SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission file number 000-50121

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TeliaSonera AB(Exact name of Registrant as specified in its charter)

Sweden(Jurisdiction of incorporation)

Sturegatan 1, SE-106 63 Stockholm, Sweden(Address of principal executive offices)

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

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

Title of each class

Name of each exchange on which registeredAmerican Depositary Shares

Nasdaq National MarketShares, nominal value SEK 3.20

Nasdaq National Market(1)


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

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

Shares,
nominal value SEK 3.20: 4,675,232,069

Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý        No o

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o        Item 18 ý



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TABLE OF CONTENTS

|         |  |                                                         |  | Page
|-------- |  | ------------------------------------------------------- |  | ----
|         |  | INTRODUCTION AND USE OF CERTAIN TERMS                   |  | 1   
|         |  | FORWARD-LOOKING STATEMENTS                              |  | 2   
|         |  | PART I                                                  |  | 3   
|ITEM 1.  |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS   |  | 3   
|ITEM 2.  |  | OFFER STATISTICS AND EXPECTED TIMETABLE                 |  | 3   
|ITEM 3.  |  | KEY INFORMATION                                         |  | 3   
|3.A      |  | SELECTED FINANCIAL DATA                                 |  | 3   
|3.B      |  | CAPITALIZATION AND INDEBTEDNESS                         |  | 6   
|3.C      |  | REASONS FOR THE OFFER AND USE OF PROCEEDS               |  | 6   
|3.D      |  | RISK FACTORS                                            |  | 6   
|ITEM 4.  |  | INFORMATION ON THE COMPANY                              |  | 14  
|4.A      |  | HISTORY AND DEVELOPMENT OF THE COMPANY                  |  | 14  
|4.B      |  | BUSINESS OVERVIEW                                       |  | 15  
|4.C      |  | ORGANIZATIONAL STRUCTURE                                |  | 45  
|4.D      |  | PROPERTY, PLANTS AND EQUIPMENT                          |  | 45  
|ITEM 5.  |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS            |  | 46  
|5.A      |  | OPERATING RESULTS                                       |  | 46  
|5.B      |  | LIQUIDITY AND CAPITAL RESOURCES                         |  | 76  
|5.C      |  | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES          |  | 86  
|5.D      |  | TREND INFORMATION                                       |  | 86  
|5.E      |  | OFF BALANCE SHEET ARRANGEMENTS                          |  | 88  
|5.F      |  | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS           |  | 89  
|ITEM 6.  |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES              |  | 91  
|6.A      |  | DIRECTORS AND SENIOR MANAGEMENT                         |  | 91  
|6.B      |  | COMPENSATION                                            |  | 97  
|6.C      |  | BOARD PRACTICES                                         |  | 100 
|6.D      |  | EMPLOYEES                                               |  | 102 
|6.E      |  | SHARE OWNERSHIP                                         |  | 103 
|ITEM 7.  |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS       |  | 103 
|7.A      |  | MAJOR SHAREHOLDERS                                      |  | 103 
|7.B      |  | RELATED PARTY TRANSACTIONS                              |  | 104 
|7.C      |  | INTERESTS OF EXPERTS AND COUNSEL                        |  | 106 
|ITEM 8.  |  | FINANCIAL INFORMATION                                   |  | 106 
|8.A      |  | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION |  | 106 
|8.B      |  | SIGNIFICANT CHANGES                                     |  | 110 
|ITEM 9.  |  | THE OFFER AND LISTING                                   |  | 111 
|9.A      |  | OFFER AND LISTING DETAILS                               |  | 111 
|9.B      |  | PLAN OF DISTRIBUTION                                    |  | 112 
|9.C      |  | MARKETS                                                 |  | 112 
|9.D      |  | SELLING SHAREHOLDERS                                    |  | 113 
|9.E      |  | DILUTION                                                |  | 113 
|9.F      |  | EXPENSES OF THE ISSUE                                   |  | 113 
|ITEM 10. |  | ADDITIONAL INFORMATION                                  |  | 113 
|10.A     |  | SHARE CAPITAL                                           |  | 113 
|10.B     |  | MEMORANDUM AND ARTICLES OF ASSOCIATION                  |  | 113 
|10.C     |  | MATERIAL CONTRACTS                                      |  | 116 
|10.D     |  | EXCHANGE CONTROLS                                       |  | 117 
|10.E     |  | TAXATION                                                |  | 117 
|         |  |                                                         |  |     

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|10.F      |  | DIVIDENDS AND PAYING AGENTS                                                  |  | 122
|--------- |  | ---------------------------------------------------------------------------- |  | ---
|10.G      |  | STATEMENT BY EXPERTS                                                         |  | 122
|10.H      |  | DOCUMENTS ON DISPLAY                                                         |  | 122
|10.I      |  | SUBSIDIARY INFORMATION                                                       |  | 122
|ITEM 11.  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  | 122
|ITEM 12.  |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  | 122
|          |  | PART II                                                                      |  | 123
|ITEM 13.  |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  | 123
|ITEM 14.  |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  | 123
|ITEM 15.  |  | CONTROLS AND PROCEDURES                                                      |  | 123
|ITEM 16.  |  | [RESERVED]                                                                   |  | 123
|ITEM 16.A |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |  | 123
|ITEM 16.B |  | CODE OF ETHICS                                                               |  | 123
|ITEM 16.C |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  | 123
|          |  | PART III                                                                     |  | 125
|ITEM 17.  |  | FINANCIAL STATEMENTS                                                         |  | 125
|ITEM 18.  |  | FINANCIAL STATEMENTS                                                         |  | 125
|ITEM 19.  |  | EXHIBITS                                                                     |  | 126

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INTRODUCTION AND USE OF CERTAIN TERMS

TeliaSonera AB is a public limited liability company incorporated under the laws of Sweden. TeliaSonera was created as a result of the merger of Telia AB and
Sonera Corporation in December 2002. Unless the context otherwise requires, as used in this annual report, (i) the terms "Group," "Company," "we," "our," "TeliaSonera" and "us" refer to
TeliaSonera AB or TeliaSonera AB together with its subsidiaries depending upon the context; (ii) the term "Telia" refers to Telia AB or to Telia AB together with its subsidiaries depending upon
the context, prior to December 3, 2002, and its subsequent name change to TeliaSonera and the merger of Telia and Sonera Corporation; and (iii) the term "Sonera" refers to Sonera
Corporation or to Sonera Corporation together with its subsidiaries depending upon the context, prior to December 3, 2002, and the merger of Telia and Sonera.

We
publish our consolidated financial statements in Swedish krona. This annual report contains our audited consolidated financial statements as of and for the years ended
December 31, 2003, 2002 and 2001, which have been prepared in accordance with International Financial Reporting Standards, or IFRS/IAS. IFRS/IAS differ in certain respects from accounting
principles generally accepted in the United States, or U.S. GAAP. For a discussion of the principal differences between IFRS/IAS and U.S. GAAP relevant to TeliaSonera, together with a reconciliation
of net income and shareholders' equity reported under IFRS/IAS to net income and shareholders' equity under U.S. GAAP, see Note 45 to our consolidated financial statements.

Our
financial statements included in this annual report include the results of Sonera and the Baltic companies UAB Omnitel, AB Lietuvos Telekomas and Latvijas Mobilais Telefons SIA as
from December 3, 2002, the date at which each of these entities became consolidated subsidiaries of TeliaSonera.

In
addition, we incorporate by reference in this document the consolidated financial statements of Netia S.A., previously one of our associated companies, as of and for each of the the
years ended December 31, 2002 and December 31, 2001, as included in Netia S.A.'s annual report on Form 20-F that was filed with the Securities and Exchange Commission on June 27,
2003, and the consolidated financial statements of Netia S.A. as of and for the year ended December 31, 2003 as filed on Form 6-K with the Securities and Exchange Commission by Netia
S.A. on March 1, 2004.

References
in this annual report to "Swedish krona" and "SEK" are to the currency of Sweden. References to "euro," "euros," "€" or "EUR" are to the currency of the
European Union's Economic and Monetary Union. References in this annual report to "U.S. dollar," "$" and "USD" are to the currency of the United States of America.

In
this annual report, unless otherwise stated, Swedish krona amounts have been translated, solely for convenience, into U.S. dollars using the noon buying rate in New York City for
cable transfers in Swedish krona, as certified for customs purposes by the Federal Reserve Bank of New York (the "Noon Buying Rate"), on December 31, 2003, which was SEK 7.1950 per $1.00 (SEK
1.00 per $0.1390). On March 31, 2004, the Noon Buying Rate for the Swedish krona was SEK 7.5500 per $1.00 (SEK 1.00 per $0.1324). These translations should not be construed as a representation
that the U.S. dollar amounts actually represent, or could be converted into, Swedish krona at the rates indicated.

References
in this annual report to "Nordic countries" are to Denmark, Finland, Norway and Sweden. References to the "Baltic States," the "Baltic countries" or "Baltic region" are to
Estonia, Latvia and Lithuania.

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FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are
forward-looking statements and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "seek," "plan," "intend," "anticipate," "estimate," or "predict."
These statements are based on current plans, estimates and projections, and, therefore, you should not place too much reliance on them. Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. These factors include, but are not
limited to, the following:



We
are under no obligation to, and expressly disclaim any such obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or
otherwise.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3.A  Selected Financial Data

Selected Consolidated Financial Data

The financial data set forth below as of and for the years ended December 31, 2003, 2002 and 2001 have been derived from our audited consolidated financial
statements, which are included in Item 18 of this annual report. Financial data as of and for the years ended December 31, 2000 and 1999 have been derived from our previously published audited
consolidated financial statements not included in this document. The financial data is based on our historical results, which include the results of Sonera and the new Baltic subsidiaries Omnitel,
Lietuvos Telekomas and Latvijas Mobilais Telefons only for the period beginning December 3, 2002.

The
audited consolidated financial statements, from which the selected consolidated financial data set forth below have been derived, have been prepared in accordance with International
Financial Reporting Standards, or IFRS/IAS. For a discussion of the principal differences between IFRS/IAS and U.S. GAAP relevant to TeliaSonera, together with a reconciliation of net income and
shareholders' equity reported under IFRS/IAS to net income and shareholders' equity under U.S. GAAP, see Note 45 to our consolidated financial statements.

You
should read the following selected consolidated financial data in conjunction with the consolidated financial statements and "Item 5. Operating and Financial Review and Prospects,"
each included elsewhere in this annual report.

Solely
for the convenience of the reader, Swedish krona amounts have been translated into U.S. dollars at the rate of SEK 1.00 = $0.1390 ($1.00 = SEK 7.1950), the Noon
Buying Rate for the Swedish krona on December 31, 2003. On March 31, 2004, the Noon Buying Rate for the Swedish krona was SEK 1.00 = $0.1324 ($1.00 = SEK 7.5500).

