation(b)                           |                          | 7, 8  |                         | 39,216  |                                                                              | 1,956  |                   | (1,997 | )                                              |       |                       | 39,175 
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  |                                                |                          |       | 1,259,892               |         | 19,970                                                                       |        | 17,008            |        |                                               |        | 1,296,870             |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Current liabilities                                               |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  | Other debt and financing                       |                          |       |                         | 88,511  |                                                                              | 8,275  |                   |       |                                                |       |                       | 96,786 
|                                                                  | Trade payables                                 |                          |       |                         | 173,969 |                                                                              | 12,116 |                   |       |                                                | (968   | )                     | 185,117
|                                                                  | Amount due to joint ventures                   |                          |       |                         | 7,760   |                                                                              | 1,355  |                   |       |                                                |       |                       | 9,115  
|                                                                  | Amounts due to other related parties           |                          |       |                         | 975     |                                                                              | 326    |                   |       |                                                | (5     | )                     | 1,296  
|                                                                  | Accrued interest and other expenses            |                          | 7     |                         | 55,203  |                                                                              | 22,253 |                   | 11,942 |                                                | (88    | )                     | 89,310 
|                                                                  | Other current liabilities(b)                   |                          | 8     |                         | 176,125 |                                                                              | 15,648 |                   | 2,565  |                                                | (249   | )                     | 194,089
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|                                                                  |                                                |                          |       | 502,543                 |         | 59,973                                                                       |        | 14,507            |        | (1,310                                         | )      | 575,713               |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Total Liabilities                                                 |                                                |                          |       | 1,762,435               |         | 79,943                                                                       |        | 31,515            |        | (1,310                                         | )      | 1,872,583             |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Total liabilities from disposal group classified as held for sale |                                                |                          |       |                        |         |                                                                             |        |                  |        | 1,310                                          |        | 1,310                 |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        
|Total Shareholders' Equity and Liabilities                        |                                                |                          |       | 2,044,829               |         | 138,188                                                                      |        | 54,544            |        |                                               |        | 2,237,561             |        
|                                                                  |                                                |                          |       |                         |         |                                                                              |        |                   |        |                                                |        |                       |        

---

F-80

---



The following significant balance sheet differences arise under U.S. GAAP as of December 31, 2003:

