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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)o

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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2010ORo

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

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


000-22828 Commission file number

MILLICOM INTERNATIONAL CELLULAR S.A.

(Exact name of Registrant as specified in its charter)

GRAND-DUCHY OF LUXEMBOURG

(Jurisdiction of incorporation or organization)

15 Rue Léon Laval, L-3372 Leudelange Grand Duchy of Luxembourg

(Address of principal executive offices)

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

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

Securities
registered or to be registered pursuant to Section 12 (b) of the Act:NoneSecurities registered or to be registered pursuant to Section 12 (g) of the Act:NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: Common Stock, par value $1.50 per share

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

109,053,120 shares of Common Stock as of December 31, 2010

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

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

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

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

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

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

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o


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

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

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

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



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Table of Contents



TABLE OF CONTENTS



PageFORWARD-LOOKING STATEMENTS


1PRESENTATION OF FINANCIAL AND OTHER INFORMATION


2PART I


3ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS


3ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE


3ITEM 3.

KEY INFORMATION


3ITEM 4.

INFORMATION ON THE COMPANY


16ITEM 4A

UNRESOLVED STAFF COMMENTS


50ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


50ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


81ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


91ITEM 8.

FINANCIAL INFORMATION


91ITEM 9.

THE OFFER AND LISTING


92ITEM 10.

ADDITIONAL INFORMATION


93ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


104ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES


107ITEM 12A.

DEBT SECURITIES


107ITEM 12B.

WARRANTS AND RIGHTS


107ITEM 12C.

OTHER SECURITIES


107ITEM 12D.

AMERICAN DEPOSITARY SHARES


107PART II


112ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES


112ITEM 14.

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


112ITEM 15.

CONTROLS AND PROCEDURES


112ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT


112ITEM 16B.

CODE OF ETHICS


113ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


113ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES


113ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES


114ITEM 16F.

CHANGE IN CERTIFYING ACCOUNTANT


114ITEM 16G.

SIGNIFICANT DIFFERENCES IN CORPORATE GOVERNANCE PRACTICES


114PART III


115ITEM 17.

FINANCIAL STATEMENTS


115ITEM 18.

FINANCIAL STATEMENTS


115ITEM 19.

EXHIBITS


115


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Table of Contents

FORWARD-LOOKING STATEMENTS

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

These
factors include, but are not limited to:



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

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Table of Contents

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless the context otherwise requires, the term "Company" refers only to Millicom International Cellular S.A., a stock
corporation organized under the laws of the Grand Duchy of Luxembourg, and the terms "Group", "Millicom", "we", "us" or "our" refer to Millicom International Cellular S.A. and its subsidiaries,
joint ventures and affiliates. Unless the context otherwise requires, when used herein with respect to a licensed area, "persons", "population" and "pops" are interchangeable and refer to the
aggregate number of persons located in such licensed area and "equity pops" refers to the number of such persons in a licensed area multiplied by the Group's ownership interest in the licenses for
such licensed area. The term "Attributable Customers" refers to 100% of customers in the Group's subsidiaries and the Group's percentage ownership of customers in each joint venture. Persons,
population and pops data for 2009, 2008, and 2007 have been extracted from the "CIAThe World Factbook" for 2010 for countries where the license area covers the entire country. In
addition, information on the countries in which Millicom operates has been extracted from the "CIAThe World Factbook" for 2010 with updates, where appropriate, from the U.S. Department of
State's website.

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

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

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Table of Contents

PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable for Annual Report filing.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable for Annual Report filing.

ITEM 3.    KEY INFORMATION

Selected Financial Information

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

The
following table sets forth summary financial data of the Group as of and for the years ended December 31, 2010, 2009, 2008, 2007, and 2006. The data is based upon the
Group's audited consolidated statements of financial position as of December 31, 2010, 2009, 2008, and 2007, and audited consolidated income statements for the years then ended. The
following information is qualified in its entirety by, and should be read in conjunction with, such statements.

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

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

Year Ended December 31,2010

2009

2008

2007

2006(6)(in thousands of U.S. dollars, except per share data)Income Statements Data:Revenues(1)

3,920,249

3,372,727

3,150,559

2,429,082

1,423,240Operating profit(1)

1,041,730

851,023

818,222

630,662

411,888Profit for the period from continuing operations(1)

1,643,067

503,590

402,195

436,477

222,352Net profit attributable to equity holders for the period

1,652,233

850,788

517,516

697,142

168,947Basic earnings from continuing operations per common share

$15.19

$5.09

$4.79

$4.18

$2.13Basic earnings per common share

$15.27

$7.84

$4.80

$6.90

$1.68Weighted average number of shares in basic computation (in thousands)(2)

108,219

108,527

107,869

101,088

100,361Diluted earnings from continuing operations per common share

$15.16

$5.08

$4.76

$4.07

$2.13Diluted earnings per common share

$15.24

$7.82

$4.77

$6.61

$1.67Weighted average number of shares in diluted computation (in thousands)(2)

108,396

108,750

108,646

108,047

101,371Dividends per share

$6.00

$1.24

$2.40






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As of December 31,2010

2009

2008

2007

2006(in thousands of U.S. dollars)Statements of Financial Position Data:Property, plant and equipment, net


2,767,667


2,710,641


2,787,224


2,066,122


1,267,159Intangible assets, net


2,282,845


1,044,837


990,350


467,502


482,775Investments in associates(3)


18,120


872


21,087


11,234


6,838Total assets


6,995,117


5,991,018


5,220,808


4,413,826


3,320,994Current liabilities


1,684,831


1,569,772


1,749,079


2,002,269


901,851Non-current liabilities


2,090,508


2,067,534


1,812,554


1,043,221


1,442,716Non-controlling interest


45,550


(73,673
)

(25,841
)

80,429


77,514Shareholders' equity


3,113,461


2,383,803


1,677,918


1,287,907


504,874




As of and for the year ended December 31,2010

2009

2008

2007

2006Operating Data (unaudited)(4):Total Customers:Prepaid


36,123,812


32,073,052


26,316,527


19,308,632


12,016,649Postpaid


2,465,768


1,847,052


1,374,147


977,166


861,116Monthly churn (%)(5):Prepaid


5.2
%

5.2
%

5.5
%

4.1
%

4.1
%Postpaid


1.9
%

1.7
%

1.1
%

1.3
%

1.2
%


(1)Includes impact of revaluation of previously held interests in Honduras and excludes discontinued operations. A more complete description of the impact of
the revaluation is contained in Note 4 of the "Notes to the Consolidated Financial Statements" and of discontinued operations is contained in Note 6 of the "Notes to the Consolidated
Financial Statements.(2)The average number of shares, which is calculated on a weighted average basis. There were 3,253,507 treasury shares as of December 31, 2010.(3)Investments in associates under IFRS from 2006 to 2008 mainly represented Navega.com S.A. and its subsidiaries. Investments in associates in 2010
mainly represented Helios Towers Ghana. See "Operating and Financial Review and ProspectsResults of Operations".(4)Operating data excludes discontinued operations.(5)Churn rates are calculated by dividing the number of customers whose service is disconnected during a period, whether voluntarily or involuntarily (such as
when a customer fails to pay a bill) by the average number of customers during the period. We believe that we apply conservative policies in calculating customer totals and related churn rates. For
example, Millicom counts a customer as a "customer" only when the customer has made a revenue generating call within a 60-day period. Other operators with whom we compete generally use
less restrictive definitions, such as labeling a "customer" a customer who has made a revenue generating call within a 90-day or 120-day period. Our conservative definitions
may result in different churn rates and market share figures than if we used criteria employed by some other operators in calculating customer churn and market share.(6)Reclassified as a result of the classification of Millicom's operations in Asia and Sierra Leone as discontinued operations and are unaudited.


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RISK FACTORS

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

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

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

In 2010, our business continues to be impacted by the general worldwide economic downturn and its effects will continue to impact on
our results in 2011.

In
addition, further deterioration in the economic environment could have an adverse effect on the level of demand by our individual customers for our products and services. This could
also impact our growth in mobile telecommunications, and/or broadband products and services.

General
inflation could affect our business as we are not certain of consumers' acceptance of potential price increases for our products. Food price inflation more specifically may
affect low income customers and may lead to a redistribution of income within the countries where we operate.

Risks Relating to our Business

Emerging Markets Risks

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

We offer mobile telephony and cable services in 14 emerging markets in Central and South America, Africa and Asia. Many of the
countries in which we operate are considered to be emerging economies and, therefore, can be subject to greater political and economic risk than developed countries. The governments of these 14
countries differ widely with respect to type of government, constitution, and stability. Many of these 14 countries lack mature legal and regulatory systems. Some of the countries in which we operate
suffer from political instability, civil unrest, or war-like actions by anti-government insurgent groups. These problems may continue or worsen, potentially resulting in civil
war in these countries. Honduras was largely cut off from foreign aid as a result of the political events of June 2009.

As
a result of the above, we face several risks, ranging from risk of network disruption, to the risk that we may have to evacuate some or all of our key staff from certain countries, in
which case there is no guarantee that we would be able to continue to conduct our local business as previously. Any of these events would adversely affect our revenues or results of operations.

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

In order for our operations to provide mobile services, they must receive a license from the government of the country in which they
operate. Our ability to operate is therefore dependent on the licenses granted by the government of each country. These licenses generally allow our companies to operate for a number of years, after
which they are subject to renewal. To the extent that our operations depend on governmental approval and regulatory decisions, our local business may be adversely affected by changes in the political
structure or by actions or decisions of specific government representatives in the relevant market. It is possible that a government could decide arbitrarily to

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revoke
a license or impose new conditions that we do not agree with and may not get consulted about in advance. For example, we are currently in litigation with the government of Senegal, which
challenged the validity of our license when we refused to pay additional amounts for a license that we validly hold and that does not expire until 2018. We may not always have access to efficient
avenues for appeal and may have to accept arbitrary conditions imposed upon us. This could adversely affect our business and our revenues. Our only avenue of recourse may often be to the judicial
system of the relevant country; however, the legal and court systems of many countries in which we operate tend to be poorly developed and can be subject to political influence and other inherent
uncertainties. It can therefore be difficult to obtain a rapid, fair and unbiased resolution of disagreements with governmental authorities. Our ability to renew licenses and the costs of such
renewals cannot be reliably predicted even if comparable renewals exist in other markets.

Even
where we have other options, such as claiming compensation in arbitration proceedings for violations of a bilateral investment treaty, the process can be lengthy and costly. For
example, the arbitration we filed against the government of Senegal before the International Center for the Settlement of Investment Disputes in November 2008 has not yet resulted in a final decision
and is expected to be reviewed on the merits by the arbitration panel beginning in November 2011. Even if the outcome is successful, the enforcement of any award favorable to us could be challenging.

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

This risk potentially exists in any of the countries in which we operate, but might be highest in Bolivia at the moment under the
current government. The government of President
Evo Morales in Bolivia has nationalized the telecommunications company Entel, which had been privatized under previous presidential regimes in Bolivia. Other such actions might take place in our
sector in connection with the government's decision to regain more control over the Bolivian economy, as shown by certain measures implemented in the oil & gas sector in 2005 and 2006. We
believe that nationalization of the telecommunications sector will probably not occur but that the Bolivian Government may rather attempt to impose measures to lower tariffs offered to customers and
improve the offer and availability of mobile telephony and other telecommunications services in isolated rural areas, or increased taxes on private foreign owned businesses such as Telecel, our
Bolivian operation, to increase government revenues. Measures like these may have the effect of increasing our network rollout costs and reducing the profitability of our Bolivian operation.

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

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

Some
of these countries have historically experienced high inflation rates, although in the recent years inflation rates in all countries where we operate have been relatively
low, if we exclude Ghana, following the significant devaluation of the local currency. Periods of significant inflation in any of our markets could adversely affect our costs and financial condition
as well as the purchasing power for telecommunications services at the lower end of the customer pyramid. The recent spike in food

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prices
in many countries around the world may impact the purchasing power of a large number of our customers, especially at the lower end of our customer base.

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

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

The
electricity supply is insufficient in certain countries in which we operate (predominantly in Africa, with the exception of Mauritius) due to underdevelopment of electricity sectors
compared to growth experienced in such countries. We therefore have to rely on diesel powered generators that we source, install, maintain and refuel. In Chad, at December 31, 2010, almost 100%
of our radio sites were powered by diesel powered generators, and in the Democratic Republic of Congo it was the case for about 75% of our sites. This increases our costs and impacts the profitability
of our African operations.

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

Many of the foreign countries in which we operate have imposed new taxes or increased the rates of existing taxes applicable to
corporations, or reduced tariffs (interconnect rates) in order to raise government revenue. Furthermore, competitive pricing pressure or provisions of new tax laws may prevent us from passing these
taxes onto our local customers. Consequently, any increase in taxes applicable to our local operating subsidiaries could reduce the amount of earnings they generate or reduce the consumption of our
services in our countries. Recent examples include, taxes on incoming international calls in El Salvador and Honduras, sales tax increases in Honduras, fixed interconnect rates in Paraguay and
frequency and numbering taxes in the DRC.

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

Many people in the countries in which we operate receive significant inflows of funds from relatives and friends who work abroad in
developed countries. A significant deterioration in the developed country economies could impact the ability of those abroad to continue remitting funds because of job losses or reduced wages. Lower
remittances would reduce the disposable income which would impact our revenues as happened in 2009 where remittances of funds from migrant workers in the United States of America to Central America
decreased by 13%. The deterioration in developed economies could also put pressure on the amount of foreign aid the developed countries provide to developing countries in which we operate and could
increase the local governments' need to generate revenue through taxation or reduce the ability of consumers to buy our products and services.

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

Exchange rates for currencies of the countries in which our companies operate fluctuate in relation to the US$ and such fluctuations
may have a material adverse effect on our earnings, assets or cash

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flows
when translating local currency into US$. For each operation that reports its results in a currency other than the US$, a decrease in the value of that currency against the US$ reduces our
profits while also reducing our assets, our liabilities and our future dividends. To the extent that our operations retain earnings or distribute dividends in local currencies, the amount of US$ we
receive is affected by fluctuations of exchange rates for such currencies against the US$, which could affect our results of operations. In addition, exchange rates are impacting Millicom's earnings,
assets and cash flows as our operating subsidiaries have US$ debt, because of lack of available financing in local currencies.

Generally,
due to lack of available instruments in the countries where we operate, we are not able to hedge against foreign currency exposures, with the exception of Colombia. Millicom
had a net exchange loss of $15 million for the year ended December 31, 2010, compared to a loss of $32 million for the year ended December 31, 2009.

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

Most of the operations in which we have interests receive substantially all of their revenues in the currency of the countries in which
they operate. We derive substantially all of our revenues through funds generated by our local operations and, therefore, we rely on their ability to transfer funds to the Company.

Although
there are foreign exchange controls in some of the countries in which our mobile telephone companies operate, none of these countries currently significantly restrict the
ability of these operations to pay interest, dividends, technical service fees, royalties or repay loans by exporting cash, instruments of credit or securities in foreign currencies. However, existing
foreign exchange controls may be strengthened in countries where we operate, or foreign exchange controls may be introduced in countries where we operate that do not currently impose such
restrictions, in which case, the Company's ability to receive funds from the operations will subsequently be restricted, which will impact our ability to pay dividends to our shareholders.

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

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

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

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

We hold the interests in our mobile telephone companies through our subsidiaries in various jurisdictions in and outside Luxembourg,
mainly but not exclusively through holding companies incorporated in the Netherlands and the Netherlands Antilles. The laws or administrative practices relating to taxation (including the current
position as to withholding taxes on dividends paid by our local operations and tax concessions we have obtained in certain of our countries of operation), foreign

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exchange
controls, or other matters, are periodically subject to change. Any such change could have a material adverse impact on our financial affairs and on our ability to receive, or the tax
treatment of, funds from our local operations.

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

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



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

Risks Related to our Operations and the Mobile Telephony Market

We face intense competition in the mobile telephone operator market.

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

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

A
risk also exists that, as new competitors enter into our markets and price competition intensifies, our customers may move to another mobile telephone operator especially as the
majority of our customers are using a pre-paid model which means that they are free to move to the competitors at any time. This may result in a decline of our revenue, 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 could have a material adverse effect
on our revenues and overall results of operations.

The mobile telephony market is heavily regulated and taxed.

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

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

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

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

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

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

We may pursue new license opportunities. In each market we face competition for licenses from major international telecommunications
companies as well as from local or regional competitors. While we typically try not to pay large amounts for mobile licenses, the competition for the granting or renewal of licenses is increasingly
intense worldwide. As such, we might have to pay substantial license fees in certain markets, as well as meet specified network build out requirements. We may not be successful in obtaining or
renewing any mobile telephone licenses or, if licenses are awarded, in obtaining those licenses on terms acceptable to us. If we obtain further licenses or renew existing ones,

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we
may need to seek future funding through additional borrowings or equity offerings, and we may not obtain such funding on satisfactory terms or at all.

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

Fixed network and other system equipment used in the mobile telephone industry have a limited life and must be replaced frequently due
to damage or as a result of ordinary wear and tear. In addition, substantial expansion of existing networks may be required to remain competitive. Our networks are based on the GSM standard. In our
Latin American markets, Mauritius, Rwanda and in the near future Ghana and Tanzania, we have or will have both GSM and 3G networks. The GSM standard has been most appropriate for our markets because
it has the greatest availability of handsets with strong functionality and has relatively low repair and maintenance costs. As new technologies are being developed besides GSM and 3G, such as fourth
generation systems, including WiMAX and LTE (Long Term Evolution), equipment may need to be replaced or upgraded or a mobile telephone network may need to be rebuilt in whole or in part, at
substantial cost, to remain competitive. Unforeseeable technological developments may also render our services unpopular with customers or obsolete. If our equipment or systems become obsolete, we may
be required to recognize an impairment charge to such assets, which may have a material adverse effect on our results of operations. LTE or 4G is currently under implementation in some countries. Its
benefits are still unknown and we may have to invest a significant amount of money to follow competition and to secure our competitiveness with this technology.

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

In line with current trends in the U.S. and European Union, where spectrum regulation may intend to change in such a way that spectrum
formerly reserved exclusively for GSM operators could be opened to other uses, such as 3G or LTE, and/or new spectrum is freed such as the 700 or 2,000 Mhz band, we could find that new
competitors are given access to our markets. Although we do not believe such changes will occur in our markets in near future, we believe these developments are likely to influence telecom regulatory
trends in other parts of the world. If such trends become law in our markets, our competitive position in the relevant countries may be adversely affected.

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

Our ability to increase our customer base depends upon the success of the expansion and management of our networks and distribution.
The build-out of our networks and distribution is subject to risks and uncertainties which may delay the introduction of service and increase the cost of network construction. Such
uncertainties may include natural disasters, the risk of hurricanes, volcanic activity and earthquakes in Central America, and flooding in low-lying areas in Bolivia and Paraguay (as
occurred in the first quarter of 2007). Other risks include sabotage and theft, which is an ongoing risk particularly in DRC. To the extent we fail to expand our network and distribution capabilities
on a timely basis, we may experience difficulty in expanding our customer base.

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

Furthermore,
we depend upon a small number of major suppliers for essential hardware, software and services, mainly network infrastructure and mobile devices. These suppliers may, among
other

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things,
extend delivery times, raise prices and limit supply due to their own shortages and business requirements. If these suppliers fail to deliver products and services on a timely basis, our
business could be adversely affected.

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

We have entered into three transactions in 2010 whereby we have sold and leased back a significant amount of our passive infrastructure
in Africa. Through these transactions Millicom is losing ownership and control of the passive infrastructure which could potentially impact the quality of service we offer to our customers if the
service provider cannot meet its contractual obligations.

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



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

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

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

We expect that a large part of our future growth in the coming years will come from new products and innovation. If we are
unable to find attractive new products for our customers this could adversely impact our future growth as well as the sustainability of our existing business as customers could switch to other
operators if they offer better new services than we do.

Furthermore,
some of these new products, such as banking services, are complex, involve new distribution channels, and/or new regulatory and compliance requirements. In addition some of
these new products may involve cash handling exposing us to additional risk of fraud and money laundering.

For
many of our new products, customers need a 3G handset to access them. The current cost of 3G handsets is high and we will need, at least initially to subsidise the cost of the
handsets to our customers. These handset subsidies may put pressure on our profitability and may threaten our business model based on affordability as a whole.

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

Our operations are dependent upon access to networks not controlled by us, primarily networks controlled by current or former
government owned public telecommunications operators or competing mobile telephone operators. Our financial results are affected by the cost of transmission and leased lines to secure 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. As we are often one of the largest suppliers of telephone services in the countries in which we operate, this could reduce our revenue. For example, in December 2007, the Colombian regulator
significantly reduced the interconnect rate, and in April 2010 the El Salvadorian regulator reduced mobile terminated call interconnect rates by 70%. As our customer base receives significantly
more calls from other networks than it makes, the change in the interconnect rate has had a significant impact on the revenues and profitability of this operation.

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

Media and other reports have suggested that electromagnetic and radio frequency emissions from mobile telephone handsets and base
stations may cause health problems, including cancer. There is also some concern that these emissions may interfere with the operation of certain electronic equipment, including aircraft guidance
systems, automobile braking and steering systems (e.g. GPS), and civil and military radars. Although we expect that the actual or perceived risks relating to mobile communications devices and
base stations, or press reports about these risks will not significantly adversely affect us, its actual impact is difficult to estimate. It may have the effect of reducing our customer growth rate,
customer base or average use per customer, which could have a negative impact on the market price of our shares.

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

General Risks

Our ability to generate cash depends on many factors beyond our control.

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

High levels of penetration for mobile phone services in some of our markets could have an impact on our future growth.

Most of the Latin American markets where we operate now have mobile phone penetration levels close to 100% with the exception of
Bolivia and to a lesser extent Guatemala. Although there are still opportunities for further growth, the high penetration rates in Latin America could lead to a slowdown

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in
growth in those markets. Likewise, urban areas in the markets where we operate in Africa have a high penetration rate for mobile phones and opportunities for increasing the penetration rates in our
African markets are largely in rural areas where Average Revenues Per User's (ARPU's) are lower and costs are higher, which could threaten our future profitability.

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

As of December 31, 2010, Millicom's total consolidated indebtedness was $2.3 billion. All of the consolidated
indebtedness was our share of the indebtedness of our subsidiaries and joint ventures.

Corporate
guarantees issued by the Company secured $0.8 billion of the indebtedness of our operations at December 31, 2010. The Group's share of total debt and financing
secured by either pledged assets, pledged deposits issued to cover letters of credit or guarantees issued by the Company was $1.4 billion at December 31, 2010.

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



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

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

We
rely upon dividends and other payments from our operations to generate funds required to meet the Company's obligations. The local operations are legally separate and distinct from
the Company and have no obligation to pay amounts due with respect to the Company's obligations or to make funds available for such payments. Our local operations do not guarantee the Company's

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obligations.
The ability of our operations to make such payments to the Company is subject to, among other things, the availability of funds, the agreement of our partners, the terms of each
operation's indebtedness and local law. The majority of our local operations have entered into financing facilities, which may be guaranteed by the Company, many of which restrict the payment of
dividends by those operations to the Company. Claims of creditors of our operations, including trade creditors, will generally have priority over our claims and the holders of our indebtedness.

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

At December 31, 2010, Investment AB Kinnevik, our largest shareholder, owned 37,835,438 shares in Millicom, representing
approximately 35% of voting shares on that date. Kinnevik and its affiliates, having a significant ownership in Millicom, could have significant influence over our management and affairs. The
influence that they have may potentially conflict with the Company's interests.

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

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

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

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

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ITEM 4.    INFORMATION ON THE COMPANY

Background

Overview

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

As
at December 31, 2010, we had 14 mobile operations in 14 countries focusing on emerging markets in Central America, South America, Africa and Asia. Millicom operates its mobile
businesses in El Salvador, Guatemala and Honduras in Central America; in Bolivia, Colombia and Paraguay in South America; in Chad, the Democratic Republic of Congo, Ghana, Mauritius, Rwanda,
Senegal and Tanzania in Africa; and in Laos in Asia. Millicom's operation in Sierra Leone was sold on November 25, 2009; and operations in Sri Lanka and Cambodia were sold respectively
on October 16 and November 26, 2009 (see note 5). In 2008, Millicom acquired 100% of Amnet Telecommunications Holding Limited, a provider of broadband and cable television
services in Costa Rica, Honduras and El Salvador, of fixed telephony in El Salvador and Honduras, and of corporate data services in the above countries and in Guatemala and Nicaragua.

As
at December 31, 2010, the countries where we had mobile operations had a combined population of approximately 267 million. This means that 267 million people are
covered by our mobile licenses and could receive mobile services under the terms of our mobile licenses if our networks covered the entire population. Our total mobile customers reached
38.6 million as at December 31, 2010.

Some
of our markets, especially in Africa, are attractive due to their relatively low degree of penetration of fixed and mobile telephony services as compared to more developed markets.
Usage of telecommunications services has historically been low in the countries in which we operate due to poor or insufficient infrastructure, lack of availability and high costs of such services,
and low levels of disposable income. We believe there is still some opportunity for further growth in the markets in which we operate as our services are essential for communication, and we believe
that demand for these services will result in continued growth in the percentage of GDP spent on our services. Furthermore, we believe that there is an opportunity to develop and market new services
based on mobile telephony and we have structured our business around these four categoriescommunication, information, entertainment and solutions, so as to position Millicom as a
customer-centric organisation.

Summary of Highlights and Recent Developments

In January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement with Helios Towers Ghana, a direct
subsidiary of Helios Towers Africa, for most of its cell sites.

During
September 2010, with our partners in Central America, we aligned the shareholding of our mobile and cable operations so as to improve their integration and to facilitate
synergies.

On
November 30, 2010 we early redeemed the corporate 2013 10% Notes resulting in our entire debt being at operating level, improving tax efficiency and mitigating country risk.

In
December 2010, Millicom's operations in Tanzania and the Democratic Republic of Congo signed sale and lease-back agreements subsidiaries of Helios Towers Africa, for most
of their cell sites.

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During
the year we demonstrated our commitment both to enhancing the returns from holding Millicom shares, and to improving the efficiency of our capital structure by returning
$300 million to shareholders through the repurchase of more than 3.2 million shares and paid $654 million in dividends.

Strategy

Our strategy is to be a leading wireless/broadband operator in our markets and to operate with the lowest possible cost base from which
we can offer the consumer better value for money through lower tariffs whilst at the same time offering network quality and wide distribution. We believe that, given the relatively low mobile
penetration levels in most of our markets compared to more developed markets, and increasing demand for mobile connectivity, we can continue to achieve significant growth in our customer base and
maintaining our operating margins and improving cash flows. We also see large opportunities to develop new services beyond voice in the
information category (3G/data), in entertainment and in solutions (banking). We have rolled out our tigo® brand across most of our operations and continue to focus on our triple "A"
operating strategy:



Focus on growth.We believe there are attractive opportunities for further growth in Africa due to relatively low mobile penetration
levels (the
weighted average penetration rate in our markets in Africa is 41% as at December 31, 2010) and increasing demand for additional services obtainable through mobile phones. Many of our markets,
mainly in Africa, have high growth potential and substantial unmet demand for basic voice telephony services. We believe we can grow our customer base and revenue by continuing to focus on prepaid
services while controlling costs and maintaining our position with postpaid customers. We see more and more opportunities with value-added services ("VAS"), especially in more mature markets. VAS
(non-voice) accounted for almost 25% of recurring revenues in the last quarter of 2010. We see a significant growth opportunity in the short to medium term in 3G/data services
especially in Latin America and with mobility services, including banking, over the longer term. We will continue to invest in our existing mobile operations, where we believe we can generate
attractive returns. In addition, we would consider opportunities to increase our equity ownership in those of our operations where we still have either joint-venture or non-controlling
partners, provided it is permitted under the terms of our license, through buy-outs of our partners. We may, using a disciplined financial approach, participate in the consolidation within
our markets through the careful evaluation, selection and pursuit of strategic opportunities. We may pursue new license opportunities in adjacent markets within existing financial guidelines and
provided there is group-wide synergy potential. We will also look to continue our expansion into other services such as broadband in

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our
existing markets. We will consider external growth opportunities that meet our risk and returns criteria outside our existing markets, mainly in Latin America and Africa.

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

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

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

Voice
technologies, such as VoIP (Voice over Internet Protocol), are increasingly widespread. VoIP allows voice communication by sending data packages with voice encapsulated over data
networks. These services are increasingly present in competing with fixed-line services and international calls rather than with mobile telephony services.

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

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

If
future successful technologies are different from those adopted by us, we may decide that additional investment in network equipment and training is desirable.

Introducing new products and services.In 2011, Millicom will continue to launch innovative value-added services such as money
transfers, bill
payments, airtime credits, airtime transfers, music related services, gaming, social networking, interactive content services and advanced SMS services to address the needs of our customers. In 2010,
Millicom rolled out mobile payment and transactional services in some of its markets providing added convenience to Millicom's customers. This roll-out will continue in 2011 and is another
tool for us to attract and retain customers, reduce churn, increase customer loyalty and grow revenues and earnings.

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

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

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Competitive Strengths

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

Established prepaid operator.Our focus on prepaid mobile services for the mass market offers the advantage of lower customer
acquisition and
operating costs, which typically results in higher margins and a faster average payback time. In addition, prepaid services prevent bad debt issues and reduce billing and collection costs. The
introduction of prepaid mobile services has opened up the market for mobile services to customers previously denied access to mobile service.

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

Leading market positions.We enjoy number one and two market positions in 12 out of 14 markets which allows us to benefit from
economies of scale and
to improve our margins with more on-net calls.

Track record of innovation.We believe that innovation is another key to our success. In nearly all our markets, we were the first to
launch branded
prepaid mobile services (now prevalent in our markets). We have been the first to focus on non-traditional distribution channels to increase mass-market prepaid customer reach
in our markets. For example, we have used freelance distributors, such as street vendors, and sold prepaid cards in mass market outlets, which has reduced sales and marketing costs. We have also
introduced e-PIN and per second billing in most of our markets. We are offering 3G broadband services in our Latin American markets, Mauritius, Rwanda and soon in Ghana and Tanzania. We
are offering WiMAX services in selected countries where we have acquired WiMAX licenses (such as in Paraguay, Bolivia and El Salvador), and will continue to expand if and when our customers
demand these services and we are able to provide them at reasonable prices. As we focus on prepaid services and low costs, we believe that we offer the best value proposition to the customer. Value
Added Services (VAS) represented close to 25% of recurring revenues in the fourth quarter of 2010.

Low operating costs and high capital efficiencies.We establish services in markets that we believe offer high potential financial
returns and
substantial operational leverage. We operate sizeable networks covering areas of the highest population density and business activity. Any further build-outs of our network infrastructure
are demand driven. In addition, our migration to GSM has lowered our investment per capacity minute with faster payback times. Our strategy of outsourcing maintenance and operation of towers, whilst
retaining equity stakes in the tower operating companies will further improve efficiency and contribute to lower overall operating costs.

Integrated strategy.We actively pursue the many synergies inherent in our multi-country operations and the increasing scale in our
existing markets.
Such synergies include sharing information and best practices in services, human resources, technologies and market strategies; centralized negotiation of financing and of supply contracts for network
equipment, and the rollout of the single tigo® brand to most of our operations. For example, our operations in Africa have been able to draw on the operational and managerial experiences
and resources of our operations in Central and South America. We are in the process of implementing a common financial platform (ERPEnterprise resource planning) in all our markets during
2011 and 2012. Likewise we are investing to have a common CRM (customer relationship management) platform in all countries.

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Diversified operations.We believe our 14 mobile operations based in 14 countries on three continents at December 31, 2010 provide
a balance
of established cash flow generation and further growth potential. Our diversification across countries and continents also lessens our exposure to unfavorable changes in a single market or currency.

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

License Acquisition

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

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

From
time to time, Millicom encounters difficulties when negotiating terms of existing licenses. Millicom is currently engaged in a dispute with the Senegalese government regarding
maintenance of the existing Sentel license. Millicom's commitment to its business in Senegal remains strong and its subsidiaries Millicom International Operations, B.V. and Sentel intend to
vigorously pursue all available remedies in the matter before an international arbitration forum. In July 2010, the ICSID panel ruled that it has jurisdiction over the claims brought by Sentel and
MIO B.V., overruling the objections to ICSID's jurisdiction made by Senegal. On November 10, 2010, Senegal withdrew its action against Sentel and Millicom in the court proceedings in
Senegal. The ICSID arbitration proceedings continue and the arbitration panel has scheduled a hearing on the merits beginning in November 2011. Millicom remains in effective control of its Senegalese
operations and is seeking ways to find an amicable solution with the Senegalese authorities, and a decision on the merits of the case is expected for December 2011 at the earliest.

Management Structure

The Millicom management team is led by Chief Executive Officer and President, Mikael Grahne, previously Chief Operating Officer of
Millicom for 7 years, who took over the position from the former Chief Executive Officer, Marc Beuls, on March 2, 2009. The Chief Executive Officer has overall responsibility for the
business and Millicom's strategy. Our Chief Financial Officer, Francois-Xavier Roger, oversees the financial, administrative and accounting areas. We primarily operate in three major geographic
regions of the world: Central America, South America and Africa. Mario Zanotti is our Head of Latin America (Central and South America) and Regis Romero is our Head of Africa. They both report
directly to our Chief Executive Officer and are responsible for day-to-day operations. We believe this structure allows us to maintain a high degree of coordination,
cooperation and sharing of information among the various managers while providing a degree of regional responsibility that ensures quick and effective decision making.

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The Industry

Mobile Telecommunications Industry Overview

Mobile Telecommunications Technology.Mobile telecommunication systems are capable of providing high quality, high capacity voice and
data
communications to and from mobile handsets and devices. Mobile telecommunications systems are capable of handling thousands of calls simultaneously and providing data service to hundreds of thousands
of customers in any particular area.

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

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

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

Millicom
uses mainly GSM/GPRS/EDGE technology that is 3G enabled in some operations. GSM is a digital standard for mobile telecommunications systems that countries have adopted as a
common standard. GSM offers increased value-added services and enables transmissions to be made in encrypted form so that conversations cannot easily be intercepted. The GSM system allows customers to
use their mobile telephones in any country where the GSM system has been adopted and where appropriate roaming agreements are implemented, providing increased mobility and flexibility. GSM systems are
the most ubiquitous worldwide.

In
the United States, a number of digital standards have been developed and are being deployed. One of them is Code Division Multiple Access (CDMA), which is also popular in some parts
of 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. All third
generation (3G) networks support high data bandwidth applications such as full motion video, video conferencing and full internet access to mobile devices.

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

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

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

New
competing technologies have started to be deployed. 3G (WCDMA), using HSDPA, since this provides a very spectrally efficient wireless solution. This technology is being deployed in
Asia and Africa in the 2100MHz spectrum while in the Americas 3G is using the existing 850 and 1900MHz spectrum.

During
the last two years, in our Latin America markets we have introduced 3G networks based on W-CDMA/HSDPA (High-Speed Downlink Packet Access). WCDMA is
a system based on the third generation (3G) of mobile phone standards and technology that allows the transmission of large volumes of data at high speeds. 3G technologies enable us to offer our users
a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency. 3G enables us in Latin America, Mauritius, Rwanda and Tanzania to offer new
services to our corporate as well as prepaid users like video calls, mobile broadband data, and full internet experience with richer mobile content. The main reasons to introduce 3G/HSDPA networks
are:

New market opportunities.It allows us to enter new markets and provide new services, such as the wireless broadband market, which we
believe has
significant growth potential.

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

Cost effective deployment.3G networks can be co-located with existing infrastructure allowing faster and more cost effective network
deployment.

Other
new technologies have also recently appeared, such as Long Term Evolution (LTE), mobile WiMAX 802.16m and Ultra Mobile Broadband (UMB) based on a new OFDMA technology. This allows
operators to have an all IP packet only connection. Most of the largest mobile operators in the world, including Millicom, are choosing the LTE evolution path.

In
the event that future successful technologies are different from those adopted by the Company, the Company will have to make additional investments in network equipment replacement
and training.

Operating Characteristics.The mobile telecommunications industry is typically characterized by high fixed costs and low variable costs.
Until
technological limitations on total capacity are approached, additional mobile telecommunications system capacity can usually be added in increments that closely match demand and at less than the
proportionate cost of the initial capacity. The industry is also seeing declining equipment prices in real terms. Once revenues exceed fixed costs, incremental revenues are expected to yield an
increasing operating profit, giving mobile operators an incentive to stimulate and satisfy demand for their services in the market. The amount of profit, if any, under such circumstances is dependent
upon, among other things, prices and variable marketing costs, which, in turn, are affected by the amount and the extent of competition. As competition increases in markets, prices have fallen with
the result that revenues and operating profits increase at a lower rate than customer growth. In addition, as penetration rates increase, there is a tendency for a higher proportion of new customers
to

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use
prepaid services. Prepaid customers tend to have lower usage than credit customers, but the operating margin on prepaid is generally higher than with credit customers as the risk of customer bad
debt is eliminated and there is generally no subsidizing of handsets.

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

Development of the Mobile Telecommunications Industry

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

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

Mobile Telecommunications in Developing Countries.While the mobile telecommunications industry is well-established in the developed
world, the mobile telecommunications industry in the developing world is still in a growth phase. Millicom believes that mobile telecommunications will continue to grow in developing countries because
of poor quality of existing fixed-line services, unsatisfied demand for basic telecommunications service, and increasing demand from users seeking convenience of mobile telephones. In some
countries the mobile communications network provides significantly improved access to local and international fixed-line networks compared with the existing fixed-line service,
as well as access to the Internet. Penetration rates (the number of customers per 100 people) are lower in Africa than in developed countries. Consequently, Millicom believes that its markets
still offer attractive growth potential.

For
developing countries, mobile telecommunications networks can represent a faster and more cost-effective method of expanding telecommunications infrastructure than
traditional fixed-line networks. Fixed-line networks involve extensive outside infrastructure in the form of buried or overhead cable networks, while mobile telecommunications
networks require less construction activity. Mobile telephony can also be a good base to offer new services to customers in emerging markets as the mobile telephony industry has access to a very large
customer base and has the capability to collect small amounts of money at low cost.

Other Mobile industry trends

Another trend in the mobile industry, and a new market opportunity, is the integration of mobile services with broadband, fixed line
and cable TV services to offer packages known as "triple" and "quadruple" play services.

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Competitive Position in the Market

The following table shows certain estimated information regarding the competitive position of Millicom's operations in each of its
mobile telephony markets as at December 31, 2010. This information was derived from active customers based on interconnect activity on our own networks. Millicom operates in developing
economies and markets and believes that the data research available in these countries is not always accurate, consistent or verifiable. Therefore, the information provided here is given in ranges of
market share to indicate the relative size and market position of Millicom's mobile telephony operations in comparison to its competitors.

Estimated Market Share Ranking at December 31, 2010(i)Market

Greater
than 50%

Between 25%
and 50%

Between 10%
and 25%

Less
than 10%

December 31,
2010(i)Central AmericaEl Salvador



Millicom

Am. Movil
Telefonica
Digicel

Red Intelfon


1 of 5Guatemala

Millicom

Am. Movil

Telefonica




1 of 3Honduras

Millicom



Am. Movil

Hondutel


1 of 4DigicelSouth AmericaBolivia



Entel






2 of 3MillicomNuevaTelColombia

Am. Movil



Telefonica

Millicom


3 of 3Paraguay

Millicom

Personal



Am. Movil


1 of 4VoxAfricaChad

Millicom

Celtel






1 of 2DRC



Millicom

Vodacom

Standard


1 of 5
(ii)Celtel

CCTGhana

MTN

Millicom

Vodafone

Airtel


2 of 5ExpressoMauritius

Orange

Millicom



Mahanagar T.