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|                                                             |         | Year ended December 31, |     
|------------------------------------------------------------ | ------- | ----------------------- | ----
|
|
|
|INCOME STATEMENT DATA                                        |         |                         |     
|IFRS/IAS                                                     |         |                         |     
|Net sales                                                    |         | 11,455.9                |     
|Costs of production                                          |         | (6,489.0                | )   
|Gross income                                                 |         | 4,966.9                 |     
|Sales, administrative, and research and development expenses |         | (3,219.0                | )   
|Other operating revenues and expenses, net                   |         | 243.5                   |     
|Income from associated companies                             |         | 53.1                    |     
|Operating income                                             |         | 2,044.5                 |     
|Financial net                                                |         | (112.7                  | )   
|Income after financial items                                 |         | 1,931.8                 |     
|Income taxes                                                 |         | (535.1                  | )   
|Minority interests                                           |         | (134.7                  | )   
|Net income (loss)                                            |         | 1,262.0                 |     
|Earnings (loss) per share                                    |         |                         |     
|                                                             | Basic   |                         | 0.27
|                                                             | Diluted |                         | 0.27
|Cash dividend per share(1)                                   |         | 0.14                    |     
|Earnings (loss) per ADS(2)                                   |         |                         |     
|                                                             | Basic   |                         | 1.35
|                                                             | Diluted |                         | 1.35
|Cash dividend per ADS(1)(2)                                  |         | 0.69                    |     

|                                                             |         | Year ended December 31, |          
|------------------------------------------------------------ | ------- | ----------------------- | ---------
|
|
|
|Operating margin (%)(3)                                      |         | 17.8                    |          
|Return on sales (%)(4)                                       |         | 11.0                    |          
|U.S. GAAP                                                    |         |                         |          
|Net sales                                                    |         | 11,410.6                |          
|Net income                                                   |         | 1,477.1                 |          
|Earnings (loss) per share                                    |         |                         |          
|                                                             | Basic   |                         | 0.32     
|                                                             | Diluted |                         | 0.32     
|Earnings (loss) per ADS(2)                                   |         |                         |          
|                                                             | Basic   |                         | 1.58     
|                                                             | Diluted |                         | 1.58     
|Weighted average number of shares outstanding (in thousands) |         |                         |          
|                                                             | Basic   |                         | 4,667,618
|                                                             | Diluted |                         | 4,668,426
|CASH FLOW DATA                                               |         |                         |          
|IFRS/IAS                                                     |         |                         |          
|Cash flow from operating activities                          |         | 3,675.2                 |          
|Cash flow from investing activities                          |         | (478.5                  | )        
|Cash flow from financing activities                          |         | (2,281.0                | )        
|Cash flow for the year                                       |         | 915.7                   |          

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|                                  |                                            | At December 31,
|--------------------------------- | ------------------------------------------ | ---------------
|
|
|
|BALANCE SHEET DATA                |                                            |                
|IFRS/IAS                          |                                            |                
|Intangible fixed assets           |                                            | 8,592.1        
|Tangible fixed assets             |                                            | 6,832.6        
|Financial fixed assets            |                                            | 5,845.9        
|Current assets                    |                                            | 5,145.0        
|                                  | Total assets                               |                
|Shareholders' equity              |                                            | 15,621.0       
|Minority interests                |                                            | 478.3          
|Provisions                        |                                            | 2,126.1        
|Long-term debt                    |                                            | 3,595.1        
|Current debt                      |                                            | 651.4          
|Non-interest-bearing liabilities  |                                            | 3,943.7        
|                                  | Total shareholders' equity and liabilities |                
|Capital employed(5)               |                                            | 19,768.6       
|Operating capital(6)              |                                            | 16,679.1       
|Net debt(7)                       |                                            | 2,530.5        
|Net interest-bearing liability(8) |                                            | 1,229.6        
|U.S. GAAP                         |                                            |                
|Total assets                      |                                            | 27,906.5       
|Shareholders' equity              |                                            | 15,535.8       
|RATIOS                            |                                            |                
|IFRS/IAS                          |                                            |                
|Debt/equity ratio (multiple)(9)   |                                            | 0.08           
|Equity/assets ratio (%)(10)       |                                            | 56.7           

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Currency and Exchange Rate Information

We present our financial statements in Swedish krona. A significant portion of our revenues and expenses is denominated in the Swedish krona and a portion is
denominated in currencies other than the Swedish krona. The table below sets forth, for the periods and dates indicated, the average, high, low and period-end Noon Buying Rates for the
Swedish krona expressed in Swedish krona per U.S. dollar.

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Other than for the monthly information, the average Noon Buying Rates have been calculated based on the Noon Buying Rate for the last business day of each month during the relevant
period. This information is being provided to you for your convenience. These are not necessarily the rates that were used in the preparation of our financial statements and we do not make any
representation that Swedish krona amounts could have been converted into U.S. dollars at the rates shown or at any other rate for such periods or at such dates.

Solely
for the convenience of the reader, certain Swedish krona amounts in this annual report have been translated into U.S. dollars at the Noon Buying Rate on December 31, 2003,
which was $1.00 = SEK 0.1390.

Swedish Krona Exchange Rate

|Year          |  | Average |  | High    |  | Low    |  | Period End
|------------- |  | ------- |  | ------- |  | ------ |  | ----------
|
|1998          |  | 7.9658  |  | 8.3350  |  | 7.5800 |  | 8.1030    
|1999          |  | 8.3007  |  | 8.6500  |  | 7.7060 |  | 8.5050    
|2000          |  | 9.1735  |  | 10.3600 |  | 8.3530 |  | 9.4440    
|2001          |  | 10.3425 |  | 11.0270 |  | 9.3250 |  | 10.4571   
|2002          |  | 9.7233  |  | 10.7290 |  | 8.6950 |  | 8.6950    
|2003          |  | 8.0828  |  | 8.7920  |  | 7.1950 |  | 7.1950    
|October 2003  |  | 7.6957  |  | 7.8140  |  | 7.5970 |  | 7.8140    
|November 2003 |  | 7.6799  |  | 7.9150  |  | 7.5200 |  | 7.5510    
|December 2003 |  | 7.3464  |  | 8.2980  |  | 7.1950 |  | 7.1950    
|January 2004  |  | 7.2334  |  | 7.4120  |  | 7.0850 |  | 7.4120    
|February 2004 |  | 7.2630  |  | 7.4330  |  | 7.1295 |  | 7.4330    
|March 2004    |  | 7.5322  |  | 7.6620  |  | 7.3660 |  | 7.5500    

3.B  Capitalization and Indebtedness

Not applicable.

3.C  Reasons for the Offer and Use of Proceeds

Not applicable.

3.D  Risk Factors

Set forth below is a description of factors that may affect our business, results of operations and share price from time to time.



We face intensifying competition, especially in the Nordic market. Competition could lead to a decrease in the rate at which we gain new customers and to a
decrease of our market share if customers decide to switch to other providers. Increased competition has also led to declines in the prices we charge for our services and is expected to lead to
further price declines in the future, especially in our mobile services. As the largest telecommunications operator in many markets in which we operate, we may be at a competitive disadvantage in
responding to changes in the market and technological developments when compared to our typically smaller competitors.

We
have, for example, experienced significant price competition in mobile voice services from new market entrants such as Hi3G Access AB (operating under the brand name "3"), which owns
UMTS licenses in Sweden, Norway and Denmark, and expect to experience increasing competition from such new entrants. We are also experiencing increased competition from non-traditional
operators, including Mobile Virtual Network Operators (MVNOs), which are telecommunications service providers that

6

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typically
do not own their own network infrastructure but, rather, lease capacity from network operators.

As
mobile penetration rates increase in the markets in which we provide mobile services, the focus of competition is shifting from customer acquisition to customer retention. An
inability on our part to retain customers could negatively affect our profitability, since we would experience lower revenues and would incur additional selling and marketing costs to replace
customers.

With
the continuation of the trend of traditional users of fixed network services switching to mobile phone services, a trend sometimes referred to as fixed-mobile substitution, our
fixed network businesses are also expected to face increased competition from mobile operators. Moreover, new forms of telecommunications that do not use conventional tariff structures, such as
Internet telecommunications, are expected to increase the sources of competition that we will face.

Additionally,
new competition in fixed voice access in Sweden, which represents approximately ten percent of our consolidated net sales, could reduce our revenues and profitability. We
currently have approximately 100 percent of the consumer fixed voice access market in Sweden due to our history as the incumbent operator, but new legislation adopted in 2003 will open up the
fixed voice access market for competition, which may reduce our revenues. In the domestic fixed voice traffic market, we experienced a significant drop in our market share, from 100 percent to
approximately 50 percent today, after such market was opened up to competition in Sweden. As the trend of fixed-mobile substitution continues, we also face a risk that the overall fixed access
market will decline, as users may opt to use mobile services exclusively.

In
the Baltic region, we already experience strong competition from rival GSM operators and expect that both our mobile and fixed line operations will lose market share as regulation
favoring competition is adopted in line with European Union directives. The anticipated grant of additional GSM licenses in Turkey, Russia and certain Eurasian countries where we operate is also
expected to increase competition in those markets.

Slower growth in the Nordic telecommunications market may negatively affect our revenues and profitability.

The telecommunications industry in the Nordic countries is currently well developed relative to most other European countries. In particular, each of Denmark,
Finland, Norway and Sweden has among the highest mobile penetration rates and lowest mobile calling tariffs in the world. The high penetration rate in the Nordic countries will make it more difficult
for us to match our previous subscriber growth. In addition, economic growth in the Nordic countries has slowed considerably since the beginning of 2001, causing a decrease in the growth of customer
demand for telecommunications services. These trends may result in our recording slower revenue growth than we have achieved in the past, or recording flat or declining revenues in these markets.

We operate in a regulated industry and changes in, or adverse applications of, the regulations affecting us could harm our business, financial condition and
results of operations.

Our mobile and fixed line telecommunications operations are subject to regulatory and licensing requirements, either at the national level or at a transnational
level, such as by the European Union. Implementation and application of these regulations are undertaken by one or more regulatory and competition authorities which, in their discretion, may challenge
our compliance with the regulations. If we are found not to have complied with applicable regulations, we may be subject to damage awards, fines, penalties, injunctions or suspensions.

The
regulations to which we are subject impose significant limits on our flexibility to manage our business. For example, in both Sweden and Finland, we have been designated as a party
with significant

7

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market
power in certain markets in which we operate, including the fixed and mobile telecommunications markets. As a result, we are required to provide certain services on
non-discriminatory, cost-based and transparent terms, which may differ from the terms on which we would otherwise have provided those services. Although we are appealing our
designation as a mobile operator with significant market power on the Swedish national market for interconnection, there can be no assurance that the final outcome of the proceedings will be in our
favor. In addition, the legislatures in the Baltic countries are revising their telecommunications legislations in connection with their entry into the European Union. We cannot assure you that we
will not be subject to additional obligations relating to the services we provide in those countries as a result of such changes.

Additionally,
the opening up for competition of fixed voice accesses in Sweden, which represent approximately ten percent of our consolidated net sales, could reduce our revenues and
profitability. We currently have approximately 100 percent of consumer fixed voice accesses in Sweden due to our history as the incumbent operator, but new legislation adopted in 2003 will
force us to sell our access services to other operators. We have submitted a proposal to the Swedish regulator in December 2003 to approve a plan whereby we would sell wholesale access at
cost-based prices to other operators. If the Swedish regulator were to require that our wholesale pricing be set at levels below cost-based prices, our revenues and
profitability could be negatively affected.

Changes
in legislation, regulation or government policy affecting our business activities, as well as decisions by competition and other regulatory authorities or courts, including
granting, amending or revoking of licenses to us or other parties, could harm our business, financial condition and results or operations. For example, both Sweden and Finland have adopted new laws
that will significantly revise telecommunications regulation in those countries. In Finland, for example, mobile operators had to begin offering number portability by July 2003, which had a
negative impact on our Finnish mobile operations in 2003. These changes may result in additional legal obligations for us, which may have a considerable adverse impact upon our business. As a result
of potential changes in Finnish regulation, the current fixed to mobile price regime in Finland is also subject to change in the future. However, we are currently not in a position to assess the full
impact of these changes on our business, financial condition or results of operations.

For
further information regarding the regulatory regimes to which our business is subject, see "Item 4.B Business OverviewRegulation."



We conduct some of our activities as a telecommunications operator outside of the Nordic region through associated companies in which we do not have a controlling
interest, such as Turkcell Iletisim Hizmetleri A.S. in Turkey, OAO MegaFon in Russia, Lattelekom SIA in Latvia and AS Eesti Telekom in Estonia. As a result, we have limited influence over the conduct
of many of our international operator businesses. Under the governing documents for certain of these entities, certain key matters such as the approval of business plans and decisions as to timing and
amount of cash distributions require the agreement of our partners. The risk of disagreement or deadlock is inherent in jointly controlled entities. In 2003, for instance, we were involved in a
dispute with Çukurova regarding its proposal to carry out certain affiliated party transactions with Turkcell. In Russia, certain shareholders of MegaFon are involved in a dispute
relating to the ownership of a 25.1 percent interest in Megafon. Our partners may have different approaches with respect to the associated companies and we may be unable to reach agreement with
our partners.