|Balance sheet as of December 31, 2003                             |                                                            | Item     |       | Per Balance
Sheet Group |         | Proportional
Consolidation
Adjustments(a)
and consolidation of GU and Modern
(Item 1) |         | Other
Adjustments |        | Held for sale
assets and
liabilities
(Item 14) |      | Under
U.S. GAAP
Group |          
|----------------------------------------------------------------- | ---------------------------------------------------------- | -------- | ----- | ----------------------- | ------- | ------------------------------------------------------------------------------------- | ------- | ----------------- | ------ | ---------------------------------------------- | ---- | --------------------- | ---------
|
|Assets                                                            |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Non-Current Assets                                                |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Intangible assets                                                 |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|                                                                  | Goodwill, net                                              |          | 3, 10 |                         | 49,578  |                                                                                       | 10,661  |                   | 40,365 |                                                |     |                       | 100,604  
|                                                                  | Licenses, net                                              |          | 4     |                         | 30,889  |                                                                                       | (8,372  | )                 | (7,872 | )                                              | (210 | )                     | 14,435   
|                                                                  | Oher intangibles net                                       |          | 9, 13 |                         | 3,351   |                                                                                       | (372    | )                 | 24,183 |                                                | (51  | )                     | 27,111   
|Property, plant and equipment, net                                |                                                            | 8        |       | 489,543                 |         | (126,751                                                                              | )       | (1,579            | )      | (1,848                                         | )    | 359,365               |          
|Financial assets                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|                                                                  | Investment in Tele2 AB shares                              |          |       |                         | 479,040 |                                                                                       |        |                   |       |                                                |     |                       | 479,040  
|                                                                  | Investment in other securities                             |          |       |                         | 25,397  |                                                                                       | 768     |                   |       |                                                |     |                       | 26,165   
|                                                                  | Investments in associates                                  |          | 7     |                         | 1,340   |                                                                                       | 96,075  |                   | (688   | )                                              |     |                       | 96,727   
|                                                                  | Pledged deposits                                           |          |       |                         | 23,785  |                                                                                       | (1,460  | )                 |       |                                                | (28  | )                     | 22,297   
|                                                                  | Deferred taxation                                          |          |       |                         | 5,226   |                                                                                       | (1,100  | )                 |       |                                                | (370 | )                     | 3,756    
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total Non-Current Assets                                          |                                                            |          |       | 1,108,149               |         | (30,551                                                                               | )       | 54,409            |        | (2,507                                         | )    | 1,129,500             |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Current Assets                                                    |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Financial assets                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Investment in other securities                                    |                                                            |          |       | 15,291                  |         |                                                                                      |         |                  |        |                                               |      | 15,291                |          
|Inventories                                                       |                                                            |          |       | 10,941                  |         | (3,823                                                                                | )       |                  |        | (35                                            | )    | 7,083                 |          
|Trade receivable, net                                             |                                                            |          |       | 113,750                 |         | (29,012                                                                               | )       |                  |        | (705                                           | )    | 84,033                |          
|Amounts due from joint ventures and joint venture partners        |                                                            |          |       | 13,137                  |         | 3                                                                                     |         |                  |        |                                               |      | 13,140                |          
|Amounts due from other related parties                            |                                                            |          |       | 2,905                   |         | 3,665                                                                                 |         |                  |        |                                               |      | 6,570                 |          
|Prepayments and accrued income                                    |                                                            | 7        |       | 19,739                  |         | (4,131                                                                                | )       | 2,207             |        | (297                                           | )    | 17,518                |          
|Other current assets                                              |                                                            |          |       | 49,583                  |         | (6,152                                                                                | )       |                  |        | (116                                           | )    | 43,315                |          
|Pledged deposits                                                  |                                                            |          |       | 7,745                   |         |                                                                                      |         |                  |        |                                               |      | 7,745                 |          
|Time deposits                                                     |                                                            |          |       | 32,880                  |         |                                                                                      |         |                  |        | (598                                           | )    | 32,282                |          
|Cash and cash equivalents                                         |                                                            |          |       | 148,829                 |         | (577                                                                                  | )       |                  |        | (356                                           | )    | 147,896               |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total Current Assets                                              |                                                            |          |       | 414,800                 |         | (40,027                                                                               | )       | 2,207             |        | (2,107                                         | )    | 374,873               |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total assets from disposal group classified as held for sale      |                                                            |          |       |                        |         |                                                                                      |         |                  |        | 4,614                                          |      | 4,614                 |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total Assets                                                      |                                                            |          |       | 1,522,949               |         | (70,578                                                                               | )       | 56,616            |        |                                               |      | 1,508,987             |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Shareholders' Equity and Liabilities                              |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Shareholders' equity                                              |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Share capital and premium                                         |                                                            | 4, 6, 13 |       | 239,876                 |         |                                                                                      |         | (36,018           | )      |                                               |      | 203,858               |          