2 of 3Rwanda

MTN



Millicom RwandaTel




2 of 3Senegal

Sonatel Mobiles (France T)

Millicom



Expresso
Kirene


2 of 4Tanzania



Vodacom Millicom Zain



Zantel
TTCL
Mobile
Bol
Dovetel


2 of 7AsiaLaos

Lao Tel.



ETL Mobile Millicom

Lao Asia Tel. (LAT)


3 of 4


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


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Table of Contents

Operations

Description of operations

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

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

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

AfricaMillicom's mobile operations comprise Chad, Democratic Republic of Congo, Ghana, Mauritius, Rwanda, Senegal and Tanzania. Millicom's operation
in Sierra Leone was classified as discontinued in 2008 and sold on November 25, 2009 (see note 5).

CableMillicom's cable, broadband, television, fixed telephony and corporate data business is across Central America.

AsiaMillicom's mobile operations comprise Laos. The entire Asia segment was classified as discontinued in 2009. Millicom's operations in Sri Lanka
and Cambodia were sold respectively on October 16 and November 26, 2009 (see note 5).

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

2010

2009

2008

2007

2006Central America


36%


39%


44%


48%


55%South America


35%


32%


32%


33%


23%Africa


23%


23%


23%


19%


22%Cable


6%


6%


1%





Total


100%


100%


100%


100%


100%


*We are in the process of integrating our cable and mobile operations in Central America to generate synergies. As a consequence we expect to report both cable
and mobile operations together in the Central American segment in 2011.


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Table of Contents

Subsidiaries and their Market Presence

The following table shows certain information for each of Millicom's mobile operations as at December 31, 2010.

Market

Company Name

Ownership

Method of
Consolidation(1)

Start-Up/
Acquisition
Date

Estimated
Population
of Area
under
License(2)

Mobile
Penetration
as of
December 31,
2010(3)(percent)





(million)

(percent)Central AmericaEl Salvador

Telemóvil El
Salvador S.A.


100.0%

S


1993


6


102%Guatemala

Comunicaciones Celulares S.A.


55.0%

JV


1990


14


84%Honduras

Telefónica
Cellular S.A.


66.7%

S


1996


8


86%South AmericaBolivia

Telefónica Celular
de Bolivia S.A.


100.0%

S


1991


10


65%Colombia

Colombia Móvil S.A. E.S.P.


50.0%
+1 share

S


2006


44


95%Paraguay

Telefónica Celular
del Paraguay S.A.


100.0%

S


1992


6


93%AfricaChad

Millicom
Tchad S.A.


100.0%

S


2004


11


23%DR of Congo

Oasis S.P.R.L.


100.0%

S


2005


71


41%Ghana

Millicom Ghana
Company Limited


100.0%

S


1992


24


57%Mauritius

Emtel Limited


50.0%

JV


1989


1


86%Rwanda

Tigo Rwanda S.A.


87.5%

S


2009


11


26%Senegal

Sentel GSM S.A.


100.0%

S


1999


12


58%Tanzania

MIC Tanzania
Limited


100.0%

S


1994


43


34%AsiaLao People's D.R.

Millicom Lao Co. Limited


74.1%

S


2003


6


50%Total












267


(1)JV = Joint Ventures. Under IFRS, joint ventures are consolidated using the proportional method of accounting in which only our share of the assets,
liabilities, income and expenses of the joint ventures in which we have an interest are consolidated. Millicom determines the existence of joint control by reference to the joint venture agreements,
articles of association, capital structure and voting protocols of the board of directors of the relevant entity, as well as the influence it has over day-to-day
operations.S = Subsidiary. Subsidiaries are entities over which we have control and are fully consolidated.(2)Source: The U.S. Central Intelligence Agency's "The World Factbook" for 2010.(3)Source: Millicom. We derive penetration rates from estimates of the total active customers in the relevant market based on
interconnect traffic.


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Selected Operating Data

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

As at December 31,Total Customers

Prepaid Customers as %
of Total CustomersMarket

2010

2009

2008

2010

2009

2008Central AmericaEl Salvador


2,728,136


2,780,229


2,528,056


89
%

92
%

92
%Guatemala


6,308,543


5,379,467


4,413,519


95
%

96
%

97
%Honduras


4,448,317


4,742,014


4,239,676


93
%

95
%

95
%Subtotal Central America


13,484,996


12,901,710


11,181,251


93
%

95
%

95
%South AmericaBolivia


2,404,406


2,023,412


1,399,048


92
%

93
%

94
%Colombia


4,293,423


3,743,671


3,313,851


81
%

83
%

87
%Paraguay


3,441,423


3,048,134


2,747,872


86
%

89
%

90
%Subtotal South America


10,139,252


8,815,217


7,460,771


85
%

87
%

90
%AfricaChad


1,429,350


1,017,159


541,159


100
%

100
%

100
%DR Congo


2,156,151


1,511,105


1,048,419


100
%

100
%

100
%Ghana


3,525,146


3,094,176


2,887,927


100
%

100
%

100
%Mauritius


471,579


437,428


421,683


92
%

92
%

93
%Rwanda


549,532


74,785





100
%




Senegal


2,356,064


2,090,067


1,852,461


100
%

100
%

100
%Tanzania


4,477,510


3,978,457


2,297,003


100
%

100
%

100
%Subtotal Africa


14,965,332


12,203,177


9,048,652


100
%

100
%

100
%Total


38,589,580


33,920,104


27,690,674


94
%

95
%

95
%


CENTRAL AMERICA

Millicom's mobile operations in Central America are located in El Salvador, Guatemala and Honduras. Our Central American
licenses covered approximately 28 million people as at December 31, 2010.

El Salvador

Population:

6 million2010 GDP real growth:

1.2%GDP per capita:

$7,300


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

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Despite being the smallest country geographically in Central America, El Salvador has the third largest economy in the region. The
economy took a hit from the global recession and GDP contracted by 3.5% in 2009. The economy began a slow recovery in 2010 on the back of improved export and remittances figures. El Salvador's
service-oriented economy depends largely on remittances and low-cost textile and agricultural exports. As of November 2010, remittances increased 2.3% compared to the same period in 2009,
driven primarily by economic recovery in the U.S. Low-cost textile manufacturing, better known as 'maquilas', increased 1.3% as of September 2010 compared to the same period in 2009, while
'maquilas' exports increased 14.9% for the same period. Importantly, employment in the private and public sector, as of September 2010, increased 2.8% and 2.6% respectively, driven primarily by
economic recovery in the
manufacturing sector. For the same period, agricultural production increased 5.0%, stimulated by favorable international prices and credit alternatives. Remittances accounted for 16% of GDP in 2010,
and about a third of all households receive these transfers. El Salvador has promoted an open trade and investment environment, and has embarked on a wave of privatizations extending to
telecom, electricity distribution, banking, and pension funds. With the adoption of the US dollar as its currency in 2001, El Salvador lost control over monetary policy. Any counter-cyclical
policy response to the downturn must be through fiscal policy, which is constrained by legislative requirements for a two-thirds majority to approve any international financing.



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

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

Telemóvil
launched its operations in 1993 and was the only mobile services provider until 1999. Since its entry into the market, Telemóvil has expanded its
coverage of the main cities rapidly and remains the market leader. The GSM network was launched in August 2004. Services offered also include broadband internet, fixed wireless telephony and public
telephony. Telemóvil's 3G/HSDPA network was launched in September 2008 offering services such as video calls, mobile internet (datacards) and all current 3G network telecommunication
services. Telemóvil was awarded a 15-year mobile license in September 1991 which was subsequently extended until 2018. Telemóvil acquired WiMAX spectrum in
1998. As at December 31, 2010, Millicom's network in El Salvador comprised of 937 cell sites and covered 92% of the total population.

In
2010 there were 5 mobile services providers in the country. Telefónica and Telecom (initially owned by France Telecom) entered the market in 1999 as the second and
third mobile operator, respectively. Digicel (privately owned) entered the market in 2001 with a GSM network as the fourth operator. Digicel was subsequently acquired by the Caribbean operator with
the same name. América Móvil of Mexico acquired France Telecom's interest in Telecom in 2003. In October 2005, Intelfon (privately owned) entered the market as the fifth
mobile operator, offering services based on the iDen push-to-talk technology.

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Guatemala

Population:

14 million2010 GDP real growth:

2.2%GDP per capita:

$5,200


Guatemala's government system is a constitutional democratic republic. In 1996, peace accords were signed which brought an end to a 36-year civil war.
Although Guatemala has completed a successful transition from military to civilian government, the military retains considerable political power. In November 2007, Mr. Alvaro Colom was elected
President with 52.82% of votes. Mr. Colom's UNE Party, is of center-left tendency and does not control the majority of seats in Congress. Elections are due to take place in
September 2011 and many political parties have commenced preparation activities in what is widely expected to be a tight contest.



Guatemala is the most populous of the Central American countries with a GDP per capita roughly one-half that of the average
for Latin America and the Caribbean. The agricultural sector accounts for nearly 15% of GDP and half of the labor force; key agricultural exports include coffee, sugar, and bananas. In 2010 economic
growth was stable compared to 2009, despite oil price increases, deterioration in security, an increase in natural disasters and little demonstrable improvement from actions to address poverty.
Remittances increased by 6% over 2009 and GDP growth was almost 3%. Economic growth fell in 2009 as export demand from US and other Central American markets fell and foreign investment slowed amid the
global recession, but the economy recovered gradually in 2010 and is forecast to return to more normal growth rates by 2012.

The
1996 peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and since then Guatemala has pursued important reforms and macroeconomic
stabilization. The Central American Free Trade Agreement (CAFTA) entered into force in July 2006 spurring increased investment and diversification of exports, with the largest increases in ethanol and
non-traditional agricultural exports. While CAFTA has helped improve the investment climate, concerns over security, the lack of skilled workers and poor infrastructure continue to hamper
foreign direct investment. The distribution of income remains highly unequal with the richest decile comprising over 40% of Guatemala's overall consumption. More than half of the population is below
the national poverty line and 15% lives in extreme poverty. Poverty among indigenous groups, which make up 38% of the population, averages 76% and extreme poverty rises to 28%. 43% of children under
five are chronically malnourished, one of the highest malnutrition rates in the world. President Colom entered into office with the promise to increase education, healthcare, and rural development,
and in April 2008 he inaugurated a conditional cash transfer program, modeled after programs in Brazil and Mexico, that provide financial incentives for poor families to keep their children in school
and get regular health check-ups. Given Guatemala's large expatriate community in the
United States, it is the top remittance recipient in Central America, with inflows serving as a primary source of foreign income equivalent to nearly two-thirds of exports.



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

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

Comcel
operates GSM/GPRS/EDGE and 3G/HSDPA networks. The GSM/GPRS/EDGE network was launched in August 2004 and the 3G/HSDPA network was launched in August 2008. Comcel also provides
international long-distance services, roaming service, internet services and local telephony services. In January 1990, Comcel was awarded its initial 20-year license to
operate a nationwide 800MHz network. In March 2003, Comcel was awarded a revised license to operate 10MHz of frequency for a period of 15 years until 2018. In August 1998, as validated in
October 2001, the license to operate another 4MHz spectrum was awarded for the period until 2013. This license can then be extended for a further 15 years. Comcel acquired 25 MHz in the
2.5 GHz spectrum to operate WiMAX in July 2006. As at December 31, 2010, Millicom's network in Guatemala comprised of 2,541 cell sites and covered 99% of the total population.

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

Honduras

Population:

8 million2010 GDP real growth:

2.2%GDP per capita:

$5,200


Honduras's government system is a democratic constitutional republic. Since the regional peace process in the late 1980s, democracy in Honduras has been
strengthened. Presidential elections took place in November 2005, with the opposition candidate Manuel Zelaya Rosales of the Partido Liberal party being elected and taking office in January 2006.
Mr. Rosales left power in June 2009 and an intermediary government took his place to run the country until the new elections, held in November 2009 with the same political parties leading the
polls, and won by Porfirio Lobo Sosa, the candidate running for the National Party. This new government has largely been accepted by the international community.



Honduras, the second poorest country in Central America, suffers from extraordinarily unequal distribution of income, as well as high
underemployment. While historically dependent on the export of bananas and coffee, Honduras has diversified its export base to include apparel and automobile wire harnessing. Nearly half of Honduras's
economic activity is directly tied to the US, with exports to the US equivalent to 30% of GDP and remittances for another 20%. The US-Central America Free Trade Agreement (CAFTA) came into
force in 2006 and has helped foster foreign direct investment (FDI), but physical and political insecurity may deter potential investors; about 70% of FDI is from US firms. The economy registered
marginally positive economic growth in 2010, insufficient to improve living standards for nearly 60% of the population in poverty. The Lobo administration inherited a difficult

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fiscal
position with off-budget debts accrued in previous administrations and government salaries nearly equivalent to tax collections. His government has displayed a commitment to
improving tax collection and cutting expenditures. This enabled Tegucigalpa to secure an IMF Precautionary Stand-By agreement in October 2010. The IMF agreement has helped renew
multilateral and bilateral donor confidence in Honduras following the Zelaya administration's economic mismanagement and the political coup.



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

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

Celtel
operates a GSM/GPRS/EDGE network and a 3G/HSDPA network. The 3G/HSDPA network was launched in August 2008. Celtel also provides international long-distance services
and local telephony services. In June 1996, Celtel was awarded a 10-year license to operate a nationwide mobile network for a price of US$5.1 million. The license was transformed
into a 25-year license in March 2005 with an expiry date of June 2021 at a cost of US$4.8 million. Celtel has already acquired a WiMAX license but have not yet performed a
commercial launch. As at December 31, 2010, Millicom's network in Honduras comprised of 1,433 cell sites and covered 95% of the total population.

Celtel
launched commercial operations in 1996 as the first mobile operator in Honduras and today operates a GSM and a 3G network. Until late 2003, Celtel enjoyed sole provider status in
the mobile market, when Megatel entered the market with a GSM network as the second operator. In the first quarter of 2008, Megatel launched its 3G Network. The third mobile license was issued to
Hondutel (the State owned fixed line incumbent) but its operations have only limited coverage in the 5 main cities of the country. A fourth license was issued to Digicel Honduras S.A., who
launched operations on November 2008 with a GSM network.

SOUTH AMERICA

Millicom's mobile operations in South America are located in Bolivia, Colombia and Paraguay. Our South American licenses covered
approximately 60 million people as at December 31, 2010.

Bolivia

Population:

10 million2010 GDP real growth:

3.8%GDP per capita:

$4,800


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



Bolivia is one of the poorest and least developed countries in Latin America. Following a disastrous economic crisis during the early
1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions,
and violent protests against planssubsequently abandonedto export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the
government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all
production to the state energy company in exchange for a predetermined service fee. After higher prices for mining and hydrocarbons exports produced a fiscal surplus in 2008, the global recession in
2009 slowed growth. A decline in commodity prices that began in late 2008, a lack of foreign investment in the mining and hydrocarbon sectors, a poor infrastructure, and the suspension of trade
benefits with the United States pose challenges for the Bolivian economy. The country is a major producer of tin and gold, and, although its exports of zinc and silver are small parts of the world
market, they account for a significant portion of export earnings. Bolivia also has reserves of antimony, tungsten (wolfram), lead, copper, and lithium.



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

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

Telecel
Bolivia launched commercial operations in 1991 through an offering of analogue mobile services in Bolivia's three main cities of La Paz, Santa Cruz and Cochabamba. Telecel
Bolivia introduced the first prepaid mobile telephony offering in Bolivia at the end of 1996 and launched digital services through its TDMA network in 1997. Telecel Bolivia started offering nationwide
GSM services in December 2005 and was the first and only operator in Bolivia to offer 3G services since 2008. Telecel Bolivia was awarded a 20-year license in 1990 to operate a mobile
network in Bolivia's

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three
main cities (La Paz, Santa Cruz and Cochabamba). The license was extended in 1995 and will expire in November 2015. Telecel Bolivia's license was extended in 1997 to cover the rest of the
country for a period of 20 years. In December 2002, Telecel Bolivia was also awarded a 40-year license to provide long-distance telecommunication services in Bolivia.
This license is mainly used to carry Telecel Bolivia's mobile traffic. In May 2006, Telecel Bolivia was awarded a 40-year data concession to provide services in Bolivia. As at
December 31, 2010, Millicom's network in Bolivia comprised 908 cell sites and covered 54% of the total population.

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

Colombia

Population:

44 million2010 GDP real growth:

4.4%GDP per capita:

$9,800


Colombia's system of government is a Constitutional Republic. The president of the Republic of Colombia (Colombia) is Mr. Juan Manuel Santos who has been
in office since August 2010, succeeding former president Mr. Alvaro Uribe who held the presidential office since August 2002. A 40-year conflict between government forces, and
anti-government insurgent groups and illegal paramilitary groups, both heavily funded by the drug trade, escalated during the 1990's. The insurgents lack the military or popular support
necessary to overthrow the government and violence has been decreasing since 2002 but insurgents continue attacks against civilians and large parts of the countryside are under guerrilla influence.
Most paramilitary members have demobilized since 2002 in an ongoing peace process, although their commitment to ceasing illicit activity is unclear. During his term former president Alvaro Uribe
stepped up efforts to reassert government control throughout the country. However, neighbouring countries worry about the violence spilling over their borders. In January 2011, Colombia assumed a
non-permanent seat on the UN Security Council for the 2011-12 term.



Colombia experienced accelerating growth between 2002 and 2007, chiefly due to improvements in domestic security, rising commodity
prices, and to President Uribe's pro-market economic policies. Foreign direct investment reached a record $10 billion in 2008, and continues to flow in, especially in the oil
sector. A series of policies enhanced Colombia's investment climate: pro-business reforms in the oil and gas sectors and export-led growth fueled mainly by the Andean Trade
Promotion and Drug Eradication Act. Inequality, underemployment, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires major improvements to sustain economic
expansion. Because of the global financial crisis and weakening demand for Colombia's exports, Colombia's economy grew only 2.7% in 2008, and 0.8% in 2009 but rebounded to around 4.5% in 2010. The
economy continued to improve, buoyed by reduced public debt, the export-oriented growth strategy, improved security, and high commodity prices (oil in particular). The government continues to
encourage exporters to diversify their customer base beyond the United States and Venezuela, traditionally Colombia's largest trading partners; the Santos administration continues to pursue free trade
agreements with Asian and South American partners and awaits the approval of a Canadian trade accord by Canada's and EU's parliaments. The business sector remains concerned about Venezuela's trade
restrictions on Colombian

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exports,
an appreciating domestic currency, and the pending US Congressional approval of the US-Colombia Trade Promotion Agreement.



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

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

Colombia
Móvil was awarded three licenses in February 2003 to offer Personal Communications System (PCS) services in the three zones, covering all of Colombia. The PCS
licenses each have a term of 10 years and allow Colombia Móvil to offer voice, data and video services without additional license requirement for value added services.
Additionally, Colombia Móvil has one license for offering carrier services, with a term of ten years, extendable for an additional ten years. Colombia
Móvil S.A. ESP is operating in Colombia with GSM/GPRS technology, on the 1900 MHz band, with 40MHz of spectrum in the 1900MHz band composed of 30 MHz awarded with the PCS license
in 2003 with duration of ten years and 10MHz awarded in August 2008 for the same validity period as the PCS license. In addition to the PCS license, Colombia Móvil has another
license that permits it to offer several telecommunication services, named "Título Habilitante Convergente" which was awarded in April 2008 and it has a term of 10 years
renewable. Through this license, Colombia Móvil is offering value added services, has offered international gateway services since July 2003 and is able to offer bearer services. As at
December 31, 2010, Millicom's network in Colombia comprised 2,832 cell sites and covered 74% of the total population.

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

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Paraguay

Population:

6 million2010 GDP real growth:

6.5%GDP per capita:

$4,900


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



Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer
goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living
from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. On a per capita basis, real income has
stagnated at 1980 levels. The economy grew rapidly between 2003 and 2008 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based
export expansion. Paraguay is the sixth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The
economy fell 3.8% in 2009, as lower world demand and commodity prices caused exports to contract. The government reacted by introducing fiscal and monetary stimulus packages. Growth resumed at a 6.5%
level in 2010. Political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to growth.



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

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

Telecel
Paraguay started operations in 1992. It primarily operates a GSM network which is GPRS/EDGE enabled. Telecel also operates the largest broadband wireless network with
WiMAX in Paraguay and was the market leader in the Paraguayan broadband market in 2007. In 2008, Telecel launched 3G/HSDPA services. Telecel was awarded a 10-year license for an 800MHz
network in 1991, which was renewed in October 2001 until October 2006, when the license was again renewed until 2011. The 1900MHz PCS license that expired in November 2007 was renewed for an
additional 5 year period (until November 2012). This license is renewable for successive five-year periods. The ISP services license was renewed in 2009 until 2014 and in 2010
Conatel announced that both ISP and data licenses were to become a single license. In August 2008 Tigo launched Fiber to the Home (FTTH) services, with an initial phase of 25 Central Offices
and an initial capacity of 2,000 ports, covering the

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metropolitan
area of Asuncion, Ciudad del Este and Encarnación. During the first half of the year, Telecel launched Tigo Cash providing a number of bill payment and money transfer
services to customers. As at December 31, 2010, Millicom's network in Paraguay comprised 866 cell sites and covered 94% of the total population.

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

AFRICA

Millicom's Africa cluster consists of its mobile operations in Chad, the Democratic Republic of Congo, Ghana, Mauritius, Rwanda,
Senegal and Tanzania. Our African licenses covered approximately 173 million people as at December 31, 2010.

Chad

Population:

11 million2010 GDP real growth:

2%GDP per capita:

$1,800


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

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Chad's primarily agricultural economy will continue to be boosted by major foreign direct investment projects in the oil sector that
began in 2000. At least 80% of Chad's population relies on subsistence farming and raising of livestock for its livelihood. Chad's economy has long been handicapped by its landlocked position, high
energy costs, and a history of instability. Chad relies on foreign assistance and foreign capital for most public and private sector investment projects. A consortium led by two US companies has been
investing $3.7 billion to develop oil reservesestimated at 1 billion barrelsin southern Chad. Chinese companies are also expanding exploration efforts and are
currently building a 300-km pipeline and the country's first refinery. The nation's total oil reserves are estimated at 1.5 billion barrels. Oil production came on stream in late
2003. Chad began to export oil in 2004. Cotton, cattle, and gum arabic provide the bulk of Chad's non-oil export earnings.



The Ministry of Posts & Telecommunications was responsible for regulation of the telecoms sector until the Telecommunications
Act was passed in 1998. The enactment of the law paved the way for the creation of a new regulatory authority, the Office Tchadien de Régulation des
Télécommunications (OTRT), in 2000. In the same year, the Société des Télécommunications du Tchad
(Sotel Tchad) was established to operate basic fixed-line telephony services in the country during a five-year exclusivity period. The amount of fixed telephone lines installed
was estimated at 13,000 in 2004. The government has sold 60% of Sotel Tchad to Libyan state-owned firm LAP Green Network for $90 million.

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

Millicom
Tchad launched commercial operations in the capital city, N'Djamena, in October 2005. The company offers tigo® branded prepaid services over its GSM network and
services include GPRS, EDGE, MMS and e-PIN and has an international gateway. In November 2004, Millicom Tchad was awarded a 10-year license to operate a nationwide GSM
network in Chad. The company's license was amended in July 2005 to allow for international gateway operations and in January 2007 for GPRS/EDGE. Millicom Tchad does not have a WiMAX license
because no such licenses have yet been issued in Chad. As at December 31, 2010, Millicom's network in Chad comprised 360 cell sites and covered 73% of the total population.

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

Democratic Republic of Congo (DRC)

Population:

71 million2010 GDP real growth:

3%GDP per capita:

$300


The DRC's government system is a Unitary Republic. Following the withdrawal of Rwandan forces from eastern DRC in 2002, the Pretoria Accord was signed by all
relevant parties to end four years of regional war involving Angola, Chad, Namibia, Sudan and Zimbabwe supporting the Congolese regime being challenged by Rwanda and Uganda. A transitional
government was set up in July 2003 with Joseph Kabila. He was joined by four vice-presidents representing the former government, former rebel groups and the political opposition. New
elections had been due by June 2005 after a transition period of two years. The transitional government held a successful constitutional referendum in December 2005 and elections considered
generally free and fair for the presidency, National Assembly, and provincial legislatures in 2006. These were the first democratic elections in approximately 40 years,

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since
the election of Patrice Lumumba, Congo's first ever elected head of state. President Kabila was inaugurated president in December 2006. Provincial assemblies were constituted in early 2007, and
elected governors and national senators in January 2007. In 2008, the war in the East started again, with one million refugees displaced, and the international community and the United Nations fully
involved in the humanitarian crisis. On March 23, 2009, the Government of the D.R.C. signed separate peace agreements with (1) the CNDP, (2) the North Kivu armed groups, and
(3) the South Kivu armed groups. The rebel groups agreed to transform their movements from military to political in nature, while the government promised to work toward integrating rebel
soldiers and officials into the FARDC, national police, and national and local political and administrative units.



The economy of the Democratic Republic of the Congoa nation endowed with vast potential wealthis slowly
recovering from decades of decline. Systemic corruption since independence in 1960 and conflict that began in May 1997 dramatically reduced national output and government revenue, increased external
debt, and resulted in the deaths of more than 5 million people from violence, famine, and disease. Foreign businesses curtailed operations due to uncertainty about the outcome of the conflict,
lack of infrastructure, and the difficult operating environment. Conditions began to improve in late 2002 with the withdrawal of a large portion of the invading foreign troops. The transitional
government reopened relations with international financial institutions and international donors, and President Kabila began implementing reforms. Progress has been slow and the International Monetary
Fund curtailed their program for the DRC at the end of
March 2006 because of fiscal overruns. Much economic activity still occurs in the informal sector, and is not reflected in GDP data. Renewed activity in the mining sector, the source of most export
income, boosted Kinshasa's fiscal position and GDP growth from 2006-2008, however, the government's review of mining contracts that began in 2006, combined with a fall in world market
prices for the DRC's key mineral exports temporarily weakened output in 2009, leading to a balance of payments crisis. The recovery in mineral prices beginning in mid 2009 boosted mineral exports, and
emergency funds from the IMF boosted foreign reserves. An uncertain legal framework, corruption, and lack of transparency in government policy are long-term problems for the mining sector
and the economy as a whole. The global recession cut economic growth in 2009 to less than half its 2008 level, but growth returned to 3% in 2010. The DRC signed a Poverty Reduction and Growth Facility
with the IMF in 2009 and received $12 billion in multilateral and bilateral debt relief in 2010.



DRC's incumbent fixed line operator is the "Office Congolais des Postes et des Télécommunications"
(OCPT). It operates an outdated, poorly managed analogue fixed-line network of approximately 10,000 lines mainly concentrated in the capital city of Kinshasa. The Autorité
de Régulation de la Poste et des Télécommunications du Congo (ARPTC) is in charge of regulating the telecommunications sector. Legislation has been
prepared but not yet implemented which will formally end the OCPT's monopoly and allow for market liberalization. To date, the government has not developed a telecommunications policy. As the DRC
lacks the funds to invest in a modern fixed-line infrastructure, the country's mobile sector has been facing high demand in recent years. According to the Ministry of
Telecommunications, which is charged with the organization of 3G licenses, 3G licenses should be auctioned in 2011. Recently, the government has introduced a temporary minimum tariff to protect
consumers and national interests, which has led to Millicom's operation, Oasis S.P.R.L. (Oasis), significantly increasing its on-net tariff.

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

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In
November 1997 Oasis was awarded a 20-year license to operate a fixed-line network in DRC. An amendment to the license was signed in October 1999 which allows
the company to construct a nationwide GSM network. Oasis does not have a WiMAX license. Oasis also has an international gateway. As at December 31, 2010, Millicom's network in DRC comprised 760
cell sites (of which 212 are off), and covered 75% of the Kinshasa Bas-Congo Region population. In December 2010 an agreement was reached with
Helios Towers DRC, in which 729 towers will be sold to Helios DRC, as part of an outsourcing deal in which Helios DRC will manage the towers and provide related services to Oasis.

Three
operators (Starcel, Comcel and Afritel) were offering limited analogue and CDMA mobile services in DRC when Oasis entered the market with its GSM offering. These operators had
ceased to exist by the end of 2003. Initially Celtel Congo, owned by Kuwait based Zain (formerly MTC), was the only other GSM operator in the market, becoming the leading provider of mobile services
in DRC with coverage in almost 100 cities. In 2010, Zain was acquired by Airtel. In 2001, Congolese Wireless Networks (CWN) entered into a joint venture with South African mobile operator Vodacom,
creating a new operator, Vodacom Congo, which launched GSM services in DRC in April 2002 and extended its coverage to a large number of cities. The fourth operator, CCT, jointly owned by Chinese
telecom equipment provider ZTE (51%) and the DRC government (49%), launched its GSM network in January 2002. Other GSM licenses were granted in 2008 to the following operators: Niletel (present in
Sierra Leone), Hits Telecom (present in Tanzania and Equatorial Guinea) and MTN.

Ghana

Population:

24 million2010 GDP real growth:

4.7%GDP per capita:

$1,600


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



Ghana is well endowed with natural resources and agriculture accounts for roughly one-third of GDP and employs more than
half of the workforce, mainly small landholders. The services sector accounts for 50% of GDP. Gold and cocoa production and individual remittances are major sources of foreign exchange. Oil production
at Ghana's offshore Jubilee field began in mid-December and is expected to boost economic growth. Ghana signed a Millennium Challenge Corporation (MCC) Compact in 2006, which aims to
assist in transforming Ghana's agricultural sector. Ghana opted for debt relief under the Heavily Indebted Poor Country (HIPC) program in 2002, and is also benefiting from the Multilateral Debt Relief
Initiative that took effect in 2006. In 2009 Ghana signed a three-year Poverty Reduction and Growth Facility with the IMF to improve macroeconomic stability, private sector
competitiveness, human resource development, and good governance and civic responsibility. Sound macro-economic management along with high prices for gold and cocoa helped sustain GDP growth in
2008-10. In early 2010 President John Atta Mills targeted recovery from high inflation and current account and budget deficits as his priorities.

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

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

Millicom
Ghana was the first mobile operator in Ghana, having commenced operations in 1992. Millicom Ghana introduced the concept of prepaid services in Ghana in 1998. Millicom Ghana's
GSM license authorizes it to provide mobile and local fixed wireless services. Although Millicom Ghana applied for a GSM license in 2000, it was not allowed to launch GSM services for approximately
two years until July 2002 when it launched its GSM operation, which led to an important growth in its customer base. In December 2004, the NCA issued Millicom Ghana a formal GSM operating
license that is valid for 15 years. Under this license, Millicom Ghana has 8 MHz of spectrum in the 900 band and has been granted an additional 10 MHz in the 1800 band. Millicom Ghana also
acquired an International Gateway license in June 2005. This license is valid for 10 years. In March 2006, Millicom Ghana introduced the tigo® brand and offered an array of
Value-Added Services (VAS): General Packet Radio Services (GPRS), Wireless Application Protocol (WAP), Multimedia Messaging Services (MMS), Caller Ring Back Tones (CRBT) and other interactive
value-added services. Millicom Ghana acquired a 3G license in the last quarter of 2008, and is scheduled to roll-out 3G services in early 2011. In January 2010, Millicom's operation in
Ghana signed a sale and lease-back agreement with Helios Towers Ghana, a direct subsidiary of Helios Towers Africa, for most of its sites, the majority of which have been transferred to
Helios Towers Ghana during 2010. As at December 31, 2010, Millicom's network in Ghana comprised 801 cell sites and covered 72% of the total population.

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

Mauritius

Population:

1 million2010 GDP real growth:

3.6%GDP per capita:

$13,500


Mauritius' government system is a Parliamentary Democracy. After almost four centuries under Dutch, French and British control, the country gained its
independence in 1968. A stable democracy with regular free elections, Mauritius has attracted considerable foreign investment and has earned one of Africa's highest per capita incomes. Sir Anerood
Jugnauth has been president since 2003 and

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Navinchandra
Ramgoolam of the Labor Party was elected prime minister in the July 2005 elections and was re-elected in May 2010 within a coalition of the Labor Party, the Militant Socialist
Movement and the Social Democrat Party. Stated priorities of the new government are improvement of road infrastructures, the security of the people, education, and health and youth development.



Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income
diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been in the order of 5% to 6%. This remarkable achievement has been reflected in
more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. The economy rests on sugar, tourism, textiles and apparel, and
financial services, and is expanding into fish processing, information and communications technology, and hospitality and property development. Sugarcane is grown on about 90% of the cultivated land
area and accounts for 15% of export earnings. The government's development strategy centers on creating vertical and horizontal clusters of development in these sectors. Mauritius has attracted more
than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over $1 billion. Mauritius, with its strong textile
sector, has been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA). Mauritius' sound economic policies and prudent banking practices helped to mitigate negative effects
from the global financial crisis in 2008-09. GDP grew 3.6% in 2010 and the country continues to expand its trade and investment outreach around the globe.



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

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

Emtel
owns licenses for mobile services, international long-distance and internet services. Emtel was awarded a 10-year license in 1989, including a
seven year exclusivity period. Emtel's license was modified in November 2000 and is valid for a period of 15 years. Furthermore, Emtel obtained additional spectrum for UMTS/3G services
in November 2004, an international long-distance license in December 2003 (valid until 2018) and an internet service license in May 2004 (valid until 2019). Emtel acquired WiMAX spectrum
in 2007 and has a WiMAX network with 11 base stations. Emtel's HSDPA network includes 145 base stations at December 31, 2010, of which 30 are also HSUPA capable. Implementation of the
Telecommunications Directive (1 of 2008) to reduce interconnect tariffs to the state owned fixed-line infrastructure was implemented in May 2008. Emtel operates a GSM network which
is GPRS enabled and a UMTS/3G/HSDPA network. As at December 31, 2010, Millicom's network in Mauritius comprised 269 cell sites and covered 91% of the total population.

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

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Telephone
(Mauritius) Ltd., entered the market in December 2006 using CDMA technology. MTML is currently constructing a GSM network.

Rwanda

Population:

11 million2010 GDP real growth:

6.0%GDP per capita:

$1,100


In 1959, three years before independence from Belgium, the majority ethnic group, the Hutus, overthrew the ruling Tutsi king. Over the next
several years, thousands of Tutsis were killed, and some 150,000 driven into exile in neighboring countries. The children of these exiles later formed a rebel group, the Rwandan Patriotic Front
(RPF), and began a civil war in 1990. The war, along with several political and economic upheavals, exacerbated ethnic tensions, culminating in April 1994 in the genocide of roughly 800,000 Tutsis and
moderate Hutus. The Tutsi rebels defeated the Hutu regime and ended the killing in July 1994, but approximately 2 million Hutu refugees, many fearing Tutsi retaliation, fled to neighboring
Burundi, Tanzania, Uganda, and Democratic Republic of Congo (at that time Zaire). Since then, most of the refugees have returned to Rwanda, but several thousand remained in the neighboring Democratic
Republic of the Congo and formed an extremist insurgency bent on retaking Rwanda, much as the RPF tried in 1990. Rwanda held its first local elections in 1999 and its first post-genocide
presidential and legislative elections in 2003. In 2009, Rwanda staged a joint military operation with the Congolese Army in DRC to root out the Hutu extremist insurgency there and Kigali and Kinshasa
restored diplomatic relations. Rwanda also joined the Commonwealth in late 2009. During 2010 a second presidential election was completed and the incumbent was re-elected.



Rwanda is a poor rural country with about 90% of the population engaged in (mainly subsistence) agriculture and some mineral and
agro-processing. In 2008, minerals overtook coffee and tea as Rwanda's primary foreign exchange earner. The 1994
genocide decimated Rwanda's fragile economic base, severely impoverished the population, particularly women, and temporarily stalled the country's ability to attract private and external investment.
However, Rwanda has made substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels. GDP has rebounded and inflation has been curbed. Nonetheless, the majority
continue to live below the poverty line of 250 Rwandan francs per day (about US$0.43). Despite Rwanda's fertile ecosystem, food production often does not keep pace with demand, requiring food imports.
Rwanda continues to receive substantial aid money and obtained IMF-World Bank Heavily Indebted Poor Country (HIPC) initiative debt relief in 2005-06, although these levels have
been impacted in 2010 with the global economic turndown. Rwanda also received a Millennium Challenge Account Compact in 2008. Africa's most densely populated country is trying to overcome the
limitations of its small, landlocked economy by leveraging regional trade. Rwanda joined the East African Community and is aligning its budget, trade, and immigration policies with its regional
partners. The government has embraced an expansionary fiscal policy to reduce poverty by improving education, infrastructure, and foreign and domestic investment and pursuing market-oriented reforms,
although energy shortages, instability in neighboring states, and lack of adequate transportation linkages to other countries continue to handicap growth. The global downturn hurt export demand and
tourism, but economic growth is recovering, driven in large part by the services sector, and inflation has been contained. On the back of this growth, government is gradually ending its fiscal
stimulus policy while protecting aid to the poor.



The enabling framework for the liberalisation of the telecommunications sector was put in place by the current Telecommunications Law,
passed in 2001. The Telecommunications Law established RURA,

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the
regulator, granting it the authority to regulate telecommunications and setting up a regulatory board to carry out that function. Rwanda currently has three GSM licenses in force. The overall aim
of the telecom reform policy was to increase universal affordable access to telecommunications in the interests of social and economic development.

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

In
late 2008, Millicom was successful in its tender against three other bidders for the third national mobile license in Rwanda. Millicom set up Tigo Rwanda and, after
roll-out of the network, services were launched in December 2009. As at December 31, 2010, Millicom's network in Rwanda comprised 171 cell sites and covered 86% of the population.

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

Senegal

Population:

12 million2010 GDP real growth:

3.9%GDP per capita:

$1,900


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



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

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the year,
bakers protested government price controls on bread. Foreign investment in Senegal is constrained by Senegal's business environment, which has slipped in recent years, and by
perceptions of corruption.



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

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

Sentel
launched its commercial operations in 1999 as the second mobile operator in the country and it was the first mobile operator to introduce GPRS services. As at
December 31, 2010, Millicom's network in Senegal comprised 589 cell sites and covered 69% of the total population.

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

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

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Tanzania

Population:

43 million2010 GDP real growth:

6.4%GDP per capita:

$1,500


Tanzania's system of government is a Federal Republic formed by the union in 1964 of Tanganyika and Zanzibar. President Jakaya Mrisho Kikwete came to power after
winning the last democratic elections held on December 14, 2005. One-party rule came to an end in 1995 with the first democratic elections held in the country since the 1970s.
Zanzibar's semi-autonomous status and popular opposition have led to two contentious elections since 1995, which the ruling party won despite international observers' claims of voting
irregularities. President Kikwete is continuing to carry out economic reforms that gained momentum during the two terms in office of the previous president, Benjamin Mkapa. President Kikwete's
government was re-elected in October 2010 in peaceful and uncontested results.