An
important part of our strategy is to achieve majority control, where practical, in all of our operations by increasing our shareholdings in those associated companies which are
telecommunications operators. The implementation of such strategy, however, is not always within our control, but requires, among other things, willingness on the part of other existing shareholders
to dispose or accept dilution

8

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of
their shareholdings. In addition, to the extent we gain majority control of our associated companies, we cannot guarantee that we will be able to successfully manage such company or to achieve any
expected synergy benefits.

In
addition, the shareholding structure of our associated companies may change for reasons beyond our control. In Turkey, for example, regulatory actions affecting the
Çukurova Group, the other major shareholder in Turkcell, may have an impact on the ownership structure of Turkcell, or may have a negative impact on our relationship or cooperation with
the Çukurova Group. Additionally, any new partners may have strategies very different from ours. Because we do not have control of these entities, our partners may have the right to
make certain decisions on key business matters with which we do not agree. In some cases, strategic partners may choose not to continue partnerships that they have with us. Any of these factors could
impact our ability to pursue our stated strategies with respect to those entities and may harm our business, financial condition and results of operations.

The value of our investments in telecommunications companies outside of the Nordic and Baltic markets may be adversely affected by political, economic and legal
developments in these countries.

We have made a number of significant investments in telecommunications providers with operations in countries such as Turkey, Russia, Azerbaijan, Georgia,
Kazakhstan and Moldova. The political, economic and legal systems in these countries may be less predictable than in countries with more developed institutional structures. Political or economic
upheaval, changes in laws and other factors, such as legal or regulatory proceedings brought against such companies, may have a material effect upon the operations of the companies in which we have
invested and, in turn, the amount of income from, and the value of, these investments. Turkey, for example, has experienced severe political and economic crises in recent years, including periods of
hyperinflation. In addition, the political situation in each of the Eurasian countries in which Fintur has operations remains unstable, with each of Azerbaijan, Georgia and Moldova facing regional
separatist movements. Each of these nations is also experiencing financial difficulties, including weak local currencies and high external debt.

The
more significant risks of operating in emerging market countries arise from the establishment or enforcement of foreign exchange restrictions, which could effectively prevent us from
receiving profits from, or from selling our investments in, these countries. While none of the countries in which our international subsidiaries or associated companies are located currently have
foreign exchange controls that affect them significantly, all of these countries have had such controls in the recent past and we cannot assure you that they will not reinstitute such controls in the
future.

Another
risk is the potential establishment of foreign ownership restrictions in the countries in which we operate. Recently, the Kazakhstan government proposed a 49 percent
ownership limit restriction regarding Kazakh mobile operations. While such proposals were subsequently abandoned, we cannot assure you that similar legislative proposals will not be raised in
Kazakhstan or elsewhere, which could require us to divest all or a portion of our investments in these countries.

Changes in the economic, political, legal and regulatory environment and in our business plans or the business plans of our associated companies could result in
significant write-downs of asset values and could affect our ability to pay dividends.

Events in the telecommunications and technology markets, including significant declines in stock prices and market capitalizations of market participants, and
negative changes in the economic, regulatory, business or political environment, as well as our ongoing review and refinement of our business plans could result in substantial write-downs of our
assets in the future. In particular, we will regularly review the carrying value of assets such as the goodwill and fair value adjustments we recorded in connection with the merger of Telia and Sonera
in 2002 as well as assets such as the goodwill we recorded in connection with our acquisition of NetCom, a Norwegian mobile operator, in

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2000,
our tangible fixed assets and our minority interests in companies such as Infonet Services Corp., a provider of data communications, and may also in the future be required to recognize
impairment charges with respect to these assets if our expectations of future cash flows attributable to these assets change.

In
addition, we have undertaken a number of restructuring and streamlining initiatives, including the restructuring of our Danish fixed network operations and the restructuring of our
international carrier operations, which have resulted in substantial restructuring charges. While the restructuring efforts have already had a positive impact on our Danish and international carrier
operations, there can be no assurance that these businesses will become profitable in the future, and we may be required to record write-downs of the assets related to these operations in the future.

Such
potential write-downs may adversely affect our ability to pay dividends. Under Swedish law, the amount of dividends that we may pay is generally limited to profits and other
non-restricted reserves available at the end of the preceding fiscal year for our parent company or for the consolidated group, whichever is lower. Any write-down of intangible
or other assets will have the effect of reducing, or possibly eliminating, our non-restricted reserves that are available to pay dividends.

We and our associated companies are involved in a number of regulatory and legal proceedings that could have a material adverse effect upon our business,
financial condition or results of operations.

We are involved in a number of regulatory proceedings in Sweden and Finland, which, if decided against us, could have a negative effect upon our results of
operations. In addition, our associated company, Turkcell, is presently subject to a number of regulatory and legal proceedings relating to, among other things, license fees it pays to the Turkish
authorities, interconnection fees it pays to the incumbent fixed-line provider in Turkey and national roaming, which could, if determined adversely to Turkcell, have a material adverse
effect on its results of operations and financial position. Any adverse rulings against Turkcell in these matters could in turn have a negative effect upon the value of our investment in Turkcell and
on our own results of operations.

We may not realize the benefits we expect to derive from our investments in licenses and new technologies, including UMTS.

We have made investments in UMTS licenses and have invested and expect to invest substantial amounts over the next several years in the upgrading and expansion of
our network to support UMTS services and the roll-out of UMTS services. The success of our UMTS investments will depend to a large extent on the availability of services which utilize the
greater capacity of UMTS technology and that will be attractive enough to customers to generate sufficient traffic volume, the costs associated with such services and the timing of the introduction of
such services. We cannot be certain that these new services will achieve acceptance in the market, or that the demand for such services will justify the related costs to develop, upgrade and maintain
our networks and to develop and promote these services. In addition, any delays in providing UMTS-based services, whether due to problems associated with suppliers of UMTS networks,
difficulties in network construction, the unavailability of adequate UMTS-compatible handsets in sufficient supply, the lack of marketable services or otherwise, could adversely affect the
level or timing of revenues generated by UMTS services.

Moreover,
a variety of new entrants in the third generation market could intensify competition and reduce the potential profitability of providing third generation services. Possible new
entrants include MVNOs, which typically do not have their own network infrastructure and thus would not have our fixed cost burdens. Competition from companies providing Wireless Local Area Network
(WLAN) services, which are based on wireless short distance transmission networks and can deliver wireless data services at a lower cost than UMTS in concentrated areas, may also affect the market and
pricing for

10

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third
generation services. In addition, operators utilizing UMTS technology may face competition from other operators using other technological standards to deliver third generation services.

Under
the terms of our UMTS licenses and the licenses of our international UMTS minority investments, we have agreed to make significant investments in UMTS networks. If we or our UMTS
investees cannot fulfil the conditions under such UMTS licenses or obtain their modification, such licenses could be revoked or, in certain cases, we could be subject to monetary penalties.

In
particular, we have significant ongoing investment and guarantee obligations in connection with our investments in Xfera Moviles S.A., our UMTS minority investment in Spain. There can
be no assurance that any additional investments we make will assist Xfera in developing into a viable business or that we will not be required to make payments under the guarantees we have issued. For
further information relating to our financial obligations in connection with our international UMTS joint ventures, see "Item 5.F Tabular Disclosure of Contractual Obligations."



While we believe that the integration process of Telia and Sonera is substantially complete, it is still too early to tell whether we will be able to achieve the
full level of expected synergies and other benefits of the merger within the expected timescale. Our competitors may also seek to take advantage of our focus on achieving synergy benefits to gain
customers from us.

Our cooperation with Tele2 in connection with the build out and operation of a UMTS network in Sweden may not be successful.

While we were not awarded a UMTS license in Sweden in connection with a license tender held by the Kingdom of Sweden in 2000, we have entered into a cooperation
arrangement with Tele2 to build and operate a UMTS network in Sweden to exploit, through our 50 percent owned associated company Svenska UMTS-nät AB, the Swedish UMTS
license originally granted to Tele2. TeliaSonera and Tele2 are significant competitors in both the mobile and fixed line telecommunications market in Sweden. As in any associated company, there is a
risk that the partners may disagree on important aspects of the cooperation, including the funding of the company, and this risk may be magnified when the partners are competitors. A disagreement or
deadlock regarding the company or a breach by one of the parties of the material provisions of the cooperation arrangements would result in a setback to the goal of building out and operating a UMTS
network in Sweden, which, in turn, would have a negative effect on our ability to pursue our UMTS strategy. In addition, the current exemption for Svenska UMTS-nät from the
prohibition against anti-competitive agreements included in the Swedish Competition Act will expire in 2007. Thereafter, a reassessment of the cooperation will be made from a competition law
perspective. Accordingly, there can be no assurance that the Swedish Competition Authority will not in the future change its view on the cooperation, which could have a material adverse effect upon
Svenska UMTS-nät and our operations.

In
addition, we have made an aggregate capital contribution of SEK 500 million to Svenska UMTS-nät and have issued a guarantee of a maximum of SEK
3.5 billion in favor of Svenska UMTS-nät. We have also pledged our interest in Svenska UMTS-nät to its lenders. If Svenska
UMTS-nät is unsuccessful, whether due to the failure of UMTS services to achieve market acceptance, its inability to build out the network in a timely fashion, disagreements
between the parties or otherwise, we may face significant financial exposure with respect to our UMTS investment in Sweden.

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As part of our strategy, we may seek to participate in the consolidation of the telecommunications industry through acquisitions, strategic alliances or business
combinations. A failure to participate successfully in the consolidation of the industry could harm our business and our shareholders.

As part of our strategic focus, we aim to take an active role in the consolidation of the telecommunications services industry. This strategy entails a variety of
risks that could negatively affect our business, our results of operations and our financial position. There is, on the one hand, the risk that, due to competition in the identification of acquisition
opportunities or strategic partners, we will make an acquisition or enter into a strategic alliance on unfavorable terms. There is also the risk that we will not be able to successfully integrate and
manage any acquired company or strategic alliance, that the acquisition or strategic alliance will fail to achieve the strategic benefits or synergies sought and that management's attention will be
diverted away from other ongoing business concerns. In addition, any potential acquisition could negatively affect our financial position, including our credit ratings, or, if made using our shares,
dilute our existing shareholders.



We are reliant upon certain suppliers, of which there are a limited number, to manufacture and supply network equipment and related software as well as handsets
in our markets, to allow us to develop our networks and to offer our services on a commercial basis. We cannot be certain that we will be able to obtain network equipment or handsets from alternative
suppliers on a timely basis if our existing suppliers are unable to satisfy our requirements.

In
addition, we currently outsource many of our key support services, including our network construction and maintenance and directory assistance services in Sweden and Finland, from a
limited number of suppliers. In particular, in some cases, such as in connection with the sale of our entire interest in the Orbiant Group, we entered into commitments to purchase telecommunications
network construction and maintenance services and certain other products and services from such divested or partially divested businesses, which may restrict our operational flexibility in the near
future.

MegaFon, our associated GSM company operating in Russia, has significant capital needs and may be required to change its strategy if it is unable to obtain
financing on satisfactory terms.

MegaFon, a GSM operator in Russia in which we hold a 43.8 percent interest, has significant capital needs and will have to secure additional financing if
it is to implement its current strategy of becoming a provider of nationwide GSM services in Russia. In particular, MegaFon will need additional financing to build out its GSM network. We have made
capital commitments to, and issued guarantees on behalf of, MegaFon. We may need to contribute additional capital to MegaFon and/or provide additional guarantees or offer forms of credit support to
assist MegaFon in securing the necessary financing. If MegaFon is unable to secure such financing on satisfactory terms or if the Russian mobile market does
not develop as expected, MegaFon might have to revise its strategic focus, which may adversely affect its growth prospects as well as the amount of income we derive from, and the value of, the
company.