|Treasury stock                                                    |                                                            |          |       | (8,833                  | )       |                                                                                      |         |                  |        |                                               |      | (8,833                | )        
|2% PIK notesequity component                                     |                                                            | 13       |       | 16,006                  |         |                                                                                      |         | (16,006           | )      |                                               |      |                      |          
|Legal reserve                                                     |                                                            |          |       | 4,256                   |         |                                                                                      |         |                  |        |                                               |      | 4,256                 |          
|Accumulated losses brought forward                                |                                                            |          |       | (446,110                | )       | (15,389                                                                               | )       | 71,093            |        |                                               |      | (390,406              | )        
|Net profit/(loss) for the year                                    |                                                            |          |       | 178,823                 |         | 3,551                                                                                 |         | (232,731          | )      |                                               |      | (50,357               | )        
|Currency translation reserve                                      |                                                            |          |       | (69,198                 | )       | 2,660                                                                                 |         |                  |        |                                               |      | (66,538               | )        
|Deferred compensation costs                                       |                                                            | 6        |       |                        |         |                                                                                      |         | (1,344            | )      |                                               |      | (1,344                | )        
|Revaluation reserve                                               |                                                            | 12       |       |                        |         |                                                                                      |         | 241,163           |        |                                               |      | 241,163               |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total Shareholders' Equity                                        |                                                            |          |       | (85,180                 | )       | (9,178                                                                                | )       | 26,157            |        |                                               |      | (68,201               | )        
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Minority Interest                                                 |                                                            |          |       | 26,571                  |         | 1,299                                                                                 |         |                  |        |                                               |      | 27,870                |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Liabilities                                                       |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Non-current liabilities                                           |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|                                                                  | 10% Senior Notes                                           |          | 9     |                         | 536,036 |                                                                                       |        |                   | 13,964 |                                                |     |                       | 550,000  
|                                                                  | 2% PIK Notesdebt component                                |          | 13    |                         | 50,923  |                                                                                       |        |                   | 973    |                                                |     |                       | 51,896   
|                                                                  | 5% Mandatory Exchangeable Notesdebt component             |          | 9     |                         | 327,635 |                                                                                       |        |                   | 8,943  |                                                |     |                       | 336,578  
|                                                                  | Embedded derivative on the 5% Mandatory Exchangeable Notes |          |       |                         | 103,457 |                                                                                       |        |                   |       |                                                |     |                       | 103,457  
|                                                                  | Other debt and financing                                   |          |       |                         | 126,150 |                                                                                       | (20,294 | )                 |        |                                                |     |                       | 105,856  
|                                                                  | Deferred taxation and other non current liabilities        |          |       |                         | 38,006  |                                                                                       | (12,465 | )                 | (253   | )                                              |     |                       | 1,173,075
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|                                                                  |                                                            |          |       | 1,182,207               |         | (32,759                                                                               | )       | 23,627            |        |                                               |      | 1,173,075             |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Current liabilities                                               |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|                                                                  | Other debt and financing                                   |          |       |                         | 132,664 |                                                                                       | 7,341   |                   |       |                                                | (75  | )                     | 139,930  
|                                                                  | Trade payables                                             |          |       |                         | 107,424 |                                                                                       | (37,409 | )                 |       |                                                | (959 | )                     | 69,056   
|                                                                  | Amount due to joint ventures                               |          |       |                         | 5,340   |                                                                                       | 4,186   |                   |       |                                                |     |                       | 9,526    
|                                                                  | Amounts due to other related parties                       |          |       |                         | 608     |                                                                                       | 267     |                   |       |                                                | (5   | )                     | 870      
|                                                                  | Accrued interest and other expenses                        |          | 7     |                         | 44,673  |                                                                                       | 9,742   |                   | 6,579  |                                                | (363 | )                     | 60,631   
|                                                                  | Other current liabilities                                  |          | 8     |                         | 108,642 |                                                                                       | (14,067 | )                 | 253    |                                                | (420 | )                     | 94,408   
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|                                                                  |                                                            |          |       | 399,351                 |         | (29,940)                                                                              |         | 6,832             |        | (1,822                                         | )    | 374,421               |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total Liabilities                                                 |                                                            |          |       | 1,581,558               |         | (62,699                                                                               | )       | 30,459            |        | (1,822                                         | )    | 1,547,496             |          
|Total liabilities from disposal group classified as held for sale |                                                            |          |       |                        |         |                                                                                      |         |                  |        | 1,822                                          |      | 1,822                 |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          
|Total Shareholders' Equity and Liabilities                        |                                                            |          |       | 1,522,949               |         | (70,578                                                                               | )       | 56,616            |        |                                               |      | 1,508,987             |          
|                                                                  |                                                            |          |       |                         |         |                                                                                       |         |                   |        |                                                |      |                       |          