Tanzania is one of the world's poorest economies in terms of per capita income, however Tanzania averaged 7% GDP growth per year
between 2000 and 2008 on strong gold production and tourism. The economy depends heavily on agriculture, which accounts for more than one-fourth of GDP, provides 85% of exports, and
employs about 60% of the work force. The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging economic infrastructure, including rail and port infrastructure
that are important trade links for inland countries. Recent banking reforms have helped increase private-sector growth and investment, and the government has increased spending on agriculture to 7% of
its budget. Continued donor assistance and solid macroeconomic policies supported a positive growth rate, despite the world recession. In 2008, Tanzania received the world's largest Millennium
Challenge Compact grant, worth $698 million. Dar es Salaam used fiscal stimulus and loosened monetary policy to ease the impact of the global recession. GDP growth in 2009-10 was a
respectable 6% per year due to high gold prices and increased production.



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

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

In
January 1994, MIC Tanzania was awarded a 15-year license to operate a nationwide mobile network and, in January 2004, the company's license was extended to a
25-year license expiring in January 2019. MIC Tanzania does not have a WiMAX license, but believes it will obtain one as part of the migration to the newly converged licensing framework.
Such license is presently under negotiation since all spectrums have already been awarded. In May 2007, MIC Tanzania migrated to the converged licensing framework which is technological neutral. MIC
Tanzania has been issued three separate licenses for Network Facilities Services, Network Services and Application Services. These licenses are

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valid
for 25 years, 25 years and 5 years, respectively. As at December 31, 2010, Millicom's network in Tanzania comprised 1,057 cell sites and covered 60% of the total
population.

In
addition to Millicom's, there are 10 other licenses for mobile operators in Tanzania. Millicom's main competitors are Vodacom Tanzania (65% owned by Vodafone which recently took
control of the operation and 35% owned by its local partner, it entered the market in August 2000 and has become the leading provider of mobile services in Tanzania in terms of customers), Zain
Celtel, purchased by Bharti Airtel in 2010, launched GSM services in the country in November 2001 and Zantel (jointly owned by the government of Zanzibar, Emirate Telecommunication Company, Kintbury
Investment of the Channel Islands and a local technology firm), introduced GSM services in Zanzibar and the islands of Unguja and Pemba in August 1999, and entered the Tanzanian mainland in June 2005
through a national roaming agreement with Vodacom Tanzania). Other operators with less than 3% of market share include TTCL mobile, Bol and Dovotel.

AMNET

Amnet entered into the Central American market with its first acquisition in Costa Rica in 1997. In 1998 it acquired one of the main
cable TV operators in El Salvador and one year later it adopted the commercial name Amnet (American Network). In the same year it became the first internet provider in Costa Rica. In
2002 Amnet started offering digital Pay TV in El Salvador and Costa Rica and, in 2004, started offering internet services and data transmission, voice and video, followed by fixed telephony
services for both residential and corporate segments in 2005.

Today
Amnet has a large network in Central America with approximately 1.3 million homes passed, which together with Millicom's existing mobile network gives Millicom opportunities
for future growth with cost efficiencies. Amnet has approximately 670,000 Revenue Generating Units ("RGUs") across Central America with cable and broadband customers in El Salvador, Honduras
and Costa Rica as well as corporate data customers in Guatemala, Nicaragua, El Salvador and Honduras.

Amnet
provides analog and digital cable TV, broadband internet, telephony, VOIP and data transmission. 82% of its network is composed of a two-way capability system bandwidth
of 750 MHz. The remaining one-way video signal network is being rebuilt due to its limited capacity in order to accommodate various services, such as Internet, VOD, VOIP, and data
transmission. This kind of network has the benefit for multi-service support for mobile customers, particularly for 3G and next-generation services in the near future.

With
the addition of Amnet to Millicom's existing mobile operations within Central America, Millicom started offering bundled services as a quadruple player in the telecommunications
industry. In addition Amnet's optical fiber network can be extended to the existing mobile radio base stations which could strengthen Millicom's competitiveness.

On
August 20, 2010, to facilitate the integration of its various business lines and to create synergies, Millicom entered into agreements with its partners in Honduras and
Guatemala to align ownership of its Amnet and Navega businesses in each country as follows:

Former
ownership

New
ownership

Status at
December 31,
2010AcquisitionsNavega El Salvador


55.0
%

100.0
%
Pending regulatory approvalNavega Honduras


60.7
%

66.7
%
ClosedDisposalsAmnet Guatemala


100.0
%

55.0
%
ClosedAmnet Honduras


100.0
%

66.7
%
Pending regulatory approval


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Costa Rica

Population:

5 million2010 GDP real growth:

3.5%GDP per capita:

$11,400


Although explored by the Spanish early in the 16th century, initial attempts at colonizing Costa Rica proved unsuccessful due to a combination of factors,
including: disease from mosquito-infested swamps, brutal heat, resistance by natives, and pirate raids. It was not until 1563 that a permanent settlement of Cartago was established in the cooler,
fertile central highlands. The area remained a colony for some two and a half centuries. In 1821, Costa Rica became one of several Central American provinces that jointly declared their independence
from Spain. Two years later it joined the United Provinces of Central America, but this federation disintegrated in 1838, at which time Costa Rica proclaimed its sovereignty and independence.
Since the late 19th century, only two brief periods of violence have marred the country's democratic development. Although it still maintains a large agricultural sector, Costa Rica has
expanded its economy to include strong technology and tourism industries. The standard of living is relatively high. Land ownership is widespread.



Prior to the global economic crisis, Costa Rica enjoyed stable economic growth. The economy contracted 0.7% in 2009, but resumed growth
at more than 3% in 2010. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialized
agricultural products have broadened export trade in recent years. High value added goods and services, including microchips, have further bolstered exports. Tourism continues to bring in
foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country's political stability and relatively high
education levels, as well as the fiscal incentives offered in
the free-trade zones; and Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. However, many business impediments, such as high
levels of bureaucracy, difficulty of enforcing contracts, and weak investor protection, remain. Poverty has remained around 15-20% for nearly 20 years, and the strong social safety
net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Unlike the rest of Central America, Costa Rica is not highly dependent
on remittances as they only represent about 2% of GDP. Immigration from Nicaragua has increasingly become a concern for the government. The estimated 300,000-500,000 Nicaraguans in Costa
Rica legally and illegally are an important source ofmostly unskilledlabor, but also place heavy demands on the social welfare system. The US-Central
American-Dominican Republic Free Trade Agreement (CAFTA-DR) entered into force on 1 January 2009, after significant delays within the Costa Rican legislature. CAFTA-DR
will likely lead to increased foreign direct investment in key sectors of the economy, including the insurance and telecommunications sectors recently opened to private investors. President Chinchilla
is likely to push for fiscal reform in the coming year, seeking to boost revenue, possibly through revised tax legislation, to fund an increase in security services and education.



Today, Amnet provides cable TV services in Costa Rica. It also serves the internet market together with RACSA (a subsidiary of ICE
group), the state owned telecommunications company which holds the internet license. Using its fiber optic infrastructure, Amnet has been the main network provider to RACSA, which uses it to provide
data services to corporate clients.

The
government of Costa Rica moved to a total liberalized telecom market in the country from 2008. A new Telecommunications Law was enacted in June 2008 and the new regulatory body SUTEL

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is
in operation. Amnet has obtained licenses to provide telephony, internet, and data and value added services. The company will start offering fixed line telephony services at the end of the first
quarter of 2011, and will be able to offer customers triple play bundles (cable TV, internet and fixed telephony).

El Salvador

Please refer to the earlier section on El Salvador.

Amnet
is the leading player in the cable industry in El Salvador with a market share of approximately 80%. Amnet also provides broadband, and telephony services. Bundled services
are becoming increasingly popular and Millicom's acquisition has strengthened Amnet's position since it will now be able to offer the full quadruple play bundled service packages: cable, broadband,
fixed telephony and mobile services, providing its client base with value-added services.

Guatemala

Please refer to the earlier section on Guatemala.

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

Honduras

Please refer to the earlier section on Honduras.

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

Nicaragua

Population:

6 million2010 GDP real growth:

2.8%GDP per capita:

$2,900


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

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Nicaragua, the poorest country in Central America and the second poorest in the Hemisphere, has widespread underemployment and poverty.
The US-Central America Free Trade Agreement (CAFTA) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods. Textiles
and apparel account for nearly 60% of Nicaragua's exports, but increases in the minimum wage during the Ortega administration will likely erode its comparative advantage in this industry. Ortega's
promotion of mixed business initiatives, owned by the Nicaraguan and Venezuelan state oil firms, together with the weak rule of law, could undermine the investment climate for domestic and
international private firms in the near-term. Nicaragua relies on international economic assistance to meet internal- and external-debt financing obligations. Foreign donors
have curtailed this funding, however, in response to November 2008 electoral fraud. Managua has an IMF extended Credit Facility program, which could help keep the government's fiscal deficit on target
during the 2011 election year and encourage transparency in the use of Venezuelan off-budget loans and assistance. In early 2004, Nicaragua secured some $4.5 billion in
foreign debt reduction under the Heavily Indebted Poor Countries (HIPC) initiative, however, Managua still struggles with a high public debt burden. Nicaragua is gradually recovering from the global
economic crisis as increased exports drove positive growth in 2010. The economy is expected to grow at a rate of about 3% in 2011.



In 2005, the fixed line sector was officially privatized and a competition law was issued in 2006, however full liberalization is
pending, which is not the case for the mobile sector, which is open to full competition. The Government is contemplating to add competition to the market by introducing a new player using a
competitive bidding process set to start this year.

DISCONTINUED AND DIVESTED OPERATIONS

During 2009, Millicom completed the sale of its mobile operations in Sri Lanka (on October 16, 2009), Sierra Leone (on
November 25, 2009) and Cambodia (on November 26, 2009). A total net gain of $289 million was recognized from the sale of these operations (see note 5). Millicom's
operations in Sri Lanka, Sierra Leone and Cambodia ceased to be consolidated from the date of sale. Millicom incurred total costs of $11 million on the above mentioned transactions.

On
September 16, 2009 Millicom announced that it signed an agreement for the sale of its 74.1% holding in Millicom Lao Co. Ltd., its Laos operation, to VimpelCom for
approximately $65 million in total cash proceeds, payable on completion. Completion of the transaction was subject to certain conditions, which were not satisfied before December 31,
2009. As a result, Millicom's operation in Laos was classified as a disposal group held for sale and discontinued operations. As of December 31, 2010 certain completion conditions remain open,
such that the Laos operation continues to be classified as a disposal group held for sale and discontinued operation (see note 6). Millicom has notified Vimpelcom of the fact that it had
breached the terms of the Sale and Purchase Agreement with Millicom.

OTHER

Property, Plant and Equipment

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

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



Insurance

We maintain the types and amounts of insurance which we believe to be customary in the industry and countries in which we operate and
in accordance with our risk management strategy. In 2009 we conducted a review and analysis of our worldwide insurance coverage with the assistance of AON Sweden AB. We consider our insurance
coverage to be adequate both as to risks and amounts for the business we conduct. As our insurance policies expire around the Group, we are standardizing our coverage along the recommendations
suggested by AON. These changes will increase our coverage terms at similar costs.

ITEM 4A.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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

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

Operating Results

Millicom finalized the sale of its operations in Cambodia, Sierra Leone and Sri Lanka during 2009. In addition, in September 2009,
Millicom signed an agreement to dispose of its operation in Laos. Accordingly these operations have been classified as discontinued operations. The discussion below focuses on results from continuing
operations.

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Years Ended December 31, 2010 and 2009

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

Impact on
Comparative Results
for PeriodYear Ended December 31,Amount of
Variation

Percent
Change2010

2009(in thousands of U.S. dollars, except percentages)Revenues


3,920,249


3,372,727


547,522


16
%Cost of sales


(1,331,003
)

(1,202,902
)

(128,101
)

11
%Gross profit


2,589,246


2,169,825


419,421


19
%Sales and marketing


(737,691
)

(647,009
)

(90,682
)

14
%General and administrative expenses


(738,779
)

(606,213
)

(132,566
)

22
%Other operating expenses, net


(71,046
)

(65,580
)

(5,466
)

8
%Operating profit


1,041,730


851,023


190,707


22
%Interest expense


(214,810
)

(173,475
)

(41,335
)

24
%Interest and other financial income


14,748


11,573


3,175


27
%Revaluation of previously held interests


1,060,014


32,319


1,027,695


3180
%Other non operating expenses, net


(29,702
)

(32,181
)

2,479


(8
%)Loss (profit) from associates


(1,817
)

2,329


(4,146
)

(178
%)Profit before tax from continuing operations


1,870,163


691,588


1,178,575


170
%Charge for taxes


(227,096
)

(187,998
)

(39,098
)

21
%Profit for the year from continuing operations


1,643,067


503,590


1,139,477


226
%Profit from discontinued operations, net of tax


11,857


300,342


(288,485
)

(96
%)Non-controlling interests


(2,691
)

46,856


(49,547
)

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


1,652,233


850,788


801,445


94
%


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

Total
revenues increased by 16% for the year ended December 31, 2010 to $3,920 million from $3,373 million for the year ended December 31, 2009.
Excluding the effect of the movement in currencies, revenues increased by 10% year-on-year. Growth in revenue is impacted by growth in the number of customers and
increasingly, the type and number of value added services purchased by customers.

Mobile Customers

2010

2009

GrowthCentral America


13,484,996


12,901,710


5
%South America


10,139,252


8,815,217


15
%Africa


14,965,332


12,203,177


23
%Total


38,589,580


33,920,104


14
%


As of December 31, 2010, our worldwide total mobile customer base increased by 14% to 38,589,580 from 33,920,104 as of December 31, 2009. Prepaid
customers accounted for 94% or 36,123,812 of the total mobile customers.

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

Capital
expenditure resulted in improvements in the quality of our networks and increased capacity and coverage which attracted additional customers. Expansion of the distribution
network also helped

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drive
customer growth by increasing the number of points of sale where we sell our products, making the products more accessible. We are further driving higher penetration rates in our markets by
continuing to secure affordability of our services by using innovative distribution channels and techniques. Future customer growth is partly dependent on the level of capital expenditure invested in
the business; increased points of sale; innovative product development and a competitive value proposition.

In
Central America, Guatemala grew its mobile customer base by 17% year-on-year, Honduras declined by 6% year-on-year and El
Salvador by 2%. In South America, total mobile customers increased by 15% with Bolivia, Colombia and Paraguay showing increases of 19%, 15% and 13% respectively. Customer growth was particularly
strong in Africa. The two best performing markets in terms of net mobile customer additions were Chad, which grew by 41% year-on-year, and Tanzania, which grew by 13%
year-on-year, with strong growth also in DRC, 43%, and Ghana 14%. In Senegal, net mobile customers continue to increase by 13% year-on-year,
despite the dispute with the Senegalese government regarding the Sentel license (see note 31) and the launch of a new Mobile Virtual Network Operator (MNVO) in the third quarter of 2009. At the
end of its first full year of operation Rwanda had 550,000 customers.

Overall,
we expect customer intake to continue to be quite volatile, with variable factors including the macro environment, seasonality, competitor promotions and our own marketing
activities. In addition, the trend towards mandatory SIM card registration, and aggressive competitor pricing in some African markets is contributing to volatility. We see less and less relevance of
the net customer intake as a proxy for future growth, given that Millicom sells more and more high-value services like 3G whose revenues are much higher than for basic voice customers.
Revenue growth and ARPU developments are more valued today than customer intake by Millicom management.

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

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

2010

2009

GrowthHomes passed (in thousands)


1,332


1,287


3
%Revenue generating units (in thousands)


670


631


6
%


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

Revenue

2010

2009

GrowthUS$ '000

US$ '000Central America


1,415,933


1,314,760


8
%South America


1,373,877


1,075,914


28
%Africa


904,931


782,150


16
%Cable


225,508


199,903


13
%Total


3,920,249


3,372,727


16
%


Central AmericaRevenue increased by 8% in 2010 to $1,416 million from $1,315 million for the year ended December 31,
2009. Revenues in Central America are heavily impacted by remittances from the US and we have seen no meaningful improvement in the flow of these remittances which were down
10% year-on-year for our markets in the region.

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

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

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

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

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

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

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

Cost of sales:Cost of sales increased by 11% for the year ended December 31, 2010 to $1,331 million from
$1,203 million
for the year ended December 31, 2009. The primary cost of sales incurred by us is in relation to the provision of telecommunication services relates to interconnection costs, roaming
costs, leased lines to connect the switches and main base stations, cost of handsets and terminals, and the depreciation of network equipment. The interconnection and roaming costs are directly
related to revenues and increased as a result of the growth in revenues described above. The cost of leased lines increased as we continued to expand our networks and depreciation increased due to the
higher capital expenditures on our networks. Gross profit margin slightly increased from 64% for the year ended December 31, 2009 to 66% for the year ended December 31,
2010.

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

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

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

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

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

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

Other operating income (expenses), net:Other operating expenses increased by 8% for the year ended December 31, 2010 to
$71 million from $66 million for the year ended December 31, 2009. The costs related to the corporate staff and other group support functions has increased, and the
necessity to oversee and support the significant growth in the operating companies will contribute to increase other operating expenses.

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

Operating profit

2010

2009

GrowthUS$ '000

US$ '000Central America


599,396


584,341


3
%South America


361,969


227,904


59
%Africa


147,737


84,582


75
%Cable


39,202


31,295


25
%Unallocated


(106,574
)

(77,099
)

38
%Total


1,041,730


851,023


22
%




Operating profit margin

2010

2009

Change
in % ptsCentral America


42
%

44
%

(2
%)South America


26
%

21
%

5
%Africa


16
%

11
%

5
%Cable


17
%

16
%

1
%Total


27
%

25
%

2
%


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

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

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

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

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

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

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

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

Other non operating (expenses) income, net:Other non operating (expenses) income, was a net expense of $30 million for
the year ended
December 31, 2010 and remained broadly consistent with an expense of $32 million for the year ended December 31, 2009. In 2009 these related to exchange losses, and in 2010
to both exchange losses and fair value adjustments on hedges.

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

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

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

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

Net profit for the year attributable to equity holders of the company:The net profit for the year ended December 31,
2010 was
$1,652 million compared to a net profit of $851 million for the year ended December 31, 2009. Profit from continuing operations increased from $504 million for
the year ended December 31, 2009 to $1,643 million for the year ended December 31, 2010 for the reasons stated above. The profit from discontinued operations for
the year ended December 31, 2010 was $12 million compared to a profit from discontinued operations for the year ended December 31, 2009 of $300 million
(including a $289 million net gain on disposals of Millicom's operations in Cambodia and Sri Lankasee note 5).

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Years Ended December 31, 2009 and 2008

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

Impact on
Comparative Results
for PeriodYear Ended December 31,Amount of
Variation

Percent
Change2009

2008(in thousands of U.S. dollars, except percentages)Revenues


3,372,727


3,150,559


222,168

7%Cost of sales


(1,202,902
)

(1,114,822
)

(88,080
)
8%Gross profit


2,169,825


2,035,737


134,088

7%Sales and marketing


(647,009
)

(657,480
)

10,471

(2)%General and administrative expenses


(606,213
)

(498,597
)

(107,616
)
22%Other operating expenses


(65,580
)

(61,438
)

(4,142
)
7%Operating profit


851,023


818,222


32,801

4%Interest expense


(173,475
)

(135,932
)

(37,543
)
28%Interest and other financial income


11,573


32,277


(20,704
)
(64)%Revaluation of previously held interests


32,319





32,319

N/AOther non operating expenses, net


(32,181
)

(52,265
)

20,084

(38)%Profit from associates


2,329


8,706


(6,377
)
(73)%Profit before tax from continuing operations


691,588


671,008


20,580

3%Charge for taxes


(187,998
)

(268,813
)

80,815

(30)%Profit for the year from continuing operations


503,590


402,195


101,395

25%Profit from discontinued operations, net of tax


300,342


2,246


298,096

13,272%Non controlling interests


46,856


113,075


(66,219
)
(59)%Net profit for the year attributable to equity holders


850,788


517,516


333,272

64%


We earn revenue mainly from provision of telecommunications services such as monthly subscription fees, airtime usage fees, roaming fees, interconnect fees,
connection fees for subscription services, and other services and equipment sales.

Total
revenues increased by 7% for the year ended December 31, 2009 to $3,373 million from $3,151 million for the year ended December 31, 2008.
Excluding the effect of the movement in currencies, revenues increased by 10% year-on-year. Currently the growth in revenue is heavily impacted by the growth in the
number of customers.

Customers

2009

2008

GrowthCentral America


12,901,710


11,181,251


15
%South America


8,815,217


7,460,771


18
%Africa


12,203,177


9,048,652


35
%Total


33,920,104


27,690,674


22
%


As of December 31, 2009, our worldwide total mobile customer base increased by 22% to 33,920,104 mobile customers from 27,690,674 mobile customers as of
December 31, 2008. Prepaid customers accounted for 95% or 32,073,052 of the total mobile customers.

Our
mobile attributable customer base increased to 29,715,765 customers as at December 31, 2009 from 24,080,521 customers as of December 31, 2008, an increase of 23%.

The
high capital expenditure resulted in improvements in the quality of our networks and increased capacity and coverage which attracted additional customers. Expansion of the
distribution network also helped drive customer growth by increasing the points of sale where we sell our products, which makes the products more accessible. We are further driving higher penetration
rates in our

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markets
by continuing to drive down the entry price for our services by using innovative distribution channels and techniques. Future customer growth is highly dependent on the level of capital
expenditure invested in the business; increased points of sale; innovative product development and continued focus on a competitive value proposition.

In
Central America, Guatemala grew its mobile customer base by 22% year-on-year, Honduras grew by 12% year-on-year and
El Salvador by 10%. In South America, total mobile customers increased by 18% with Bolivia, Colombia and Paraguay showing increases of 45%, 13% and 11% respectively. Customer growth was
particularly strong in Africa. The two best performing markets in terms of net mobile customer additions were Chad, which grew by 88% year-on-year, and Tanzania, which grew by
73% year-on-year, close to 4 million mobile customers. DRC also showed a significant year-on-year net mobile customer growth of 44%. In
Senegal, net mobile customers increased by 13% year-on-year, despite the dispute with the Senegalese government regarding the Sentel license (see note 31) and the
launch of a new MVNO in the third quarter of 2009. Services were launched in Rwanda at the beginning of December and, by the end of the year, we had attracted some 75,000 customers.

Overall,
we expect customer intake to continue to be quite volatile, with variable factors including the macro environment, seasonality, competitor promotions and our own marketing
activities. In addition, the trend towards mandatory SIM card registration in some African markets is likely to contribute to this volatility.

Our
Cable business now passes 1.3 million homes in Central America a 10% increase on 2008, and provides services to 474,000 households giving a penetration of 37% of homes passed.
Customers take on an average of 1.3 services each and our aim is to increase this take-up of services by our customers by investing in upgrades to our networks so that they are
bidirectional and both broadband internet and cable TV can be accommodated.

Total
homes passed and revenue generating units for our cable businesses for the years ended December 31, 2009 and 2008 were as follows:

2009

2008

GrowthHomes passed (in thousands)


1,287


1,171


10
%Revenue generating units (in thousands)


631


534


18
%


Revenues:Revenues for the years ended December 31, 2009 and 2008 by operating segment were as follows:

Revenue

2009

2008

GrowthUS$ '000

US$ '000Central America


1,314,760


1,376,848


(5
)%South America


1,075,914


1,019,332


6
%Africa


782,150


711,364


10
%Cable


199,903


43,015


365
%Total


3,372,727


3,150,559


7
%


Central AmericaRevenue decreased by 5% in 2009 to $1,315 million from $1,377 million for the year ended December 31,
2008. Revenues in Central America are heavily impacted by remittances from the US and we have seen no meaningful improvement in the flow of these remittances which were down
10% year-on-year for our markets in the
region. In addition, there has been weakness in the Guatemala quetzal in recent months which has impacted reported revenues.

Local
currency average revenue per user (ARPU) for Central America was down 18% on last year, with Honduras showing the weakest trend. The main factor of the decline in Honduras
was

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the
new tax on inbound international traffic introduced in July. A similar tax was introduced in El Salvador at the end of the year which is expected to have a similar impact. In
addition, the interconnect rate in El Salvador was cut by more than 50% in the last quarter of 2009, with tariffs being reduced accordingly. Across Central America, our customers have shown an
increased appetite for promotions and offers built on price as they seek to optimize the use of their disposable income.

South AmericaRevenue grew by 6% in 2009 to $1,076 million from $1,019 million for the year ended December 31, 2008. ARPU
was higher than in the previous year, reaching $12.1, reflecting stronger local currencies year-on-year as well as an improving trend in local currency ARPU. The
aggressive marketing of 3G services across the region and of Paquetigos (bundles of minutes, SMS and Internet sold for use within a certain period of time) in Colombia and Paraguay has helped to
increase prepaid recharges and, therefore, ARPU.

AfricaRevenue grew by 10% in 2009 to $782 million from $711 million for the year ended December 31, 2008. ARPU for Africa
in dollar terms was 50 cents higher than in 2008. In local currency, revenues were up 26% year-on-year, representing the strongest performance of 2009.

CableRevenues in 2009 for Cable reached $200 million. Despite the tough economic environment in Central America, our Cable business is
demonstrating good growth, reflecting the attractive opportunity in cable broadband and TV services.

Our
focus in 2010 will be on increasing customer penetration and usage within our existing footprint rather than extensive coverage roll-out.

Further
revenue growth will likely come from all of our operations as we continue to implement our triple "A" strategy, particularly in the countries where Tigo® was most
recently launched. This strategy will continue to drive higher penetration rates in our markets. The average revenue per user (ARPU) will most likely fall over time as we penetrate deeper into the
populations and reach customers with less disposable income. However, this might not happen immediately as we continue to see price elasticity amongst our existing customers and as we continue to
develop our valued added services.

In
addition, innovation has become a major focus of the Group as we seek to continue to grow revenues in maturing markets by developing additional products and services through which we
can gain a greater share of customers' disposable income. In the course of 2009, we increased the contribution to recurring revenues from value added services from 14% in the first quarter to 21% in
the fourth quarter. We expect innovation to be an important driver of growth in the years ahead.

Cost of sales:Cost of sales increased by 8% for the year ended December 31, 2009 to $1,203 million from
$1,115 million
for the year ended December 31, 2008. The primary cost of sales incurred by us is in relation to the provision of telecommunication services relates to interconnection costs, roaming
costs, leased lines to connect the switches and main base stations, and the depreciation of network equipment. The interconnection and roaming costs are directly related to revenues and increased as a
result of the growth in revenues described above. The cost of leased lines increased as we continued to expand our networks and depreciation increased due to the higher capital expenditures on our
networks. Gross profit margin slightly decreased from 65% for the year ended December 31, 2008 to 64% for the year ended December 31, 2009.

Future
gross margin percentages will be mostly affected by the mix of revenues generated from calls, VAS and data made exclusively within our networks and those between our networks and
other networks. Calls made exclusively within our networks have a higher gross margin because we do not incur interconnect charges to access other networks.

Sales and marketing:Sales and marketing expenses decreased by 2% for the year ended December 31, 2009 to $647 million from
$657 million for the year ended December 31, 2008. Sales and

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marketing
costs were comprised mainly of commissions to dealers for obtaining customers on our behalf and selling prepaid reloads, general advertising and promotion costs for tigo®, point
of sales materials for the retail outlets, and staff costs. As a percentage of revenues, sales and marketing expenses decreased from 21% for the year ended December 31, 2008 to 19% for
the year ended December 31, 2009.

Future
sales and marketing costs will be impacted by the expansion of the distribution network which requires higher spending on brand awareness point of sales materials. The level of
future sales and marketing spend will impact both revenues and operating profits.

General and administrative expenses:General and administrative expenses increased by 22% for the year ended December 31,
2009 to
$606 million from $499 million for the year ended December 31, 2008. This increase is mainly explained by the increase in network maintenance costs to support the expansion
in our mobile operations, but also higher staff costs from more employees needed to manage the growth of Millicom's business. As a percentage of revenues, general and administrative expenses increased
from 16% for the year ended December 31, 2008 to 18% for the year ended December 31, 2009.

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

In
addition, in January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement for most of its sites (see note 35). The agreement marks Millicom's
first outsourcing of passive infrastructure and is consistent with Millicom's strategy of improving both our capital and operating efficiency by focusing on our core activities. Millicom is exploring
similar opportunities in some other countries where we operate and we feel we can benefit from the same efficiencies as in Ghana.

Other operating expenses:Other operating expenses increased by 7% for the year ended December 31, 2009 to $66 million
from
$61 million for the year ended December 31, 2008. The costs related to the corporate staff and other group support functions has increased, and the necessity to oversee and
support the significant growth in the operating companies will contribute to increase other operating expenses.

Operating profit:Operating profit for the years ended December 31, 2009 and 2008 by segment were as follows:

Operating profit

2009

2008

GrowthUS$ '000

US$ '000Central America


584,341


642,851


(9
)%South America


227,904


149,848


52
%Africa


84,582


95,935


(12
)%Cable


31,295


6,537


379
%Unallocated


(77,099
)

(76,949
)

Total


851,023


818,222


4
%


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Operating profit margin

2009

2008

Change
in % ptsCentral America


44
%

47
%

(3
)South America


21
%

15
%

6Africa


11
%

13
%

(2
)Cable


16
%

15
%

1Total


25
%

26
%

(1
)


Operating margin in Central America decreased from 47% for the year ended December 31, 2008 to 44% for the year ended December 31,
2009, reflecting the impact of increasing taxes on calls in Honduras and El Salvador.

In
South America, we were able to improve our operating margins due to the improving performance of our Colombian operations where the margin improved from negative 16% in 2008 to
negative 7%
for 2009. Operating margin for our South America operating segment overall increased from 15% for the year ended December 31, 2008 to 21% for the year ended December 31,
2009.

In
Africa, increasing depreciation charges from Millicom's high capital expenditure in the region as it aggressively rolled out the triple "A" operating strategy for the region
negatively impacted operating margins. This led to a reduction in Africa operating profit margin from 13% for the year ended December 31, 2008, to 11% for the year ended
December 31, 2009. During 2009, Millicom's operation in the DRC moved equipment to focus on the two regions with the highest economic activity in the country until the economic circumstances in
the rest of the country improve.

The
Cable operating segment increased its operating margin to 16% for the year ended December 31, 2009 from 15% for the year ended December 31, 2008.

In
the future, Millicom's operating profitability will depend on the ability to continue growing revenues while maintaining control of costs and capital expenditures. Millicom is
striving to improve the profitability of its operations in Colombia and the DRC and expects both of these operations to generate operating profits in the near future.

Interest expense:Interest expense for the year ended December 31, 2009 increased by 28% to $173 million for
the year
ended December 31, 2009, from $136 million for the year ended December 31, 2008. In the third quarter of 2008, Millicom reviewed its position to repay the 10% Senior Notes
early. The Board of Directors decided not to redeem the Notes but to keep them until the contractual maturity date (December 1, 2013). This decision impacted the future expected cash flows and,
as a result, the 5% premium accrued in 2007 was completely reversed and interest income amounting to $29 million was recorded in 2008 (see note 26). In addition, borrowings increased,
although the interest rates declined. A significant portion of Millicom's gross debt is at variable rates, which declined significantly. Millicom intends, in the near future, to hedge part of its
interest rate exposure to reach a 50% balance of variable interest rate debt (see note 33).

Interest and other income:Interest and other income for the year ended December 31, 2009 decreased by 64% to $12 million
from
$32 million for the year ended December 31, 2008. A reduction in interest rates, together with lower cash balances during the year ended December 31, 2009 compared
to the same period last year, impacted the interest income.

Revaluation of previously held interests:On March 13, 2009, Millicom's joint venture in Guatemala completed the acquisition of
the remaining
55% interest in Navega.com S.A.
("Navega"see note 4). Millicom decided to early adopt IFRS 3R and has applied it to this acquisition (see note 2). As a result, Millicom revalued at fair value its
previously held 45% interest in Navega (held by Millicom's joint venture in Guatemala) and its previously held 49% interest in Metrored S.A. ("Metrored"), a subsidiary of Navega (held by
Millicom's joint venture in Honduras), recognizing a gain of $32 million.

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Other non operating (expenses) income, net:Other non operating (expenses) income, net was an expense of $32 million for
the year ended
December 31, 2009 and an expense of $52 million for the year ended December 31, 2008, both referred to exchange losses. These lower exchange losses, mainly on borrowings,
were due as a number of currencies strengthened against the dollar during 2009.

Charge for taxes:The net tax charge for the year ended December 31, 2009 decreased to $188 million from
$269 million for
the year ended December 31, 2008. This decrease was mainly due to the impairment in 2008 of the deferred tax asset booked in 2007 in our operation in Colombia.

As
a consequence, the Group's effective tax rate decreased from 40% in 2008 to 27% in 2009.

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

Net profit for the year attributable to equity holders of the company:The net profit for the year ended December 31,
2009 was
$851 million compared to a net profit of $518 million for the year ended December 31, 2007. Profit from continuing operations increased from $402 million for
the year ended December 31, 2008 to $504 million for the year ended December 31, 2009 for the reasons stated above. The profit from discontinued operations for
the year ended December 31, 2009 was $300 million (including a $289 million net gain on disposals of Millicom's operations in Cambodia and Sri Lankasee
note 5) compared to a profit from discontinued operations for the year ended December 31, 2008 of $2 million.

Liquidity and Capital Resources

Overview

We believe that our funding is sufficient for our present requirements.

As
of December 31, 2010, Millicom's total consolidated outstanding debt and other financing was $2,352 million (2009: $2,347 million). None of this amount (2009:
$455 million) represented the Company's indebtedness and $2,352 million (2009: $1,892 million) represented the consolidated indebtedness of our subsidiaries and joint ventures.

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

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

Cash Upstreaming

Progressive improvement in operating and financial performance of our operations has enabled ongoing upstream of excess cash to the
Company. This is accomplished through a combination of dividends, royalties, technical service fees and shareholder loan repayments. For the year ended December 31, 2010, we upstreamed
$819 million from 8 of the 14 countries in which we operate. This

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upstreamed
cash was used to partly fund payment of $788 million of dividends, to repurchase $300 million of shares in a share buy-back program, and will be used for further
investment and distributions to shareholders or for external growth if appropriate. In 2009, we upstreamed $591 million from 9 of 14 countries in which we operated. In 2008, we upstreamed
$543 million from 9 of 16 countries in which we operated.

Cash Flows

Years Ended December 31, 2010 and 2009

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

Cash
used by investing activities was $528 million for the year ended December 31, 2010, compared to $930 million for the year ended
December 31, 2009. In the year ended December 31, 2010 Millicom used $5 million in the acquisition of joint ventures and subsidiaries (see note 4), compared to a use
of $53 million for the year ended December 31, 2009. Millicom also used $597 million to purchase property, plant and equipment compared to $727 million for the same
period in 2009.

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

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

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

Years Ended December 31, 2009 and 2008

For the year ended December 31, 2009, cash provided by operating activities was $1,225 million, compared to
$1,058 million for the year ended December 31, 2008. The increase is mainly due to the growth of the profitability, as described in the preceding paragraphs.

Cash
used by investing activities was $930 million for the year ended December 31, 2009, compared to $1,779 million for the year ended
December 31, 2008. In the year ended December 31, 2009 Millicom used $53 million in the acquisition of Joint ventures and subsidiaries (see note 4), compared to a
use of $532 million for the year ended December 31, 2008, mainly related to the acquisition of Amnet. Millicom also used $727 million to purchase property, plant and
equipment compared to $1,161 million for the same period in 2008.

Financing
activities provided total cash of $124 million for the year ended December 31, 2009, compared to $299 million for the year ended
December 31, 2008. In the year ended December 31, 2009, we repaid debt of $507 million while raising funds of $628 million through new financing and
$3 million through the issuance of shares.

The
net cash inflow provided by discontinued operation amounted to $417 million for the year ended December 31, 2009 (mainly related to the net proceeds from the
sale of Millicom's operations in Sri Lanka and Cambodia), compared to an outflow of $69 million for the year ended December 31, 2008.

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The net cash inflow for the year ended December 31, 2009 was $837 million compared to an outflow of $500 million for the year
ended December 31, 2008. Millicom had closing cash and cash equivalents balances of $1,511 million as at December 31, 2009 compared to $674 million as at
December 31, 2008.

Investments, Acquisitions, Divestments and Capital Expenditures

Investments

Millicom will continue to invest in existing mobile operations where we believe we can generate attractive returns. We may also
increase our equity ownership in certain existing operations through opportunistic buy-outs of local partners. We may participate in consolidation within our markets through the careful
evaluation, selection and pursuit of strategic opportunities and we may enter into new markets in Latin America and Africa by acquiring existing
operators. We may also pursue new license opportunities in markets where the investment offers group-wide synergy potential. Such synergies include sharing information and best practices
on services, human resources, technologies, market strategies, and the centralized negotiation of financings and supply contracts for network and customer equipment. We may also expand our footprint
through acquisitions or greenfield projects in areas close to our existing businesses in our existing markets such as, for example, cable or content assets.

Acquisitions and acquisition option agreements

On July 1, 2010 Millicom reached agreement with its local partner in Honduras whereby Millicom's local partner granted Millicom
an unconditional call option for the next five years for his 33% stake and Millicom granted a put option for the same duration to the local partner in the event of a change of control of
Millicom. As a result of this agreement Millicom has the right to control Celtel, which has been fully consolidated into the Millicom Group financial statements from July 1, 2010. Previously,
the results of the Honduras operations were proportionately consolidated. In addition Millicom acquired a further 6% of Navega Honduras. As a result of these transactions Millicom has the right to
control Navega Honduras and from August 20, 2010 Navega Honduras has been fully consolidated into the Millicom Group financial statements. Previously, the Honduras operations were
proportionately consolidated.

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

In
2009, Millicom's joint venture in Guatemala acquired the remaining non-controlling interest in Navega.com S.A. ("Navega") and Millicom acquired the remaining
non-controlling interest in its operation in Chad. Millicom's share of the Navega acquisition cost amounted to $49 million and Millicom's share of the net cash acquired amounted to
$10 million; net cash used for this acquisition therefore amounted to $39 million. The initial consideration for the remaining non-controlling interest in Chad amounted to
$8 million and was paid in cash. If certain conditions are met, Millicom will have to pay further $2 million within the 14 months following the statement of financial position
date.

Divestments and shareholding alignments

On August 20, 2010, to facilitate the integration of its various business lines and to create synergies, Millicom entered into
agreements with its partners in Honduras and Guatemala to align ownership of its Amnet and Navega businesses. As a result Millicom sold 45% of its Amnet operations in Guatemala to its partner in
Guatemala. From this date Amnet Guatemala has been accounted for as a joint venture and proportionately consolidated into the Millicom Group financial statements.

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Previously,
the results of the Amnet Guatemala were fully consolidated. There was no significant impact on profit and loss from the disposal.