Certain
of Megafon's principal shareholders are involved in disputes regarding the share ownership of Megafon. One of the shareholders of MegaFon has also brought arbitral proceedings
against us for alleged breaches of MegaFon's shareholders' agreement. If the current shareholder deadlock is not resolved, the company may not be able to obtain financing necessary for its expansion
from its shareholders.

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Our consolidated revenues and profitability may decrease if the currencies used in our geographic areas outside of Sweden weaken against the Swedish krona.

A significant portion of our business is located outside of Sweden where the operations are conducted in currencies other than the Swedish krona. In addition,
some of our associated companies, including Turkcell, operate under currencies that are relatively volatile and may therefore fluctuate greatly against the Swedish krona. Any loss in value of any such
currencies against the Swedish krona will have a negative impact on the amount of income we derive from such operations, as reflected in our Swedish krona-denominated financial statements.

We may not be able to fully realize anticipated tax benefits resulting from earlier-recorded asset write-downs.

We have a significant deferred tax asset resulting from the write-down of Sonera's UMTS investments in Germany and Italy in 2002. Although we
currently estimate that the deferred tax asset can be realized in seven to eight years under different scenarios, there can be no assurance of sufficient taxable income in Finland within this period.
The major part of the deferred tax asset relates to tax loss carry-forwards in Finland, which expire after ten years.

In
addition, we have recorded deferred tax assets principally in connection with write-downs related to our international carrier operations and our Danish operations in 2002. There can
be no assurance, however, that we will be able to use these tax benefits in full to reduce our tax obligations in the future.

We may not be able to remain competitive and implement our strategy if we cannot recruit and retain skilled personnel.

To remain competitive and implement our strategy, we will need to recruit and retain highly skilled employees with particular expertise. In particular,
competition is intense for qualified telecommunications and information technology personnel in the Nordic countries and elsewhere. To a considerable extent, our ability to recruit and retain skilled
personnel for growth business areas will depend on our ability to offer them competitive incentive programs. The adoption of such incentive programs may require the support of our largest
shareholders, including the Kingdom of Sweden and the Republic of Finland, and no assurance can be given that such shareholders will be supportive of such proposals. If we cannot implement competitive
incentive programs, we may be unable to recruit and retain skilled employees, which may limit our ability to develop our high growth business areas and new business areas or remain competitive in our
traditional business areas.

Actual or perceived health risks or other problems relating to mobile handsets or transmission masts could lead to decreased mobile communications usage.

Concern has been expressed that the electromagnetic signals from mobile handsets and base stations, which serve as the platform for transmitting radio signals,
may pose health risks and interfere with the operation of electronic equipment, including automobile braking and steering systems. These concerns may intensify in relation to third generation handsets
and telecommunications equipment, which may emit higher maximum levels of radiation but, due to more advanced power control features and ongoing development, are not expected to emit higher average
levels of radiation than GSM handsets or equipment. In the European Union, the European Council has adopted a recommendation on the limitation of exposure of the general public to electromagnetic
fields (1999/S19/EC). These recommended levels are assessed on an ongoing basis and may be tightened based on new scientific findings. Actual or perceived risks of mobile handsets or base stations and
related publicity or litigation could reduce the growth rate, customer base or average usage per customer of our mobile communications services or may result in significant restrictions on the
location and operation of base

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stations,
any of which could have a negative impact on our business, financial condition and results of operations.

We could be influenced by the Kingdom of Sweden and the Republic of Finland, whose interests may not always be aligned with yours.

The Kingdom of Sweden holds approximately 45 percent and the Republic of Finland holds approximately 19 percent of our shares. The Kingdom of Sweden
and the Republic of Finland have, furthermore, agreed to consult each other with respect to voting on matters to be resolved by the shareholders at general meetings of the company. Accordingly, the
Kingdom of Sweden, acting alone, may have and the Kingdom of Sweden and the Republic of Finland, if they should choose to act together, will have the power to influence matters submitted for a vote of
shareholders, including the approval of the annual financial statements, declarations of dividends, capital increases in connection
with acquisitions, investments and the election and removal of members of our board of directors. The interests of the Kingdom of Sweden and the Republic of Finland in deciding these matters and the
factors they consider in exercising their votes could be different from the interests of our other shareholders.

The Kingdom of Sweden and the Republic of Finland may sell significant amounts of our shares and this could significantly depress the market price of our shares.

At the time of the merger, the Kingdom of Sweden and the Republic of Finland, which together hold approximately 64 percent of our shares, announced their
intention to reduce their TeliaSonera shareholdings during the five-year period following the closing of the merger. Neither the Kingdom of Sweden nor the Republic of Finland is under any
contractual commitment that would restrict their ability to sell any shares. It is currently not possible to assess the precise timing and manner of any future sales by the Kingdom of Sweden or the
Republic of Finland of our shares. However, any sale by the Kingdom of Sweden or the Republic of Finland of a significant number of our shares, or the public perception that these sales could occur,
may cause the market price of our shares to decline significantly and may also make it more difficult for us to issue new shares in the future.

ITEM 4. INFORMATION ON THE COMPANY

4.A    History and Development of the Company



TeliaSonera AB was created as a result of the merger of Telia AB and Sonera Corporation in December 2002. The merger of Telia and Sonera brought together
two of the leading telecommunications companies in the Nordic region to form the leading telecommunications group in the Nordic and Baltic regions. The formation of TeliaSonera in December 2002
was the culmination of a shared strategic vision of Telia and Sonera to create a leading telecommunications company in the Nordic countries.

Our
new organization has been operational since January 1, 2003. As from January 1, 2003, we present segment information based on the following principally
geographical-based reporting units: (1) Sweden, (2) Finland, (3) Norway, (4) Denmark (5) the Baltic countries, (6) Eurasia, (7) Russia,
(8) Turkey, (9) TeliaSonera International Carrier, which comprises our international wholesale telecommunications operations, and (10) TeliaSonera Holding, which comprises our
non-core/non-strategic operations to be restructured, wound up, liquidated or sold.

The
shares of TeliaSonera are listed on the Stockholm Exchange and the Helsinki Exchanges and the ADSs of TeliaSonera are quoted on the Nasdaq National Market.

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Our principal executive office is located at Sturegatan 1, SE-106 63 Stockholm, Sweden, and our telephone number is +46-8-504 550 00. Our agent in the
United States is TeliaSonera International Carrier, Inc., 2201 Cooperative Way, Suite 302, Herndon, Virginia, 20171, and its telephone number is
+1-703-546-4000.

For
information regarding our principal divestitures and capital expenditures, see "Item 5.B Liquidity and Capital ResourcesRecent Acquisitions, Investments and
Divestitures" and "Item 5.B Liquidity and Capital ResourcesCash Flows."



Telia, the leading telecommunications company in Sweden, was originally managed directly by the Swedish State as a public service corporation, Televerket,
beginning in the 1850s. In 1993, the Swedish State decided to transform Televerket into a state-owned public company through the transfer of Televerket's assets to TeleInvest AB, a limited liability
company previously incorporated in 1966 that was subsequently renamed Telia AB. Telia AB became a public limited company in 1994. During the 1980s and 1990s, Telia developed from a near monopoly to a
competitor in an open market for telecommunications.

Prior
to June 2000, all of the shares of Telia were owned by the Swedish State. In June 2000, the Swedish State sold a 29.4 percent interest in Telia in an initial
public offering to institutional and retail investors in Sweden and internationally. Telia's shares were quoted on the A-list of the Stockholm Exchange in connection with the offering.
Prior to the merger of Telia and Sonera, the Swedish State held 70.6 percent of Telia's outstanding shares.



Sonera, the leading telecommunications operator in Finland, originated as part of a state organization, the Telegraph Office of Finland, in 1917. Between 1935 and
1992, the Posts and Telecommunications of Finland, the successor to the Telegraph Office of Finland, was the only Finnish long distance and
international call operator. The monopoly in long distance and international telephone services ended in 1992, when the Finnish Council of State began granting licenses to competing telephone
operators.

Between
1990 and 1998, the Finnish State undertook a series of initiatives to make the structure of Posts and Telecommunications of Finland more market-oriented. This culminated in the
creation of a separate telecommunications company, Telecom Finland Group plc, which eventually changed its name to Sonera Group plc in 1998. In 1999, Sonera Group plc and its principal operating
subsidiary, Sonera Ltd., merged, with the merged entity assuming the name Sonera Corporation.

Prior
to November 1998, all of Sonera's shares were owned by the Finnish State. In November 1998, the Finnish State sold a 22.2 percent interest in Sonera in
connection with an initial public offering. In connection with the November 1998 offering, Sonera's shares were listed on the Helsinki Exchanges. Subsequent to the initial public offering, the
Finnish State sold additional Sonera shares to institutional and retail investors on two separate occasions. In addition, Sonera's shares, in the form of ADSs, were quoted on the Nasdaq National
Market beginning in 1999. Prior to the merger of Telia and Sonera, the Finnish State held 52.8 percent of Sonera's outstanding shares.

4.B  Business Overview

We are the leading provider of telecommunications services in the Nordic and Baltic region. We are also a leading provider of mobile services in Eurasia and have
significant holdings in leading mobile operators in Turkey and Russia. For the year ended December 31, 2003, our net sales amounted to SEK 82 billion and we had on average approximately
26,000 employees.

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The
following table sets forth a geographic breakdown of our mobile subscriptions, our fixed network access lines and our Internet subscriptions for our consolidated operations and for
our associated companies as of December 31, 2003:

|                        |  |                                    |  | Number of subscriptions
|----------------------- |  | ---------------------------------- |  | -----------------------
|
|
|Consolidated operations |  |                                    |  |                        
|Sweden                  |  | Telia                              |  | 3,838                  
|Finland                 |  | Sonera                             |  | 2,428                  
|Norway                  |  | NetCom                             |  | 1,195                  
|Denmark                 |  | Telia                              |  | 525                    
|Lithuania               |  | Omnitel, Lietuvos Telekomas        |  | 1,052                  
|Latvia                  |  | Latvijas Mobilais Telefons         |  | 534                    
|Eurasia                 |  | Kcell, Azercell, Geocell, Moldcell |  | 2,385                  
|                        |  |                                    |  |                        
|Total                   |  |                                    |  | 11,957                 
|                        |  |                                    |  |                        
|Associated companies    |  |                                    |  |                        
|Latvia                  |  | Lattelekom                         |  |                       
|Estonia                 |  | EMT, Elion                         |  | 478                    
|Russia                  |  | MegaFon                            |  | 6,175                  
|Turkey                  |  | Turkcell                           |  | 19,000                 
|                        |  |                                    |  |                        
|Total                   |  |                                    |  | 25,653                 
|                        |  |                                    |  |                        

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The following table sets forth our net sales by reporting unit for the year ended December 31, 2003, excluding Telia Mobile Finland,
Telia's mobile business in Finland, and Com Hem, Telia's Swedish cable TV business, both of which have been sold:

Reporting Unit(1)

Net sales(SEK in millions)Sweden

42,364Finland

17,697Norway

6,081Denmark

3,278Baltic countries

5,881Eurasia

2,742TeliaSonera International Carrier

4,892TeliaSonera Holding

1,982Corporate and eliminations

(3,145
)Total

81,772


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Since
the merger of Telia and Sonera in December 2002, we have substantially completed the integration of the two operations, implemented a new governance model, and at the same
time reduced our cost and capital expenditure levels and improved our profitability significantly. Our efforts to gain synergies expected as a result of the merger have also progressed faster than
planned at the time of the

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announcement
of the completion of the merger. See "Item 5.A Operating ResultsSynergies from the Merger."



Our principal strategic goals are:

Pursue Profitable Growth in Existing Markets.We are the leading telecommunications provider in the Nordic and Baltic region
as well as a leading mobile operator in Eurasia, Turkey and Russia. Our main strategic focus is on further developing our position in these markets, where we remain committed to pursuing profitable
growth.

Seek Majority Control of Associated Companies.As an important part of our strategy, we will seek, to the greatest extent
practicable in light of the realities of the local markets, to increase our percentage ownership in our associated companies. We believe that obtaining a controlling interest in our operating
companies is important, particularly in the Baltic region, to fully extract economies of scale, and to continue to develop our position in these markets in parallel with our position in the Nordic
markets.