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F-81

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Impact of consolidation of Great Universal and Modern Holdings

As explained in adjustment item No. 15, under U.S. GAAP, both Great Universal ("GU") and Modern Holdings ("Modern") are consolidated under U.S. GAAP.
Presented in the table below are the main line items of GU and Modern's consolidated balance sheets as of December 31, 2003.

|                           |  | 2003   |  
|-------------------------- |  | ------ | -
|
|Total assets               |  | 48,061 |  
|Total shareholders' equity |  | (2,195 | )

Comprehensive Income:

The Company's statement of comprehensive income under U.S. GAAP for the years ended December 31, 2004, 2003 and 2002 is as follows:

|                                     |                                                                                                           | 2004     |          | 2003    |         | 2002     |         
|------------------------------------ | --------------------------------------------------------------------------------------------------------- | -------- | -------- | ------- | ------- | -------- | --------
|
|Net profit (loss) under U.S. GAAP    |                                                                                                           | 188,871  |          | (50,357 | )       | (322,563 | )       
|                                     |                                                                                                           |          |          |         |         |          |         
|Other comprehensive income (loss):   |                                                                                                           |          |          |         |         |          |         
|                                     | Holding (loss) gain excluding effect of sale of marketable securities sold during the year, net of tax(a) |          | (127,158 | )       | 241,163 |          | (37,422 
|                                     | Holding gain (loss) for securities sold during the year, net of tax(a)                                    |          | 201      |         | 5,597   |          | (131,396
|                                     | Reclassification adjustment for gain realized on sale of marketable securities, net of tax(a)             |          | (201     | )       | (5,597  | )        | 168,818 
|Currency translation reserve         |                                                                                                           | (3,050   | )        | 14,923  |         | (37,263  | )       
|                                     |                                                                                                           |          |          |         |         |          |         
|Other comprehensive (loss) income    |                                                                                                           | (130,208 | )        | 256,086 |         | (37,263  | )       
|                                     |                                                                                                           |          |          |         |         |          |         
|Comprehensive income under U.S. GAAP |                                                                                                           | 58,663   |          | 205,729 |         | (359,826 | )       
|                                     |                                                                                                           |          |          |         |         |          |         

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Additional Stock Option Disclosure:

As described above, under U.S. GAAP, the Company accounts for stock options under APB25 (see item 6). Had compensation costs been determined in accordance
with SFAS 123, the Company's net income and loss per share would have been adjusted to the following pro forma amounts:

|                                                                                                                                            |                          | 2004    |      | 2003    |       | 2002     |      
|------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ------- | ---- | ------- | ----- | -------- | -----
|
|Net profit (loss), as reported                                                                                                              |                          | 188,871 |      | (50,357 | )     | (322,563 | )    
|Add: total stock-based employee compensation expense determined under APB 25 for all awards, net of related tax effects                     |                          | 1,256   |      | 1,157   |       | (1,308   | )    
|Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |                          | (2,039  | )    | (2,579  | )     | 2,586    |      
|                                                                                                                                            |                          |         |      |         |       |          |      
|Pro forma net profit (loss)                                                                                                                 |                          | 188,088 |      | (51,779 | )     | (321,285 | )    
|                                                                                                                                            |                          |         |      |         |       |          |      
|                                                                                                                                            | Profit (loss) per share: |         |      |         |       |          |      
|                                                                                                                                            | As reported (basic)$    |         | 2.27 |         | (0.77 | )        | (4.94
|                                                                                                                                            | As reported (diluted)$  |         | 2.09 |         | (0.77 | )        | (4.94
|                                                                                                                                            | Pro forma (basic)$      |         | 2.26 |         | (0.79 | )        | (4.92
|                                                                                                                                            | Pro forma (diluted)$    |         | 2.08 |         | (0.79 | )        | (4.92

F-82

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The
fair value of the options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rates of 2.53%
(2003: 4.4%; 2002: 4.4%), expected lives ranging from 1 to 3.5 years, no dividends and expected volatility of 47.1% (2003: 114.9%; 2002: 58.4%).