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

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

Capital Expenditures

Our capital expenditure on property, plant and equipment, licenses and other intangibles by operating segment (including discontinued
operations) for the years ended December 31, 2010, 2009, and 2008 was as follows:

2010

2009

2008Central America


143,668


110,738


294,011South America


244,499


163,045


369,167Africa


277,613


398,244


601,080Cable


64,437


64,569


11,548Unallocated items and discontinued operations


16,713


79,964


166,885Total


746,930


816,560


1,442,691


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

Commitments to Purchase Network Equipment within One Year

As of December 31, 2010, we had commitments to purchase network equipment, land and buildings and other fixed assets with a
value of $207 million from a number of suppliers, all of which was within one year except $7 million within more than one year. We expect to meet these commitments from our
current cash balance and from the cash generated from our operations.

As
of December 31, 2009, we had commitments to purchase network equipment, land and buildings and other fixed assets with a value of $186 million from a number of
suppliers, all of which was within one year except $3 million within two years.

Financing

We finance our operations on a country-by-country basis aiming at pushing down debt to the operational level to
improve our tax efficiency and to mitigate country risk. As our local operations become more established and local financial markets become more developed, we are increasingly able to finance at the
operational level in the local currency on a non-recourse basis. As of December 31, 2010, 100% of our debt was at operational level. 55% of this debt was denominated in local
currency.

Millicom's
total consolidated indebtedness as of December 31, 2010 was $2,352 million and our total consolidated net indebtedness (representing total consolidated
indebtedness after deduction of cash, cash equivalents, and pledged deposits) was $1,268 million. Our annual interest expense for the years ended December 31, 2010 and 2009 was
$215 million and $173 million, respectively.

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10% Senior Notes

On September 9, 2010, Millicom announced early and fully redemption of the 10% Senior Notes. The 10% Senior Notes were
repurchased on November 30, 2010 for $490 million representing $459 million of principal, $23 million of interest to December 1, 2010 and $8 million early
redemption penalty.

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

Other Debt and Financing

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

2010

2009US$ '000

US$ '000Colombia(i)


522,994


508,904El Salvador(ii)


435,279


159,332Honduras(iii)


207,277


100,339Tanzania(iv)


207,086


212,405Guatemala(v)


163,631


100,351Ghana(vi)


158,183


137,650Amnet(vii)


133,816


247,334Chad(viii)


107,227


94,157Paraguay(ix)


105,700


59,931Bolivia(x)


99,085


99,075DRC(xi)


94,151


78,865Other


117,607


94,067Total other debt and financing


2,352,036


1,892,410Of which:Due after more than 1 year


1,796,572


1,458,423Due within 1 year


555,464


433,987


Other significant individual financing facilities are described below:

(i)    Colombia

In March 2008, Colombia Móvil S.A. E.S.P ("Colombia Móvil"), Millicom's operation in Colombia, entered into a
COP391 billion, 5 year facility with a club of Colombian banks. This facility bears interest at Deposits to Fixed Terms ("DTF") plus 4.5% and is 50% guaranteed by the Company. As at
December 31, 2010 $176 million (2009: $191 million) was outstanding on this facility.

Colombia
Móvil also had local currency loans from the non-controlling shareholders outstanding as at December 31, 2010 of $308 million (2009:
$274 million). These loans bear interest at DTF plus 4.15% and mature between 2011 and 2013.

In
addition, as at December 31, 2010 Colombia Móvil had $39 million (2009: $44 million) of other debt and financing, in US$ and local currency.

(ii)   El Salvador

On September 23, 2010, Telemovil Finance Co. Ltd., a fully owned subsidiary of Millicom in the Cayman Islands issued $450 million
aggregate principal amount of 8% Senior Unsecured Guaranteed

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Notes
(the "8% Senior Notes") due on October 1, 2017. The 8% Senior Notes were issued for $444 million representing 98.68% of the aggregate principal amount. Distribution and other
transaction fees of $9 million reduced the total proceeds from issuance to $435 million. The 8% Senior Notes have an 8% per annum coupon with an 8.25% per annum yield and are payable
semi-annually in arrears on April 1 and October 1. The effective interest rate is 8.76%.

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

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



October 1, 2014


104
%October 1, 2015


102
%October 1, 2016


100
%




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

In
September 2006, Telemovil El Salvador, entered into a $200 million 5 year loan. The loan was syndicated amongst a group of local and international banks and was
arranged by ABN AMRO, Citigroup and Standard Bank. The loan bears interest at $ LIBOR plus 1.75%. This loan was fully repaid in 2010. As of December 31, 2009, $130 million
of this facility was outstanding.

In
December 2008, Telemovil El Salvador entered into a $12 million 2 year loan with Banco Agrícola Comercial S.A. The loan bears interest at $
LIBOR plus 6%. This loan was fully repaid in 2010. As of December 31, 2009, $6 million of this facility was outstanding.

In
December 2009, Telemovil El Salvador entered into a 2 year loan with Scotiabank, bearing interest at $ LIBOR plus 5.0%. This loan was fully repaid in 2010. As at
December 31, 2009, $23 million was outstanding.

(iii) Honduras

Telefonica Celular S.A., Millicom's operation in Honduras, has facilities with several local banks maturing between 2012 and 2015. These facilities are in
dollars and in Lempiras and are unsecured. Interest rates are either fixed or variable, ranging as of December 31, 2010 between 6.25% and 16.5% (2009: between 7.75% and 11%). As at
December 31, 2010, the amount of outstanding debt under these facilities was $207 million. As at December 31, 2009 Millicom's share of the outstanding debt was
$100 million.

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(iv)  Tanzania

In December 2008, Millicom Tanzania Limited, Millicom's operation in Tanzania entered into facilities totaling $228 million comprising of a
five year local currency syndicated tranche for TZS95 billion at the 180 days treasury Bill rate plus 3%, a seven year $116 million EKN guaranteed financing with 45%
of the facility fixed at 4.1% and 55% of the facility at $ LIBOR plus 0.665% and a seven year $40 million tranche with Proparco at $ LIBOR plus 2.5%. All tranches are 100% guaranteed by
the Company. As at December 31, 2010, the amount outstanding under these facilities was $200 million (2009: $200 million).

In
March 2007 Millicom Tanzania Limited entered into a 5 year Citi-Opic facility, bearing interest at a rate of $ LIBOR plus 2.5%, composed of a $17.4 million $
Tranche and a Tranche in local currency up to the equivalent of $5 million. The outstanding US$ amount under these facilities as at December 31, 2010 amounted to $7 million (2009:
$12 million).

(v)   Guatemala

In March 2009, Millicom's operation in Guatemala and its sister company Asesoria en Telecomunicaciones SA ("Asertel") entered into four facilities with
3 year maturities for a total of $122 million with Banco de Desarollo Rural S.A., Banco Industrial S.A., Banco G&T Continental S.A.,
and Blue Tower Ventures Inc. Millicom's share of these facilities amounted to $48 million (2009: $67 million), out of which $7 million is guaranteed by the Company.

Comcel
also signed another 5 year facility with IFC for $100 million. As at December 31 2010, Millicom's share of the outstanding debt amounted to $64 million
(2009: $19 million), bearing interest at $ LIBOR plus 4.50%.

In
addition as at December 31, 2010, Comcel had financing of $28 million (Millicom's share of outstanding debt) with Citibank maturing at the end of 2011 bearing a fixed
rate of 4.45% (2009: $ Nil) and other financing of $16 million (2009: $14 million).

(vi)  Ghana

In December 2007 Millicom (Ghana) Limited, Millicom's operation in Ghana, entered into a $60 million local 5 year Facility. The loan bears interest
at $ LIBOR plus 2%. In parallel a $80 million offshore 7 year DFI (Development Finance Institution) financing which bears interest at $ LIBOR plus 2.25% was arranged. As at
December 31, 2010, $102 million (2009: $132 million) was outstanding under these facilities.

In
December 2009 the operation entered into a 3.5 year $22 million Ericsson arranged financing with EKN and Nordea priced at $ LIBOR + 0.85% fully guaranteed
by the Company. As at December 31, 2010, $15 million was outstanding under this facility (2009: $6 million).

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

(vii) Amnet

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

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margin
increases by an incremental 25 basis points per quarter. As at December 31, 2009 $247 million was outstanding under this facility. During the course of 2010 the loan was
refinanced by a new $105 million 7 year club deal fixed rate facility with HSBC, Bancocolombia and Citibank bearing interest at 6.7% in Costa Rica and a $30 million 7 year
bilateral fixed rate financing from Banco Industrial bearing interest at 7% in Honduras. As at December 31, 2010, $104 million was outstanding under the facility in Costa Rica and
$29 million for the facility in Honduras.

(viii)  Chad

In May and August 2007, Millicom's operation in Chad signed respectively a $31 million 5 year Facility with China Development Bank bearing interest
at $ LIBOR +2% and a Euro 15 million 5 year Facility with Proparco bearing interest at Euribor +2%. As at December 31, 2010 $13 million and $8 million
respectively (2009: $23 million and $12 million respectively) were outstanding under these facilities, both guaranteed by the Company.

In
May 2009, Millicom Chad entered into a XAF6 billion 5 year Facility co-arranged by Societe Generale Cameroun and Financial Bank priced at a fixed interest
rate of 7%, fully guaranteed by the Company. At the same date, Millicom Chad signed a XAF21 billion 5 year Subordinated Facility with Societe Generale Tchad with interest at TIAO +1.85%
and guaranteed by Nordea. This guarantee is secured by a pledged deposit of $45 million by the Company (see note 18). As at December 31, 2010 $12 million and
$43 million respectively were outstanding under these facilities (2009: $13 and $46 million respectively).

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

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

(ix)  Paraguay

In July 2008, Telefonica Cellular Del Paraguay, Millicom's operation in Paraguay entered into a $107 million, 8 year loan with the European
Investment Bank ("EIB"). The loan bears interest at $ LIBOR plus 0.125%. The outstanding amount as at December 31, 2010 was $100 million (2009: $50 million). The EIB loan
is guaranteed for commercial risks by a group of banks for a commission guarantee of 1.25%.

In
addition as at December 31, 2010, Telefonica Cellular Del Paraguay had $6 million (2009: $10 million) of other debt and financing outstanding.

(x)   Bolivia

In December 2007, Telefonica Celular de Bolivia SA ("Telecel Bolivia"), Millicom's operation in Bolivia, signed a financing agreement for
$40 million with the Nederlandse Financieringsmaatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as the Netherlands Development Finance Company. The A tranche of
$20 million was provided directly by the FMO, is repayable over 7 years and bears interest at $ LIBOR plus 2.25%. The B tranche of $20 million is provided equally by Nordea and
Standard Bank, is repayable over 5 years and bears interest at $ LIBOR plus 2%. Both tranches are guaranteed by the Company. As of December 31, 2010, $25 million of this financing
agreement was outstanding (2009: $35 million).

In
March 2008, Telecel Bolivia signed a 4 year and 9 months financing agreement for $30 million with International Finance Corporation. The loan bears interest at $
LIBOR plus 2% and is fully

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guaranteed
by the Company. As of December 31, 2010, $17 million of this financing agreement was outstanding (2009: $25 million).

In
addition to the above, Telecel Bolivia had supplier financing from Huawei (at interest rates of $ LIBOR plus 2%) and FPLT amounting to $13 million at December 31,
2010 (2009: $26 million) and $44 million of other debt and financing outstanding as at December 31, 2010 (2009: $13 million). This additional debt comprises 7 bilateral
loans in local currency bearing fixed rates ranging from 4.5% to 6.5% and maturing between December 2012 and December 2015.

(xi)  Democratic Republic of Congo

In September 2006, Oasis S.P.R.L. ("Oasis"), Millicom's operation in the Democratic Republic of Congo, entered into a $106 million, 7 year loan from
the China Development Bank to finance equipment purchases from Huawei. The loan bears interest at $ LIBOR plus 2% and is repayable over 17 equal quarterly installments commencing in 2009. This
financing is 100% guaranteed by the Company. As of December 31, 2010, $55 million was outstanding under this facility (2009: $75 million).

In
September 2009, Oasis entered into a 7 year $50 million financing with the IFC guaranteed by Millicom and bearing interest at LIBOR +5%. As at December 31, 2010
the outstanding amount under this facility was $17 million.

In
addition at December 31, 2010, Oasis had other debt and financing of $22 million (2009: $4 million), mainly consisting of $19 million financed from Huawei,
bearing interest at Libor + 3% and guaranteed by Millicom.

Guarantees

In the normal course of business, the Company has issued guarantees to secure certain obligations of some of its operations under bank
financing agreements. As of December 31, 2010, the Company has issued $762 million of guarantees (2009: $801 million). This represents the outstanding amount under the total
guarantees.

Pledged assets

The Group's share of total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit or
guarantees issued by the Company as at December 31, 2010 is $1,380 million (2009: $1,172 million). The assets pledged by the Group for these debts and financings at the same date
amount to $411 million (2009: $610 million).

Effect of Exchange Rate Fluctuations

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

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Trend Information

We believe there is an attractive opportunity for growth in many of our African markets due to relatively low mobile penetration with
high growth potential and substantial demand for basic voice telephony services. We believe we can grow our customer base and revenue by continuing to focus on prepaid services while controlling costs
and maintaining our position with postpaid customers. In addition, innovation has become a major focus of the Group as we seek to continue growing revenues in maturing markets by developing additional
products and services through which we can gain a greater share of customers' disposable income. In the course of 2010, we increased the contribution to recurring revenues from value added services
from 21% in the first quarter to 25% in the fourth quarter. We expect innovation to be a key driver of growth in the years ahead. We are developing a number of non-traditional
distribution channels in our operations to expand our market share and reduce our operating costs. However, a risk exists that as new competitors enter our markets and price competition intensifies,
our prepaid customers may move from one mobile operator to another. This also has the effect of driving prices down, thus eroding the profitability of the mobile operators. In addition, there is the
risk of additional taxes, especially in those countries that face budget constraints. 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 markets.

Research and Development, Patents and Licenses

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

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

Off-Balance Sheet and Other Arrangements

Millicom has a number of commitments and contingencies, as described in Note 31 to the consolidated financial statements.

Critical Accounting Policies

The consolidated financial statements as of December 31, 2010 are prepared in accordance with consolidation and accounting
policies consistent with those of previous financial years.

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

Basis of Consolidation

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

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Functional and presentation currencies

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

Goodwill

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

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

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



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

Trademarks and Customer bases

Trademarks and customer bases are recognized as intangible assets only when acquired in business combinations or in transactions
increasing ownership in joint ventures. Cost represents fair value as at

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the
date of acquisition. Trademarks and customer bases have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line
method to allocate the cost of the trademarks and customer bases over their estimated useful lives. The estimated useful life for trademarks and customer bases are based on the specifications of the
market in which they exist. Trademarks and customer bases are recorded under the caption "Intangible assets, net".

Impairment of Non-Financial Assets

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

An
assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. Other than for goodwill, a previously recognized impairment loss is reversed if there has been a change in the estimate used to determine the
asset's recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such a reversal is recognized in profit or loss. After
such a reversal, the depreciation charge is adjusted
in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

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

Loans and receivables

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

Financial instruments at fair value through profit or loss

Financial instruments at fair value through profit or loss are financial instruments held for trading. Their fair value is determined
by reference to quoted market prices at the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques.

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Such
techniques include using recent arm's length market transactions, reference to the current market value of a substantially similar instrument, discounted cash flow analysis and option pricing
models. A financial instrument is classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as held for trading
unless they are designated as hedges. Assets in this category are classified as current assets.

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

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

Borrowings and transaction costs

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized
cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated income statement over the period of the borrowing using the effective
interest method.

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

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

Transaction
costs which are not capitalized are recognized as an expense when incurred.

Provisions

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

Revenue Recognition

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

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

Revenues from provision of telecom services

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

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

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

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

Revenues
from the sale of handsets and accessories on a stand-alone basis (if sold with other services, multiple element arrangements accounting would then apply) are recognized when the
significant risks and rewards of ownership of handsets and accessories have been passed to the buyer.

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

Share based Compensation

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

Subsequent
to May 2006, restricted share awards are granted to the Directors, management and key employees.

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

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

Deferred tax

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

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

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

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

Discontinued operations

Revenues and expenses associated with discontinued operations are presented in a separate line on the consolidated income statement.
Comparative figures in the consolidated income statement representing the discontinued operations are also reclassified to a separate line. Discontinued operations are those with identifiable
operations and cash flows (for both operating and management

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purposes)
and represent a major line of business or geographic unit which has been disposed of, or is available for sale.

Recent Accounting Developments

IFRS Developments

The consolidated financial statements as of December 31, 2010 are prepared in accordance with consolidation and accounting
policies consistent with those of the previous financial years, with the exception of the early adoption as of January 1, 2009 of IFRS 3R, 'Business combinations', and
IAS 27R, 'Consolidated and separate financial statements'.

The
following new standards and amendments to standards, which affect the presentation of the consolidated financial statements, which were mandatory for the first time for the
financial year beginning January 1, 2010, were early adopted by the Group in 2009.





The
Group early adopted IFRS 3R, 'Business combinations', in 2009 for the step-up acquisition of Navega.com S.A. (see note 4). Millicom revalued its
previously held interests in Navega.com S.A. at fair value, recognising the resulting gain in the consolidated income statement.



As
the Group early adopted IFRS 3R, it was required to early adopt IAS 27R, 'Consolidated and separate financial statements', at the same time.



IAS 28
(amendment) was applied by the Group from the date IFRS 3R was adopted. The amendment to IAS 38 did not have a material impact on the Group's consolidated
financial statements.

The
following amendments to standards and interpretations, which could affect Millicom's financial position and accounting policies, are mandatory for the first time for the
financial year beginning January 1, 2010, but are not currently relevant nor have a material impact for the Group.



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The
following standards, amendments and interpretations issued are not effective for the financial year beginning January 1, 2010 and not early adopted.



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Tabular Disclosure of Contractual Obligations

Contractual Obligations

We have various contractual obligations to make future payments, including debt agreements, payables for license fees and lease
obligations. The following table summarizes our obligations under these contracts due by period as of December 31, 2010.

Within
1 year

Within
2-5 years

After
5 years

Total(in thousands of U.S. dollars)Debt (including finance leases and after unamortized financing fees)


555,464


1,162,320


634,252


2,352,036Future interest commitments


145,664


346,193


26,109


517,966Finance leases


6,953


33,739


79,430


120,122Operating leases


63,375


235,195


143,490


441,960Capital expenditure


199,628


7,212





206,840Total


971,084


1,784,659


883,281


3,638,924


The following table summarizes our obligations under these contracts due by period as of December 31, 2009.

Within
1 year

Within
2-5 years

After
5 years

Total(in thousands of U.S. dollars)Debt (including finance leases and after unamortized financing fees)


433,987


1,882,729


30,171


2,346,887Future interest commitments


142,709


230,392


1,263


374,364Operating leases


66,223


226,289


139,894


432,406Capital expenditure


182,451


3,206





185,657Total


825,370


2,342,616


171,328


3,339,314


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ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Board of Directors

Directors

Millicom's directors are as follows:

Name

Position

Independent

Year first
Elected

Date of
Expiration
of TermMr. Allen Sangines-Krause

Chairman

Yes


2008
(i)

May 2011Mr. Hans Holger Albrecht

Member

Yes


2010


May 2011Ms. Mia Brunell Livfors

Member

No


2007


May 2011Ms. Donna Cordner

Member

Yes


2004


May 2011Mr. Paul Donovan

Member

Yes


2009


May 2011Mr. Omari Issa

Member

Yes


2010


May 2011Mr. Daniel Johannesson

Member

Yes


2003
(ii)

May 2011Mr. Michel Massart

Member

Yes


2003


May 2011Mr. Kent Atkinson(iii)

Member

Yes


2007


May 2010


(i)Appointed as Chairman on May 25, 2010.(ii)Chairman up to May 25, 2010.(iii)Up to May 25, 2010.


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

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

Ms. Mia Brunell Livfors (born 1965)Non-executive Director and Member of the Compensation
Committee.Ms. Brunell was elected to the Board of Millicom in May 2007. From August 2006, Ms. Brunell has been Chief Executive Officer of
Investment AB Kinnevik ("Kinnevik"), a Swedish public company managing a portfolio of long-term investments in a number of public companies such

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as
Millicom. Ms. Brunell joined Kinnevik owned company Modern Times Group MTG AB in 1992, and was appointed Chief Financial Officer in 2001. As Chief Financial Officer,
Ms. Brunell played a central role in MTG's development. Currently, Ms. Brunell is a member of the Board of Directors of Korsnäs AB, Tele2 AB, CDON AB,
Metro International S.A., Transcom WorldWide S.A., Modern Times Group (MTG) and Hennes & Mauritz AB (H&M).

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

Mr. Paul Donovan (born 1958)Non-executive Director, Member of the Audit Committee.Mr. Donovan was
elected to the Board of Millicom in May 2009. He was appointed director and Chief Executive Officer of Eircom on 1 July 2009 and before that, Mr. Donovan was Chief Executive, EMAPA
Region for the Vodafone Group until 2008. Mr. Donovan's background includes a decade in fast moving consumer goods before he moved into the technology sector, principally with BT and Vodafone.
His career with Vodafone started 11 years ago and for the last six years, he has overseen Vodafone's operations in subsidiaries in Eastern Europe, Middle East and Asia Pacific. Africa,
the US, India and China were added to his remit in 2006. As part of his role, he sat on the boards of numerous subsidiaries and joint ventures during this period. He holds a BA (with Honors) from
University College, London and an MBA from the Bradford University Management Centre with a specialization in Finance and Business Policy. Mr. Donovan is an Executive Director of Eircom Group
Limited, Eircom Ltd, and Valentia Communications.

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

Mr. Daniel Johannesson (born 1943)Vice -Chairman, Non-executive Director, Chairman of the Compensation and Nominations
Committees.Mr. Johannesson was elected to the Board of Millicom in May 2003. He was Chairman between March 2004 and May 2010. He has held a number of
executive positions at major Swedish and Norwegian companies including Chief Executive Officer of Telenor Bedrift and Executive Vice President at the construction company Skanska, where he was
responsible for their telecommunications and facilities management interests. He was also Chief Executive Officer of Investment AB Kinnevik and Director General of the Swedish national railway
operator, SJ.

Mr. Michel Massart (born 1951)Non-executive Director and Chairman of the Audit Committee.Mr. Massart was elected to the Board of Millicom in May 2003. Until June 2002, he was a partner of PricewaterhouseCoopers in Belgium, where he set up the corporate finance department in 1997.
He is

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a
former member of the Board of the Institute of Statutory Auditors. He is a professor at Solvay Brussels School of Economics & Management, Belgium.

Board Practices

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

The
Board has adopted work procedures to establish a division of work between the Board and the President and Chief Executive Officer. The Chairman conducts discussions with each member
of the Board regarding the work procedures of the Board and performs an annual evaluation of the Board's work. The members of the Board annually evaluate each other and the performance of the Chief
Executive Officer.

In
2010, the Board had 5 meetings in person and 4 by telephone.

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



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

Audit Committee.Millicom's directors have established an Audit Committee that convenes at least four times a year, comprising
four directors,
Mr. Massart (Chairman and financial expert), Mr. Donovan and, from May 25, 2010 Mr. Issa and Ms. Cordner. On May 25, 2010, Mr. Kent Atkinson resigned
from the Audit Committee. This committee has responsibility for planning and reviewing the financial reporting process together with the preparation of the annual and quarterly financial reports and
accounts and the involvement of external auditors in that process. The Audit Committee focuses particularly on compliance with legal requirements (including compliance with Sarbanes Oxley Act) and
accounting standards, independence of external auditors, audit fees, the internal audit function, the fraud risk assessment, the risk management and ensuring that an effective system of internal
financial controls exists. The ultimate responsibility for reviewing and approving Millicom's annual report and accounts remains with the Board. The Audit Committee met 11 times during 2010 and
Millicom's external auditors participated in each such meeting.

Compensation Committee.Millicom's Compensation Committee is chaired by Mr. Johannesson. Ms. Brunell became a member of the
Committee
after the Annual Meeting of Shareholders on May 29, 2007 and Mr. Donovan became a member after the Annual Meeting of Shareholders on May 2009. Ms. Brunell is a
non-independent director and Mr. Donovan is an independent director. In this respect, Millicom has opted to follow home country (Luxembourg) corporate practice rather than NASDAQ
Marketplace Rule 4350(c)(3). Allen & Overy, Millicom's Luxembourg legal counsel, have sent a letter to this effect to NASDAQ on February 12, 2007.

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

CSR Committee.Millicom's directors have established a Corporate Social Responsibility (CSR) Committee that convenes at least two times
a year, comprising two directors, Ms. Brunell (Chairman) and Ms. Cordner. This committee has responsibility for overseeing and making recommendations to the Board regarding the
management of CSR.

Nominations Committee.Millicom's Nominations Committee is chaired by Mr. Johannesson. The two other members are Mr. Albrecht,
 who
replaced Mr. Massart on May 25, 2010, and Mr. Sangines-Krause. The Nominations Committee's main task is to recommend directors for election to the Board by the shareholders at the
AGM. At the AGM, shareholders may vote for or against the directors proposed for election or may elect different directors. The Nominations Committee also reviews and recommends the fees and the
grants of shares to directors, which are presented to the Board and voted on by the shareholders at the AGM.

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

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

Remuneration of Directors

The remuneration of the members of the board of directors of the Company (the "Board") is comprised of an annual fee and share based
compensation. Until May 2006, Directors were issued share options. Subsequent to May 2006, Directors are issued restricted shares. The annual fee and the share based compensation grants are proposed
by the Board and approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

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The
remuneration charge for the Board for the years ended December 31, 2010, 2009 and 2008 was as follows:

Other members of
the boardChairmanTotalNo. of shares
and share
options

US$ '000

No. of shares
and share
options

US$ '000US$ '0002010Fees





77





444


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


1,007


82


4,270


350


432Total





159





794


9532009Fees





106





584


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


1,441


81


5,111


287


368Total





187





871


1,0582008Fees





100





410


510Share based compensation:(i)Restricted shares(ii)


1,446


165


4,927


562


727Total





265





972


1,237


(i)See note 24.(ii)Restricted shares cannot be sold for one year from date of issue.


The number of shares and share options beneficially owned by the Board as at December 31, 2010 and 2009 was as follows:

Chairman

Other
members of
the Board

Total2010Shares


2,318


73,158


75,476Share options





35,000


35,0002009Shares


29,969


76,292


106,261Share options


20,000


55,000


75,000


Senior Management and Employees

Senior Executive Team

Name

PositionMikael Grahne

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

Chief Financial Officer (CFO)Mario Zanotti

Head of Latin AmericaRegis Romero

Head of Africa


Mikael Grahne,born 1953, President and Chief Executive Officer. Mikael Grahne was appointed Chief Executive
Officer in March 2009; he joined Millicom in February 2002 as the Chief Operating

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Officer,
having previously been President of Seagram Latin America. Prior to joining Seagram, he was the regional president of a division of the EMEA region at PepsiCo and held various senior
management positions with Procter & Gamble. Mr. Grahne has an MBA from the Swedish School of Economics in Helsinki, Finland.

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

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

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

Remuneration of Officers

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

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The
remuneration charge for the Officers for the year ended December 31, 2010, 2009 and 2008 was as follows:

Current
Chief
Executive
Officer

Former
Chief
Executive
Officer

Chief
Operating
Officer

Current
Chief
Financial
Officer

Former
Chief
Financial
OfficerUS$ '000

US$ '000

US$ '000

US$ '000

US$ '0002010Base salary


1,261








614


Bonus


1,823








624


Pension


385








112


Other benefits


178








74Total


3,647








1,424


Share based compensation:(i)














Shares issued/charge under long term incentive plans(ii)


2,874








1,243


Charge for share options


5











2009Base salary


1,380


2,349





625


Bonus


1,988


1,388





503


Other benefits


142











Total


3,510


3,737





1,128


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


1,598


(2,829
)(iii)




129


Charge for share options


16


10








2008Base salary





2,406


750


214


706Bonus





1,309


882


125


Pension














85Other benefits








231


7


Total





3,715


1,863


346


791Share based compensation:(i)


Shares issued/charge under long term incentive plans(ii)





3,737


1,410


23


935Charge for share options





59


29





240


(i)See note 24.(ii)Share awards of 41,628 and 19,891 were granted in 2010 under the 2010 LTIPs to the CEO and CFO. Share awards of 35,011 and 13,323 were granted under the
2009 LTIPs to the CEO and CFO. Share awards of 45,074, 23,561, 18,266 and 4,761 were granted under the 2008 LTIPs to the former CEO, former COO, former CFO and CFO.(iii)Reversal for non-vested shares of the former CEO, Marc Beuls.


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The number of shares, share options and unvested share awards beneficially owned by the senior management as at December 31, 2010 and 2009 was as follows:

Chief
Executive
Officer

Chief
Financial
Officer

Total2010Shares


648,647


905


649,552Share options








Share awards not vested


99,431


37,720


137,1512009Shares


607,404





607,404Share options


15,040





15,040Share awards not vested


81,377


17,106


98,483


Severance Payments

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

Employees

The average number of permanent employees during the years ended December 31, 2010, 2009 and 2008 was as follows:

2010

2009

2008Continuing operations


5,985


5,937


4,861Discontinued operations


237


1,852


1,812Total average number of permanent employees


6,222


7,789


6,673


Long-term incentive plans



Long term incentive awards for 2007 ("2007 LTIPs") were approved by the Board on March 15, 2007. The awards consisted of a
performance share plan and a matching share award plan.

Shares
granted under the performance share plan vest at the end of a three year period, subject to a performance condition related to Millicom's "earnings per share" ("EPS"). The
achievement of a certain level of this condition, measured at the end of the three year period, results in the vesting of a specific percentage of shares to each employee in the plan.

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

The
total charge for the 2007 LTIPs of $15 million was recorded over the service period (2007 to 2009).

In
2010, 158,677 shares were issued under the 2007 performance share plan and 66,659 shares issued under the matching share plan.

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Long term incentive awards for 2008 ("2008 LTIPs") were approved by the Board on December 4, 2007. The awards consisted of a
performance share plan and a matching share award plan, the mechanisms of which are the same as the 2007 LTIPs.

In
2010, 668 shares were issued under the 2008 performance share plan and 283 shares issued under the matching share plan.

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



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

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

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

In
2010, 612 shares were issued under the 2009 performance share plan and 27,314 shares issued under the deferred share plan.

The
total charge for the 2009 LTIPs was estimated as of December 31, 2010 at $10 million, to be recorded over the service periods (2009 to 2011).



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

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

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

Performance
shares 2010

Deferred
share awards
2010

Performance
shares 2009

Deferred
share awards
2009

Matching
share award
plan 2008

Performance
shares 2008Plan share awards


81,862


153,960


124,254


172,352


168,396


223,829Share awards granted(i)


4,167


8,127


5,867


6,658


4,732


8,317Revision for expected forfeitures


(9,872
)

(12,311
)

(22,767
)

(27,404
)

(86,432
)

(78,522
)Revision for expectations in respect of performance conditions














(57,609
)

Shares issued








(612
)

(27,314
)

(283
)

(668
)Share awards expected to vest


76,157


149,776


106,742


124,292


28,804


152,956


(i)Additional shares granted to take into consideration the special dividend paid in 2010 (see note 28).


Options

The market price of the Company's shares as at December 31, 2010 was $95.60 (2009: $73.77).

Options outstanding

Options exercisableRange of exercise price $

Weighted
average
exercise price

Number
outstanding at
December 31,
2010

Weighted
average
exercise price

Number
exercisable at
December 31,
201020.56


20.56


50,469


20.56


50,46925.05-29.75


26.93


33,332


26.93


33,33231.88-35.91


34.06


99,996


34.06


99,99620.56-35.91


29.06


183,797


29.06


183,797


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

Date issued

Number of options
outstanding as at
December 31, 2010

Exercise price $

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


133,328


25.05-35.91

Exercisable immediately. Options have an indefinite life.May 2005


35,000


20.56

Exercisable immediately. Options have a twenty year life.May 2005


15,469


20.56

Exercisable over a five year period in equal installments. Options expire after six years from date of
grant.


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ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Principal Shareholders

The table below sets out certain information known to Millicom as at February 22, 2011, unless indicated otherwise, with respect
to beneficial ownership of Millicom common share, par value $1.50 each, by:



Shareholder

Amount of Shares

PercentageInvestment AB Kinnevik


37,835,438


35
%Capital Research Global Investors


6,561,269


6
%


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

Related Party Transactions

Kinnevik

The Company's principal shareholder is Investment AB Kinnevik ("Kinnevik") and subsidiaries. Kinnevik is a Swedish holding
company with interests in the telecommunications, media, publishing, paper industries and financial services. As of December 31, 2010 and 2009, Kinnevik owned approximately 35%
of Millicom.

During
2010 and 2009, Kinnevik did not purchase any Millicom shares.

Services purchased and sold to related companies

For the year ended December 31, 2010 the Group made purchases for $4 million (2009: $1 million; 2008:
$3 million) and had outstanding balances as at December 31, 2010 of $1 million (as at December 31, 2009: $1 million) with related parties. These related parties are
companies where Kinnevik is the principal shareholder. The services purchased and supplied covered fraud detection, network and IT support, acquisition of assets and customer care systems. These
purchases were made on an arm's length basis.

There
were no sales to related companies. As of December 31, 2010 and 2009, Millicom had no receivables from related parties.

ITEM 8.    FINANCIAL INFORMATION

Financial Statements and Other Information

We file our financial statements under Item 18.

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Legal Proceedings

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

Dividend Policy

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

On
November 30, 2009 Millicom announced that the Board of Millicom was proposing to commence payment of a regular annual dividend. Under the proposed policy, the Board recommended
a dividend of not less than 25% of annual net income (netted by any effect from any item outside the ordinary course of business), subject to a minimum annual dividend of $1.20 per share. The Board
approved a dividend distribution for 2008 of $1.24 per share, paid in January 2010 (see note 28).

On
February 10, 2010 Millicom announced that the Board would propose to the Annual General Meeting of the Shareholders a dividend distribution of $1.40 per share to be paid out of
Millicom's profits for the year ended December 31, 2009 subject to the Board's approval of the 2009 Consolidated Financial Statements of the Group. On April 15, 2010 Millicom
announced that the Board of Millicom had decided to return $800 million to shareholders through a combination of a special dividend $4.6 per share ($500 million) and a share
buyback ($300 million).

The
combined dividend of $6 per share and the share buyback were approved by the shareholders at the May 25, 2010 Annual General Meeting and distributed in May 2010.

The
$300 million share repurchase plan was completed through open market purchases on NASDAQ before the end of 2010, with 3.3 million shares bought at an average price
of $92.21.

On
February 9, 2011 Millicom announced that the Board will propose to the Annual General Meeting of the Shareholders a dividend distribution of $1.80 per share to be paid
out of Millicom's profits for the year ended December 31, 2010, subject to the Board's approval of the 2010 Consolidated Financial Statements of the Group. On the same date Millicom
announced that the Board may return a further amount of up to $300 million to shareholders through another share buyback program by the end of May 2011.

Significant Changes

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

ITEM 9.    THE OFFER AND LISTING

The principal trading market of Millicom common stock is the NASDAQ National Market.

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

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

High

LowYear ended December 31, 2006

$
63.82

$
27.38Year ended December 31, 2007

$
127.40

$
60.21Year ended December 31, 2008

$
122.97

$
24.75First Quarter 2009

$
51.50

$
31.50Second Quarter 2009

$
65.81

$
37.44Third Quarter 2009

$
78.71

$
55.20Fourth Quarter 2009

$
79.19

$
61.98Year ended December 31, 2009

$
79.19

$
31.50First Quarter 2010

$
90.51

$
68.06Second Quarter 2010

$
94.29

$
75.31Third Quarter 2010

$
102.72

$
80.02September 2010

$
102.72

$
93.36October 2010

$
101.57

$
92.13November 2010

$
97.91

$
86.53December 2010

$
95.84

$
87.43Fourth Quarter 2010

$
101.57

$
86.53Year ended December 31, 2010

$
102.72

$
68.06January 2011

$
98.94

$
93.13February 2011

$
97.85

$
85.12


On March 3, 2011, the closing market price for Millicom common stock on the NASDAQ National Market was $90.35.

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

NASDAQ Corporate Governance Exemption

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

ITEM 10.    ADDITIONAL INFORMATION

Articles of Association

Registration and Object

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

The
articles of incorporation of Millicom define its purpose as follows: ". . . to engage in all transactions pertaining directly or indirectly to the
acquisition and holding of participating interests, in

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any
form whatsoever, in any Luxembourg or foreign business enterprise, including but not limited to, the administration, management, control and development of any such enterprise".

Directors

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

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

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

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

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

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

Shares

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



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

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

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

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

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Changes to Shareholder's Rights

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

Shareholders' Meetings

General meetings of shareholders are convened by convening notice published in the Luxembourg Official Gazette and in a Luxembourg
newspaper, twice with an interval of eight days, at least eight days prior to the meeting. If all the shares are registered shares, a convening notice may, as an alternative to the publication, be
sent to each shareholder by registered mail at least eight days before the annual general meeting (AGM). According to article 17 of the articles of incorporation of Millicom, the board of
directors determines in the convening notice the formalities to be observed by each shareholder for admission to the AGM. An AGM must be convened every year on the date provided for in the
articles of incorporation, which is the last Tuesday in May each year. The 2011 AGM will take place in Luxembourg on May 31, 2011 at 10:00 a.m. Other meetings can be convened as
necessary.

Limitation on Securities Ownership

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

Change of Control

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

Disclosure of Shareholder Ownership

There are no provisions in Millicom's articles of incorporation according to which Millicom shareholders must disclose to Millicom
their reaching of a certain ownership threshold. As Millicom common stock has its primary listing on NASDAQ, each time a shareholder acquires beneficial ownership of more than 5% of our common stock,
the shareholder must file within 10 days of acquisition a Schedule 13D with the U.S. Securities and Exchange Commission, who will notify Millicom and NASDAQ accordingly. Also, as
required by the Luxembourg law on transparency obligations of 11 January 2008 (the "Transparency Law"), any person who acquires or disposes of shares in Millicom's capital must notify
Millicom's board of directors of the proportion of shares held by the relevant person as a result of the acquisition or disposal, where that proportion reaches, exceeds or falls below the thresholds
referred to in the Transparency Law. As per the Transparency Law, the above also applies to the mere entitlement to acquire or to dispose of, or to exercise, voting rights in any of the cases referred
to in the Transparency Law.

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Material Contracts

8% Senior Notes

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

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

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





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

10% Senior Notes

On September 9, 2010, Millicom announced early and fully redemption of the 10% Senior Notes. The 10% Senior Notes were
repurchased on November 30, 2010 for $490 million representing $459 million of principal, $23 million of interest to December 1, 2010 and $8 million early
redemption penalty.

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

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Exchange Controls

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



Luxembourg Taxation

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

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

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

Luxembourg withholding tax on distributions

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

Non-Luxembourg Holders

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

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

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

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

Luxembourg Holders

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

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

Luxembourg income tax on dividends and capital gains

Luxembourg Corporate Holders

For Luxembourg Corporate Holders, under Luxembourg domestic tax law, dividends distributed by the Company and gains realized on the
sale of shares in the Company are, in principle, subject to Luxembourg CIT and municipal business tax ("MBT"). In addition a surcharge of 5% on the CIT is payable to the employment fund. The combined
rate (including the contribution to the employment fund) will range depending on the municipality where the Luxembourg Corporate Holder is established (28.80% for Luxembourg City as of
January 1st, 2011); each of the percentages is based on the 2008

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MBT
rates). Dividends can, however, benefit either from a full exemption if the conditions of Article 166 ITL are met or from a 50% exemption (Article 115 (15a) ITL). Capital gains
realized by
Luxembourg Corporate Holders are exempt if the conditions of the Grand Ducal Decree of December 21, 2002 (as amended) are fulfilled.