Fortify our Position in our Home Markets.We continue to view our home market as the Nordic and Baltic countries. In Sweden,
Finland and in the three Baltic countries, we will continue to develop our offering of a full range of telecommunications services. In Norway and Denmark, we will continue to offer our customers a
focused product portfolio. Our intention is to fortify our position in our home market by continuing to simplify our services and improving customer service. Our wide range of products and services,
in combination with our broad customer base, lays the foundation for effective
packaging and increased cross-selling of services. Through our strong local presence, we also aim at enhancing our pan-Nordic communications services.

Continue to Develop Innovative and Practical Services.We seek to continue to develop innovative service and product
offerings in order to satisfy our customers' need for easy-to-use, practical services and to involve customers early on in the development process. We aim to make all of our
products and services easy to understand, easy to buy and easy to use. In order to hone our competitive edge without endangering profitability, we will aim to continue to adapt our cost structures to
market conditions in various customer segments.

Participate in the Consolidation of the European Telecommunications Service Industry.Our strong financial position, together
with our experience in implementing a successful cross-border merger, provides a strong platform from which we aim to take an active role in the consolidation of the European telecommunications
services industry. Our starting point is to build on or increase our strength in our Nordic and Baltic home market, if and when the right opportunity occurs. We only intend to pursue acquisitions that
are value enhancing and fulfil our financial return requirements and which do not jeopardize our solid financial position.



Following the completion of the merger of Telia and Sonera, we regrouped our reporting units principally along geographical lines into: Sweden, Finland, Norway,
Denmark, the Baltic countries, Eurasia, Russia, Turkey, TeliaSonera International Carrier and TeliaSonera Holding.

We
operate as an integrated company with a high degree of central management which, among other things, exercises control of overall strategic issues, synergies and improvements within
the different profit centers. Responsibility for profitability and day-to-day operations is, on the other hand, decentralized, and has been assigned to four geographic profit
centers:



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FLOW CHART

* Corporate Headquarters (which includes TeliaSonera Holding)                ** Profit Centers

Our reporting unit TeliaSonera Holding is overseen by our Chief Financial Officer and included within Corporate Headquarters for management
purposes.

The
geographic profit centers have full operational responsibility and are responsible for customer satisfaction and profitability within their individual areas.

The
profit centers TeliaSonera Sweden and TeliaSonera Finland have similar organizations. In these markets, where we offer a complete range of services, we have established four separate
customer segments: Consumer, Business, Large Corporate Customers and Operators. The Consumer segment focuses on the consumer market, our Business segment is responsible for small and medium-sized
companies, our Large Corporate Customer segment serves large companies and organizations, and our Operators segment targets service operators. The customer segments are responsible for the customer
offerings as a whole and their task is to ensure both profitability and customer satisfaction within their own segment.

Within
our profit centers TeliaSonera Sweden and TeliaSonera Finland, we have also established two functional units: (1) Products and Services and (2) Networks and
Production, which have responsibility for our group-wide product range and our network platforms. The Networks and Production unit is also responsible for our Operators segment. In
accordance with our commitments to the European Union, our network operations in Sweden and Finland are kept legally separated from our retail services business.

Within
other geographic profit centers, our operations are organized based on our offerings in each market and vary according to the demands of the local market.

The
geographic profit centers are responsible for all operational resources, including marketing, sales, product and service development as well as production and network operations. The
profit centers make operational decisions within the framework of centrally established strategies, development plans and operational plans, and pricing, purchasing and investment priorities.

We
have also established two Group-wide units: (1) Marketing, Products and Services and (2) Networks and Technology.

The
Marketing, Products and Services unit has overall responsibility for our product and service development. This responsibility comprises objectives and strategies within the area and
includes responsibility for common products and services, common research and development, brand strategies, price policies, pan-Nordic services and joint campaigns. The unit is also
responsible for approving requested deviations from centrally determined plans. In an effort to enhance services to business customers in Sweden and Finland with substantial multinational operations,
the Group-wide unit is also currently responsible for coordinating our activities and resources for approximately 20 of such

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customers.
The operational sales resources, however, fall under the responsibility of the geographic profit centers where revenues and costs are recorded for these customers.

The
Networks and Technology unit has overall responsibility for our telecommunications platforms and IT systems as well as for purchasing and contracts with key suppliers.

Additionally,
we have created several competence centers to focus on high-priority areas for our business. A competence center consists of specialists with expertise within a
particular technology or product or service area. These include, for example, service competence centers focused on subscription products, messaging products and data networking solutions; business
competence centers focused on billing, customer relationship management and enterprise resource planning systems;
technical competence centers such as architecture and strategy, multiservice backbone and access and VPN; and sourcing competence centers taking care of the purchasing for the whole group. The
competence centers are commissioned by the Group as a whole, but are organized under the geographic profit centers and serve to unify networks, products and services, which is essential for exploiting
synergies. Competence centers provide data to the Group-wide units, which then establish strategies and development targets in different areas. The strategies and targets comprise the
framework for the developmental efforts of the geographic profit centers, which is also where the costs for the competence centers are reported.



We offer a wide range of services for businesses, consumers and organizations in Sweden and also provide wholesale services to operators and service providers. We
do business on the retail market under the brands Telia and Halebop and market wholesale products under the brand Skanova. We also have extensive distribution channels in Sweden with our own customer
service and retail shops, an Internet-based sales platform and a far-reaching network of resellers, from chain electronics stores to specialized retailers. We are the leader in Sweden
within all our product areas. The Swedish market represented approximately half of our consolidated net sales in 2003.

Sweden
has nearly nine million inhabitants. Swedish trade and industry is characterized by a large number of multinational companies and, like most developed western economies, the
service sector makes up a large part of the gross domestic product (GDP). Competition on the Swedish telecommunications market is well-developed and penetration rates are high. According
to our estimates, the penetration rates in Sweden at the end of 2003 were as follows: mobile communicationsapproximately 98 percent of the population, fixed
voiceapproximately 72 percent of the population, Internet accessapproximately 36 percent of the population and broadband accessapproximately
11 percent of the population. The Swedish fixed voice market is marked by intense competition. In recent years, there has also been a significant increase in pricing pressure in the mobile
telecommunications and Internet/broadband market.

The
Swedish telecommunications market continues to exhibit growth in the areas of mobile, broadband and advanced data communications. On the other hand, fixed voice services and
traditional data services are declining, largely due to the migration from fixed to mobile communications and migration from traditional data communication capacity services to IP based network
solutions.



We have the most extensive mobile communications network infrastructure in Sweden. Our GSM network covers nearly 100 percent of the Swedish population and
75 percent of the country geographically. Alongside the GSM network, we also operate an analog network with good coverage in

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the
sparsely populated mountains and archipelagos of Sweden. In 2003, mobile communications represented 29 percent of our net sales in Sweden.

In
2003, we increased the number of mobile customers by 234,000 to 3,838,000 and the number of customers via service providers by 43,000 to 131,000. We strengthened our leading position
on the Swedish mobile market and estimate that our market share at the end of 2003 was approximately 52 percent. Pre-paid subscriptions accounted for 53 percent of our GSM
customers at the end of 2003. Our main competitors in the Swedish market are Tele2 and Vodafone.

Our
average subscriber usage in Sweden decreased from 130 minutes per month in 2002 to 128 minutes in 2003, and our average revenue per user per month in Sweden decreased from SEK 277 in
2002 to SEK 272 in 2003, in both cases, principally due to the growing number of pre-paid subscriptions as a percentage of our total subscriptions.

We
have access to one of four UMTS licenses awarded in Sweden through our network sharing agreement with Tele2. The network sharing agreement gives us access to the UMTS license held by
Svenska UMTS-nät AB, a company we own jointly with Tele2. To secure future capacity for third generation services for the longer term, Svenska
UMTS-nät intends to buy the Swedish license held by the mobile operator Orange. For a further discussion of our UMTS joint venture in Sweden, see "Item 10.C Material
Contracts."

In
March 2004, we launched third generation services commercially in Sweden. Our UMTS network currently covers more than 75 percent of the Swedish population. All of our
Swedish GSM customers will have access to our UMTS network at no extra cost. At present, there are discussions going on between the third generation service operators and the Swedish authorities
regarding the conditions of the UMTS licenses and we are actively working to achieve an understanding concerning the need for a proper balance between commercial and technical freedom in the
introduction of third generation services in Sweden.



We are the leading provider of fixed communications in Sweden, including fixed access, fixed voice, wholesale, data, Internet and broadband communications.

During
2003, the number of our fixed voice subscriptions in Sweden fell by 126,000 to 5,432,000 and the number of our ISDN channel subscriptions dropped by 59,000 to 824,000. At the
beginning of 2004, we acquired approximately 37,000 voice and Internet customers from the Nordic power company Fortum.

While
we have gradually lost market share within the Swedish fixed voice market in recent years, we remain the leading provider in Sweden. We estimate that our market share in the
Swedish fixed voice market (including the access market) was approximately 70 percent at year-end 2003. Our networks carry over 50 percent of Sweden's domestic fixed traffic
and approximately 40 percent of its international traffic. Our main competitors within fixed voice are Tele2, Telenor, ACN, MCI Corporation, Glocalnet and Song Networks.

We
are the leader in Sweden in both the dial-up Internet access and broadband access market, in which we estimate having a market share at the end of 2003 of approximately
44 percent. During 2003, our broadband customer base increased by 78,000 to 399,000 and our total Internet access customer base increased by 138,000 to 1,222,000 at the end of 2003.

The
data communications market continues to evolve in Sweden, with integrated data network solutions based on Internet (IP) technology gaining customers at the expense of services based
on traditional technologies. We estimate that our share of the data communications market at the end of 2003 was approximately 60 percent.

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We
own and operate one of six domestic nation-wide fixed networks in Sweden. We have the most extensive and sophisticated networks for fixed voice, data communications,
Internet and broadband in Sweden. Our fixed local access network reaches essentially all households and businesses in Sweden and we can offer digital accesses to most of our customers. We have
fibre-optic networks in all major cities in Sweden and a well-developed regional structure largely comprised of fibre-optic lines. We are also the leading network wholesaler in Sweden.



We are the leading telecommunications provider in the Finnish market, offering an extensive product portfolio under the Sonera brand. We are the leading provider
in Finland of mobile, broadband and corporate data services and one of the three largest operators in fixed voice services. We distribute our services in Finland through our own sales force and
customer service as well as through external resellers specialized in electronics and telecommunications. We distribute certain of our services in Finland in cooperation with IT companies and system
integrators. Our main competitors are Elisa Communications and the Finnet Group, along with a number of smaller operators and IT providers.

Finland
has well-developed trade and industry based on its traditional forestry, engineering and metal industries. The rapid-growth domestic telecommunications and
electronics industries have taken a more prominent role in the last decade, however, and have expanded to employ an increasing share of the country's five million inhabitants.

Finland
has an advanced telecommunications market with high penetration rates and usage of telecommunications services. According to our estimates, the penetration rates in Finland at
the end of 2003 were as follows: mobile communicationsapproximately 90 percent of the population, fixed voiceapproximately 50 percent of the population,
consumer Internet accessapproximately 22 percent of the population and consumer broadband accessapproximately nine percent of the population. The Finnish mobile market
is distinguished by its relatively low proportion of prepaid subscriptions and the fact that as many as 35 percent of households use only mobile communications.

On
the Finnish telecommunications market, the growth in mobile subscription penetration witnessed in earlier years is subsiding, but there is a continuous growth trend in mobile services
usage, both in voice and data services. Broadband Internet access services in Finland are exhibiting strong growth. Traditional fixed voice services in Finland have been marked by slow declines due to
migration to mobile and broadband services.



We are the leading mobile operator in Finland, with a high-quality GSM network and a broad range of mobile services. Our GSM network covers
99 percent of the Finnish population and 97 percent of the geographic area. In 2003, mobile communications represented over 60 percent of our net sales in Finland.