33. SUBSEQUENT EVENTS

In January 2005 Millicom issued an aggregate principal amount of $200 million of 4% Convertible Bonds due 2010 convertible into Ordinary Shares
and/or SDRs. The net proceeds of the offering were paid and settled on January 7, 2005 in the amount of $195,875,000.

On
March 2, 2005 the registration statement of the 10% Senior Notes (see Note 18d) was declared effective and the special interest charge ceased to accrue.

On
March 30, 2005, following approval by Congress, the license of Celtel in Honduras was renewed until 2021.

On
April 18, 2005 Pakcom reached agreement with the Pakistan Telecommunications Authority (PTA) for the renewal of its license for 15 years. The payment terms are similar
to the terms agreed in 2004 by Paktel, Millicom's other subsidiary in Pakistan. Pakcom will pay a license fee of $291 million, with 50% payable over three years and the remaining 50% payable
over the following ten years. The company paid the first down payment for the license today. Pakcom is still in negotiations with the PTA with regard to the allocation of spectrum.

In
Vietnam the negotiations on the continuation of the cooperation have not yet led to an agreement between the parties. The negotiations on the creation of a Joint Stock Company, as
agreed between the parties by signing two Memoranda of Understanding in 2004, are continuing. The Government of Vietnam has agreed to equitize VMS, our partner under the current BCC. This is the first
equitization of a major telecommunication company in Vietnam which explains why at present, no information is available as to the process of this equitization. It is unlikely that this process will
have started by the end of the BCC on May 18 and without agreement between the parties at that date, Millicom will no longer be able to consolidate the Vietnam numbers and will have no more
revenues from its Vietnam operations after that date. An impairment charge of $16.6 million has been recorded in the first quarter of 2005 in the consolidated Group accounts to account for the
write-down of property, plant and equipment in Vietnam as the BCC expires on May 18, 2005. The Vietnam asset impairment is due to a late approval of investments required under the BCC which prevented
CIV from generating revenues of these fixed assets.

F-83

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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:
May 2, 2005

| |  | MILLICOM INTERNATIONAL CELLULAR S.A.
| |  | ------------------------------------
| |  | By:                                 
| |  | By:                                 

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                        
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1         |  | Articles of Association of Millicom International Cellular S.A.                                                                                                                                                                                                                                                                    
|2.1         |  | Trust Deed, dated January 7, 2005 between Millicom International Cellular S.A. and The Bank of New York, as Trustee.                                                                                                                                                                                                               
|2.2         |  | Trust Deed, dated August 7, 2003 between Millicom Telecommunications S.A., Millicom International Cellular S.A. and Deutsche Trustee Company Limited.*                                                                                                                                                                             
|2.3         |  | 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 13, 2005, respectively).
|4.1         |  | Business Co-Operation Contract dated June 2, 1994, as amended, among Vietnam Mobile Services Co., Industriforvaltnings AB Kinnevik and Comvik International Vietnam AB.**                                                                                                                                                          
|7.1         |  | Explanation of the calculation of (loss) earnings per share.*                                                                                                                                                                                                                                                                      
|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 Bruno Nieuwland required by Exchange Act Rule 13a-14(a).                                                                                                                                                                                                                                                          
|12.3        |  | Certification of Judy Tan required by Exchange Act Rule 13a-14(a).                                                                                                                                                                                                                                                                 
|13.1        |  | Certification of Marc Beuls, Bruno Nieuwland and Judy Tan required by Exchange Act Rule 13a-14(b).                                                                                                                                                                                                                                 
|14.1        |  | Consent of PricewaterhouseCoopers S. à r. l. to the incorporation by reference of their report dated May 2, 2005 in the Company's Registration Statement on Form F-3 (No. 333-111779).                                                                                                                                             

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