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

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

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

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

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

Luxembourg Individual Holders

For Luxembourg Individual Holders, dividends distributed by the Company and gains realized on the sale of shares in the Company are, in
principle, subject to Luxembourg Income Tax at the applicable progressive income tax rates (marginal tax rate is 39%
including surcharge, depending on annual income, of 4% or 6% on income tax payable to the employment fund). In addition, a 1.4% dependence insurance contribution is due and a crisis contribution of
0.8% on all income. Dividends should benefit from a 50% exemption (Article 115 (15a) ITL). Capital gains on shares owned by Luxembourg Individual Holders in their private wealth will, in
principle, only be taxable, if the shares are sold within six months after their acquisition or if the holder together with his/her spouse, life partner or under age children holds a direct or
indirect participation exceeding 10% of the Company's share capital at the date of the sale or during the 5 years preceding the date of the sale.

Non-Luxembourg Corporate Holders

For Non-Luxembourg Corporate Holders, having a permanent establishment in Luxembourg to which the Company's shares are
allocated, dividends distributed by the Company and gains realized on the sale of shares in the Company are subject to CIT and MBT. Under the domestic law (Article 166 ITL), dividends
distributed by the Company to the Luxembourg permanent establishment of a

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

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

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

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

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

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

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Non-Luxembourg Individual Holders

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

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

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

Luxembourg Net Wealth Tax

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

Luxembourg inheritance and gift tax

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

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

U.S. Federal Income Tax Considerations

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

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U.S. Holders
who hold shares as capital assets for U.S. federal income tax purposes and it does not address special classes of holders, such as:



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

This
discussion is based on the Internal Revenue Code of 1986, as amended, administrative pronouncements, judicial decisions and final, temporary and proposed U.S. Treasury
regulations, as well as the double taxation treaty between Luxembourg and the United States (the "Treaty"), all as of the date hereof. These laws are subject to change, possibly on a retroactive
basis. Prospective investors should consult their own tax advisors concerning the U.S. federal, state, local and non-U.S. tax consequences of purchasing, owning and disposing
of shares in their particular circumstances, including their eligibility for the benefits under the Treaty.

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

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

Taxation of Distributions

Distributions received by a U.S. Holder on shares, including the amount of any Luxembourg taxes withheld, other than certain pro
rata distributions of shares to all shareholders, will constitute foreign source dividend income to the extent paid out of the Company's current or accumulated earnings and profits (as determined for
U.S. federal income tax purposes). Because the Company does not maintain calculations of its earnings and profits under U.S. federal income tax principles, it is expected that
distributions generally will be reported to U.S. Holders as dividends. The amount of the dividend a U.S. Holder will be required to include in income will equal the U.S. dollar
value of the euro dividend, calculated by reference to the exchange rate in effect on the date the payment is received by the

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holder,
regardless of whether the payment is converted into U.S. dollars on the date of receipt. If the dividend is converted into U.S. dollars on the date of receipt, a
U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the
amount of the dividend is not converted into U.S. dollars on the date of receipt. If a U.S. Holder realizes gain or loss on a sale or other disposition of Euros, it will be
U.S. source ordinary income or loss. Corporate U.S. Holders will not be entitled to claim the dividends received deduction with respect to dividends paid by the Company. Subject to
applicable limitations, dividends paid by certain "qualified foreign corporations" to certain non-corporate U.S. Holders in taxable years beginning before January 1,
2013 will be taxable at a maximum rate of 15%. Millicom expects to be considered a qualified foreign corporation for this purpose. Non-corporate U.S. Holders should consult their
own tax advisors to
determine whether they are subject to any special rules that limit their ability to be taxed at this favorable rate.

Luxembourg
taxes withheld from dividends on shares will be creditable against a U.S. Holder's U.S. federal income tax liability, subject to applicable restrictions and
limitations that may vary depending upon the holder's circumstances. Instead of claiming a credit, a U.S. Holder may elect to deduct such Luxembourg taxes in computing its taxable income,
subject to generally applicable limitations. The limitation of foreign taxes eligible for credit is calculated separately with respect to specific classes of income. The rules governing foreign tax
credits are complex. Therefore, U.S. Holders should consult their own tax advisors regarding the availability of foreign tax credits in their particular circumstances.

For
taxable years beginning after December 31, 2012, dividends paid to, and capital gains recognised by certain U.S. Holders that are individuals, estates or trusts with respect to our
shares may be subject to a 3.8% Medicare tax.

Sale and Other Disposition of Shares

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

Passive Foreign Investment Company Considerations

Millicom believes that it was not a PFIC for U.S. federal income tax purposes for its 2010 taxable year. In general, a
non-U.S. company will be considered a PFIC for U.S. federal income tax purposes for any taxable year in which (i) 75% or more of its gross income consists of
passive income (such as dividends, interest, rents and royalties) or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the
production of, passive income. As PFIC status depends upon the composition of our income and assets and the market value of our assets (including, among other things, any equity investments in less
than 25%-owned entities) from time to time, there can be no assurance that Millicom will not be considered a PFIC for any taxable year. In particular, the market value of our assets may be
determined in large part by reference to the market price of our shares, which is likely to fluctuate.

If
the Company were to be treated as a PFIC for any taxable year during which a U.S. Holder held shares, certain adverse U.S. federal income tax rules would apply on
a sale or other disposition (including certain pledges) of shares by the U.S. Holder. In general, under those rules, gain recognized by the U.S. Holder on a sale or other disposition of
shares would be allocated ratably over the U.S. Holder's holding period for the shares. The amounts allocated to the taxable year of the sale or other disposition and to any year
before Millicom became a PFIC would be taxed as ordinary income.

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The
amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an
interest charge would be imposed on the amount allocated to each such taxable year. Further, the same rule would apply to any distribution in respect of shares in excess of 125% of the average of the
annual distributions on shares received by the U.S. Holder during the preceding three years or the U.S. Holder's holding period, whichever is shorter. Certain elections may be
available that would result in alternative treatments (such as a mark-to-market treatment) of the shares. U.S. Holders should consult their tax advisors to determine
whether any such elections are available and, if so, what the consequences of the alternative treatments would be in those holders' particular circumstances.

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

Information Reporting, Backup Withholding, and other Disclosure

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

Certain
U.S. Holders may be required to report information with respect to such holder's investment in "foreign financial assets". Shares of the Company may qualify as a foreign
financial asset for these purposes. Persons who are required to report foreign financial assets and fail to do so may be subject to substantial penalties. U.S. Holders are urged to consult their own
tax advisors regarding the foreign
financial asset reporting obligations and their possible application to the holding of shares of the Company.

Documents on Display

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

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Terms, conditions and risk management policies

Millicom is regularly performing risk management assessments and reviews to identify its major risks and to take the necessary steps to
mitigate such risks. A risk management committee has been set up by management for that purpose.

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

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

Cash repatriation

Millicom is repatriating cash from its operations in the form of dividends, royalties and management fees as well as repayment of
shareholders' loans, so as to recover the initial costs invested in the countries where it operates and so as to remunerate its shareholders for the risk taken through investment in emerging
countries. While Millicom has never had any issues to repatriate such funds to date, the repatriation of funds has yet to be tested in all countries. Some governments could potentially block such
repatriations, or the countries where Millicom operates could not be in a position to provide the necessary hard currencies as a consequence of major deficits with their balance of payments.

Interest rate risk

Interest rate risk generally arises on borrowings. Borrowings issued at floating rates expose the Group to cash flow interest rate
risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's exposure to risk of changes in market interest rates relates to both of the above. To manage the
risk, the Group's policy is to maintain a combination of fixed and floating rate debt with an objective for the debt to be equally distributed between fixed and variable rates. The Group actively
monitors borrowings to ensure compliance with this policy and applies a dynamic interest rate hedging approach whereby the target mix between fixed and floating rate debt is reviewed periodically. The
purpose of Millicom's policy is to achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business
strategy. At December 31, 2010, approximately 36% of the Group's borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates under interest rate
swaps (2009: 24%).

To
comply with internal policies, in January 2010 Millicom entered into an interest rate swap (see note 33) to hedge the interest rate risk of the floating rate debt in three
different countries (Tanzania, DRC and Ghana). The interest rate swap was issued in January 2010 for a nominal of $100 million, with
maturity January 2013. If Millicom had entered into the swap agreement on December 31, 2009, 28% of Group's borrowings would have been at a fixed rate of interest.

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

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

Amounts due within1 year

1-2 years

2-3 years

3-4 years

4-5 years

>5 years

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


69,761


36,361


60,987


64,885


70,409


549,062


851,465Weighted average nominal interest rate


5.69
%

6.19
%

6.35
%

5.89
%

6.66
%

8.81
%

7.87
%Floating rate


485,703


334,637


193,167


246,496


155,378


85,190


1,500,571Weighted average nominal interest rate


7.25
%

6.25
%

6.39
%

6.29
%

6.72
%

4.55
%

6.55
%Total


555,464


370,998


254,154


311,381


225,787


634,252


2,352,036Weighted average nominal interest rate


7.05
%

6.25
%

6.38
%

6.20
%

6.70
%

8.24
%

7.03
%


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Table of Contents

The table below summarizes, as at December 31, 2009, our fixed rate debt and floating rate debt:

Amounts due within1 year

1-2 years

2-3 years

3-4 years

4-5 years

>5 years

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


96,881


5,667


5,225


455,075


656


779


564,283Weighted average nominal interest rate


8.4
%

6.7
%

6.2
%

10.0
%

6.5
%

6.5
%

9.6
%Floating rate


337,106


662,220


399,741


237,982


116,163


29,392


1,782,604Weighted average nominal interest rate


5.6
%

5.7
%

5.8
%

6.3
%

5.0
%

3.6
%

5.7
%Total


433,987


667,887


404,966


693,057


116,819


30,171


2,346,887Weighted average nominal interest rate


6.2
%

5.7
%

5.8
%

8.7
%

5.0
%

3.6
%

6.6
%


A one hundred basis point fall or rise in market interest rates for all currencies in which the group had borrowings at December 31, 2010, would increase
or reduce profit before tax from continuing operations for the year by approximately $15 million (2009: $18 million).

Foreign currency risk

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

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

The
following table summarizes debt denominated in US$ and other currencies at December 31, 2010 and 2009.

2010

2009US$ '000

US$ '000Total US$


1,571,757


1,570,525Colombia


522,994


508,904Chad


72,754


70,449Tanzania


56,659


72,553Bolivia


43,878


12,426Ghana


40,565


Guatemala


20,552


31,819Other


22,877


80,211Total non-US$ currencies


780,279


776,362Total


2,352,036


2,346,887


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The table below summarizes, as at December 31, 2010, our forward currency swaps:

Amounts due within1 year

1-2 years

2-3 years

3-4 years

4-5 years

>5 years

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





41,250


42,500











83,750Contract amount (millions of Colombian Pesos)





94,256


102,266











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





2,285


2,406











ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

ITEM 12A.    DEBT SECURITIES

Not applicable.

ITEM 12B.    WARRANTS AND RIGHTS

Not applicable.

ITEM 12C.    OTHER SECURITIES

Not applicable.

ITEM 12D.    AMERICAN DEPOSITARY SHARES

General

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

SDRs
are issuable by Carnegie Investment Bank AB as Swedish depositary (the "Swedish Depositary") pursuant to the Swedish Deposit Agreement, dated March 5, 2004, entered
into by and between Millicom and the Swedish Depositary. Each SDR represents one Millicom common share ("Millicom Shares"). The SDRs are registered in the book-entry registration system of
Euroclear Sweden A.B. ("Euroclear Sweden"), in accordance with the Swedish Act on Account Keeping of Financial Instruments (Sw. lagen (1998: 1479) om kontoföring av finansiella
instrument). So long as the SDRs are eligible for book-entry registration with Euroclear Sweden, the SDRs will be represented by registration in accounts at Euroclear Sweden ("Euroclear
Sweden Accounts") and no holder of SDRs shall be entitled to receive physical certificates representing the SDRs. The ownership of SDRs is shown on the register maintained by Euroclear Sweden (the
"Euroclear Sweden Register"). Holdings of SDRs are registered in the Euroclear Sweden Accounts of the beneficial owners of the SDRs (the "Owners") or their nominees. Ownership of SDRs registered in
the name of a nominee is shown in the records of the nominee. The SDRs are listed on the Large segment of the OMX Equities CCP list of Stockholmsbörsen in Stockholm, Sweden.

Deposit and Withdrawal of Shares

The Swedish Depositary has agreed, subject to the terms and conditions of the Swedish Deposit Agreement, that upon delivery of Millicom
Shares to the Swedish Depositary or its custodian, the Swedish Depositary will instruct Euroclear Sweden to credit the relevant Euroclear Sweden Account with the appropriate number and series of SDRs.
Prior to any such deposit, the person depositing

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shares
shall deliver to the Swedish Depositary: (i) written instructions specifying the name, address and Euroclear Sweden Account number in which the SDRs are to be registered;
(ii) payment of fees of the Swedish Depositary, taxes and other governmental charges payable in connection with such deposit; and (iii) all such other information and documents as may be
required in order to comply with applicable laws.

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

Maintenance of Records

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

Record Date

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

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

Dividends

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

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

Payment
of dividends to the owners of SDRs, or to their respective nominees, shall be made without any deduction for expenses, fees, or equivalent items that are attributable to
Millicom, the Swedish Depositary or Euroclear Sweden, with the exception of such withholding tax levied in

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Luxembourg
for dividend payments to other countries or of preliminary tax or other taxes that may be levied in accordance with Swedish, Luxembourg or other applicable legislation.

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

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

Bonus Issues, Splits and Reverse Splits of Shares

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

New Issue of Shares

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

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

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

Shareholders' Meetings and Voting of Deposited Shares

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

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Depository
his or her intention to attend the shareholders' meeting. Such proxy forms shall be submitted to Millicom along with the names of the owners of SDRs for which proxies have
been issued.

Distribution of Information to SDR Owners

The Swedish Depositary shall, directly or through Euroclear Sweden and in the manner stipulated below, provide the owners of SDRs with
all the information which the Swedish Depositary receives from the Company in the Swedish Depositary's capacity as registered shareholder. However, the Swedish Depositary shall always send such
information by mail to owners of
SDRs who request such information, at the address of each such owner included in the Euroclear Sweden Register.

The
Swedish Depositary shall ensure that notices to the owners of SDRs are distributed by mail. Except where a written notice must be mailed to the shareholders in accordance with the
rules applicable to Swedish Euroclear Sweden Companies (Sw. avstämningsbolag), the Swedish Depositary mayas an alternative to mailing the noticepublish the
notice in one of Stockholm's daily newspapers.

Amendment and Termination

The Swedish Depositary shall be entitled to amend the Swedish Deposit Agreement insofar as such amendments are required by Swedish or
any other applicable legislation, decisions by public authorities or changes in the rules and regulations of Euroclear Sweden. Any provisions of the Swedish Deposit Agreement may be amended by
agreement between Millicom and the Swedish Depositary if such action is in any other respect appropriate or necessary for practical reasons and the owners' rights are in not adversely affected in any
material respect.

If
(i) a decision is taken to de-list the SDRs from the O-list of Stockholmsbörsen or any other corresponding market place, (ii) a
decision is taken by Millicom to no longer maintain the SDR facility under the Swedish Deposit Agreement, or (iii) the Company has failed to fulfill payment of expenses and fees under the
Swedish Deposit Agreement for more than 30 days, the Swedish Depositary is entitled to terminate deposits made under the Swedish Deposit Agreement by mailing notice of such termination to the
owners of the SDRs. The Swedish Deposit Agreement will continue in full force and effect for a period of six months after the date such notices have been sent to the owners of SDRs.

Charges of Swedish Depositary

Millicom has agreed to pay the fees and expenses of the Swedish Depositary and Euroclear Sweden in accordance with the terms of the
Swedish Deposit Agreement.

Fees and Expenses Payable by Owners of SDRs

Owners of SDRs must pay all applicable taxes and governmental charges and all fees and costs in connection with the deposit, withdrawal
and delivery of Millicom Shares in accordance with the Swedish Deposit Agreement. The current fee for the deposit of Millicom Shares for the issue of SDRs and withdrawal of Millicom Shares after
cancellation of SDRs is SEK 2,000 per deposit/withdrawal and is payable by the person making such deposit or withdrawal. Such fees may be amended by the Swedish Depositary from time to time.

Fees and Expenses Payable by the Depositary

There are no payments from the depositary to Millicom.

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Limitation of Liability

Except as set forth below, the Swedish Depositary is liable for all damages incurred by the owner of SDRs resulting from the Swedish
Depositary's negligence in performing its obligations under the Swedish Deposit Agreement. The Swedish Depositary is not liable for any indirect losses or damage.

The
Swedish Depositary is not liable for any loss or damage resulting from changes in Swedish or non-Swedish laws, the intervention of a Swedish or a non-Swedish
public authority, acts of war, acts of terrorism, strikes, boycotts, lockouts, blockades or other similar circumstances. The reservation in respect of strikes, boycotts, lockouts or blockades applies
even if the Swedish Depositary itself takes such measures or is subject to such measures. Where the Swedish Depositary or Millicom is prevented from effecting payments or taking other measures due to
the circumstances outside its control, the measures in question may be postponed until the obstacle has been removed.

Governing Law

The Swedish Deposit Agreement is governed by Swedish law.

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PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

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

Not applicable.

ITEM 15.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2010, the Group, under the supervision and with the participation of the Group's management, including the
Chief Executive Officer and the Chief Financial Officer, performed an evaluation of the effectiveness of the Group's disclosure controls and procedures. The Group's disclosure controls and procedures
are designed to ensure that information required to be disclosed under the Securities Exchange Act of 1934 is accumulated and communicated to the Group's management to allow timely decisions regarding
required disclosures. The Group's management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable
assurance regarding management's control objectives. Based on this evaluation, the Group's Chief Executive Officer and the Chief Financial Officer concluded that as at December 31, 2010 the
Group's disclosure controls and procedures are effective at the reasonable assurance level for recording, processing, summarizing and reporting the information the Group is required to disclose in the
reports it files under the Securities Exchange Act of 1934 within the time periods specified in the SEC's rules and forms.

Management's annual report on internal control over financial reporting

The Group's management has performed an assessment of the Group's internal control over financial reporting which can be found on
page F-2 of the financial statements filed with this annual report on Form 20-F.

Changes in internal control over financial reporting

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

Attestation report of the registered public accounting firm

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

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors 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.

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ITEM 16B.    CODE OF ETHICS

Millicom has adopted a Code of Ethics applicable to all Millicom's employees and to Directors. The text of this code is available free
of charge upon written request addressed to: General Counsel, Millicom International Cellular S.A., 15 rue Leon Laval, L-3372 Leudelange, Grand-Duchy of Luxembourg,
fax: +352 27 759 353.

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, 2010
and 2009.

2010

2009US$ '000

US$ '000Audit fees


4,237


4,179Audit related fees


604


115Tax fees





61All other fees


55


71Total


4,896


4,426


Audit related services consist principally of consultations related to financial accounting and reporting standards, including making recommendations to
management regarding internal controls and the issuance of certifications of loan covenant compliance required by Millicom's debt agreements. Tax services consist principally of tax planning services
and tax compliance services. All other fees are for services not included in the other categories.

Audit Committee Pre-approval Policies

The policies and procedures provide that no non-audit services above $10,000 individually and to a maximum of 5% of the
annual budgeted audit fees can be
rendered by Millicom's auditors without the prior consent of the Audit Committee. Such services require subsequent ratification by the Audit Committee.

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

Not applicable.

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

Purchases during the year ended December 31, 2010 are summarized in the following table. There we no purchases of equity
securities by the issuer during the year ended December 31, 2009.

Purchasers of Equity SecuritiesPeriod

(a)
Total number
of Shares
Purchased

(b)
Average Price
Paid per
Share

(c)
Total Number of
Shares Purchased
as Part of the Plan

(d)
Maximum Number
of Shares that may
yet be purchased
under the PlanMonth #5
May 1 to May 31


86,400

$
81.75


86,400


Month #6
Jun 1 to Jun 30











Month #7
Jul 1 to Jul 31


145,300

$
91.72


145,300


Month #8
Aug 1 to Aug 31


538,649

$
92.26


538,649


Month #9
Sept 1 to Sept 30


356,000

$
97.18


356,000


Month #10
Oct 1 to Oct 31


317,317

$
94.33


317,317


Month #11
Nov 1 to Nov 30


1,317,050

$
92.17


1,317,050


Month #12
Dec 1 to Dec 31


492,791

$
89.29


492,791


Total


3,253,507

$
92.21


3,253,507





A $300 million share buyback plan was announced on April 15, 2010 and approved by the shareholders at the May 25, 2010 annual general
meeting. The buyback was performed through open market purchases on NASDAQ and completed on December 10, 2010.

ITEM 16F.    CHANGES IN CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G.    SIGNIFICANT DIFFERENCES IN CORPORATE GOVERNANCE PRACTICES

The Board has developed and continuously evaluates its work procedures in line with the corporate governance rules of NASDAQ in the
United States of America regarding reporting, disclosure and other requirements applicable to NASDAQ listed companies, with the following two exceptions:



The
Board received confirmation in early 2006 from the Stockholm Stock Exchange that it is exempt from the Swedish Code of Corporate Governance so long as it adheres to NASDAQ corporate
governance rules.

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PART III

ITEM 17.    FINANCIAL STATEMENTS

Not applicable.

ITEM 18.    FINANCIAL STATEMENTS

See pages F-1 through F-91.

ITEM 19.    EXHIBITS

1.1

Articles of Association of Millicom International Cellular S.A.2.1

Indenture, dated January 7, 2005 between Millicom International Cellular S.A. and The Bank of New York, as Trustee.*2.2

Indenture, dated as of November 24, 2003 between Millicom International Cellular S.A. and The Bank of New York, as Trustee, as amended (incorporated by reference to Exhibits 4.1 and 4.3 of the Company's
registration statement on Form F-4 (File No. 333-112948) filed on February 19, 2004 and January 31, 2005, respectively).**12.1

Certification of Mikael Grahne required by Securities Exchange Act of 1934, as amended ("Exchange Act"), Rule 13a 14(a).12.2

Certification of Francois-Xavier Roger required by Exchange Act Rule 13a 14(a).13.1

Certification of Mikael Grahne required by Exchange Act Rule 13a 14(b).13.2

Certification of Francois-Xavier Roger required by Exchange Act Rule 13a 14(b).15.1

Consent of PricewaterhouseCoopers S.à r.l.


*Previously
filed with the Securities and Exchange Commission with the Company's Form 20 F filed on May 2, 2005 and incorporated herein by
reference.**Previously
filed with the Securities and Exchange Commission with the Company's Form 20 F filed on April 30, 2004 and herein
incorporated by reference.


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SIGNATURES

Under the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the
requirements for filing on Form 20 F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:
March 3, 2011

MILLICOM INTERNATIONAL CELLULAR S.A.By:

/s/ MIKAEL GRAHNE Name: Mikael Grahne
Title:Chief Executive OfficerBy:

/s/ FRANCOIS-XAVIER ROGER Name: Francois-Xavier Roger
Title:Chief Financial Officer


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INDEX TO FINANCIAL STATEMENTS



Audited Consolidated Financial Statements of Millicom and its Subsidiaries for the Years Ended December 31, 2010, 2009 and
2008Management's Report on Internal Control Over Financial Reporting

F-2Report of Independent Registered Public Accounting Firm

F-3Consolidated Income Statements for the years ended December 31, 2010,
2009 and 2008

F-5Consolidated Statements of Comprehensive Income for the years ended
December 31, 2010, 2009 and 2008

F-6Consolidated Statements of Financial Position as of December 31, 2010 and
2009

F-7Consolidated Statements of Cash Flows for the years ended December 31,
2010, 2009 and 2008

F-9Consolidated Statements of Changes in Equity for the years ended
December 31, 2010, 2009 and 2008

F-10Notes to the Consolidated Financial Statements

F-12


F-1

---





Table of Contents

Management's Report on Internal Control Over Financial Reporting

The management of Millicom International Cellular S.A. is responsible for establishing and maintaining adequate internal control
over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in conformity with International Financial Reporting Standards as adopted by the European Union as well as those issued by the International
Accounting Standards Board.

Because
of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.

Management
has assessed the effectiveness of Millicom International Cellular S.A. internal control over financial reporting as of December 31, 2010. In making its
assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal ControlIntegrated Framework. Management
concluded that based on its assessment, Millicom International Cellular S.A. internal control over financial reporting was effective as of December 31, 2010.

PricewaterhouseCoopers
S.à.r.l has issued an unqualified report on our 2010 financial statements as a result of the audit and also has issued an unqualified report on our
internal control over financial reporting which is attached hereto.

Dated: March 3, 2011

By:

/s/ MIKAEL GRAHNEName:

Mikael GrahneTitle:

Chief Executive OfficerBy:

/s/ FRANCOIS-XAVIER ROGERName:

Francois-Xavier RogerTitle:

Chief Financial Officer


F-2

---



Table of Contents

GRAPHIC

Report of Independent Registered Public Accounting FirmTo the Shareholders of
Millicom International Cellular S.A.

In
our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of income, comprehensive income, cash flows and changes in equity
present fairly, in all material respects, the financial position of Millicom International Cellular S.A. (the "Company") and its subsidiaries and joint ventures (together the "MIC Group") at
31 December 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended 31 December 2010 in conformity with
International Financial Reporting Standards as issued by the International Accounting Standards Board and in conformity with International Financial Reporting Standards as adopted by the European
Union. Also in our opinion, the MIC Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2010, based on criteria established in
Internal ControlIntegrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in "Management's Report on Internal Control Over Financial
Reporting" appearing on page F-2 of the accompanying consolidated financial statements. Our responsibility is to express opinions on these consolidated financial statements and on
the MIC Group's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

F-3

---



Table of Contents

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers S.à r.l.
Réviseur d'entreprises agréé

Luxembourg, March 3, 2011


PricewaterhouseCoopers S.à r.l., 400 Route d'Esch, B.P. 1443, L-1014 Luxembourg
T: +352 494848 1, F:+352 494848 2900, www.pwc.lu

Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n°95992)
R.C.S. Luxembourg B 65 477Capital social EUR 516 950TVA LU17564447

F-4

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Table of Contents

Millicom International Cellular S.A.        Consolidated income statements  for the years ended December 31, 2010, 2009 and 2008

Notes

2010

2009

2008US$ '000

US$ '000

US$ '000Revenues


9


3,920,249


3,372,727


3,150,559Cost of sales





(1,331,003
)

(1,202,902
)

(1,114,822
)Gross profit





2,589,246


2,169,825


2,035,737Sales and marketing





(737,691
)

(647,009
)

(657,480
)General and administrative expenses





(738,779
)

(606,213
)

(498,597
)Other operating expenses, net





(71,046
)

(65,580
)

(61,438
)Operating profit


9,10


1,041,730


851,023


818,222Interest expense





(214,810
)

(173,475
)

(135,932
)Interest and other financial income





14,748


11,573


32,277Revaluation of previously held interests


4


1,060,014


32,319


Other non operating expenses, net


12


(29,702
)

(32,181
)

(52,265
)(Loss) profit from associates


17


(1,817
)

2,329


8,706Profit before tax from continuing operations





1,870,163


691,588


671,008Charge for taxes


13


(227,096
)

(187,998
)

(268,813
)Profit for the year from continuing operations





1,643,067


503,590


402,195Profit for the year from discontinued operations, net of tax


6


11,857


300,342


2,246Net profit for the year





1,654,924


803,932


404,441Attributable to:Equity holders of the company





1,652,233


850,788


517,516Non-controlling interest





2,691


(46,856
)

(113,075
)Earnings per share for the year


14(expressed in US$ per common share)Basic earnings per sharefrom continuing operations attributable to equity holders





15.19


5.09


4.79from discontinued operations attributable to equity holders





0.08


2.75


0.01for the year attributable to equity holders





15.27


7.84


4.80Diluted earnings per sharefrom continuing operations attributable to equity holders





15.16


5.08


4.76from discontinued operations attributable to equity holders





0.08


2.74


0.01for the year attributable to equity holders





15.24


7.82


4.77


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

F-5

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Table of Contents

Millicom International Cellular S.A.        Consolidated statements of comprehensive income  for the years ended December 31, 2010, 2009 and 2008

2010

2009

2008US$ '000

US$ '000

US$ '000Net profit for the year


1,654,924


803,932


404,441Other comprehensive income:Exchange differences on translating foreign operations


(5,785
)

(14,529
)

(54,041
)Cash flow hedges


(1,700
)




Total comprehensive income for the year


1,647,439


789,403


350,400Attributable to:Equity holders of the Company


1,649,443


837,124


456,670Non-controlling interests


(2,004
)

(47,721
)

(106,270
)


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

F-6

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Table of Contents

Millicom International Cellular S.A.        Consolidated statements of financial position  as at December 31, 2010 and 2009

Notes

2010

2009US$ '000

US$ '000ASSETSNON-CURRENT ASSETSIntangible assets, net


15


2,282,845


1,044,837Property, plant and equipment, net


16


2,767,667


2,710,641Investments in associates


17


18,120


872Pledged deposits


18,26


49,963


53,333Deferred taxation


13


23,959


19,930Other non-current assets





17,754


7,965TOTAL NON-CURRENT ASSETS





5,160,308


3,837,578CURRENT ASSETSInventories





62,132


46,980Trade receivables, net


19


253,258


224,708Amounts due from joint venture partners





99,497


52,590Prepayments and accrued income





89,477


65,064Current income tax assets





10,748


17,275Supplier advances for capital expenditure





36,189


49,165Other current assets


20


72,205


58,159Time deposit


21


3,106


50,061Cash and cash equivalents


22


1,023,487


1,511,162TOTAL CURRENT ASSETS





1,650,099


2,075,164Assets held for sale


6


184,710


78,276TOTAL ASSETS





6,995,117


5,991,018


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

F-7

---



Table of Contents

Millicom International Cellular S.A.

Consolidated statements of financial position
as at December 31, 2010 and 2009 (Continued)

Notes

2010

2009US$ '000

US$ '000EQUITY AND LIABILITIESEQUITYShare capital and premium


23


681,559


660,547Treasury shares


23


(300,000
)

Other reserves


25


(54,685
)

(64,930
)Retained profits





1,134,354


937,398Profit for the year attributable to equity holders





1,652,233


850,7883,113,461


2,383,803Non-controlling interests





45,550


(73,673
)TOTAL EQUITY





3,159,011


2,310,130LIABILITIESNon-current Liabilities10% Senior Notes


26





454,477Other debt and financing


26


1,796,572


1,458,423Derivative financial instruments


33


18,250


Provisions and other non-current liabilities


27


79,767


88,142Deferred taxation


13


195,919


66,492Total non-current liabilities





2,090,508


2,067,534Current LiabilitiesOther debt and financing


26


555,464


433,987Payables and accruals for capital expenditure





278,063


276,809Other trade payables





202,707


194,691Amounts due to joint venture partners





97,919


52,180Accrued interest and other expenses





228,360


173,609Current income tax liabilities





79,861


93,364Dividend payable


28





134,747Provisions and other current liabilities


27


242,457


210,385Total current liabilities





1,684,831


1,569,772Liabilities directly associated with assets held for sale


6


60,767


43,582TOTAL LIABILITIES





3,836,106


3,680,888TOTAL EQUITY AND LIABILITIES





6,995,117


5,991,018


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

F-8

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Table of Contents

Millicom International Cellular S.A.        Consolidated statements of cash flows  for the years ended December 31, 2010, 2009 and 2008

Notes

2010

2009

2008US$ '000

US$ '000

US$ '000Profit before tax from continuing operations





1,870,163


691,588


671,008Adjustments for non-operating items:Interest expense





214,810


173,475


135,932Interest and other financial income





(14,748
)

(11,573
)

(32,277
)Revaluation of previously held interests





(1,060,014
)

(32,319
)

Profit from associates





1,817


(2,329
)

(8,706
)Other non operating expenses, net





29,702


32,181


52,265Adjustments for non-cash items:Depreciation and amortization


9,10,15,16


676,986


611,435


463,720Loss on disposal and impairment of property, plant and equipment


9,10


16,257


7,246


9,166Share-based compensation


24


30,718


10,175


13,6191,765,691


1,479,879


1,304,727Decrease (increase) in trade receivables, prepayments and other current assets





(31,282
)

73,380


5,077Decrease (increase) in inventories





(12,606
)

8,812


24,700(Decrease) increase in trade and other payables





44,773


(4,669
)

29,235Changes to working capital





885


77,523


59,012Interest expense paid





(170,604
)

(148,038
)

(137,301
)Interest received





14,639


11,316


32,535Taxes paid





(238,723
)

(195,851
)

(201,235
)Net cash provided by operating activities





1,371,888


1,224,829


1,057,738Cash flows from investing activities:Acquisition of subsidiaries and JV, net of cash acquired


4


(5,284
)

(53,086
)

(532,181
)Proceeds from disposal of subsidiaries, joint ventures and associates





5,335





Purchase of intangible assets and license renewals


15


(26,238
)

(46,004
)

(112,716
)Purchase of property, plant and equipment


16


(596,900
)

(726,565
)

(1,161,088
)Proceeds from sale of property, plant and equipment





36,617


3,708


7,434(Purchase) disposal of pledged deposits





2,462


(45,652
)

4,027(Purchase) disposal of time deposits


21


46,953


(50,061
)

Cash (used) provided by other investing activities





9,334


(12,275
)

15,929Net cash used by investing activities





(527,721
)

(929,935
)

(1,778,595
)Cash flows from financing activities:Proceeds from issuance of shares





3,276


2,856


3,179Purchase of treasury shares





(300,000
)




Proceeds from issuance of debt and other financing


26


1,147,585


627,872


1,195,550Repayment of debt and financing


26


(1,396,997
)

(506,588
)

(640,414
)Payment of dividends





(788,526
)




(259,704
)Net cash (used) provided by financing activities





(1,334,662
)

124,140


298,611Cash provided (used) by discontinued operations


6





416,755


(69,074
)Exchange gains (losses) on cash and cash equivalents





2,820


1,178


(9,082
)Net increase (decrease) in cash and cash equivalents





(487,675
)

836,967


(500,402
)Cash and cash equivalents at the beginning of the year





1,511,162


674,195


1,174,597Cash and cash equivalents at the end of the year





1,023,487


1,511,162


674,195


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

F-9

---





Table of Contents

Millicom International Cellular S.A.        Consolidated statements of changes in equity  for the years ended December 31, 2010, 2009 and 2008

Attributable to equity holdersNumber of
shares

Share
Capital(i)

Share
Premium(i)

Retained
profits(ii)

Other
reserves(iii)

Total

Non-controlling
interests(vi)

Total
equity'000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Balance as of January 1, 2008


102,428


153,643


263,709

824,998


45,557


1,287,907


80,429


1,368,336Profit for the year










517,516





517,516


(113,075
)

404,441Currency translation differences













(60,846
)

(60,846
)

6,805


(54,041
)Total comprehensive income for the year










517,516


(60,846
)

456,670


(106,270
)

350,400Transfer to legal reserve










(262)


262








Dividends paid to shareholders










(259,704)





(259,704
)




(259,704
)Shares issued via the exercise of share options


169


252


3,894




(937
)

3,209





3,209Shares issued as payment of bonuses(iii)


11


17


1,208







1,225





1,225Share-based compensation(iii)













11,666


11,666





11,666Issuance of shares2006 LTIP(iii)


52


76


3,887




(3,963
)







Issuance of shares(v)


9


14


1,025







1,039





1,039Directors' shares(iii)


6


10


717







727





727Conversion of the 4% Convertible Notes(iv)


5,622


8,434


205,658




(38,913
)

175,179





175,179Balance as of December 31, 2008


108,297


162,446


480,098

1,082,548


(47,174
)

1,677,918


(25,841
)

1,652,077For the year ended December 31, 2009Profit for the year










850,788





850,788


(46,856
)

803,932Currency translation differences













(13,664
)

(13,664
)

(865
)

(14,529
)Total comprehensive income for the year










850,788


(13,664
)

837,124


(47,721
)

789,403Transfer to legal reserve










(880)


880








Dividends declared(viii)










(134,747)





(134,747
)




(134,747
)Shares issued via the exercise of share options


139


208


3,536




(888
)

2,856





2,856Share-based compensation(iii)













9,807


9,807





9,807Directors' shares(iii) (vii)


7


10


358







368





368Issuance of shares2006, 2007 and 2009 LTIPs(iii)


205


307


13,584




(13,891
)







Acquisition of non-controlling interests in Chad(ix)










(9,523)





(9,523
)

(111
)

(9,634
)Balance as of December 31, 2009


108,648


162,971


497,576

1,788,186


(64,930
)

2,383,803


(73,673
)

2,310,130


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

F-10

---



Table of Contents

Millicom International Cellular S.A.

Consolidated statements of changes in equity
for the years ended December 31, 2010, 2009 and 2008 (Continued)

Attributable to equity holdersNumber of
shares

Number of
shares held by the Group

Share
Capital(i)

Share
Premium(i)

Treasury
Shares

Retained
profits(ii)

Other
reserves(iii)

Total

Non-
controlling
interests (vi)

Total
equity'000

'000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Balance as of January 1, 2010


108,648





162,971


497,576




1,788,186


(64,930
)

2,383,803


(73,673
)

2,310,130Profit for the year
















1,652,233





1,652,233


2,691


1,654,924Cash flow hedge



















(1,700
)

(1,700
)




(1,700
)Currency translation differences



















(1,090
)

(1,090
)

(4,695
)

(5,785
)Total comprehensive income for the year
















1,652,233


(2,790
)

1,649,443


(2,004
)

1,647,439Transfer to legal reserve
















(53)


53








Dividends paid to shareholders(viii)
















(653,779)





(653,779
)




(653,779
)Purchase of treasury shares





(3,254
)







(300,000
)






(300,000
)




(300,000
)Shares issued via the exercise of share options


145





218


3,874







(816
)

3,276





3,276Share-based compensation(iii)



















30,286


30,286





30,286Directors' shares(iii) (vii)


5





8


424










432





432Issuance of shares2007, 2008, 2009 and 2010 LTIPs(iii)


255





381


16,107







(16,488
)







Change in scope of consolidation(x)

























130,843


130,843Dividend to non-controlling shareholders

























(9,616
)

(9,616
)Balance as of December 31, 2010


109,053


(3,254
)

163,578


517,981


(300,000
)
2,786,587


(54,685
)

3,113,461


45,550


3,159,011


(i)See note 23.(ii)Includes profit for the year attributable to equity holders, of which $60 million (2009: $46 million; 2008:
$31 million) are undistributable to equity holders.(iii)See note 24 and 25.(iv)See note 25 and 26.(v)Employees purchase of shares under the Matching share award plans (see
note 24).(vi)As at December 31, 2008, non controlling interest was negative as the non-controlling shareholders of Colombia
Movil S.A. ESP have a binding obligation to cover their share of the losses of this entity.(vii)See note 29.(viii)See note 28.(ix)See note 4.(x)See note 4


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

F-11

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Table of Contents

Millicom International Cellular S.A.        Notes to the consolidated financial statements  as of December 31, 2010, 2009 and 2008

1. CORPORATE INFORMATION

Millicom International Cellular S.A. (the "Company"), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the "Group"
or "Millicom") is a global telecommunications group with mobile telephony operations in emerging markets. It also operates various combinations of fixed telephony, cable and broadband businesses in
five countries in Central America. The Group was formed in December 1990 when Investment AB Kinnevik ("Kinnevik"), formerly named Industriförvaltnings AB Kinnevik, a
company established in Sweden, and Millicom Incorporated ("Millicom Inc."), a corporation established in the United States of America, contributed their respective interests in international
mobile joint ventures to form the Group.