In
2003, our mobile subscriptions in Finland decreased by 62,000 to 2,428,000, principally due to a decline in our consumer segment customers. On the other hand, the number of
subscriptions of external service providers operating in our network increased by 142,000 to 177,000. In 2003, fewer than two percent of our mobile subscriptions were pre-paid
subscriptions. We estimate that our market share of the Finnish mobile market at the end of 2003 was over 50 percent

In
the Finnish market we compete principally with Radiolinja (Elisa) and DNA (Finnet), the largest Finnish providers having their own networks, as well as a number of service providers.
Four of the Finnish mobile service providers, including the largest providers ACN and Saunalahti, buy capacity from our network. We hold one of four UMTS licenses in Finland, with the other three
licenses being held by Radiolinja Origo, Suomen 3G Oy (owned by Tele2 AB) and Finnet Verkot Oy.

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The implementation of number portability in Finland on July 25, 2003, led to intense activity on the market, leading operators to launch a wide range of special offers to tie in
customers, including free airtime and giveaways. During the year, approximately 313,000 mobile customers switched operators.

Our
average subscriber usage in Finland increased from 151 minutes per month in 2002 to 160 minutes in 2003, mainly due to the general trend of voice traffic moving from fixed to mobile.
Despite increased usage, our average revenue per user per month in Finland decreased from €40.0 in 2002 to €39.2 in 2003, due in part to price erosion that outweighed
the increase in usage of mobile voice and non-voice services.

To
improve our competitive position, we launched Sonera One on October 1, 2003. Sonera One is a single-rate domestic calling and SMS service. In addition, to
accelerate the launch of our high-speed mobile data services, we introduced EDGE (Enhanced Data rates for GSM Evolution) in the Finnish GSM network. EDGE is currently available in major
urban areas, and it will increase the transmission rate of the network by two to three times compared to current high-speed mobile data services (General Packet Radio Service, GPRS). We
are continuing to build and test our UMTS network in Finland and plan to open the network for commercial use as soon as the technology is sufficiently mature. We have launched precommercial UMTS
network services in 18 localities in Finland and currently have over 1,000 users.



The local fixed communications market in Finland is extremely fragmented. Approximately 50 operators offer local voice on local networks within their own
geographic areas. Most of these operators belong to Finnet Group or Elisa. Approximately ten providers offer domestic and international services in Finland, of which the five
largestourselves, Finnet Group, Song Networks, Saunalahti Group and Elisahave their own domestic transport networks.

Our
local fixed networks were previously concentrated in the northern and eastern parts of Finland. In the beginning of 2003, our local networks covered 74 percent of the country
geographically, but only 26 percent of the population. During 2003, we strengthened our local presence through the acquisition of Auria, a fixed network operator with a strong presence in
south-western Finland. The acquisition gave us 126,000 new fixed-line equivalent subscriptions in Finland and our local
networks now cover 31 percent of the Finnish population. The total number of fixed line equivalent subscriptions in our network in Finland was 804,000 at the end of 2003.

Our
strategy in Finland is to offer a complete range of fixed line services for all customers within our own local network areas. Within other local areas, we act selectively and focus
primarily on providing services to large corporate customers and business customers. We also offer long distance voice and international voice, and dial-up Internet services
nation-wide. We only offer broadband Internet services in certain areas, including the Helsinki area.

In
Finland, as in many other countries, the number of fixed voice subscriptions is falling as customers migrate to mobile communications. The acquisition of Auria, however, increased our
number of voice subscriptions and we estimate that our market share of the total fixed voice market increased from 30 percent in 2002 to 32 percent in 2003. Within the Finnish domestic
long distance and international calling market, our traffic market shares in 2003 remained stable at approximately 38 and 55 percent, respectively. We are also a major provider of traffic and
network capacity on the Finnish wholesale market.

We
are the leading provider of Internet access services on the Finnish market, with an estimated market share of approximately 32 percent. In 2003, the number of our broadband
customers in Finland increased by 68,000 to 150,000.

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We are the second largest mobile operator on the Norwegian market, where we offer a broad spectrum of mobile services through our wholly owned subsidiary NetCom.
Norway has a population of approximately 4.5 million and a penetration rate of approximately 89 percent of the population at the end of 2003.

Our
estimated mobile market share in Norway, where we compete principally with the incumbent provider Telenor, is approximately 30 percent. Our GSM network covers approximately
98 percent of the population. We, Telenor and 3 each have a UMTS license. Our 3G network is under construction, but we have not yet determined the timing of the launch for our 3G services.

Our
mobile customer base in Norway increased by 107,000 in 2003 to 1,195,000 while the number of customers via our service providers remained unchanged at 90,000. Pre-paid
subscriptions accounted for 48 percent of our Norwegian customers at the end of 2003.



We offer both mobile and fixed services, cable TV services and broadband Internet access in Denmark. We offer mobile and fixed voice services under the Telia
brand and cable TV and broadband services under the Telia Stofa brand.

Denmark
has 5.4 million inhabitants. According to our estimates, the penetration rates in Denmark at the end of 2003 were as follows: mobile
communicationsapproximately 89 percent of the population, fixed voiceapproximately 67 percent of the population, and broadband accessapproximately
12 percent of the population.

We
recorded growth in net sales and a significant reduction in our operating loss in Denmark in 2003 as compared to 2002.



In 2003, our mobile customer base in Denmark increased by 59,000 to 525,000 and we estimate that our share of the Danish mobile market was approximately ten
percent. Our GSM network covers approximately 98 percent of the Danish population. We hold one of four licenses for 3G services in Denmark but have yet to commercially launch 3G services in
Denmark.

The
Danish mobile market is highly competitive. Our competitors include TDC, Sonofon, Orange and 3, each of which offer mobile services through their own networks. We also compete with a
number of service providers, including Debitel and Telmore.



To improve profitability in our Danish fixed line operations, we restructured the business in 2003. We currently offer fixed voice subscriptions,
pre-selection subscriptions and Internet access subscriptions to consumers and business customers. For business customers, we also offer a limited selection of data communications
services, including IP-VPN. We are the third largest provider of fixed voice to end users, with 172,000 fixed line customers at the end of 2003.

Since
we have a nationwide backbone network in Denmark, we also offer wholesale network services to operators and service providers. We are the second largest provider of fixed wholesale
services in the Danish market.

We
are Denmark's second largest cable TV operator with 195,000 cable TV customers at the end of 2003, and estimate that our share of this market was approximately 12 percent at
the end of 2003. We also offer broadband Internet access. In 2003, the number of our broadband customers increased

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by
23,000 to 104,000, making us the second largest broadband provider in Denmark with an estimated market share of 17 percent at the end of 2003.



We made our first investment in the Baltic countries in 1991, and are currently the leading telecommunications company in the region. In the Baltic countries, we
operate through both majority and minority owned companies, within both mobile and fixed communications, each of which are leaders in their markets.

All
forms of telecommunications services in the Baltic countries are deregulated. Penetration rates in the Baltic countries for fixed communications are significantly lower than the
European average, while mobile penetration rates are relatively high. GDP growth in the Baltic countries is among the highest in Europe, which has had a positive impact on the development of the
telecommunications sector.

In
2003, we continued to develop our mobile operations in the Baltic countries and started to redirect our fixed line operations. With the slow-down in growth of the
traditional fixed line business in the Baltic region, we have turned our focus to offering data communications, including Internet and broadband services, as well as reducing costs to increase our
competitiveness.

An
important part of our Baltic region strategy is to increase the ownership in our Baltic operators to enhance opportunities for synergies and economies of scale. In 2003, for instance,
we purchased Motorola's interest in the Lithuanian mobile operator Omnitel and now hold 90 percent of the company. In addition, we recently made a public bid for the remaining shares of Eesti
Telekom, an Estonian company in which we currently hold a 49 percent interest. The value of the bid for the remaining 51 percent, of which the Republic of Estonia holds an approximate of
27 percent, amounts to €500 million. Our bid is conditioned on us obtaining a minimum of 85 percent of the shares of Eesti Telekom and that the Estonian
Competition Authority approves the transaction.



With a population of 3.5 million, Lithuania is the largest of the Baltic countries. According to our estimates, the penetration rates in Lithuania at the
end of 2003 were as follows: mobile communicationsapproximately 62 percent of the population, fixed lineapproximately 25 percent of the population, and
broadband accessapproximately one percent of the population.

We
offer telecommunications services in Lithuania through the mobile operator Omnitel, in which we hold a 90 percent interest, and the fixed line operator Lietuvos Telekomas, in
which we hold a 60 percent interest. Omnitel has an estimated 50 percent share of the Lithuanian mobile market. In 2003, Omnitel increased its customer base by 202,000 to 1,052,000
customers.

Lietuvos
Telekomas is the leading provider of fixed line telecommunications services in Lithuania. In 2003, the aggregate number of fixed voice customers of Lietuvos Telekomas fell by
107,000 to 829,000, while the number of Lietuvos Telekomas' broadband (ADSL) customers increased by 14,000 to 25,000. The decline in fixed voice customers was due to strong competition from the mobile
sector, which also resulted in declines in price levels. We are currently working with Lietuvos Telekomas to restructure its operations and improve its operating performance. Lietuvos Telekomas is
listed on the Vilnius and London stock exchanges.



In Latvia, we offer mobile communications services through Latvijas Mobilais Telefons (LMT) and fixed line services through Lattelekom. We currently hold
60.3 percent of LMT, directly and indirectly, and 49 percent of Lattelekom.

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Latvia
has a population of 2.4 million. According to our estimates, the penetration rates in Latvia at the end of 2003 were as follows: mobile
communicationsapproximately 52 percent of the population, fixed lineapproximately 31 percent of the population, and broadband accessapproximately
one percent of the population.

Both
LMT and Lattelekom are the largest operators in Latvia in their respective markets, with estimated market shares at the end of 2003 of 48 and 99 percent, respectively. LMT's
main competitors are Tele2 and Zetcom, while Lattelekom faces limited competition from small Internet service providers, cable TV operators and energy companies.

In
2003, LMT increased its customer base by 87,000 to 534,000. LMT began offering GPRS services in 2003 and expects to launch commercial 3G services in 2004. In 2003, the aggregate
number of fixed voice customers of Lattelekom fell by 47,000 to 654,000, while the number of Lattelekom's broadband (ADSL) customers increased by 9,000 to 19,000. In 2003, Lattelekom successfully
carried out a cost reduction program and increased its efforts to develop its Internet and data communications services.



In Estonia, we offer mobile services through EMT and fixed line services through Elion. The companies are wholly owned by Eesti Telekom, in which we hold a
49 percent interest and have made a bid for the remaining 51 percent. Eesti Telekom is listed on the Tallinn and London stock exchanges. Both EMT and Elion are the largest operators in
Estonia in their respective markets. To further strengthen their competitive position, EMT and Elion have coordinated their distribution channels and put together a joint customer offering.

Estonia
is the smallest country in the Baltic region with a population of 1.4 million. According to our estimates, the penetration rates in Estonia at the end of 2003 were as
follows: mobile communicationsapproximately 77 percent of the population, fixed lineapproximately 33 percent of the population, and Internet and broadband
accessapproximately 15 percent of the population.

In
2003, EMT increased its customer base by 50,000 to 478,000. We estimate that EMT had a market share of approximately 47 percent in Estonia at the end of 2003. Its main
competitors are Tele2 Eesti and Radiolinja Eesti. EMT is a forerunner in creating new, innovative mobile services. For example, in 2003 EMT introduced services that enable customers to pay for local
transportation, parking and other types of services. EMT holds one of three 3G licenses in Estonia and expects to launch commercial 3G services in 2005. It is expected that Estonia will auction a
fourth 3G license during 2004.

In
2003, Eesti Telefon reprofiled itself and changed its name to Elion. In 2003, the aggregate number of Elion's fixed voice customers fell by 20,000 to 445,000, while the number of
Elion's broadband (ADSL) customers increased by 19,000 to 49,000. We estimate that Elion has a market share of over 80 percent of the Estonian market. Elion's main competitors are Uninet and
Tele2.