As
at December 31, 2010, Millicom had mobile operations in 14 countries focusing on emerging markets in Central America, South America, Africa and Asia (see note 7).
Millicom operates its mobile businesses in El Salvador, Guatemala and Honduras in Central America; in Bolivia, Colombia and Paraguay in South America; in Chad, the Democratic Republic of Congo,
Ghana, Mauritius, Rwanda, Senegal and Tanzania in Africa; and in Laos in Asia which is classified as a discontinued operation and as an asset held for sale (see note 6). African Millicom's
operation in Sierra Leone was sold on November 25, 2009; Millicom's operations in Sri Lanka and Cambodia were sold respectively on October 16 and November 26, 2009 (see
note 5).

In
2008, Millicom acquired 100% of Amnet Telecommunications Holding Limited (see note 4), a provider of broadband and cable television services in Costa Rica, Honduras and
El Salvador, of fixed telephony in El Salvador and Honduras, and of corporate data services in the above countries as well as Guatemala and Nicaragua. In addition, in December 2008,
Millicom was successful in the tender for the third national mobile license in Rwanda (see note 15). Services in Rwanda were launched in early December 2009.

The
Company's shares are traded on the NASDAQ National Market under the symbol MICC and on the Stockholm stock exchange under the symbol MIC. The Company has its registered office at 15,
Rue Léon Laval, L-3372, Leudelange, Grand Duchy of Luxembourg and is registered with the Luxembourg Register of Commerce under the number RCS B 40 630.

The
Board of Directors ("Board") approved these consolidated financial statements on March 3, 2011. The approval of the consolidated financial statements will be ratified by the
shareholders at the Annual General Meeting on May 25, 2011.

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES

2.1   Basis of preparation

The consolidated financial statements of the Group are presented in US dollars and all values are rounded to the nearest thousand (US$ '000) except when otherwise
indicated. The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets and liabilities that have been measured at fair value.

In
accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, the
consolidated financial statements for the year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union
("IFRS").

F-12

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

As
of December 31, 2010, International Financial Reporting Standards as adopted by the European Union are similar to those published by the International Accounting Standards
Board ("IASB"), except for IAS 39Financial Instruments that has been partially adopted by the European Union and for new standards and interpretations not yet endorsed but
effective in future periods. Since the provisions that have not been adopted by the European Union are not applicable to the Group, the consolidated financial statements comply with both International
Financial Reporting Standards as adopted by the European Union and International Financial Reporting Standards as issued by the IASB.

The
preparation of financial statements in conformity with IFRS requires management to exercise its judgment in the process of applying the Group's accounting policies. It also requires
the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions,
actual results may ultimately differ from these estimates. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.

2.2   Consolidation

The consolidated financial statements of the Group are comprised of the financial statements of the Company and its subsidiaries and joint ventures as at
December 31 each year. The financial statements of the subsidiaries and joint ventures are prepared for the same reporting year as the Company, using consistent accounting
policies.

All
intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group transactions are eliminated.

The
acquisition method of accounting is used to account for acquisitions where there is a change in control. The cost of an acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of
the Group's share of the
identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in
the income statement (see accounting policy for Goodwill). All acquisition related costs are expensed.

Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and
operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Non-controlling interests

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. Gains or
losses on disposals to non-controlling interests are recorded in equity. For purchases from non-controlling interests, the difference between any consideration paid and the
relevant share acquired of the carrying value of net assets of the subsidiary is also recorded in equity. Non-controlling interest is measured at the proportionate interest in the net
assets of the subsidiary.

Joint ventures

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

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

The
Group recognizes the portion of gains or losses on the sale of assets to joint ventures that are attributable to other parties in the joint venture. The Group does not recognize its
share of profits or losses from purchase of assets by the Group from a joint venture until it resells the assets to a third party. However, if a loss on a transaction provides evidence of a reduction
in the net realizable value of current assets or an impairment loss, the loss is recognized immediately.

Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights.

Investments
in associates are accounted for using the equity method of accounting and are initially recognized at cost. The Group's investment in associates includes goodwill (net of any
accumulated impairment loss) identified on acquisition.

The
Group's share of post-acquisition profits or losses of associates is recognized in the consolidated income statement, and its share of post-acquisition
movements in reserves is recognized in reserves. Cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an
associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless the Group has incurred obligations or made
payments on behalf of the associates.

Unrealized
gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealized losses are also eliminated unless
the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the
Group. Dilution gains and losses arising in investments in associates are recognized in the income statement.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.3   Foreign currency translation

Functional and presentation currencies

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

Transactions and balances

Transactions denominated in a currency other than the functional currency are translated into the functional currency using exchange
rates prevailing on transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions, and on translation of monetary assets and liabilities denominated in
currencies other than the functional currency at year-end exchange rates, are recognized in the consolidated income statement, except when deferred in equity as qualifying cash flow, or
net investment hedges.

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

Translation into presentation currency

The results and financial position of all Group entities (none of which operate in an economy with a hyperinflationary functional
currency) with functional currency other than the US dollar presentation currency are translated into the presentation currency as follows:



On
consolidation, exchange differences arising from the translation of net investments in foreign operations, and of borrowing and other currency instruments designated as hedges of such
investments, are taken to equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognized in the consolidated income statement as part of gain or loss on
sale.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

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

The
following table presents relevant currency translation rates to the U.S. dollar as of December 31, 2010 and 2009 and average rates for the year ended
December 31, 2010.

Country

Currency

2010
Average rate

2010
Year-end rate

2009
Year-end rateBolivia

Boliviano


7.00


6.99


7.02Chad and Senegal

CFA Franc


496.47


489.70


457.26Colombia

Peso


1,931.08


1,918.75


2,043.00Costa Rica

Colon Costa Rica


510.99


512.97


565.24Ghana

Cedi


1.47


1.49


1.43Guatemala

Quetzal


8.00


8.02


8.35Honduras

Lempira


18.90


18.90


18.90Luxembourg

Euro


0.76


0.75


0.70Mauritius

Rupee


30.53


30.45


30.01Nicaragua

Gold Cordoba


21.84


21.88


20.84Paraguay

Guarani


4,682.50


4,645.00


4,695.00Rwanda

Rwandese Franc


593.34


594.00


571.24Sweden

Krona


6.87


6.72


7.16Tanzania

Shilling


1,472.78


1,459.50


1,339.50UAE (Dubai)

Dirham


3.67


3.67


3.67


The effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the cash flow statement in order to reconcile
cash and cash equivalents at the beginning and end of the year. Millicom's functional currency in both El Salvador and DRC is the US$.

2.4   Segment Reporting

Operating segments are reported in a manner consistent with internal reporting to the Chief Operating Decision-Maker ("CODM"). The CODM, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.

2.5   Property, plant and equipment

Items of property, plant and equipment are stated at historical cost, less accumulated depreciation and accumulated impairment. Historical cost includes
expenditure that is directly attributable to acquisition of items. The carrying amount of replaced parts is derecognized. Repairs and maintenance are charged to the income statement in the financial
period in which they are incurred.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

Depreciation
is calculated using the straight-line method over the shorter of the estimated useful life of the asset and the remaining life of the license associated with the
assets, unless the renewal of the license is contractually possible. Estimated useful lives are:

Buildings

40 years or lease period, if lowerNetworks (including civil works)

5 to 15 yearsOther

2 to 7 years


The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not
be recoverable. The assets' residual value and useful life is reviewed, and adjusted if appropriate, at each statement of financial position date. An asset's carrying amount is written down
immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

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

Subsequent
costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably. All repairs and maintenance are charged to the income statement in the financial period in which they are incurred.

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

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

2.6   Intangible assets

Intangible
assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is measured at fair value at the date
of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and expenditure is charged to the income statement in the year in which expenditure is incurred. Intangible assets are amortized
over their estimated useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method
for intangible assets with finite useful lives are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the assets are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on
intangible assets with finite lives is recognized in the

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

consolidated
income statement in the expense category consistent with the function of the intangible assets.

Goodwill

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

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

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



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

Licenses

Licenses are shown at either historical cost or, if acquired in a business combination, at fair value at the date of acquisition.
Licenses have a finite useful life and are carried at cost less accumulated

F-18

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

amortization
and any accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of the licenses over their estimated useful lives.

The
terms of licenses, which have been awarded for various periods, are subject to periodic review for, amongst other things, rate setting, frequency allocation and technical standards.
Licenses are initially measured at cost and are amortized from the date the network is available for use on a straight-line basis over the license period. Licenses held, subject to certain
conditions,
are usually renewable and generally non-exclusive. When estimating useful lives of licenses, renewal periods are not usually included.

Trademarks and customer bases

Trademarks and customer bases are recognized as intangible assets only when acquired or gained in a business combination. Their cost
represents fair value at the date of acquisition. Trademarks and customer bases have finite useful lives and are carried at cost less accumulated amortization. Amortization is calculated using the
straight-line method to allocate the cost of the trademarks and customer bases over their estimated useful lives. The estimated useful lives for trademarks and customer bases are based on
specific characteristics of the market in which they exist. Trademarks and customer bases are included in "Intangible assets, net".

2.7   Impairment of non-financial assets

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

At
each reporting date an assessment is made as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. Other than for goodwill, a previously recognized impairment loss is reversed if there has been a change in the estimate used to determine the
asset's recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss. After
such a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

F-19

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.8   Loans and receivables

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

2.9   Financial instruments at fair value through profit or loss

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

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

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

2.11 Inventories

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

2.12 Trade receivables

Trade
receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for
impairment is recorded when there is objective evidence that the Group will not be able to collect amounts due according to the original terms of receivables. Significant financial difficulties of the
debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are indicators of impairment. The amount of the provision is the
difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The provision is recognized in the consolidated income
statement within "Cost of sales".

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.13 Deposits

Time deposits

Cash deposits with banks with maturities of more than 3 months that generally earn interest at market rates are classified as
time deposits.

Pledged deposits

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

2.14 Cash and cash equivalents

Cash
and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or
less.

2.15 Impairment of financial assets

The
Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or group of financial assets is impaired. Impairment losses are
recognized in the consolidated income statement.

2.16 Share capital

Common
shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.

Where
any Group company purchases the Company's share capital, the consideration paid including any directly attributable incremental costs is shown under "Treasury shares" and deducted
from equity attributable to the Company's equity holder until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of
any directly attributable incremental costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

2.17 Borrowings

Borrowings
are initially recognized at fair value, net of directly attributable transaction costs. After initial recognition borrowings are subsequently measured at amortized cost using
the effective interest rate method. Amortised cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the effective interest
rate. Any difference between the initial amount and the maturity amount is recognized in the consolidated income statement over the period of the borrowing.

The
fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a
liability on an amortized cost basis until extinguishment, conversion or maturity of the bonds. The remainder of the proceeds is

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

allocated
to the conversion option, which is recognized and included in equity, net of income tax effects.

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

2.18 Leases

The
determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Finance
leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair
value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Where a finance lease results from a sale and leaseback transaction,
any excess of sales proceeds over the carrying amount of the assets is deferred and amortised over the lease term.

Capitalized
leased assets are depreciated over the shorter of the estimated useful lives of the assets, or the lease term if there is no reasonable certainty that the Group will obtain
ownership by the end of the lease term.

Operating
lease payments are recognized as expenses in the consolidated income statement on a straight-line basis over the lease term.

2.19 Provisions

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

2.20 Trade payables

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

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.21 Revenue recognition

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

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

Revenues from telecom services

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

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

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

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

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

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

2.22 Cost of sales

The
primary cost of sales incurred by the Group in relation to the provision of telecommunication services relate to interconnection costs, roaming costs, rental of leased lines, costs
of handsets and other accessories sold, and royalties. Cost of sales is recorded on an accrual basis.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

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

2.23 Customer acquisition costs

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

2.24 Employee benefits

Pension obligations

Pension obligations can result from either a defined contribution plan or a defined benefit plan.

A
defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity No further payment obligations exist once the contributions have been
paid. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in future payments
is available.

A
defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit pension plans define an amount of pension benefit that an employee will
receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position respect of the
defined benefit pension plan is the present value of the defined benefit obligation at the statement of financial position date less the fair value of plan assets, together with adjustments for
unrecognized actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using an appropriate discount rate based on maturities of the related pension liability. The Group does not have any defined benefit
pension plans.

Share based compensation

Restricted share awards are granted to Directors, management and key employees.

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

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

F-24

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.25 Taxation

Current tax

Current tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rate and tax laws used to compute the amount are those enacted or substantively enacted by the statement of financial position date.

Deferred tax

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

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

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

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

2.26 Discontinued operations

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

F-25

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.27 Derivative financial instruments and hedging activities

Derivatives
are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of
recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives
as either:



For
transactions designated and qualifying for hedge accounting the Group documents, at the inception of the transaction the relationship between hedging instruments and hedged items, as
well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether
the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The
fair values of derivative instruments used for hedging purposes are disclosed in note 34. Movements on the hedging reserve in other comprehensive income are shown in the
statement of changes in equity. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months,
and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability when the remaining
maturity of the hedged item is less than 12 months.

The
Group does not have either fair value or net investment hedges.

The
effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss
relating to any ineffective portion is recognized immediately in the income statement within 'other non operating (expenses) income, net'.

Amounts
accumulated in equity are reclassified to profit and loss in the periods when the hedged item affects profit or loss.

When
a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in
equity and is recognized when the forecast transaction is ultimately recognized in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
was reported in equity is immediately transferred to the income statement within 'other non operating (expenses) income, net'.

F-26

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)

2.28 Changes in accounting policies

The
consolidated financial statements as of December 31, 2010 are prepared in accordance with consolidation and accounting policies consistent with those of the previous
financial years, with the exception of the early adoption as of January 1, 2009 of IFRS 3R, 'Business combinations', and IAS 27R, 'Consolidated and separate financial
statements'.

The
following new standards and amendments to standards, which affect the presentation of the consolidated financial statements, which were mandatory for the first time for the
financial year beginning January 1, 2010 were early adopted by the Group in 2009.



The
Group early adopted IFRS 3R, 'Business combinations', in 2009 for the step-up acquisition of Navega.com S.A. (see note 4). Millicom revalued its
previously held interests in Navega.com S.A. at fair value, recognising the resulting gain in the consolidated income statement.



As
the Group early adopted IFRS 3R, it was required to early adopt IAS 27R, 'Consolidated and separate financial statements', at the same time.



IAS 38
(amendment) was applied by the Group from the date IFRS 3R was adopted. The amendment to IAS 38 did not have a material impact on the Group's consolidated
financial statements.

The
following amendments to standards and interpretations, which could affect Millicom's financial position and accounting policies, are mandatory for the first time for the
financial year beginning January 1, 2010, but are not currently relevant nor have a material impact for the Group.

F-27

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)



F-28

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)



The
following standards, amendments and interpretations issued are not effective for the financial year beginning January 1, 2010 and have not been early adopted.



F-29

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

2. SUMMARY OF CONSOLIDATION AND ACCOUNTING POLICIES (Continued)



3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

Contingent liabilities

Contingent liabilities are potential liabilities that arise from past events whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of Millicom. Provisions for liabilities are
recorded when a loss is considered probable and can be reasonably estimated. The determination of whether or not a provision should be recorded for any potential liabilities is based on management's
judgment.

Estimates

Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. Because of inherent uncertainties in this evaluation process, actual results may be different from originally estimated amounts. In
addition, significant estimates are involved in the determination of impairments, provisions related to taxes and litigation risks. These estimates are subject to change as new information becomes
available and may significantly affect future operating results.

F-30

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (Continued)

Accounting for property, plant and equipment, and intangible assets involves the use of estimates for determining fair values at acquisition dates, particularly in the case of such
assets acquired in a business combination. Furthermore, the expected useful lives of these assets must be estimated. The determination of fair values of assets and liabilities, as well as of useful
lives of the assets is based on management judgment.

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

For
our critical accounting estimates reference is made to the relevant individual notes to these consolidated financial statements, more specifically
note 4Acquisition of subsidiaries, joint ventures and non-controlling interests; note 6Discontinued operations and assets held for sale;
note 13Taxes; note 15Intangible assets, note 16Property, plant and equipment, note 19Trade receivables,
note 24Share-based compensation (relating to long-term incentive plans); note 31Commitments and contingencies; and
note 34Financial instruments.

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS

Year ended December 31, 2010

In 2010, Millicom gained control over Telefonica Cellular S.A. DE CV, its mobile phone operation in Honduras, and acquired
control Navega S.A. DE CV, its cable operation in Honduras.

Telefonica Cellular S.A. DE CV

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

F-31

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2010. The
recognized amounts of identified assets acquired and liabilities assumed as of July 1, 2010 were as follows:

Fair value
(100%)

Previously
held interests
(66.7%)US$ '000

US$ '000Intangible assets, net(i)


435,174


22,602Other investments


20,653


13,769Property, plant and equipment, net


339,082


226,055Trade receivables


13,876


9,251Prepayments and accrued income


6,681


4,454Other current assets


34,485


22,990Cash and cash equivalents


24,654


16,436874,605


315,557Other non-current liabilities(ii)


264,590


100,492Current debt and other financing


74,943


49,962Trade payables


6,117


4,078Accrued interests and other expenses


12,756


8,504Current income tax liabilities


17,465


11,643Other current liabilities


51,890


35,871427,761


210,550Non-controlling interests


147,121Fair value of the net assets acquired and contingent liabilities


299,723Goodwill arising on change of control


854,572Previously held interests in Celtel


(105,007
)Revaluation of the previously held interests in Celtel


1,049,288Cost of change of control





(i)Intangible assets not previously recognized are trademarks for an amount of $40 million, with estimated useful life of 10 years, customers'
list for an amount of $335 million, with estimated useful life of 8-9 years, and telecommunications license for an amount of $21 million, with estimated useful life of
11 years.(ii)Deferred tax liabilities, related to the differences between the tax base and the fair value of the identifiable assets acquired amount to
$114 million.


The goodwill, which is not expected to be tax deductible, is attributable to the profitability potential of Celtel and the synergies expected to arise. The fair
value of the customers' list was ascertained using the discounted excess earnings method, the fair value of the trademark was ascertained using the relief from royalty approach, and the fair value of
the telecommunications license against comparable transactions.

F-32

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

The
change of control contributed revenues of $100 million and net profit of $1,049 million (including gain on revaluation) for the period from acquisition to
December 31, 2010. If the change of control had occurred on January 1, 2010, unaudited pro forma Group revenues from continuing operations for the year ended December 31,
2010 would have been $4,018 million, and the unaudited pro forma net profit from continuing operations for the same period would have been $1,665 million. These amounts have been
calculated using the Group accounting policies.

Millicom
revalued at fair value its previously held 66.7% interest in Celtel recognizing a gain of $1,044 million, recorded under the caption "Revaluation of previously held
interests". The fair value of the previously held interests was determined based on a discounted cash flow. The cash flow projections used (adjusted operating profit margins, income tax, working
capital and capital expenditure) were estimated by management covering 6 years. Cash flows beyond this period were extrapolated using a perpetual growth rate of 2%. The valuation was determined
using a discount rate of 14.3%.

Navega S.A. DE CV

As part of a regional shareholding alignment agreement with its local partner in Honduras, on August 20, 2010 Millicom reached
agreement with its local partner in Honduras whereby Millicom acquired a further 6% of Navega S.A. DE CV ("Navega Honduras") (formerly Metrored S.A.). As a result of this agreement
Millicom has the right to control Navega Honduras, which has been fully consolidated into the Millicom Group financial statements from August 20, 2010. Previously, the results of Navega
Honduras were proportionately consolidated. The agreement is expected to facilitate further integration of the cable business and to create synergies.

F-33

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2010. The
recognized amounts of identified assets acquired and liabilities assumed were as follows:

Fair value
(100%)

Previously
held interests
(60.72%)US$ '000

US$ '000Intangible assets, net


19,563


11,879Property, plant and equipment, net


22,875


13,890Other non-current assets


180


109Trade receivables


1,988


1,207Prepayments and accrued income


40


25Current income tax assets


0Other current assets


482


293Cash and cash equivalents


3,050


1,85248,178


29,255Other non-current liabilities


3,178


1,930Current debt and other financing


1,152


699Trade payables


357


217Accrued interests and other expenses


1,135


689Current income tax liabilities


1,035


628Other current liabilities


2,211


1,3439,068


5,506Non controlling interests


13,037Fair value of the net assets acquired and contingent liabilities


26,073Goodwill arising on change of control


13,866Previously held interests in Navega Honduras


(23,748
)Revaluation of the previously held interests in Navega Honduras


10,726Cost of change of control


5,465


The goodwill, which is not expected to be tax deductible, is attributable to the profitability potential of Navega Honduras and the synergies expected to arise.
The fair value of the customers' list was ascertained using the discounted excess earnings method, and the fair value of the trademark was ascertained using the relief from royalty approach.

Navega
Honduras contributed revenues of $1 million and net profit of $20 million (including gain on revaluation) for the period from acquisition to December 31,
2010. If the acquisition had occurred on January 1, 2010, unaudited pro forma Group revenues from continuing operations for the year ended December 31, 2010 would have been
$3,924 million, and the unaudited pro forma net profit from continuing operations for the same period would have been $1,644 million. These amounts have been calculated using the Group
accounting policies.

F-34

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
revalued at fair value its previously held 60% interest in Navega Honduras recognizing a gain of $11 million, recorded under the caption "Revaluation of previously held
interests".

Year ended December 31, 2009

In 2009, Millicom's joint venture in Guatemala acquired the remaining non-controlling interest in Navega.com S.A.
and Millicom acquired the remaining non-controlling interest in its operation in Chad.

Navega.com S.A.

On March 13, 2009, Millicom's joint venture in Guatemala completed the acquisition of the remaining 55% interest in
Navega.com S.A. ("Navega Guatemala"). Millicom's share of the acquisition cost of the remaining 55% interest in Navega Guatemala amounted to $49 million and Millicom's share of the cash
acquired amounted to $10 million; net cash used for this acquisition therefore amounted to $39 million.

F-35

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2009.
Millicom's share of the fair value of the identifiable assets and liabilities acquired was as follows:

Fair value

Previously
held interestsUS$ '000

US$ '000Intangible assets, net(i)


51,442


8,988Property, plant and equipment, net


34,205


18,995Other non-current assets


122


87Trade receivables


3,196


1,739Prepayments and accrued income


13


8Current income tax assets


16


7Other current assets(ii)


2,400


353Cash and cash equivalents


10,656


5,070102,050


35,247Other non-current liabilities(iii)


3,437


Current debt and other financing


10,953


5,546Trade payables


7,241


4,611Accrued interests and other expenses


557


286Current income tax liabilities


2,872


1,899Other current liabilities(ii)


16,589


5,96141,649


18,303Fair value of the net assets acquired and contingent liabilities


60,401Goodwill arising on acquisition


38,203Previously held interests in Navega Guatemala and Metrored


(16,944
)Revaluation of the previously held interests in Navega Guatemala and Metrored


(32,319
)Acquisition cost


49,341


(i)Intangible assets not previously recognized are trademarks for an amount of $2 million (Millicom's share: $1 million), with estimated useful
life of 8 years, and customers' list for an amount of $62 million (Millicom's share: $35 million), with estimated useful life of 9 years.(ii)Contingent liabilities relating to tax and other contingencies at the time of the acquisition and amounting to $6 million (Millicom's share:
$3 million) were booked within "Other current liabilities". The former shareholders of Navega.com and Metrored placed in escrow $3 million to partly cover these contingencies. Therefore
a corresponding financial asset of $3 million (Millicom's share: $2 million) has been recorded within "Other current assets".(iii)Deferred tax liabilities, related to the differences between the tax base and the fair value of the identifiable assets acquired amount to
$6 million (Millicom's share: $3 million).


F-36

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)




The goodwill, which is not expected to be tax deductible, is attributable to the profitability potential of the acquired business and the synergies expected to
arise from the Group's acquisition of Navega. The fair value of the customer bases was ascertained using the discounted excess earnings method and the fair value of the trademark was ascertained using
the relief from royalty approach.

The
acquired business contributed revenues of $21 million and net profit of $12 million for the period from acquisition to December 31, 2009. If the acquisition had
occurred on January 1, 2009, unaudited pro forma Group revenues from continuing operations for the year ended December 31, 2009 would have been $3,378 million, and the
unaudited pro forma net profit from continuing operations for the same period would have been $507 million. These amounts have been calculated using the Group accounting policies.

In
2009 Millicom early adopted IFRS 3R and applied it to this acquisition (see note 2). As a result, Millicom revalued at fair value its previously held 45% interest in
Navega (held by Millicom's joint venture in Guatemala) and its previously held 49% interest in Metrored S.A. ("Metrored"), a subsidiary of Navega (held by Millicom's joint venture in Honduras),
recognizing a gain of $32 million, recorded under the caption "Revaluation of previously held interests".

Millicom Tchad S.A.

On March 4, 2009, Millicom completed the acquisition of the remaining 12.5% non-controlling interests in its
operation in Chad. The initial consideration amounted to $8 million and was paid in cash.

In
2009 Millicom early adopted IAS 27R and applied it to this acquisition (see note 2). As a result, the purchase of the non-controlling interest in Chad was
treated as an equity transaction. The difference between the acquisition cost and the carrying value of the existing non-controlling interest at the date of the transaction resulted in a
decrease in Millicom shareholders' equity of $10 million.

Other minor investments

In 2009, Millicom acquired other minor investments for a cash consideration of $6 million.

Year ended December 31, 2008

In 2008, Millicom acquired 100% interest in Amnet Telecommunications Holding Limited.

Amnet Telecommunications Holding Limited

On October 1, 2008, the Group acquired 100% interest in Amnet Telecommunications Holding Limited (together with its subsidiaries
"Amnet" or "Amnet Group"). Amnet is a provider of broadband and cable television services in Costa Rica, Honduras and El Salvador, of fixed telephony in El Salvador and Honduras, and of
corporate data services in the above countries as well as Guatemala and Nicaragua. Acquisition cost amounted to $546 million and net cash acquired to $14 million; net cash used for the
acquisition of Amnet therefore amounted to $532 million.

F-37

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)

Millicom
completed the allocation of the purchase price to the assets acquired, liabilities assumed and contingent liabilities during the year ended December 31, 2008. The
final determined fair value of the identifiable assets and liabilities acquired were as follows:

Recognized
on acquisition

Carrying
valueUS$ '000

US$ '000Intangible assets, net(i)


162,383


26,631Property, plant and equipment, net


71,197


67,911Other non-current assets


3,093


3,093Financial assets


7,502


7,502Inventories


1,454


1,454Trade receivables


8,052


8,052Prepayments and accrued income


2,960


2,960Current income tax assets


3,728


3,728Other current assets(ii)


27,899


3,989Cash and cash equivalents


13,497


13,497301,765


138,817Non-current debt and other financing


116


116Other non-current liabilities(iii)


43,337


1,810Current debt and other financing


3,271


3,271Trade payables


9,992


9,992Accrued interest and other expenses


5,950


5,950Current income tax liabilities


7,057


7,057Other current liabilities(ii)


26,294


2,38496,017


30,580Fair value of net assets acquired and contingent liabilities (100%)


205,748Goodwill arising on acquisition


339,982Acquisition cost


545,730


(i)Intangible assets identified are trademarks for an amount of $5 million, with estimated useful life of 15 months; customer bases for an amount
of $123 million, with estimated useful life of 4 to 9 years; and non-compete agreements for $19 million, with estimated useful lives of 4 years.(ii)Contingent liabilities relate to existing tax and other contingencies at the time of the acquisition amounting to $24 million were booked within
"Other current liabilities". The former shareholders of Amnet placed in escrow $35 million to cover these contingencies. Therefore a corresponding financial asset of $24 million has been
recorded within "Other current assets".(iii)Deferred tax liabilities, related to the differences between the tax base and the fair values of the identifiable assets acquired at the time of
acquisition amounted to $42 million.


F-38

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

4. ACQUISITIONS OF SUBSIDIARIES, JOINT VENTURES AND NON-CONTROLLING INTERESTS (Continued)




The goodwill is attributable to the profitability potential of the acquired business and the synergies expected to arise from the Group's acquisition of Amnet.
The fair value of the customer bases was ascertained using the discounted excess earnings method and the fair value of the trademark was ascertained using the relief from royalty approach. The fair
value of the non-compete agreements was ascertained using the incremental cash flow approach. Acquisition cost of Amnet was $546 million, including acquisition costs of
$4 million and was funded through a one-year bridge loan facility with two commercial banks and cash (see note 26).

The
acquired business contributed revenues of $43 million and net profit of $4 million for the period from acquisition to December 31, 2008. If the acquisition had
occurred on January 1, 2008, unaudited pro forma Group revenue from continuing operations would have been $3,534 million, and the unaudited pro forma profit for the year from
continuing operations would have been $437 million. These amounts have been calculated using the Group accounting policies.

5. DISPOSALS OF SUBSIDIARIES AND JOINT VENTURES

Year ended December 31, 2010

As part of the regional shareholding alignment agreement with its local partner in Guatemala, on August 20, 2010, Millicom
disposed of 45% of its interest in Newcom Guatemala ("Amnet Guatemala"). From that date Amnet Guatemala has been accounted for as a joint venture and proportionately consolidated into the Millicom
Group financial statements. Previously, the results of the Amnet Guatemala were fully consolidated. There was no significant impact on profit and loss from the disposal.

Year ended December 31, 2009

On October 16, November 25 and November 26, 2009 respectively, Millicom completed the sale of its operations in
Sri Lanka, Sierra Leone and Cambodia, for total proceeds of respectively $155 million, $1million and $353 million realizing a total net gain of $289 million. Total
transaction costs amounted to $11 million. Total cash disposed amounted to $30 million.

Year ended December 31, 2008

In 2008, Millicom did not dispose of any subsidiary or joint venture.

F-39

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

6. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Discontinued operations

The results of discontinued operations for the years ended December 31, 2010, 2009 and 2008 are presented below:

2010

2009

2008US$ '000

US$ '000

US$ '000Revenues


29,625


218,874


270,738Operating expenses(i)


(17,086
)

(193,038
)

(243,345
)Gain from disposal, net





288,860


Operating profit


12,539


314,696


27,393Non-operating income (expenses), net


271


(10,500
)

(16,591
)Profit before tax


12,810


304,196


10,802Tax charge


(953
)

(3,854
)

(8,556
)Net profit for the year


11,857


300,342


2,246


(i)In 2009, an impairment of $11 million (2008: $11 million) was booked to align the carrying value of Millicom's operation in Sierra Leone to
its estimated fair value less cost to sell.


The cash (used) provided by discontinued operations for the years ended December 31, 2010, 2009 and 2008 is presented below:

2010

2009

2008US$ '000

US$ '000

US$ '000Net cash provided by operating activities


11,105


29,906


73,956Net cash used by investing activities


(16,089
)

(62,795
)

(129,366
)Net cash (used) provided by financing activities


5,597


(8,270
)

(22,323
)Exchange (loss) gain on cash and cash equivalents


234


(158
)

1,587Transfer of cash to assets held for sale


(847
)

(19,099
)

(521
)Proceeds from the sale of discontinued operations





477,171


7,593Cash provided (used) by discontinued operations





416,755


(69,074
)


The following table gives details of non cash investing and financing activities of discontinued operations for the years ended December 31, 2010,
2009 and 2008:

2010

2009

2008US$ '000

US$ '000

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





(873
)

(6,563
)Financing activitiesVendor financing and finance leases





873


6,563


Asia segment

In May 2009, Millicom decided to dispose of its businesses in Cambodia, Laos and Sri Lanka and, as a result, in accordance with
IFRS 5, these operations were classified as discontinued operations.

F-40

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

6. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

Millicom's
operations in Sri Lanka and Cambodia were sold respectively on October 16 and November 26, 2009. As a result, as at December 31, 2009, only Laos's assets and
liabilities were disclosed under the caption "Assets held for sale" and "Liabilities directly associated with assets held for sale". Millicom's businesses in Cambodia, Laos and Sri Lanka
previously represented the entire operating segment "Asia".

Millicom Sierra Leone Limited

In December 2008, Millicom decided to dispose of its business in Sierra Leone, Millicom Sierra Leone Limited, and, as a result, in
accordance with IFRS 5, this operation was classified as a discontinued operation. In addition as at December 31, 2008 the assets and liabilities of Millicom Sierra Leone Limited are
disclosed under the captions "Assets held for sale" and "Liabilities directly associated with assets held for sale". Millicom's operation in Sierra Leone was previously disclosed within the operating
segment "Africa".

Assets held for sale

Millicom Lao Co. Ltd

On September 16, 2009 Millicom announced that it signed an agreement for the sale of its 74.1% holding in Millicom
Lao Co. Ltd., its Laos operation, to VimpelCom for approximately $65 million in total cash proceeds, payable on completion. Completion of the transaction was subject to certain
conditions, which were not satisfied before the year-end. As a result, Millicom's operation in Laos was classified as a disposal held for sale as of December 31, 2009. As of
that date, Millicom kept all assets and liabilities of its Laos operation at the carrying values as they were lower than the estimated fair value less cost to sell.

On
March 31, 2010 Millicom announced that VimpelCom had not completed the agreement to acquire Millicom's operation in Laos, despite that all conditions precedent had been met.
Millicom is reserving its rights under the terms of the agreement, including the right to seek compensation for any loss of value that may arise as a result of VimpelCom's decision not to complete.

As
at December 31, 2010 activities are continuing under the sale process and Millicom is still of the opinion that the sale of its operation in Laos is highly probable and
therefore continues to treat this operation as a discontinued operation as at December 31, 2010.

Sale of tower assets in Ghana, Tanzania and Democratic Republic of Congo ("DRC")

In January 2010, Millicom's operation in Ghana signed a sale and lease-back agreement with Helios Towers Ghana, a direct
subsidiary of Helios Towers Africa, for most of its tower assets. Under the agreement, Millicom Ghana will sell those tower assets to Helios for a total consideration of $30 million cash and a
40% stake in Helios Towers Ghana, and will lease back a dedicated portion of each tower to locate its network equipment. Approximately 80% of the towers under this agreement have been sold in 2010 and
the remaining towers are expected to be transferred in 2011. The carrying value of the portion of the remaining towers that will not be leased back has been classified as assets held for sale as at
December 31, 2010 and amounted to $6 million.

F-41

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

6. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

In
December 2010, Millicom's operations in Tanzania and DRC signed sale and lease-back agreements with Helios Towers Tanzania and Helios Towers DRC respectively, for most of
their tower assets. The carrying value of the portion of the towers that will not be leased back and any related liabilities have been classified respectively as assets held for sale and liabilities
directly associated with assets held for sale. The net amount reclassified amounted to $46 million in respect of Tanzania and $50 million in respect of DRC as at December 31,
2010.

The
major classes of assets and liabilities classified as held for sale as at December 31, 2010, and 2009 are as follows:

2010

2009US$ '000

US$ '000AssetsProperty, plant and equipment, net


171,473


70,030Trade receivables, net


6,044


3,490Inventories


477


312Other assets


4,402


2,979Cash and cash equivalents


2,314


1,465Assets held for sale


184,710


78,276LiabilitiesNon-current debt and other financing


13,322


8,244Other non-current liabilities


13,992


7,982Current debt and other financing


5,662


5,124Trade payables


4,278


14,317Other current liabilities


23,513


7,915Liabilities directly associated with assets held for sale


60,767


43,582Net assets directly associated with the disposal group


123,943


34,694


F-42

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

7. SUBSIDIARIES

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

Name of the company

Country

Holding
December 31,
2010

Holding
December 31,
2009% of ownership
interest

% of ownership
interestCentral AmericaTelemovil El Salvador S.A.

El Salvador


100.0


100.0Telefonica Celular S.A.

Honduras


66.7


Navega S.A. DE CV (formerly Metrored S.A) (see notes 4 and 17).

Honduras


66.7


South AmericaTelefonica Celular de Bolivia S.A.

Bolivia


100.0


100.0Telefonica Celular del Paraguay S.A.

Paraguay


100.0


100.0Colombia Movil S.A. E.S.P.

Colombia


50.0 + 1 share


50.0 + 1 shareAfricaMillicom Ghana Company Limited

Ghana


100.0


100.0Sentel GSM S.A.

Senegal


100.0


100.0MIC Tanzania Limited

Tanzania


100.0


100.0Oasis S.P.R.L.

Democratic Republic of Congo


100.0


100.0Millicom Tchad S.A. (see note 4)

Chad


100.0


100.0Millicom Rwanda Limited

Rwanda


87.5


87.5AsiaMillicom Lao Co. Limited (see note 6)

Lao People's Democratic Republic


74.1


74.1AmnetAmnet Telecommunications Holding Limited (see note 4)

Bermuda


100.0


100.0UnallocatedMillicom International Operations S.A.

Luxembourg


100.0


100.0Millicom International Operations B.V.

Netherlands


100.0


100.0MIC Latin America B.V.

Netherlands


100.0


100.0Millicom Africa B.V.

Netherlands


100.0


100.0Millicom Holding B.V.

Netherlands


100.0


100.0Millicom Ireland Limited

Ireland


100.0


100.0


F-43

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

8. INTERESTS IN JOINT VENTURES

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

Name of the company

Country

Holding
December 31,
2010

Holding
December 31,
2009% of ownership
interest

% of ownership
interestCentral AmericaComunicaciones Celulares S.A.

Guatemala


55.0


55.0Navega.com S.A. (see notes 4 and 17)

Guatemala


55.0


55.0Telefonica Celular S.A.

Honduras





66.7Navega S.A. DE CV (formerly Metrored S.A) (see notes 4 and 17).

Honduras





60.7AfricaEmtel Limited

Mauritius


50.0


50.0


In 2010, Millicom gained control over Telefonica Cellular S.A. DE CV, its mobile phone operation in Honduras, and acquired an additional 6% shareholding in
Navega S.A. DE CV, its cable operation in Honduras (see note 4). As a result both of these operations are now classified as subsidiaries from July 2010 (see note 7).

Millicom's
joint ventures in Cambodia were sold on November 26, 2009 (see note 5).

The
share of assets and liabilities of the jointly controlled entities at December 31, 2010 and 2009, which are included in the consolidated financial statements, are as follows:

2010

2009US$ '000

US$ '000Current assets


199,147


177,878Non-current assets


386,703


644,553Total assets


585,850


822,431Current liabilities


159,616


250,552Non-current liabilities


145,664


166,698Total liabilities


305,280


417,250


The share of revenues and operating expenses of the jointly controlled entities for the years ended December 31, 2010, 2009, and 2008, which are
included in the consolidated income statements from continuing operations, are as follows:

2010

2009

2008US$ '000

US$ '000

US$ '000Revenues


799,305


947,600


968,317Total operating expenses


(413,461
)

(503,298
)

(488,632
)Operating profit


385,844


444,302


479,685


F-44

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

9. SEGMENT INFORMATION

Management has determined the operating and reportable segments based on the reports that are used to make strategic and operational decisions.

Management
considers the Group from both a business and geographic perspective. The Group operates in the mobile telephony business as well as in the cable business (including broadband,
television and fixed telephony). The Group's risks and rates of return for its mobile operations are affected predominantly by the fact that it operates in different geographical regions. The mobile
operating businesses are organized and managed according to these selected geographical regions, which represent the basis for evaluation of past performance and for making decisions about the future
allocation of resources.

The
Group has mobile businesses in three regions: Central America, South America and Africa. Its Cable business, which includes Amnet and Navega, operates in Central America. Millicom's
operation in Sierra Leone and the Asia region have been classified as discontinued operations (see note 6). Millicom's operations in Sri Lanka, Sierra Leone and Cambodia were sold in
2009 (see note 5).

The
following tables present revenues, operating profit (loss) and other segment information for the years ended December 31, 2010, 2009 and 2008:

December 31, 2010

Central
America

South
America

Africa

Cable

Unallocated
items

Total
continuing
operations

Discontinued
operations
(note 6)

Inter-
company
elimination

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Revenues


1,415,933


1,373,877


904,931


225,508





3,920,249


29,625





3,949,874Operating profit (loss)


599,396


361,969


147,737


39,202


(106,574
)

1,041,730


12,539





1,054,269Add back:Depreciation and amortization


183,839


223,186


202,733


66,305


923


676,986








676,986Loss (gain) of disposal and impairment


1,762


4,590


7,568


2,337





16,257








16,257Share based compensation














30,718


30,718








30,718Corporate costs














74,933


74,933








74,933Adjusted operating profit (loss)(i)


784,997


589,745


358,038


107,844





1,840,624


12,539





1,853,163Additions to:Property, plant and equipment


(131,876
)

(216,408
)

(273,689
)

(55,281
)

(17
)

(677,271
)

(16,223
)




(693,494
)Intangible assets


(11,792
)

(28,091
)

(3,924
)

(9,156
)

(473
)

(53,436
)







(53,436
)Capital expenditure


(143,668
)

(244,499
)

(277,613
)

(64,437
)

(490
)

(730,707
)

(16,223
)




(746,930
)Taxes paid


(121,498
)

(62,240
)

(9,291
)

(17,641
)

(28,053
)

(238,723
)Changes in working capital


32,334


(31,333
)

(27,776
)

1,690


25,970


885Other movements


3,018


60,061


101,603


3,960


(24,456
)

144,186Operating free cash flow(iii)


555,183


311,734


144,961


31,416


(27,029
)

1,016,265Total Assets(ii)


2,780,225


1,503,621


1,600,307


837,577


650,677


7,372,407


71,878


(449,168
)

6,995,117Total Liabilities


1,129,406


1,257,708


1,630,201


420,949


803,332


5,241,596


47,518


(1,453,008
)

3,836,106


(i)Adjusted operating profit is used by the management to monitor the segmental performance and for the capital management
(see note 33).(ii)Segment assets include goodwill and other intangibles.(iii)Operating free cash flow by segment includes vendor financing of capital equipment as a cash transaction.


F-45

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

9. SEGMENT INFORMATION (Continued)

December 31, 2009

Central
America

South
America

Africa

Cable

Unallocated
items

Total
continuing
operations

Discontinued
operations
(note 6)

Inter-
company
elimination

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Revenues


1,314,760


1,075,914


782,150


199,903





3,372,727


218,874





3,591,601Operating profit (loss)


584,341


227,904


84,582


31,295


(77,099
)

851,023


314,696





1,165,719Add back:Depreciation and amortization


145,741


208,469


196,832


59,311


1,082


611,435


34,842





646,277Loss (gain) of disposal and impairment


725


2,222


3,401


636


262


7,246


(277,665
)




(270,419
)Share based compensation














10,175


10,175








10,175Corporate costs














65,580


65,580








65,580Adjusted operating profit (loss)(i)


730,807


438,595


284,815


91,242





1,545,459


71,873





1,617,332Additions to:Property, plant and equipment


(102,925
)

(143,556
)

(395,352
)

(49,297
)

(246
)

(691,376
)

(79,072
)




(770,448
)Intangible assets


(7,813
)

(19,489
)

(2,892
)

(15,272
)

(646
)

(46,112
)







(46,112
)Capital expenditure


(110,738
)

(163,045
)

(398,244
)

(64,569
)

(892
)

(737,488
)

(79,072
)




(816,560
)Taxes paid


(100,127
)

(54,423
)

(6,654
)

(15,287
)

(19,359
)

(195,850
)Changes in working capital


(43,323
)

39,978


55,631


(10,084
)

239


42,441Other movements


399


1,927


18


1,364





3,708Operating free cash flow(iii)


477,018


263,032


(64,434
)

2,666


(20,012
)

658,270Total Assets(ii)


1,256,219


1,370,202


1,586,488


876,112


732,667


5,821,688


411,939


(242,609
)

5,991,018Total Liabilities


645,879


1,141,956


1,594,662


612,078


470,781


4,465,356


242,625


(1,027,093
)

3,680,888


(i)Adjusted operating profit is the measure used by the management to monitor the segmental performance and for the capital management (see
note 33).(ii)Segment assets include goodwill and other intangibles.(iii)Operating free cash flow by segment includes vendor financing of capital equipment as a cash transaction.


F-46

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

9. SEGMENT INFORMATION (Continued)

December 31, 2008

Central
America

South
America

Africa

Cable

Unallocated
items

Total
continuing
operations

Discontinued
operations
(note 6)

Inter-
company
elimination

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000Revenues


1,376,848


1,019,332


711,364


43,015





3,150,559


270,738





3,421,297Operating profit (loss)


642,851


149,848


95,935


6,537


(76,949
)

818,222


27,393





845,615Add back:Depreciation and amortization


112,296


198,861


140,094


11,518


951


463,720


57,257





520,977Loss (gain) of disposal and impairment


3,865


2,816


1,551


(7
)

941


9,166


11,049





20,215Share based compensation














13,619


13,619








13,619Corporate costs














61,438


61,438








61,438Adjusted operating profit (loss)(i)


759,012


351,525


237,580


18,048





1,366,165


95,699





1,461,864Additions to:Property, plant and equipment


(283,255
)

(351,134
)

(510,836
)

(11,164
)

(1,298
)

(1,157,687
)

(163,629
)




(1,321,316
)Intangible assets


(10,756
)

(18,033
)

(90,244
)

(384
)

(135
)

(119,552
)

(1,823
)




(121,375
)Capital expenditure


(294,011
)

(369,167
)

(601,080
)

(11,548
)

(1,433
)

(1,277,239
)

(165,452
)




(1,442,691
)Taxes paid


(115,049
)

(51,468
)

(22,411
)

(1,767
)

(10,541
)

(201,236
)Changes in working capital


25,688


42,808


47,225


(34,913
)

(18,360
)

62,448Other movements


2,324


952


5,119


476


(1,437
)

7,434Operating free cash flow(iii)


377,964


(25,350
)

(333,567
)

(29,704
)

(31,771
)

(42,428
)Total Assets(ii)


1,242,421


1,260,230


1,484,841


738,554


389,669


5,115,715


409,114


(304,021
)

5,220,808Total Liabilities


556,799


1,071,739


1,396,189


174,959


927,215


4,126,901


369,790


(927,960
)

3,568,731


(i)Adjusted operating profit is the measure used by the management to monitor the segmental performance and for the capital management (see
note 33).(ii)Segment assets include goodwill and other intangibles.(iii)Operating free cash flow by segment includes vendor financing of capital equipment as a cash transaction.


Revenues from continuing operations for the years ended December 31, 2010, 2009 and 2008 analyzed by country are as follows:

2010

2009

2008US$ '000

US$ '000

US$ '000Colombia


612,111


444,899


448,374Guatemala


570,827


517,555


515,531Honduras


532,068


436,435


426,689Paraguay


462,537


387,964


392,626El Salvador


453,503


493,298


461,878Other


1,289,203


1,092,576


905,461Total


3,920,249


3,372,727


3,150,559


F-47

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

9. SEGMENT INFORMATION (Continued)

Non-current assets (intangible assets and property, plant and equipment) as at December 31, 2010 and 2009 analyzed by country are as follows:

2010

2009US$ '000

US$ '000Colombia


604,723


585,184Guatemala


348,682


308,580Honduras


1,762,865


329,791Paraguay


223,840


231,917El Salvador


482,623


441,521Other(i)


1,627,779


1,858,485Total


5,050,512


3,755,478






10. ANALYSIS OF OPERATING PROFIT

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

2010

2009

2008US$ '000

US$ '000

US$ '000Revenues


3,920,249


3,372,727


3,150,559Cost of rendering telecommunication services


(809,669
)

(716,269
)

(737,407
)Depreciation and amortization (notes 9, 15 and 16)


(676,986
)

(611,435
)

(463,720
)Dealer commissions


(354,608
)

(300,487
)

(286,007
)Employee related costs (note 11)


(294,045
)

(249,757
)

(210,545
)Sites and network maintenance


(175,971
)

(151,816
)

(123,176
)Advertising and promotion


(119,675
)

(122,986
)

(132,351
)Phone subsidies


(124,448
)

(108,714
)

(143,634
)External services


(110,344
)

(81,537
)

(74,080
)Operating lease expense (note 31)


(82,929
)

(72,749
)

(59,486
)Billing and payments


(27,831
)

(21,005
)

(16,853
)Loss on disposal and impairment of assets, net (note 9 and 16)


(16,257
)

(7,246
)

(9,166
)Other expenses


(85,756
)

(77,703
)

(75,912
)Operating profit


1,041,730


851,023


818,222


F-48

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

10. ANALYSIS OF OPERATING PROFIT (Continued)

The
following table summarizes the aggregate amounts paid to Millicom's auditors for the years ended December 31, 2010, 2009 and 2008.

2010

2009

2008US$ '000

US$ '000

US$ '000Audit Fees


4,237


4,179


4,276Audit Related Fees


604


115


15Tax Fees





61


52All Other Fees


55


71


5Total


4,896


4,426


4,348


Audit related services consist principally of consultations related to financial accounting and reporting standards, including making recommendations to
management regarding internal controls and the issuance of certifications of loan covenant compliance required by Millicom's debt agreements. Tax
services consist principally of tax planning services and tax compliance services. Other services are services not included in the other categories.

11. EMPLOYEE RELATED COSTS

Employee related costs are comprised of the following:

2010

2009

2008US$ '000

US$ '000

US$ '000Wages and salaries


(196,318
)

(183,220
)

(141,931
)Social security


(21,094
)

(20,105
)

(17,863
)Share based compensation (see note 24)


(30,718
)

(10,175
)

(13,619
)Other employee related costs(i)


(45,915
)

(36,257
)

(37,132
)Total


(294,045
)

(249,757
)

(210,545
)






The average number of permanent employees during the years ended December 31, 2010, 2009 and 2008 was as follows:

2010

2009

2008Continuing operations


6,109


5,937


4,861Discontinued operations


237


1,852


1,812Total average number of permanent employees


6,346


7,789


6,673


F-49

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

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

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

2010

2009

2008US$ '000

US$ '000

US$ '000Change in fair value of derivatives


(14,597
)




Other exchange (losses) gains, net


(15,105
)

(32,181
)

(52,265
)Other non operating (expenses) income, net


(29,702
)

(32,181
)

(52,265
)


13. TAXES

Group taxes mainly comprise income taxes of subsidiaries and joint ventures. As a Luxembourg commercial company, the Company is subject to all taxes applicable to a Luxembourg
Société Anonyme.
Due to losses incurred and brought forward, no taxes based on Luxembourg-only income have been computed for 2010, 2009 or 2008.

The
effective tax rate on continuing operations is 12% (2009: 27%, 2008: 40%). Currently Millicom operations are in jurisdictions with income tax rates of 10% to 40% (2009 and 2008: 10%
to 40%).

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

2010

2009

2008%

%

%Weighted average statutory tax rate(i)


23


23


22Derecognition (recognition) of previously unrecorded tax losses








10Unrecognized current year tax losses(ii)


7


9


10Non taxable income and non deductible expenses, net





(1
)

(1
)Taxes based on revenue


(7
)

(8
)

(8
)Income taxes at other than statutory tax rates


2


3


4Withholding taxes on transfers between operating and non operating entities


3


3


3Non-taxable gain arising from revaluation of previously held interests


(16
)

(2
)

Effective tax rate


12


27


40




F-50

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

13. TAXES (Continued)

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

2010

2009

2008US$ '000

US$ '000

US$ '000Current income tax charge


(223,077
)

(201,230
)

(192,427
)Net deferred income tax benefit (expense)


(4,019
)

13,232


(76,386
)Charge for taxes


(227,096
)

(187,998
)

(268,813
)


The tax effects of significant items comprising the Group's net deferred income tax asset and liability as of December 31, 2010 and 2009 are as follows:

Consolidated
balance sheets

Consolidated
income statements2010

2009

2010

2009US$ '000

US$ '000

US$ '000

US$ '000Loss carry-forwards





5,877


(5,877
)

(1,945
)Provision for doubtful debtors


4,206


3,604


602


408Temporary differences between book and tax basis of intangible assets and property, plant and equipment


(45,456
)

(36,631
)

(2,398
)

(2,411
)Deferred tax liabilities recognized as part of the acquisition of Celtel (see note 4)


(105,392
)




8,460


Deferred tax liabilities recognized as part of the acquisition of Amnet (see note 4)


(25,805
)

(32,042
)

6,237


9,485Deferred tax liabilities recognized as part of the acquisition of Navega (see note 4)


(3,126
)

(2,962
)

936


540Temporary differences between book and tax basis of other assets and liabilities


3,613


15,592


(11,979
)

7,155Deferred tax benefit (expense)








(4,019
)

13,232Deferred tax liabilities, net


(171,960
)

(46,562
)Reflected in the statements of financial position as follows:Deferred tax assets


23,959


19,930Deferred tax liabilities


(195,919
)

(66,492
)


Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.

No
deferred tax liability was recognized in respect of $3,659 million (2009: $1,955 million) of unremitted earnings of subsidiaries and joint ventures, because the Group
was in a position to control the timing of the reversal of the temporary differences and it was unlikely that such differences would reverse in a
foreseeable future. Furthermore, it was not practicable to estimate the amount of unrecognized deferred tax liabilities in respect of these unremitted earnings.

F-51

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

13. TAXES (Continued)

Unrecognized
net operating losses and other tax loss carry-forwards relating to continuing operations amounted to $775 million as at December 31, 2010 (2009:
$885 million, 2008: $610 million) with expiry periods of between 1 and 5 years except for $378 million of losses which do not expire. In addition the Company has
unrecognized net operating losses of $1,833 million (2009: $1,971 million) which do not expire.

14. EARNINGS PER SHARE

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

Diluted
earnings per share are calculated by dividing the net profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of dilutive potential shares.

The
following reflects the net profit and share data used in the basic and diluted earnings per share computations:

2010

2009

2008US$ '000

US$ '000

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


1,643,447


551,390


516,316Net profit attributable to equity holders from discontinued operations


8,786


298,858


1,200Net profit attributable to equity holders used to determine the basic earnings per share


1,652,233


850,788


517,516DilutedNet profit attributable to equity holders from continuing operations


1,643,447


551,390


516,316Interest expense on convertible debt (note 26)








760Net profit attributable to equity holders from continuing operations used to determine the diluted earnings per share


1,643,447


551,390


517,076Net profit attributable to equity holders from discontinued operations


8,786


298,858


1,200Net profit attributable to equity holders used to determine the diluted earnings per share


1,652,233


850,788


518,276


F-52

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

14. EARNINGS PER SHARE (Continued)



2010

2009

2008'000

'000

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


108,219


108,527


107,869Effect of dilution:Potential incremental shares as a result of share options


177


223


434Assumed conversion of convertible debt








343Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of dilution


108,396


108,750


108,646


To calculate earnings per share amounts for the discontinued operations, the weighted average number of shares for both basic and diluted amounts is as per the
table above.

15. INTANGIBLE ASSETS

The movements in intangible assets in 2010 were as follows:

Goodwill

Licenses

Other(ii)

TotalUS$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


547,986


218,510


278,341


1,044,837Change in the composition of the Group (see note 4,5)


869,559


30,519


383,837


1,283,915Additions (see note 9)





26,190


27,246


53,436Amortization charge(i)





(39,353
)

(78,801
)

(118,154
)Transfers





1,751


(1,751
)

Other movements





(80
)

(2,167
)

(2,247
)Exchange rate movements


10,280


659


10,119


21,058Closing balance, net


1,427,825


238,196


616,824


2,282,845As at December 31, 2010Cost or valuation


1,427,825


401,306


839,112


2,668,243Accumulated amortization





(163,110
)

(222,288
)

(385,398
)Net


1,427,825


238,196


616,824


2,282,845




F-53

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

15. INTANGIBLE ASSETS (Continued)

The movements in intangible assets in 2009 were as follows:

Goodwill

Licenses

Other(ii)

TotalUS$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


507,295


223,678


259,377


990,350Change in the composition of the Group (see note 4)


38,203


7,566


51,442


97,211Transfer to assets held for sale (see note 6)


(298
)

(8,453
)

(73
)

(8,824
)Additions (see note 9)





18,382


27,730


46,112Amortization charge(i)





(30,142
)

(57,798
)

(87,940
)Transfers





7,603


(7,603
)

Other movements





(107
)

452


345Exchange rate movements


2,786


(17
)

4,814


7,583Closing balance, net


547,986


218,510


278,341


1,044,837As at December 31, 2009Cost or valuation


547,986


338,008


413,617


1,299,611Accumulated amortization





(119,498
)

(135,276
)

(254,774
)Net


547,986


218,510


278,341


1,044,837




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

2010

2009

2008US$ '000

US$ '000

US$ '000Additions


53,436


46,112


121,375Additions from Discontinued Operations








(1,823
)Subtotal


53,436


46,112


119,552Change in suppliers advances


160





Change in capex accruals and payables


(27,358
)

(108
)

323License acquisition costs, paid in shares in Millicom Rwanda Limited








(7,159
)Cash used from continuing operations for additions from intangible assets


26,238


46,004


112,716


Impairment test of goodwill

As at December 31, 2010, management tested all goodwill for impairment. The Group determines whether goodwill is impaired at
least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit (or group of cash-generating units) to which the goodwill is
allocated.

F-54

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

15. INTANGIBLE ASSETS (Continued)

The
recoverable amount of a cash-generating unit ("CGU") or group of CGUs is determined based on discounted cash flows. The cash flow projections used (adjusted operating
profit margins, income tax, working capital, capital expenditure and license renewal cost) are extracted from financial budgets approved by management and the Board covering a period of 3 years
apart from our new business in Rwanda where 8 years has been used. The planning horizon reflects industry practice in the countries where the Group operates. Cash flows beyond this period are
extrapolated using a perpetual growth rate from 2% (2009: 1%). Apart from Millicom's operation in Sierra Leone (see note 6), no impairment losses were recorded on goodwill for the years
ended December 31, 2010 and 2009. As part of the impairment tests, sensitivity analysis was performed on the key assumptions from which it was determined that sufficient margin exists from
realistic changes to the assumptions that would have resulted in impairment.

The
recoverable amounts have been determined for the cash generating units based on the following discount rates for the years ended December 31, 2010 and 2009:

Discount rate after tax2010

2009Central America, including Amnet and Navega

9.9%14.3%

10.7%15.7%South America

9.5%15.9%

10.6%16.3%Africa

8.8%14.6%

9.7%14.8%


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

2010

2009US$ '000

US$ '000Millicom's operations in:Honduras (see note 4)


891,623


14,364Amnet Group (see note 4)


341,230


339,982Colombia


52,283


49,103El Salvador


42,053


42,053Senegal


35,209


37,706Navega Guatemala (see note 4)


24,848


23,839Other


40,579


40,939Total goodwill


1,427,825


547,986


F-55

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

16. PROPERTY, PLANT AND EQUIPMENT

Movements in tangible assets in 2010 were as follows:

Network
equipment(iv)

Land and
Buildings

Construction
in Progress

Other(i)

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


2,352,954


81,215


152,234


124,238


2,710,641Change in the composition of the Group (note 4)(iii)


118,923


2,165


3,431


5,330


129,849Additions


54,906


417


600,625


21,323


677,271Impairments and net disposals


(48,038
)

(263
)

(2,034
)

(2,560
)

(52,895
)Depreciation charge(ii)(v)


(508,339
)

(3,062
)




(47,431
)

(558,832
)Asset retirement obligations


(17,176
)

493








(16,683
)Transfers


560,413


(26,870
)

(545,093
)

11,550


Transfer to assets held for sale (see note 6)


(106,174
)










(106,174
)Exchange rate movements


(11,872
)

(370
)

(2,355
)

(913
)

(15,510
)Closing Balance


2,395,597


53,725


206,808


111,537


2,767,667As at December 31, 2010Cost or valuation


4,165,165


65,868


206,808


303,781


4,741,622Accumulated depreciation


(1,769,568
)

(12,143
)




(192,244
)

(1,973,955
)Net


2,395,597


53,725


206,808


111,537


2,767,667




F-56

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

16. PROPERTY, PLANT AND EQUIPMENT (Continued)

Movements in tangible assets in 2009 were as follows:

Network
equipment

Land and
Buildings

Construction
in Progress

Other(i)

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000Opening balance, net


2,294,605


63,805


310,475


118,339


2,787,224Change in the composition of the Group (note 4)(iii)


31,132


5


10,087


11,600


52,824Additions


21,002


1,009


654,325


15,040


691,376Impairments and net disposals


(497
)

(331
)

(9,021
)

(1,105
)

(10,954
)Depreciation charge(ii)


(479,825
)

(4,959
)




(38,711
)

(523,495
)Asset retirement obligations


24,209











24,209Transfers


720,003


22,190


(774,430
)

32,237


Transfer to assets held for sale (see note 6)


(277,218
)

(1,547
)

(36,110
)

(12,912
)

(327,787
)Exchange rate movements


19,543


1,043


(3,092
)

(250
)

17,244Closing Balance


2,352,954


81,215


152,234


124,238


2,710,641As at December 31, 2009Cost or valuation


3,601,325


100,211


152,234


254,971


4,108,741Accumulated depreciation


(1,248,371
)

(18,996
)




(130,733
)

(1,398,100
)Net


2,352,954


81,215


152,234


124,238


2,710,641




The amount of borrowing costs capitalized for the year ended December 31, 2010 was $0 (2009: $4 million).

F-57

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

16. PROPERTY, PLANT AND EQUIPMENT (Continued)

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

2010

2009

2008US$ '000

US$ '000

US$ '000Additions


693,494


770,448


1,321,316Additions from discontinued operations


(16,223
)

(79,072
)

(163,629
)Subtotal


677,271


691,376


1,157,687Change in suppliers advances


(12,072
)

(77,539
)

72,881Change in capex accruals and payables


22,480


162,421


(19,013
)Vendor financing and finance leases (see note 30)


(90,779
)

(45,399
)

(42,069
)Capitalized interests





(4,294
)

(8,398
)Cash used from continuing operations for purchase of property, plant and equipment


596,900


726,565


1,161,088


17. INVESTMENTS IN ASSOCIATES

As at December 31, 2010 Millicom's associates, included $17 million representing its 40% interest in Helios Towers Ghana acquired during the year (see
note 6).

As
at December 31, 2008 Millicom's associates, amounting to $21 million, were Navega, which was 45% held through Millicom's joint venture in Guatemala, and Navega Honduras,
which was a subsidiary of Navega. On March 13, 2009, Millicom's joint venture in Guatemala completed the acquisition of the remaining 55% interest in Navega (see note 4) and, as a
result, both Navega and Navega Honduras were reclassified from associates to joint ventures (see note 8).

18. NON-CURRENT PLEDGED DEPOSITS

As at December 31, 2010, non-current pledged deposits amounted to $50 million (2009: $53 million) and mainly related to a borrowing in Millicom's
operation in Chad (see note 26).

19. TRADE RECEIVABLES

2010

2009US$ '000

US$ '000Gross trade receivables


304,999


262,884Less: provisions for impairment of receivables


(51,741
)

(38,176
)Trade receivables, net


253,258


224,708


The nominal value less impairment of trade receivables is assumed to approximate their fair values (see note 34).

F-58

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

19. TRADE RECEIVABLES (Continued)

As
at December 31, 2010 and 2009, the ageing analysis of trade receivables is as follows:

Past due but not impairedNeither past
due nor
impaired<30 days

30-90 days

>90 days

Total2010Telecom operators


68,929


30,244


38,340


28


137,541Own customers


50,339


16,088


6,510


337


73,274Others


33,508


4,997


3,938





42,443Total


152,776


51,329


48,788


365


253,2582009Telecom operators


64,043


34,690


40,850


789


140,372Own customers


29,088


11,990


6,823


1,141


49,042Others


25,642


4,775


4,877





35,294Total


118,773


51,455


52,550


1,930


224,708


20. OTHER CURRENT ASSETS

Other current assets are comprised as follows:

2010

2009US$ '000

US$ '000Value added tax receivables


9,319


15,152Pledged deposits


7,261


9,396Escrow accounts (see note 27)


11,730


18,039Other


43,895


15,572Total other current assets


72,205


58,159


21. TIME DEPOSITS

As at December 31, 2010, time deposits amounted to $3 million (2009: $50 million bearing interest at 0.65% per annum).

22. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised as follows:

2010

2009US$ '000

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


571,158


1,247,345Cash and cash equivalents in other currencies


452,329


263,817Total cash and cash equivalents


1,023,487


1,511,162


Cash balances are diversified among leading international banks and in domestic banks within the countries where we operate.

F-59

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

23. SHARE CAPITAL

Share capital and share premium

The authorized share capital of the Company totals 133,333,200 registered shares (2009: 133,333,200). As at December 31, 2010,
the total subscribed and fully paid-in share capital and premium was $682 million (2009: $661 million) consisting of 109,053,120 (2009: 108,648,325) registered common shares
at a par value of $1.50 (2009: $1.50) each.

In
2010, the Company issued a total of 404,795 new shares (2009: 350,818 new shares), resulting from:



No
new unrestricted shares were issued to employees and directors in 2010 (2009: 921).

In
2010, the Company re-purchased 3,253,507 shares for $300 million under a share buy-back program (2009: none).

24. SHARE BASED COMPENSATION

Share options

Until May 30, 2006, share options were granted to directors, senior executives, officers and selected employees. The exercise
price of the granted options was equal to or higher than the market price of the shares on the date of grant. The options were conditional on the employee or director completing one to
five years service (the vesting period). The options were exercisable starting from one year to five years from the grant date. The options have a contractual option term of
six years from the grant date for employees and of twenty years for directors (amended in 2005). Share options grants for directors prior to 2005 had an indefinite life. Shares issued
when share options are exercised have the same rights as common shares.

The
following table summarizes information about share options outstanding and exercisable at December 31, 2010. The market price of the Company's shares as at December 31,
2010 was $95.60 (2009: $73.77).

Options outstanding

Options exercisableRange of exercise price $

Weighted
average
exercise price

Number
outstanding at
December 31,
2010

Weighted
average
exercise price

Number
exercisable at
December 31,
201020.56


20.56


50,469


20.56


50,46925.0529.75


26.93


33,332


26.93


33,33231.8835.91


34.06


99,996


34.06


99,99620.5635.91


29.06


183,797


29.06


183,797


F-60

---



Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

24. SHARE BASED COMPENSATION (Continued)

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

Date issued

Number of
options
outstanding
as at
December 31,
2010

Exercise
price $

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


133,328


25.05-35.91

Exercisable immediately. Options have an indefinite life.May 2005


35,000


20.56

Exercisable immediately. Options have a twenty year life.May 2005


15,469


20.56

Exercisable over a five year period in equal installments. Options expire after six years from date of grant.


The following table summarizes the Company's share options as of December 31, 2010, 2009 and 2008, and changes during the years then ended:

2010

2009

2008Average
exercise
price in $
per share

Number
of options

Average
exercise
price in $
per share

Number
of options

Average
exercise
price in $
per share

Number
of optionsOutstanding at beginning of year


26.21


329,788


24.23


494,120


22.60


708,003Expired/forfeited


25.05


(686
)

18.73


(25,108
)

19.02


(44,827
)Exercised


22.58


(145,305
)

20.53


(139,224
)

18.79


(169,056
)Outstanding at end of year


29.06


183,797


26.21


329,788


24.23


494,120Exercisable at end of year


29.06


183,797


28.20


243,946


27.73


252,624


In May 2006 at the Annual General Meeting, it was agreed to accelerate the vesting period for share options held by the directors from three years to one
year to correspond to the directors' one-year term in office. It was also agreed to change the term of the share options so that they no longer expire when a director is no longer a member
of the Board. In addition, the directors entered into an agreement with Millicom, whereby if Millicom is subject to a change of control the directors' share options will vest immediately and the
restricted shares will become unrestricted upon the change of control.

F-61

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

24. SHARE BASED COMPENSATION (Continued)

Restricted share grants

Starting on May 30, 2006, the grant of options was replaced by the grant of restricted shares whereby these shares cannot be
sold or transferred for 12 months. Grants to directors in 2010 were as follows:

Number
of shares

Share price
at date
of grant

2010
ExpenseUS$ '000Directors


5,277

$
81.91


432Total


5,277





432


Grants to directors in 2009 were as follows:

Number
of shares

Share price
at date
of grant

2009
ExpenseUS$ '000Directors


6,552

$
56.17


368Total


6,552





368


Compensation expense for the total number of shares awarded in 2010 and 2009 to directors was measured on the grant dates using Millicom's closing share price as
quoted on the NASDAQ National Market on those dates.

Long-term incentive plans



Long term incentive awards for 2007 ("2007 LTIPs") were approved by the Board on March 15, 2007. The awards consisted of a
performance share plan and a matching share award plan.

Shares
granted under the performance share plan vest at the end of a three year period, subject to a performance condition related to Millicom's "earnings per share" ("EPS"). The
achievement of a certain level of this condition, measured at the end of the three year period, results in the vesting of a specific percentage of shares to each employee in the plan.

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

The
total charge for the 2007 LTIPs of $15 million was recorded over the service period (2007 to 2009).

In
2010, 158,677 shares were issued under the 2007 performance share plan and 66,659 shares issued under the matching share plan.

F-62

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

24. SHARE BASED COMPENSATION (Continued)



Long term incentive awards for 2008 ("2008 LTIPs") were approved by the Board on December 4, 2007. The awards consisted of a
performance share plan and a matching share award plan, the mechanisms of which are the same as the 2007 LTIPs.

In
2010, 668 shares were issued under the 2008 performance share plan and 283 shares issued under the matching share plan.

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



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

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

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

In
2010, 612 shares were issued under the 2009 performance share plan and 27,314 shares issued under the deferred share plan.

The
total charge for the 2009 LTIPs was estimated as of December 31, 2010 at $10 million, to be recorded over the service periods (2009 to 2011).



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

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

F-63

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

24. SHARE BASED COMPENSATION (Continued)

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

Performance
shares 2010

Deferred
share awards
2010

Performance
shares 2009

Deferred
share awards
2009

Matching
share award
plan
2008

Performance
shares 2008Plan share awards


81,862


153,960


124,254


172,352


168,396


223,829Share awards granted(i)


4,167


8,127


5,867


6,658


4,732


8,317Revision for expected forfeitures


(9,872
)

(12,311
)

(22,767
)

(27,404
)

(86,432
)

(78,522
)Revision for expectations in respect of performance conditions














(57,609
)

Shares issued








(612
)

(27,314
)

(283
)

(668
)Share awards expected to vest


76,157


149,776


106,742


124,292


28,804


152,956




Bonus shares

No bonus shares were issued in 2010 or 2009. A charge of $1 million was recorded in 2008 as bonus shares.

Total share based compensation expense

Total share-based compensation for years ended December 31, 2010, 2009 and 2008 was as follows:

2010

2009

2008US$ '000

US$ '000

US$ '000Share options


7


(46
)

364Restricted share grants


432


368


7272006 LTIP





(530
)

4,0872007 LTIP


97


5,142


2,9792008 LTIP


20,467


167


4,2372009 LTIP


3,461


5,074


2010 LTIP


6,254





Bonus shares








1,225Total share-based compensation expense


30,718


10,175


13,619


F-64

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

25. OTHER RESERVES

Legal
reserve

Equity-settled
transaction
reserve

Equity
component
convertible
notes

Hedge
reserve

Currency
translation
reserve

TotalUS$ '000

US$ '000

US$ '000

US$ '000

US$ '000

US$ '000As at January 1, 2008


15,103


23,960


38,913





(32,419
)

45,557Transfer from retained profits


262














262Shares issued via the exercise of share options





(937
)










(937
)Share based compensation





11,666











11,666Issuance of shares2006 LTIP





(3,963
)










(3,963
)Conversion of part of the 4% Convertible Notes








(38,913
)







(38,913
)Currency translation movement














(60,846
)

(60,846
)As at December 31, 2008


15,365


30,726








(93,265
)

(47,174
)Transfer from retained profits


880














880Shares issued via the exercise of share options





(888
)










(888
)Share based compensation





9,807











9,807Issuance of shares2006, 2007 and 2009 LTIPs





(13,891
)










(13,891
)Currency translation movement














(13,664
)

(13,664
)As at December 31, 2009


16,245


25,754








(106,929
)

(64,930
)Transfer from retained profits


53














53Shares issued via the exercise of share options





(816
)










(816
)Share based compensation





30,286











30,286Issuance of shares2007, 2008, 2009 and 2010 LTIPs





(16,488
)










(16,488
)Cash flow hedge reserve movement











(1,700
)




(1,700
)Currency translation movement














(1,090
)

(1,090
)As at December 31, 2010


16,298


38,736





(1,700
)

(108,019
)

(54,685
)


Legal reserve

On an annual basis, if the Company reports a net profit for the year on a non-consolidated basis, Luxembourg law
requires appropriation of an amount equal to at least 5% of the annual net profit to a legal reserve until such reserve equals 10% of the issued share capital. This reserve is not available for
dividend distribution.

F-65

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

25. OTHER RESERVES (Continued)

At
the Company's Annual General Meeting in May 2010, the shareholders voted to transfer $53 thousand from retained profits to the legal reserve (May 2009: $880 thousand).

Equity-settled transaction reserve

The cost of share options and LTIPs is recognized as an increase in the equity-settled transaction reserve over the period in which the
performance and/or service conditions are rendered. When the options are subsequently exercised their cost is transferred from the equity-settled transaction reserve to the share premium. The reserve
will be transferred to the share capital and share premium when the shares under the different LTIPs vest and are issued.

Equity component convertible notes

The portion of the convertible bond representing the fair value of the conversion option at the time of issue is included in an equity
reserve.

On
January 22, 2008, Millicom converted $196 million of outstanding bonds into 5,420,235 ordinary shares and 202,236 Swedish Depository Receipts ("SDRs"). On the same day
the remaining $3 million of bonds that were not converted, including accrued interest was repaid in cash. The conversion resulted in an increase of equity amounting to $175 million in
January 2008. The equity component of the 4% Convertible Notes was then fully reversed and, for that part referred to the converted bonds, reclassified to share premium.

Currency translation reserve

For the purposes of consolidating joint ventures, associates and subsidiaries with functional currencies other than
U.S. dollars, their statements of financial position are translated to U.S. dollars using the closing exchange rate. Income statements accounts are translated to U.S. dollars at
the average exchange rates during the year. The currency translation reserve includes foreign exchange gains and losses arising from the translation of financial statements.

26. BORROWINGS

Borrowings comprised the following:

2010

2009US$ '000

US$ '000Corporate debt:10% Senior Notes





454,477Other debt and financing


2,352,036


1,892,410Total borrowings


2,352,036


2,346,887


F-66

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

Borrowings due after more than one year:

2010

2009US$ '000

US$ '000Corporate debt:10% Senior Notes





454,477Other debt and financing:8% Senior Notes


435,279


Bank financing


1,477,680


1,487,863Non-controlling shareholders


308,162


274,066Vendor financing


49,211


25,889Finance leases


41,235


4,146Total non-current other debt and financing


2,311,567


2,246,441Less: portion payable within one year


(514,995
)

(333,541
)Total other debt and financing due after more than one year


1,796,572


1,912,900


Borrowings due within one year:

2010

2009US$ '000

US$ '000Other debt and financing:Bank financing


36,876


71,896Vendor financing


3,593


28,376Finance leases





174Total current other debt and financing


40,469


100,446Portion of non-current debt payable within one year


514,995


333,541Total other debt and financing due within one year


555,464


433,987


F-67

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

The following table provides details of net debt change for the years 2010, 2009 and 2008:

2010

2009

2008US$ '000

US$ '000

US$ '000Net debt at the beginning of the year


722,935


1,483,831


659,694Cash itemsProceeds from issuance of debt and other financing


1,147,585


627,872


1,206,607Repayment of debt and other financing


(1,396,997
)

(506,588
)

(664,294
)Net (increase) decrease in cash and cash equivalents


487,675


(836,967
)

500,402(Purchase) disposal of time deposits


46,953


(50,061
)

(Purchase) disposal of pledged deposits


2,462


(45,652
)

4,027Non-cash itemsVendor financing and finance leases (see note 30)


90,779


45,399


48,632Interest accretion


31,825


20,908


30,53210% Senior Notes adjustment








(28,545
)Conversion of the 4% Convertible Notes








(176,247
)Debt acquired in acquisition of subsidiaries





25,962


3,387Other


77,249


(95,637
)

(19,469
)Exchange movement on debt and other financing


57,753


53,868


(80,895
)Net debt at the end of the year


1,268,219


722,935


1,483,831


Net debt includes interest bearing loans and borrowings, less cash and cash equivalents and pledged and time deposits related to bank borrowings.

10% Senior Notes

On September 9, 2010, Millicom announced early and fully redemption of the 10% Senior Notes. The 10% Senior Notes were
repurchased on November 30, 2010 for $490 million representing $459 million of principal, $23 million of interest to December 1, 2010 and $8 million early
redemption penalty.

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

F-68

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

Other Debt and Financing

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

2010

2009US$ '000

US$ '000Colombia(i)


522,994


508,904El Salvador(ii)


435,279


159,332Honduras(iii)


207,277


100,339Tanzania(iv)


207,086


212,405Guatemala(v)


163,631


100,351Ghana(vi)


158,183


137,650Amnet(vii)


133,816


247,334Chad(viii)


107,227


94,157Paraguay(ix)


105,700


59,931Bolivia(x)


99,085


99,075DRC(xi)


94,151


78,865Other


117,607


94,067Total other debt and financing


2,352,036


1,892,410Of which:Due after more than 1 year


1,796,572


1,458,423Due within 1 year


555,464


433,987


Other significant individual financing facilities are described below:

(i)    Colombia

In
March 2008, Colombia Movil S.A. E.S.P ("Colombia Movil"), Millicom's operation in Colombia, entered into a COP391 billion, 5 year facility with a club of
Colombian banks. This facility bears interest at Deposits to Fixed Terms ("DTF") plus 4.5% and is 50% guaranteed by the Company. As at December 31, 2010 $176 million (2009:
$191 million) was outstanding on this facility.