Fintur, in which we have a direct and indirect 74 percent interest, operates in four Eurasian markets: Kazakhstan, Azerbaijan, Georgia and Moldova. All
four countries have low telecommunications penetration rates, and thus present good growth opportunities, especially in the mobile sector. At the end of 2003, Fintur had 2.4 million mobile
customers, which represents an increase of 48 percent from year-end 2002. Fintur's other major shareholder is Turkcell, our associated company in Turkey.

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Kazakhstan, the world's ninth largest country by geographic area, which has almost 16 million inhabitants, is Fintur's largest market, accounting for
49 percent of Fintur's net sales in 2003. In Kazakhstan, Fintur owns 51 percent of the country's leading mobile operator, KCell, which had a market share of over 70 percent at the
end of 2003. At the end of 2003, KCell had 990,000 customers,
an increase of 61 percent from year-end 2002. Kcell has the most extensive network coverage of the three mobile providers operating in the country. KCell was the first operator to
introduce high-speed mobile data services (GPRS) and MMS in Kazakhstan.



Fintur owns 51.3 percent of Azercell, the leading operator in Azerbaijan, with a market share of approximately 86 percent at the end of 2003. At the
end of 2003, Azercell had 912,000 customers, an increase of 36 percent from year-end 2002. Azerbaijan, with a population of eight million, has one of the highest mobile penetration
rates, estimated at 13 percent of the population at the end of 2003, among the former Soviet republics. Azercell has an extensive network that covers 95 percent of the population in
Azerbaijan. Azercell expects to launch MMS and GPRS services in 2004.



Fintur owns 83.2 percent of Geocell, which is the second largest mobile operator in Georgia with an estimated market share of approximately
44 percent at the end of 2003. At the end of 2003, Geocell had 307,000 customers, an increase of 55 percent from year-end 2002. Geocell's goal is to overtake the subscriber
levels of the leading mobile operator in Georgia, Magticom, in the near future.



Fintur holds 100 percent of Moldcell, which has an estimated share of the Moldovan market of approximately 50 percent. The other provider operating
in Moldova is Voxtel. At the end of 2003, Moldcell had 176,000 customers, an increase of 33 percent from year-end 2002. Moldcell plans to launch GPRS services and MMS in 2004. At
the end of 2003, Moldova had approximately 3.5 million inhabitants (excluding Transnistria).



We have a combined direct and indirect 43.8 percent interest in MegaFon, the third largest mobile operator in Russia. The mobile communications market in
Russia has continued to grow rapidly, as evidenced by an increase in the penetration rate level from 12 percent of the population at the end of 2002 to 25 percent at the end of 2003. At
the end of 2003, MegaFon had approximately 6.2 million customers in Russia, an increase of approximately 100 percent as compared to year-end 2002.

MegaFon
is a pan-Russian operator mainly concentrated in the St. Petersburg region, Moscow, the Caucasus in the Southern Region, the Volga region, and the Urals. MegaFon's
nationwide GSM licenses, covering all of Russia's 89 regions, provide MegaFon access to a total population of about 145 million. MegaFon had an estimated market share of 17.5 percent in
Russia at the end of 2003. The company's strongest position is the northwestern part of Russia, where its market share exceeds 50 percent. Following the launch of services in Siberia at the end
of 2003 and in the Far East in March 2004, MegaFon now has commercial operations in all major regions in Russia. MegaFon's main competitors, both pan-Russian, are MTS and Vimpelcom,
in which the largest foreign owners are Deutsche Telekom and Telenor, respectively.

MegaFon's
strategy is to maintain its leading market position in the northwestern region, strengthen its position in Moscow and in the North Caucasus region, and expand operations and
gain

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market
share in other regions. We aim to achieve majority control in MegaFon by increasing our shareholding in the company to the extent reasonably practicable and in keeping with our overall
strategic goal of profitable growth.

In
2003, MegaFon introduced MMS, GPRS and other advanced services, including positioning services in Moscow and St. Petersburg. MegaFon aims to launch more advanced services as the
market matures.

In
August 2003, Alfa-Eco Group announced it had acquired a 25.1 interest stake in MegaFon through CT Mobile. In the autumn of 2003, IPOC International Growth
Fund Ltd., the owner of 6.5 percent of MegaFon's shares, announced that it had a priority interest in the shares Alfa-Eco Group allegedly acquired and initiated legal
proceedings asserting its right to the shares claimed by the Alfa-Eco Group. TeliaSonera is not a party in these disputes. In 2003, IPOC also brought arbitral proceedings against us for
alleged breach of the shareholders' agreement relating to MegaFon. Until these shareholder issues are resolved, it may be difficult for MegaFon to seek outside financing for its growth plans.



We have a direct and indirect 37.3 percent interest in Turkcell, the largest mobile operator in Turkey. The mobile communications market in Turkey
continues to grow, as evidenced by an increase in the penetration rate level from 35 percent of the population at the end of 2002 to 40 percent at the end of 2003. At the end of 2003,
Turkcell had approximately 19 million customers, an increase of approximately 3.3 million as compared to year-end 2002. Turkey has 71 million inhabitants.

The
other major shareholder is Cukurova Group, an industry conglomerate in Turkey, which has a 41.8 percent interest in Turkcell. In 2003, we had a dispute with Cukurova regarding
its proposal to carry out certain affiliated party transactions with Turkcell and the subsequent attempt by a Cukurova-nominated statutory auditor to change the composition of Turkcell's board of
directors. We successfully opposed these initiatives and have continually aimed to adopt an appropriate corporate governance model for Turkcell. In line with our overall strategic goals, we will seek
to obtain a controlling interest in Turkcell to the extent reasonably practicable and in keeping with our overall strategic goal of profitable growth.

Under
the terms of its GSM license, Turkcell is obligated to pay an ongoing license fee, equal to 15 percent of its monthly gross revenues, to the Treasury of Turkey. The license
also gives the Turkish Ministry of Communications certain powers to set and approve charges for GSM services provided by Turkcell. Separately, since 1999, Turkcell has also been obligated to charge
subscribers a 25 percent communications tax on behalf of the Turkish government.

Turkcell
offers a wide range of services, including high-speed mobile data service (GPRS) and MMS. The GSM network covers practically all areas in the country with
significant numbers of inhabitants. Turkey has not yet made any firm announcements regarding the granting of UMTS licenses. Turkcell currently faces competition from Telsim and TT&TIM.

In
late 2003, Turkcell decided to establish a new subsidiary in the Ukraine with a local partner which has a nationwide GSM 1800 license. In early 2004, the Turkcell-led
consortium won a nationwide GSM 900/1800 license tender in Iran. The consortium expects to be awarded the license upon the payment of the license fee of €300 million and the
signing of a license agreement with the regulatory authorities in Iran.

Turkcell
is presently subject to a number of legal and regulatory proceedings that may have a material adverse effect on its business, financial condition and results of operations,
which could, in turn, have a negative impact on our results of operations. See "Item 8.A.7 Legal and Regulatory Proceedings."

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We are one of the leading providers of wholesale services on the European market. The merger of Telia and Sonera strengthened our position in the Nordic and
Baltic regions and in the western part of Russia, where we are the largest provider of wholesale services. We also have a strong position in the wholesale telecommunications market in Central and
Western Europe and with respect to trans-Atlantic traffic.

We
offer international IP, capacity and voice services on a wholesale basis. We provide services principally to larger operators, service providers and system integrators that demand
international wholesale telecommunications products. Our services are based on our international infrastructure, the Viking Network, which has been adapted for sophisticated broadband communications
and offers connections to selected international traffic aggregation points in Europe.



Former
Telia's carrier operations were restructured in 2003, at which point we trimmed the focus of the business to concentrate on sales of IP, voice and capacity services on the
profitable part of our wholly owned network in Europe and across the Atlantic. As a result of the restructuring, the profitability of our carrier operations improved substantially in 2003. Net sales,
however, decreased in 2003 due to the phase-out of our Asian operations, our domestic capacity operations in the United States and our domestic voice reseller operations in the United
Kingdom and Germany.

The
carrier market was characterized by continued uncertainty in 2003. We expect current market conditions to prevail during 2004, with continued volume growth and substantial price
erosion due to surplus capacity on the market. Our objective is to be the European international wholesale carrier of choice and a profitable provider of wholesale services.



TeliaSonera Holding is responsible for the management of our non-core/non-strategic operations. Currently, TeliaSonera Holding manages
approximately 200 investments, including investments in subsidiaries, associated companies and other minority holdings.

Our
overall goal is to restructure, wind up, liquidate or sell all or a portion of our interest in the businesses managed by TeliaSonera Holding. In addition, we may also from time to
time transfer non-core businesses from our profit centers to be managed by TeliaSonera Holding.

Some
of the most significant companies managed by TeliaSonera Holding, in terms of annual revenues and customers, are the following:



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We
presently maintain significant and continuing commercial and financial relationships with some of the companies in which we have sold our interest in part or entirely. We also have
commitments to purchase pre-determined levels of products and services from some of these companies. See "Item 7.B Related Party Transactions."

In
addition, TeliaSonera Holding manages our non-core investments in several telecommunications companies outside our home market. These include the following:





As of December 31, 2003, our GSM network had the following coverage in the Nordic countries:



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We have UMTS licenses in Finland, Norway and Denmark, and access to a UMTS license in Sweden through our network sharing agreement with Tele2. In the Baltic
countries, we have a UMTS license in Latvia and our associated company AS EMT has a UMTS license in Estonia. No UMTS licenses have yet been issued in Lithuania.

Our
network sharing agreement in Sweden, established in 2001, gives us access to the UMTS license of our Swedish associated company, Svenska UMTS-nät. In
March 2003, Svenska UMTS-nät requested the Swedish regulators to amend its UMTS license by pushing back the date by which our and Tele2's UMTS network must be
completed. Svenska UMTS-nät has cited the difficulty in receiving required building permits and the unavailability of key UMTS technology as the primary reasons for its
request. In March 2004, we launched third generation services commercially in Sweden. Our UMTS network currently covers more than 75 percent of the Swedish population and our
build-out continues according to plan. To secure future capacity for third generation services, Svenska UMTS-nät has also expressed its willingness to acquire
Orange's UMTS license, following Orange's decision not to build a UMTS network in Sweden.

In
Finland, we opened our UMTS network for technical testing in January 2002. We have also launched pre-commercial UMTS network services in Finland in main cities and
currently have over 1,000 users. We expect to open the UMTS network for commercial use as soon as the handset technology is sufficiently developed.

We
have not yet determined the timing of the launch for our third generation services in Norway and Denmark. We expect to launch third generation services in Latvia during 2004.



We view the further development of our networks in the Nordic countries as an ongoing process. We intend to continue building new base stations, adding capacity
to existing base stations and updating the technology and functionality of our existing networks in the Nordic countries to meet customer demands regarding coverage, capacity and quality. In addition,
we have installed a number of base stations to improve the quality of our network coverage within the offices and production facilities of some of our major corporate customers.

The
implementation of GPRS, EDGE, UMTS and WLAN technology is expected to enable mobile networks to transfer data at sufficient speed to support a wide range of data and media
applications. We are actively evaluating the possible applications and services that such technologies will enable. For example, in Finland, we introduced EDGE (Enhanced Data rates for GSM Evolution)
in the GSM network to speed up the traditional GPRS (General Packet Radio Service) transmission rates and to accelerate the launch of our high-speed mobile data services. EDGE is currently
available in major urban areas in Finland. EDGE increases the transmission rate by up to two or three times the rates achieved by current high-speed mobile data services. We will also
continue to build WLAN (Wireless Local Area Network) as a complement to UMTS and other mobile data solutions for Intranet/Internet access and other services. WLAN is a wireless broadband technology
that links the user to a local area network.

We
plan on adding additional value added service nodes, to the extent economically beneficial, to our network. We intend to develop our infrastructure in such a way that our services can
be reached via a wide array of accesses, such as GSM, UMTS and WLAN. We are also participating in the development of a seamless switch between the networks such that a user will not notice when his or
her terminal moves from one network to another.