Colombia
Movil S.A. E.S.P. also had local currency loans from its non-controlling shareholders outstanding as at December 31, 2010 of $308 million (2009:
$274 million). These loans bear interest at DTF plus 4.15% and mature between 2011 and 2013.

In
addition, as at December 31, 2010 Colombia Movil S.A. E.S.P. had $39 million (2009: $44 million) of other debt and financing, in US$ and local currency.

(ii)   El Salvador

On
September 23, 2010, Telemovil Finance Co. Ltd., a fully owned subsidiary of Millicom in the Cayman Islands issued $450 million aggregate principal amount
of 8% Senior Unsecured Guaranteed Notes (the "8% Senior Notes") due on October 1, 2017. The 8% Senior Notes were issued for $444 million representing 98.68% of the aggregate principal
amount. Distribution and other transaction fees of $9 million reduced the total proceeds from issuance to $435 million. The 8% Senior Notes have

F-69

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

an
8% per annum coupon with an 8.25% yield and are payable semi-annually in arrears on April 1 and October 1. The effective interest rate is 8.76%.

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

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



October 1, 2014


104%October 1, 2015


102%October 1, 2016


100%




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

In
September 2006, Telemovil El Salvador S.A., Millicom's operation in El Salvador, entered into a $200 million 5 year loan. The loan was syndicated amongst a
group of local and international banks and was arranged by ABN AMRO, Citigroup and Standard Bank. The loan bears interest at $ LIBOR plus 1.75%. This loan was fully repaid in
2010. As of December 31, 2009, $130 million of this facility was outstanding.

In
December 2008, Telemovil El Salvador S.A., entered into a $12 million 2 year loan with Banco Agrícola Comercial S.A. The loan bears
interest at $ LIBOR plus 6%. This loan was fully repaid in 2010. As of December 31, 2009, $6 million of this facility was outstanding.

In
December 2009, El Salvador entered into a 2 year loan with Scotiabank, bearing interest at $ LIBOR plus 5.0%. This loan was fully repaid in 2010. As at
December 31, 2009, $23 million was outstanding.

(iii) Honduras

Telefonica
Celular S.A., Millicom's operation in Honduras, has facilities with several local banks maturing between 2012 and 2015. These facilities are in dollars and in Lempiras
and are unsecured.

F-70

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

Interest
rates are either fixed or variable, ranging as of December 31, 2010 between 6.25% and 16.5% (2009: between 7.75% and 11%). As at December 31, 2010, the amount of outstanding
debt under these facilities was $207 million. As at December 31, 2009 Millicom's share of the outstanding debt was $100 million.

(iv)  Tanzania

In
December 2008, Millicom Tanzania Limited, Millicom's operation in Tanzania entered into facilities totaling $228 million comprising of a five year local currency
syndicated tranche for TZS95 billion at the 180 days treasury Bill rate plus 3%, a seven year $116 million EKN guaranteed financing with 45% of the facility fixed at 4.1%
and 55% of the facility at $ LIBOR plus 0.665% and a seven year $40 million tranche with Proparco at $ LIBOR plus 2.5%. All tranches are 100% guaranteed by the Company. As
at December 31, 2010, the amount outstanding under these facilities was $200 million (2009: $200 million).

In
March 2007 Millicom Tanzania Limited entered into a 5 year Citi-Opic facility, bearing interest at a rate of $ LIBOR plus 2.5%, composed of a
$17.4 million $ Tranche and a Tranche in local currency up to the equivalent of $5 million. The outstanding US$ amount under these facilities as at December 31, 2010 amounted to
$7 million (2009: $12 million).

(v)   Guatemala

In
March 2009, Millicom's operation in Guatemala and its sister company Asesoria en Telecomunicaciones SA ("Asertel") entered into four facilities with 3 year maturities
for a total of $122 million with Banco de Desarollo Rural S.A., Banco Industrial S.A., Banco G&T Continental S.A., and Blue Tower Ventures Inc. Millicom's share of
these facilities amount to $48 million (2009: $67 million), out of which $7 million is guaranteed by the Company.

Comcel
also signed another 5 year facility with IFC for $100 million. As at December 31 2010, Millicom's share of the outstanding debt amounted to $64 million
(2009: $19 million), bearing interest at $ LIBOR plus 4.50%.

In
addition as at December 31, 2010, Comcel had financing of $28 million (Millicom's share of outstanding debt) with Citibank maturing at the end of 2011 bearing a fixed
rate of 4.45% (2009: $ Nil) and other financing of $16 million (2009: $14 million).

(vi)  Ghana

In
December 2007 Millicom (Ghana) Limited, Millicom's operation in Ghana, entered into a $60 million local 5 year Facility. The loan bears interest at $ LIBOR plus
2%. In parallel a $80 million offshore 7 year DFI (Development Finance Institution) financing which bears interest at $ LIBOR plus 2.25% was arranged. As at December 31,
2010, $102 million (2009: $132 million) was outstanding under these facilities.

In
December 2009 the operation entered into a 3.5 year $22 million Ericsson arranged financing with EKN and Nordea priced at $ LIBOR + 0.85% fully
guaranteed by the Company. As at December 31, 2010, $15 million was outstanding under this facility (2009: $6 million).

F-71

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

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

(vii) Amnet

In
September 2009, Millicom Cable N.V., a subsidiary of the Company, refinanced with a 2 year, $250 million senior term loan facility fully guaranteed by the Company
with Standard Bank, RBS, Nordea, DnB Nor, and Morgan Stanley. This loan agreement is allocated to the 3 main Amnet
operating entities in Costa Rica, El Salvador, and Honduras. The loan bore interest for the first six months at $ LIBOR plus 4.5%, for months seven to twelve at $ LIBOR plus 4.75%
and thereafter the margin increases by an incremental 25 basis points per quarter. As at December 31, 2009 $247 million was outstanding under this facility. During the course of 2010 the
loan was refinanced by a new $105 million 7 year club deal fixed rate facility with HSBC, Bancocolombia and Citibank bearing interest at 6.7% in Costa Rica and a $30 million
7 year bilateral fixed rate financing from Banco Industrial bearing interest at 7% in Honduras. As at December 31, 2010, $104 million was outstanding under the facility in Costa
Rica and $29 million for the facility in Honduras.

(viii)  Chad

In
May and August 2007, Millicom's operation in Chad signed respectively a $31 million 5 year Facility with China Development Bank bearing interest at $ LIBOR +2%
and a Euro15 million 5 year Facility with Proparco bearing interest at Euribor +2%. As at December 31, 2010 $13 and $8 million respectively (2009: $23 and
$12 million respectively) were outstanding under these facilities, both guaranteed by the Company.

In
May 2009, Millicom Chad entered into a XAF6 billion 5 year Facility co-arranged by Societe Generale Cameroun and Financial Bank priced at a fixed interest
rate of 7%, fully guaranteed by the Company. At the same date, Millicom Chad signed a XAF21 billion 5 year Subordinated Facility with Societe Generale Tchad with interest at TIAO +1.85%
and guaranteed by Nordea. This guarantee is secured by a pledged deposit of $45 million by the Company (see note 18). As at December 31, 2010 $12 and $43 million
respectively were outstanding under these facilities (2009: $13 and $46 million respectively).

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

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

(ix)  Paraguay

In
July 2008, Telefonica Cellular Del Paraguay, Millicom's operation in Paraguay entered into a $107 million, 8 year loan with the European Investment Bank ("EIB"). The
loan bears interest at

F-72

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

$ LIBOR
plus 0.125%. The outstanding amount as at December 31, 2010 was $100 million (2009: $50 million). The EIB loan is guaranteed for commercial risks by a group of
banks.

In
addition as at December 31, 2010, Telefonica Cellular Del Paraguay had $6 million (2009: $10 million) of other debt and financing outstanding.

(x)   Bolivia

In
December 2007, Telefonica Celular de Bolivia SA ("Telecel Bolivia"), Millicom's operation in Bolivia, signed a financing agreement for $40 million with the Nederlandse
Financieringsmaatschappij Voor Ontwikkelingslanden, N.V. (FMO), also known as the Netherlands Development Finance Company. The A tranche of $20 million was provided directly by the FMO,
is repayable over 7 years and bears interest at $ LIBOR plus 2.25%. The B tranche of $20 million is provided equally by Nordea and Standard Bank, is repayable over 5 years
and bears interest at $ LIBOR plus 2%. Both tranches are guaranteed by the Company. As of December 31, 2010, $25 million of this financing agreement was outstanding (2009:
$35 million).

In
March 2008, Telecel Bolivia signed a 4 year and 9 months financing agreement for $30 million with International Finance Corporation. The loan bears interest at
$ LIBOR plus 2% and is fully guaranteed by the Company. As of December 31, 2010, $17 million of this financing agreement was outstanding (2009: $25 million).

In
addition to the above, Telecel Bolivia had supplier financing from Huawei (at interest rates of $ LIBOR plus 2%) and FPLT amounting to $13 million at December 31,
2010 (2009: $26 million) and $44 million of other debt and financing outstanding as at December 31, 2010 (2009: $13 million). This additional debt comprises 7 bilateral
loans in local currency bearing a fixed rate ranging from 4.5% to 6.5% and maturing between December 2012 and December 2015.

(xi)  Democratic Republic of Congo

In
September 2006, Oasis S.P.R.L. ("Oasis"), Millicom's operation in the Democratic Republic of Congo, entered into a $106 million, 7 year loan from the China Development
Bank to finance equipment purchases from Huawei. The loan bears interest at $ LIBOR plus 2% and is repayable over 17 equal quarterly installments commencing in 2009. This financing is 100%
guaranteed by the Company. As of December 31, 2010, $55 million was outstanding under this facility (2009: $75 million).

In
September 2009, Oasis entered into a 7 year $50 million financing with the IFC guaranteed by Millicom and bearing interest at LIBOR +5%. As at December 31, 2010
the outstanding amount under this facility was $17 million.

In
addition at December 31, 2010, Oasis had other debt and financing of $22 million (2009: $4 million), mainly consisting of $19 million financed from Huawei,
bearing interest at Libor + 3% and guaranteed by Millicom.

F-73

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

Fair value of financial liabilities

Borrowings are recorded at amortized cost. The fair value of borrowings as at December 31, 2010 and 2009 is as follows:

2010

2009US$ '000

US$ '00010% Senior Notes





474,523Other debt and financing


2,246,644


1,878,112Fair value of total debt


2,246,644


2,352,635


When the quoted price of the borrowings in an active market is not available, the fair value of the borrowings is calculated by discounting the expected future
cash flows at market interest rates.

The
nominal value of the other financial liabilities is assumed to approximate their fair values (see note 34).

Guarantees

In the normal course of business, Millicom has issued guarantees to secure some of the obligations of some of its operations under bank
and supplier financing agreements. The tables below describe the outstanding amount under the guarantees and the remaining terms of the guarantees as of December 31, 2010 and 2009. Amounts
covered by bank guarantees are recorded in the consolidated statements of financial position under the caption "Other debt and financing" and amounts covered by supplier guarantees are recorded under
the caption "Trade payables" or "Other debt and financing" depending on the underlying terms and conditions.

As of December 31, 2010

Bank and other financing
guarantees(i)Terms

Outstanding
exposure

Maximum
exposureUS$ '000

US$ '00001 year





6,20013 years


360,084


472,23135 years


220,079


293,424More than 5 years


182,165


265,710Total(ii)


762,328


1,037,565


F-74

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

26. BORROWINGS (Continued)

As of December 31, 2009

Bank and other financing
guarantees(i)Terms

Outstanding
exposure

Maximum
exposureUS$ '000

US$ '00001 year





13 years


377,109


393,89935 years


293,542


352,603More than 5 years


130,152


155,401Total(ii)


800,803


901,903


(i)The guarantee ensures payment by the guarantor of outstanding amounts of the underlying loans in the case of non-payment by the obligor.(ii)Including discontinued operations.


Pledged assets

The Group's share of total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit or
guarantees issued by the Company as at December 31, 2010 is $1,380 million (2009: $1,172 million). The assets pledged by the Group for these debts and financings at the same date
amount to $411 million (2009: $610 million).

27. OTHER NON-CURRENT AND CURRENT PROVISIONS AND LIABILITIES

Provisions and other non-current liabilities are comprised as follows:

2010

2009US$ '000

US$ '000Non-current legal provisions (note 31)


6,416


6,461Long-term portion of asset retirement obligations


61,473


76,217Other


11,878


5,464Total


79,767


88,142


Included in non-current legal provisions are litigation contingencies of $2 million (2009: $2 million) that were assumed as part of the
Colombia Móvil S.A. acquisition. The founding shareholders of Colombia Móvil S.A. committed to reimburse Millicom for any payments relating to these
litigation contingencies. As a consequence, Millicom has booked a corresponding receivable.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

27. OTHER NON-CURRENT AND CURRENT PROVISIONS AND LIABILITIES (Continued)

Provisions
and other current liabilities are comprised as follows:

2010

2009US$ '000

US$ '000Deferred revenues


111,169


91,365Customer deposits


12,242


9,134Current legal provisions (note 31)


2,314


3,053Other tax payables


87,541


64,806Current provisions(i)


21,067


28,785Other


8,124


13,242Total


242,457


210,385






28. DIVIDENDS

On February 9, 2011 Millicom announced that the Board will propose to the Annual General Meeting of the Shareholders a dividend distribution of $1.80 per share to be paid out of
Millicom's profits for the year ended December 31, 2010 subject to the Board's approval of the 2010 Consolidated Financial Statements of the Group.

On
February 10, 2010 Millicom announced that the Board will propose to the Annual General Meeting of the Shareholders a dividend distribution of $1.40 per share to be paid out of
Millicom's profits for the year ended December 31, 2009 subject to the Board's approval of the 2009 Consolidated Financial Statements of the Group. On April 15, 2010 Millicom
announced that the Board of Millicom decided to pay a special dividend of $4.6 per share. The combined dividend of $6 per share was approved by the shareholders at the May 25, 2010 Annual
General Meeting and distributed in June 2010.

In
December 2009, the shareholders of the Company in an extraordinary general meeting approved the distribution of a gross dividend of $1.24 per share, to be paid out of Millicom's
profits for the year ended December 31, 2008. Dividend payable as at December 31, 2009 amounted to $135 million. The dividend was paid on January 5, 2010.

29. DIRECTORS' AND OFFICERS' REMUNERATION

Directors

The remuneration of the members of the Board of Directors of the Company is comprised of an annual fee and share based compensation.
Until May 2006, the Directors were issued share options. Subsequent to May 2006, the Directors are issued restricted shares. The annual fee and the share based compensation grants are proposed by the
Board and approved by the shareholders at the Annual General Meeting of Shareholders (the "AGM").

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

29. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

The
remuneration charge for the Board for the years ended December 31, 2010, 2009 and 2008 was as follows:

Other members of
the boardChairmanTotalNo. of shares

US$ '000

No. of shares

US$ '000US$ '0002010Fees





77





444


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


1,007


82


4,270


350


432Total





159





794


9532009Fees





106





584


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


1,441


81


5,111


287


368Total





187





871


1,0582008Fees





100





410


510Share based compensation:(i)Restricted shares(ii)


1,446


165


4,927


562


727Total





265





972


1,237




The number of shares and share options beneficially owned by the Directors as at December 31, 2010 and 2009 was as follows:

Chairman

Other
members of
the Board

Total2010Shares


2,318


73,158


75,476Share options





35,000


35,0002009Shares


29,969


76,292


106,261Share options


20,000


55,000


75,000


Officers

The remuneration of the Officers of the Company ("Officers") comprises an annual base salary, an annual bonus, share based
compensation, social security contributions, pension contributions and other benefits. The bonus and share based compensation plans are based on actual performance (including individual and Group
performance). Up until May 2006, the Officers were issued share options.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

29. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

Subsequent
to May 2006, the Officers were issued restricted shares. Share based compensation is granted once a year by the Compensation Committee of the Board. Since 2006, the annual base
salary and other benefits of the Chief Executive Officer ("CEO") are proposed by the Compensation Committee and approved by the Board and the annual base salary and other benefits of the Chief
Financial Officer ("CFO") and Chief Operating Officer ("COO") were set by the CEO and approved by the Board.

On
March 2, 2009, Millicom announced that the Board appointed Mikael Grahne, who has been the COO of Millicom since February 2002, to succeed Marc Beuls as President and CEO.
Since this date the position of COO no longer existed.

F-78

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

29. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

The
remuneration charge for the Officers for the years ended December 31, 2010, 2009 and 2008 was as follows:

Current
Chief
Executive
Officer

Former
Chief
Executive
Officer

Chief
Operating
Officer

Current
Chief
Financial
Officer

Former
Chief
Financial
OfficerUS$ '000

US$ '000

US$ '000

US$ '000

US$ '0002010Base salary


1,261








614


Bonus


1,823








624


Pension


385








112


Other benefits


178








74Total


3,647








1,424


Share based compensation:(i)














Shares issued/charge under long term incentive plans(ii)


2,874








1,243


Charge for share options


5











2009Base salary


1,380


2,349





625


Bonus


1,988


1,388





503


Other benefits


142











Total


3,510


3,737





1,128


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


1,598


(2,829
)(iii)




129


Charge for share options


16


10








2008Base salary





2,406


750


214


706Bonus





1,309


882


125


Pension














85Other benefits








231


7


Total





3,715


1,863


346


791Share based compensation:(i)


Shares issued/charge under long term incentive plans(ii)





3,737


1,410


23


935Charge for share options





59


29





240




F-79

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

29. DIRECTORS' AND OFFICERS' REMUNERATION (Continued)

The number of shares, share options and unvested share awards beneficially owned by senior management as at December 31, 2010 and 2009 was
as follows:

Chief
Executive
Officer

Chief
Financial
Officer

Total2010Shares


648,647


905


649,552Share options








Share awards not vested


99,431


37,720


137,1512009Shares


607,404





607,404Share options


15,040





15,040Share awards not vested


81,377


17,106


98,483


Severance payments

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

30. NON-CASH INVESTING AND FINANCING ACTIVITIES

The following table gives details of non-cash investing and financing activities for continuing operations for the years ended December 31, 2010, 2009 and 2008.

2010

2009

2008US$ '000

US$ '000

US$ '000Investing activitiesAcquisition of property, plant and equipment (see note 16)


(90,779
)

(45,399
)

(42,069
)Asset retirement obligations (see note 16)


16,683


(24,209
)

(11,987
)Financing activitiesVendor financing and finance leases (see note 16)


90,779


45,399


42,069Share based compensation (see note 24)


30,718


10,175


13,619


31. COMMITMENTS AND CONTINGENCIES

Operational environment

Millicom has operations in emerging markets, namely Latin America and Africa, where the regulatory, political, technological and
economic environments are evolving. As a result, there are uncertainties that may affect future operations, the ability to conduct business, foreign exchange transactions and debt repayments and which
may impact upon agreements with other parties. In the normal course of business, Millicom faces uncertainties regarding taxation, interconnect, license renewal and tariff arrangements, which can have
a significant impact on the long-term economic viability of its operations.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

31. COMMITMENTS AND CONTINGENCIES (Continued)

Litigation

The Company and its operations are contingently liable with respect to lawsuits and other matters that arise in the normal course of
business. As of December 31, 2010, the total amount of claims against Millicom's operations was $143 million (December 31, 2009: $48 million) of which $6 million
(December 31, 2009: $11 million) relate to joint ventures. As at December 31, 2010, $9 million (December 31, 2009: $10 million) has been provided for these
claims in the consolidated
statement of financial position. Management is of the opinion that while it is impossible to ascertain the ultimate legal and financial liability with respect to these claims, the ultimate outcome of
these contingencies is not anticipated to have a material effect on the Group's financial position and operations.

Sentel GSM S.A. ("Sentel") license

The Sentel license to provide mobile telephony services in the Republic of Senegal has been challenged by the Senegalese authorities.
As of today, Sentel continues to provide telephony services to its customers and effectively remains in control of the business. However, the government of the Republic of Senegal published on
November 12, 2008 a decree dated as of 2001 that purports to revoke Sentel's license.

Sentel's
twenty year license was granted in 1998 by a prior administration, before the enactment in 2002 of the Senegal Telecommunications Act. Although the current Senegalese
government has, since 2002, acknowledged the validity of the Sentel license, it has also requested that Sentel renegotiate the terms of the license. Sentel has indicated its willingness to negotiate
only certain enhancements to the license and data services and the extension of the duration of the license.

On
November 11, 2008 Millicom International Operations B.V. (MIO B.V.), a wholly-owned Millicom subsidiary and Sentel instituted arbitration proceedings with the
International Center for the Settlement of Investment Disputes (ICSID) against the Republic of Senegal under provisions of the Sentel license and international law. MIO B.V. and Sentel seek
compensation for the purported expropriation of the Senegal license and monetary damages for breach of the license.

On
the same day, the Republic of Senegal instituted court proceedings in the Republic of Senegal against Millicom and Sentel and sought court approval for the revocation of Sentel's
license and sought damages against Sentel and Millicom.

In
July 2010, the ICSID panel ruled that it has jurisdiction over the claims brought by Sentel and MIO B.V., overruling the objections to ICSID's jurisdiction made by the Republic
of Senegal. On November 10, 2010, the Republic of Senegal withdrew its action against Sentel and Millicom in the court proceedings in Senegal. ICSID has scheduled a hearing on the merits of the
case to begin in November 2011.

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

31. COMMITMENTS AND CONTINGENCIES (Continued)

Lease commitments

Operating leases:

The Group has the following annual operating lease commitments as of December 31, 2010 and 2009.

2010

2009US$ '000

US$ '000Operating lease commitmentsWithin: one year


63,375


66,223Between: one to five years


235,195


226,289After: five years


143,390


139,894Total


441,960


432,406


Operating leases comprise mainly of lease agreements relating to land and buildings. The operating lease terms and conditions reflect normal market conditions.
Total operating lease expense from continuing operations was $83 million in 2010 (2009: $73 million, 2008: $59 millionsee note 10).

Finance leases:

The Group's future minimum payments on finance leases were $120 million at December 31, 2010 and mainly comprised leased
towers in Ghana under 12 year leases (see note 16). Other financial leases are not material and mainly consist of lease agreements relating to vehicles used by the Group.

The
Group has the following tower finance lease liabilities as of December 31, 2010 and 2009.

2010

2009US$ '000

US$ '000Finance lease commitmentsWithin: one year


6,874


Between: one to five years


33,438


After: five years


79,430


Total


119,742





Capital commitments

As of December 31, 2010 the Company and its subsidiaries and joint ventures have fixed commitments to purchase network
equipment, land and buildings and other fixed assets for a value of $207 million (2009: $186 million), of which $19 million (2009: $35 million) relate to joint ventures,
from a number of suppliers.

In
addition, Millicom is committed to supporting Colombia Móvil S.A., its operation in Colombia, through loans and warranties. The maximum commitment is
$308 million and remains until the time the total support from Millicom equals the support from the founding shareholders of Colombia Móvil S.A.

F-82

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

31. COMMITMENTS AND CONTINGENCIES (Continued)

Contingent assets

Due to late delivery by suppliers of network equipment in various operations, Millicom is entitled to compensation. This compensation
is in the form of discount vouchers on future purchases of network equipment. The amount of vouchers received but not recognized as they had not yet been used as at December 31, 2010 was
$1 million (2009: $5 million).

Dividends

The ability of the Company to make dividend payments is subject to, among other things, the terms of indebtedness, legal restrictions
and the ability to repatriate funds from Millicom's various operations. As at December 31, 2010, $60 million (December 31, 2009: $46 million) of Millicom's retained profits
represent statutory reserves and are undistributable to owners of the Company.

Foreign currency forward contracts

As of December 31, 2010, the Group held foreign currency forward contracts to sell Colombian Pesos in exchange for United States
Dollars for nominal of $84 million. Net exchange losses on these forward contracts for the year were $15 million.

Ownership agreements with non-controlling shareholders

As of December 31, 2010 agreements with non-controlling shareholders to increase Millicom's ownership of its cable
businesses in El Salvador from 55% to 100% and in Honduras from 100% to 66.7% were pending regulatory approval.

32. RELATED PARTY TRANSACTIONS

Kinnevik

The Company's principal shareholder is Investment AB Kinnevik ("Kinnevik") and subsidiaries. Kinnevik is a Swedish holding
company with interests in the telecommunications, media, publishing, paper industries and financial services. As of December 31, 2010 and 2009, Kinnevik owned approximately 35% of Millicom.

During
2010 and 2009, Kinnevik did not purchase any Millicom shares.

Services purchased and sold to related companies

For the year ended December 31, 2010 the Group made purchases for an amount of $4 million (2009:
$1 million; 2008: $3 million) and had outstanding balances as at December 31, 2010 of $1 million (as at December 31, 2009: $1 million) with related parties.
These related parties are companies where Kinnevik is the principal shareholder. The services purchased and supplied covered fraud detection, network and IT support, acquisition of assets and customer
care systems. These purchases were made on an arm's length basis.

There
were no sales to related companies. As of December 31, 2010 and 2009, Millicom had no receivables from related parties.

F-83

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

33. FINANCIAL RISK MANAGEMENT

Terms, conditions and risk management policies

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

Interest rate risk

Interest rate risk generally arises on borrowings. Borrowings issued at floating rates expose the Group to cash flow interest rate
risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group's exposure to risk of changes in market interest rates relates to both of the above. To manage the
risk, the Group's policy is to maintain a combination of fixed and floating rate debt with target for the debt to be equally distributed between fixed and variable rates. The Group actively monitors
borrowings against target and applies a dynamic interest rate hedging approach. The target mix between fixed and floating rate debt is reviewed periodically. The purpose of Millicom's policy is to
achieve an optimal balance between cost of funding and volatility of financial results, while taking into account market conditions as well as our overall business strategy. At December 31,
2010, approximately 36% of the Group's borrowings are at a fixed rate of interest or for which variable rates have been swapped for fixed rates under interest rate swaps (2009: 24%).

To
comply with internal policies, in January 2010 Millicom entered into an interest rate swap to hedge the interest rate risk of the floating rate debt in three different countries
(Tanzania, DRC and Ghana). The interest rate swap was issued in January 2010 for a nominal amount of $100 million, with maturity January 2013. If Millicom had entered into the swap agreement on
December 31, 2009, 28% of Group's borrowings would have been at a fixed rate of interest.

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

F-84

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

33. FINANCIAL RISK MANAGEMENT (Continued)

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

Amounts due within1 year

1-2 years

2-3 years

3-4 years

4-5 years

>5 years

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


69,761


36,361


60,987


64,885


70,409


549,062


851,465Weighted average nominal interest rate


5.69%


6.19%


6.35%


5.89%


6.66%


8.81%


7.87%Floating rate


485,703


334,637


193,167


246,496


155,378


85,190


1,500,571Weighted average nominal interest rate


7.25%


6.25%


6.39%


6.29%


6.72%


4.55%


6.55%Total


555,464


370,998


254,154


311,381


225,787


634,252


2,352,036Weighted average nominal interest rate


7.05%


6.25%


6.38%


6.20%


6.70%


8.24%


7.03%


The table below summarizes, as at December 31, 2009, our fixed rate debt and floating rate debt:

Amounts due within1 year

1-2 years

2-3 years

3-4 years

4-5 years

>5 years

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


96,881


5,667


5,225


455,075


656


779


564,283Weighted average nominal interest rate


8.4%


6.7%


6.2%


10.0%


6.5%


6.5%


9.6%Floating rate


337,106


662,220


399,741


237,982


116,163


29,392


1,782,604Weighted average nominal interest rate


5.6%


5.7%


5.8%


6.3%


5.0%


3.6%


5.7%Total


433,987


667,887


404,966


693,057


116,819


30,171


2,346,887Weighted average nominal interest rate


6.2%


5.7%


5.8%


8.7%


5.0%


3.6%


6.6%


A one hundred basis point fall or rise in market interest rates for all currencies in which the Group had borrowings at December 31, 2010, would increase
or reduce profit before tax from continuing operations for the year by approximately $15 million (2009: $18 million).

Foreign currency risk

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

Millicom
seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities denominated in foreign currencies. In some cases, Millicom
may borrow in US dollars where it is either commercially more advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or where US dollar denominated borrowing is the
only funding source available to a joint venture or subsidiary. In these circumstances, Millicom accepts the remaining

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

33. FINANCIAL RISK MANAGEMENT (Continued)

currency
risk associated with financing its joint ventures and subsidiaries, principally because of the relatively high cost of forward cover, when available, in the currencies in which the Group
operates.

The
following table summarizes debt denominated in US$ and other currencies at December 31, 2010 and 2009.

2010

2009US$ '000

US$ '000Total US$


1,571,757


1,570,525Colombia


522,994


508,904Chad


72,754


70,449Tanzania


56,659


72,553Bolivia


43,878


12,426Ghana


40,565


Guatemala


20,552


31,819Other


22,877


80,211Total non-US$ currencies


780,279


776,362Total


2,352,036


2,346,887


At December 31, 2010, if the US$ had weakened/strengthened by 10% against the other functional currencies of our operations and all other variables held
constant, then profit before tax from continuing operations would have increased/decreased by $105 million and $129 million respectively (2009: $82 million and $90 million
respectively). This increase/decrease in profit before tax would have mainly been as a result of the conversion of the results of our operations with functional currencies other than the US dollar.
The increase in the effect of a change in the rate of the US$ between 2010 and 2009 is mainly as a result of the increase in profit before tax of operations within the Group that have functional
currencies other than the US dollar.

Non-repatriation risk

Most of the operations in which we have interests receive substantially all of their revenues in the currency of the countries in which
they operate. We derive substantially all of our revenues through funds generated by our local operations and, therefore, we rely on their ability to transfer funds to the Company.

Although
there are foreign exchange controls in some of the countries in which our mobile telephone companies operate, none of these countries currently significantly restrict the
ability of these operations to pay interest, dividends, technical service fees, royalties or repay loans by exporting cash, instruments of credit or securities in foreign currencies. However, existing
foreign exchange controls may be strengthened in countries where we operate, or foreign exchange controls may be introduced in countries where we operate that do not currently impose such
restrictions, in which case, the Company's ability to receive funds from the operations will subsequently be restricted, which would impact our ability to pay dividends to our shareholders.

In
addition, in some countries, it may be difficult to convert large amounts of local currency into foreign currency because of limited foreign exchange markets. The practical effects of
this are time

F-86

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

33. FINANCIAL RISK MANAGEMENT (Continued)

delays
in accumulating significant amounts of foreign currency and exchange risk, which could have an adverse effect on the Group's results of operations.

Credit risk

Financial instruments that potentially subject the Group to credit risk are primarily cash and cash equivalents, pledged deposits,
letters of credit, trade receivables, amounts due from joint venture partners, supplier advances and other current assets. Counterparties to agreements relating to the Group's cash and cash
equivalents, pledged deposits and letters of credit are significant financial institutions with investment grade ratings. Management does not believe there are significant risks of
non-performance by these counterparties and management has taken steps to diversify its banking partners so as to avoid any significant exposure to specific banks.

A
large portion of turnover comprises prepaid airtime. For customers for whom telecom services are not prepaid, the Group follows risk control procedures to assess the credit quality of
the customer, taking into account its financial position, past experience and other factors.

Accounts
receivable are mainly derived from balances due from other telecom operators. Credit risk of other telecom operators is limited due to the regulatory nature of the telecom
industry, in which licenses are normally only issued to credit worthy companies. The Group maintains a provision for impairment of trade receivables based upon expected collectability of all trade
receivables.

As
the Group has a large number of internationally dispersed customers, there is no significant concentration of credit risk with respect to trade receivables.

Liquidity risk

Liquidity risk is defined as the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities. The Group has incurred significant indebtedness but also has significant cash balances. Millicom evaluates its ability to meet its obligations on an ongoing basis using a recurring
liquidity planning tool. This tool considers the operating net cash flows generated from its operations and the future cash needs for borrowing and interest payments and capital and operating
expenditures required in maintaining and developing local business.

The
Group manages its liquidity risk through use of bank overdrafts, bank loans, vendor financing, Export Credit Agencies and Direct Financial Institutions ("DFI") and finance leases.
Millicom believes that there is sufficient liquidity available in our markets to meet ongoing liquidity needs. Additionally, Millicom is able to arrange offshore funding through the use of Export
Credit Agency guarantees and
DFIs (IFC, PROPARCO, DEG and FMO), who have been established specifically to finance development in our markets. Millicom is diversifying its financing with commercial banks representing about 70% of
its gross financing, Direct Financial Institutions 15%, suppliers 2% and partners 13%. The Group is therefore not dependent on a few sources of financing but is relying on various financing
opportunities.

F-87

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

33. FINANCIAL RISK MANAGEMENT (Continued)

The
tables below summarize the maturity profile of the Group's net financial liabilities at December 31, 2010 and 2009.

Year ended 31 December 2010

Less than
1 year

1 to 5 years

>5 years

TotalUS$ '000

US$ '000

US$ '000

US$ '000Total borrowings (see note 26)


(555,464
)

(1,162,320
)

(634,252
)

(2,352,036
)Cash and cash equivalent


1,023,487








1,023,487Time deposit


3,106








3,106Pledged deposit (relating to bank borrowings)


7,261


49,963


0


57,224Net cash (debt)


478,390


(1,112,357
)

(634,252
)

(1,268,219
)Future interest commitments(i)


(145,664
)

(346,193
)

(26,109
)

(517,966
)Trade payables (excluding accruals)


(315,058
)







(315,058
)Derivative financial instruments





(18,250
)




(18,250
)Other financial liabilities (including accruals)


(734,448
)







(734,448
)Trade receivables


253,258








253,258Other financial assets


200,630


17,754





218,384Net financial asset (liability)


(262,892
)

(1,459,046
)

(660,361
)

(2,382,299
)




Year ended 31 December 2009

Less than
1 year

1 to 5 years

>5 years

TotalUS$ '000

US$ '000

US$ '000

US$ '000Total borrowings (see note 26)


(433,987
)

(1,882,729
)

(30,171
)

(2,346,887
)Cash and cash equivalent


1,511,162








1,511,162Time deposit


50,061








50,061Pledged deposit (relating to bank borrowings)


9,396


53,333





62,729Net cash (debt)


1,136,632


(1,829,396
)

(30,171
)

(722,935
)Future interest commitments(i)


(142,709
)

(230,392
)

(1,263
)

(374,364
)Trade payables (excluding accruals)


(341,707
)







(341,707
)Other financial liabilities (including accruals)


(565,967
)







(565,967
)Trade receivables


224,708








224,708Other financial assets


150,518


7,965





158,483Net financial asset (liability)


461,475


(2,051,823
)

(31,434
)

(1,621,782
)




Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital
ratios in order to support its business and maximize shareholder value.

The
Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may make dividend
payments to shareholders, return capital to shareholders or issue new shares. Millicom is rated by one independent rating agency, namely Moody's, which upgraded Millicom's rating by one notch to Ba1,

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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

33. FINANCIAL RISK MANAGEMENT (Continued)

which
is just one notch below investment grade. The Group monitors capital using primarily a net debt to adjusted operating profit ratio, as well as a set of other indicators.

2010

2009US$ '000

US$ '000Net debt


1,268,219


722,935Adjusted operating profit (see note 9)


1,840,624


1,545,459


Ratio

RatioNet debt to adjusted operating profit ratio


0.7


0.5


The Group reviews it gearing ratio (net debt divided by total capital plus net debt) periodically. Net debt includes interest bearing loans and borrowings, less
cash and cash equivalents and pledged deposits related to bank borrowings. Capital represents equity attributable to the equity holders of the parent.

2010

2009US$ '000

US$ '000Net debt


1,268,219


722,935Equity


3,159,011


2,310,130Net debt and equity


4,381,680


3,106,738Gearing ratio


29%


23%


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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

34. FINANCIAL INSTRUMENTS

The following table shows the carrying and fair values of Millicom's financial instruments, by category, as of December 31, 2010 and 2009:

Carrying value

Fair value2010

2009

2010

2009US$ '000

US$ '000

US$ '000

US$ '000FINANCIAL ASSETSLoans and receivablesPledged deposits


49,963


53,333


49,963


53,333Other non-current assets


17,754


7,965


17,754


7,965Trade receivables, net


253,258


224,708


253,258


224,708Amounts due from joint venture partners


99,497


52,590


99,497


52,590Prepayments and accrued income


89,477


65,064


89,477


65,064Other current assets


72,205


58,159


72,205


58,159At fair value through profit and lossTime deposit


3,106


50,061


3,106


50,061Cash and cash equivalents


1,023,487


1,511,162


1,023,487


1,511,162Total


1,608,747


2,023,042


1,608,747


2,023,042Current


1,541,030


1,961,744


1,541,030


1,961,744Non-current


67,717


61,298


67,717


61,298FINANCIAL LIABILITIESFinancial liabilitiesDebt and financing (see note 26)


2,352,036


2,346,887


2,246,644


2,352,635Trade payables


202,707


194,691


202,707


194,691Payables and accruals for capital expenditure


278,063


276,809


278,063


276,809Derivative financial instruments


18,250





18,250


Amounts due to joint venture partners


97,919


52,180


97,919


52,180Accrued interest and other expenses


228,360


173,609


228,360


173,609Dividend payable





134,747





134,747Other liabilities


24,120


13,806


24,120


13,806Total


3,201,455


3,192,729


3,096,063


3,198,477Current


1,374,755


1,275,157


1,374,755


1,275,157Non-current


1,826,700


1,917,572


1,721,308


1,923,320


The fair value of Millicom's financial instruments is included at the amount at which the instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The fair value of all financial assets and all financial liabilities except debt and financing approximate their carrying value largely due to the
short-term maturities of these instruments. The fair values of all debt and financing have been estimated by the Group based on discounted future cash flows at market interest rates.

Effective
January 1, 2009, Millicom adopted the amendment to IFRS 7 for financial instruments that are measured in the Statement of Financial Position at fair value, which
requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:



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Table of Contents

Millicom International Cellular S.A.

Notes to the consolidated financial statements
as of December 31, 2010, 2009 and 2008 (Continued)

34. FINANCIAL INSTRUMENTS (Continued)



Derivative
financial instruments are measured with reference to Level 2.

35. SUBSEQUENT EVENTS

Dividend

On February 9, 2011 Millicom announced that the Board will propose to the Annual General Meeting of the Shareholders a dividend
distribution of $1.80 per share to be paid out of Millicom's profits for the year ended December 31, 2010 subject to the Board's approval of the 2010 Consolidated Financial Statements of
the Group.

Senegal license

As disclosed in note 31, the Sentel license to provide mobile telephony services in Senegal continues to be challenged by the
Senegalese authorities. In February 2011 the ICSID has scheduled a hearing on the merits of the case to occur in November 2011.

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Table of Contents

Shareholder information

Corporate and registered officeMillicom International Cellular SA
15 Rue Léon Laval
L-3372 Leudelange
Grand-Duchy of Luxembourg
Tel: +352 27 759 101
Fax: +352 27 759 359
RCB 40630 Luxembourg

Investor RelationsEmily Hunt
Tel: +44 7779 018539

Visit MIC's homepage athttp://www.millicom.com

Financial CalendarApril 19, 2011
First quarter results

July 19,
2011
Second quarter results

October 18,
2011
Third quarter results

February
2012
Full year results 2011

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