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We believe that our Swedish and Finnish networks are among the most technologically advanced fixed line networks in the world. Our Swedish and Finnish fixed line
networks feature:



SDH
allows for enhanced reliability. Through the use of a stand-by national network and restoration system and self-healing local rings, the SDH optical network
is protected against cable failures.

DWDM
technology provides an effective platform for SDH, IP and wavelength services. DWDM is a transmission technique that is capable of operating at transmissions speeds of up to 10 Gbps
and is expected in the future to be able to operate at speeds of up to 40 Gbps, multiplying the fiber cable capacity.

Our
existing local networks in Sweden and Finland are fully digitalized. As of December 31, 2003, we had the capability to provide approximately 93 percent of
end-users in Sweden and 99 percent of the end-users in Finland in areas where we have our own local network, with ISDN access.

At
the end of 2003, there were 823,000 dial-up and 399,000 broadband subscriptions connected to our Swedish network, and approximately 155,000 residential dial-up
and 150,000 broadband subscriptions connected to our Finnish network.

In
2003, we have, among other things, taken the following measures to increase the functionality of our fixed network:



We have established a high quality international fiber optic backbone network based on fiber optics and wavelength technology. Our network is based on a fully
operational 19,800 kilometer long duct/cable network with repeater stations in Europe. Our network is connected to New York via the transatlantic cable system, TAT 14. In addition, our IP network is a
global network with multiple high-speed links as well as extensive interconnections to other Internet carriers across Europe and the United States.

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We operate in an increasingly competitive environment in Sweden, with the result that we face strong price pressure with regard to many of our products and
services. Sweden was among the first countries in Europe to have liberalized and deregulated its telecommunications market. Currently, entrants face almost no restrictions in providing
telecommunications services in Sweden, and a number of non-Swedish controlled entities have entered the Swedish market.



Our major competitors for mobile communications services in Sweden are the mobile operators Tele2 (Comviq), Vodafone and Hi3G Access AB (operating under the brand
name "3") and virtual network operators ACN, Chess and Djuice. In the future, we expect to face competition from additional UMTS operators and mobile service providers. Orange Sverige AB, which has a
UMTS license in Sweden, has recently announced its intention to withdraw from the Swedish market. Competition in our mobile communications business in Sweden is currently based primarily on pricing
and service quality, including factors such as availability of new services and network coverage.



Our major competitors in the Internet and broadband market in Sweden are Tele2, Telenor, B2 Bredband AB, Com Hem AB, Chello Broadband AB, UPC Sverige AB, Spray
and MCI. Of these companies, our primary competitors for broadband access are B2 Bredband, Com Hem, Chello, UPC and Telenor. Our primary competitors in data communications are Telenor, Song Networks,
MCI, Equant, Colt and BT Ignite.



Our major competitors in fixed voice services in Sweden in the retail sector are Tele2, Telenor, ACN, MCI Corporation, Glocalnet, Song Networks and Ventelo. In
the fixed networks wholesale sector, our competitors are Song Networks, Telenor, MCI, Teracom, Banverket, Svenska Kraftnät, Sydkraft and local
city nets. We believe that competition for fixed voice services and fixed network services in Sweden will increasingly be based on price.



The telecommunications market in Finland is highly competitive and characterized by successive promotional campaigns and price competition, with the exception of
local telephone service where the market is dominated by incumbent local operators that control, with minor exceptions, the local access market.

Generally,
our main competitor in Finland is Elisa Communications, which is the largest local access operator in Finland and whose traditional service area is the Helsinki metropolitan
area. Elisa Communications is also the parent of a number of telecommunications companies, including Radiolinja Group, the second largest mobile operator in Finland.

Another
significant competitor in Finland is the Finnet Group, an alliance of local telephone companies, which owns, among other entities, DNA Finland Oy and Finnet Verkot Oy (a mobile
network operator).

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Our main competitors for mobile communications services in Finland include Radiolinja Group, DNA Finland Oy and an increasing number of service operators that do
not maintain their own network, such as Saunalahti Group and ACN Inc. Service operators significantly increased their share of the Finnish market in 2003. The introduction of mobile number
portability in July 2003 has resulted in greater competition in the Finnish market. We consider it likely that our competitors will continue to market their services aggressively and reduce
prices for their services in the future. There were four UMTS licenses awarded in Finland: the current license holders are us, Radiolinja Group (owned by Elisa Communications), Suomen 3G Oy (owned by
Tele2 AB) and Finnet Group.



The market for Internet and data communications services in Finland is highly competitive. With respect to consumer media services in Finland, including Internet
related services, we compete with the Saunalahti Group, MTV3 Oy, Elisa Communications, the Finnet Group and some cable TV operators such as HTV in the capital region, among other competitors. With
respect to the provision of Internet access to business customers in Finland, we compete principally with Elisa Communications and the Finnet Group, and expect to face increasing competition from
other companies in the future.

In
the data communications services market in Finland, our competitors include Elisa Communications, Finnet Group and Song Networks, among others, and international telecommunications
companies that provide data services to large corporate customers in Finland.



The local fixed communications market in Finland is extremely fragmented. Approximately 50 operators offer local voice on local networks within their geographic
areas. The majority of these local operators belong to either Elisa Communications or Finnet Group. These local operators generally own their own networks and operate mainly in larger cities and
towns. Traditionally, there has been only one local operator per area.

Our
primary competitors for long distance voice services in Finland are the Finnet Group, Elisa Communications and Song Networks.

Our
competitors in the provision of international voice services in Finland include Finnet Group, Saunalahti Group and Song Networks. The international voice service market has been
characterized by aggressive promotional campaigns and price reductions. We believe that competition will continue to increase in the international telecommunications market, resulting in further
reductions of tariffs. In addition, we face competition in Finland from service operators, and from international telecommunications operators.



The four mobile operators in Norway that have their own licenses include Telenor, the leading telecommunications provider in Norway, Teletopia, "3" and us. The
largest service providers in Norway are Tele2, Chess, Ventelo and Sense.



The market for mobile communications services in Denmark is highly competitive. Our main competitors in the Danish mobile communications market are TDC, Sonofon
and Orange, of which TDC is the largest. In the market for Internet services in Denmark, we face competition from TDC, Tele2, Sonofon and Orange A/S (formerly, Mobilix). In the fixed network and fixed
voice services market in Denmark, our major wholesale competitors are TDC, Orange, Global Connect A/S, Song

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Networks,
COLT and Global Crossing, and our major retail competitors are TDC, Tele2, Debitel Danmark A/S, Orange and Sonofon.



We have been facing increasing competition in the Baltic States due to the recent deregulation of the telecommunications markets in these countries and the
increase of competitors entering the market as it continues to develop and grow. In Lithuania, our competitors in the mobile communications market are Bite GSM and Tele2. Our main competitor in the
Latvian market for mobile communications services is Tele2. While currently we do not have any direct major competition in the market for fixed voice services and fixed network services in Latvia and
Lithuania, the fixed communications monopoly ended in Latvia and Lithuania on January 1, 2003, and we expect several new competitors to enter the market. In Estonia, our main competitors for
mobile communications services are Radiolinja Eesti AS and Tele2 Eesti AS, while in fixed voice services and Internet and data communications we compete mainly with Tele2 and Uninet AS.



TeliaSonera International Carrier faces competition in Europe and the United States from competitors such as France Telecom, British Telecommunications plc, COLT
Telecom Group plc, Global Crossing Ltd, Cable & Wireless Plc and Level 3 Communications Ltd. Competition in the international carrier segment is currently based primarily on
price, although we expect that as the carrier business matures, competition will increasingly be based on quality of service.



We are the largest telecommunications operator in the Nordic and Baltic region. To maintain and improve our market position in the Nordic and Baltic region we
market our services to residential and business subscribers through sales agents, our own retailers in Sweden and Finland, independent distributors and resellers in all countries, and over the
Internet via our local web sites. We believe that our Internet channels provide a lower cost means of marketing our products and services than more traditional distribution and service channels.



On the consumer and end-customer market, TeliaSonera Sweden operates under the Telia brand. We believe that Telia is considered to be the leading
brand in the area of telecommunication in Sweden.

In
Sweden, we have a Telia branded retail chain that serves an important role by providing a showcase for our products and services as well as by contributing to the creation of our
strong brand presence. As of December 31, 2003, our services were available through approximately 75 Telia stores and approximately 8,000 external resellers in Sweden. Through our Internet
portal,www.telia.se, we are also able to make personalized product offerings to our on-line customers and a convenient means for new
customers to subscribe to additional services provided by us.

In
addition, Skanova, our Swedish wholesale operator, and TeliaSonera International Carrier are each active in the Swedish market and offer national and international network services to
operators and service providers. Skanova uses a differentiated distribution channel that enables us to separately focus on large companies, public organizations and small- and medium-sized companies.

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TeliaSonera Finland operates in Finland under the Sonera brand. We believe that Sonera is the leading brand in the Finnish telecommunication sector.

Our
principal distributor to consumers in Finland is an independent dealer network, which has acted as the non-exclusive distributor of Sonera's mobile subscriptions since
1990. The network comprises approximately 1,000 outlets in Finland, including specialty stores for mobile communications equipment, home electronic stores and department stores. In our Internet
portal,www.sonera.net, customers are able to modify their subscription options, and subscribe to additional services through Internet, WAP and SMS.



In Norway, we operate under the NetCom brand. NetCom is the second largest mobile operator behind the local incumbent Telenor. Sales of mobile services in Norway
are carried out through a network of external resellers.

In
Denmark, we operate under the Telia brand, providing customers with fixed, mobile, Internet and cable TV services. These services are mainly sold through external resellers. Digital
cable television access in Denmark is mainly sold through our subsidiary, Telia Stofa, as well as through antenna associations. We manage our own sales of network capacity and network services to
operators and service providers in Denmark.

In
the Baltic countries, each of our subsidiaries and associated companies operates using its own local brand and sells its services through both its own retail stores and external
resellers.



Each of our subsidiaries in Kazakhstan, Azerbaijan, Georgia and Moldova, and our associated companies in Russia and Turkey, operates using its own local brand and
sells its services through both its own retail stores and external resellers.

We
offer wholesale carrier services under the TeliaSonera International Carrier brand, and sell our services primarily through our direct sales force.

Regulation

European Union

General

As member states of the European Union (EU), Sweden, Finland and Denmark are required to follow EU regulations and enact domestic legislation to give effect to EU
directives. Moreover, EU decisions are directly binding on those to whom they are addressed. Recommendations and opinions are not legally binding, but they are politically important. Norway is under
similar obligations as a party to the European Economic Area Agreement.

On
May 1, 2004, ten new member states will join the EU, including countries where we have significant operations, such as Lithuania, Latvia and Estonia. EU law, including
telecommunications-related legislation, will be applicable in these countries from the date of accession or soon thereafter, depending on the provisions of the Treaty of Accession applicable to each
individual country.

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Liberalization of Telecommunications Markets

The liberalization of the European telecommunications sector accelerated in June 1990, when the European Commission adopted Directive 90/388/EEC on
competition in the markets for telecommunications services (the "Services Directive").

In
March 1996 the Services Directive was amended by the so-called "Full Competition Directive" (96/19/EC), which enabled alternative infrastructure providers, such as
cable companies, railroads and utility companies, to offer liberalized telecommunications services or resell capacity on their networks for the provision of such services.

In
September 2002 the European Commission adopted Directive 2002/77/EC on competition in the markets for electronic communications networks and services (the "Consolidated
Competition Directive"), which consolidates, clarifies and repeals the Services Directive, as amended. The Consolidating Competition Directive entered into force in October 2002, and EU member
states had to implement it by July 2003.

New Communications Framework

Following a review of the telecommunications regulatory framework initiated in 1999, the European Parliament and the Council adopted a new regulatory framework
for electronic communications networks and services (the "Communications Framework") in 2002. The Communications Framework consists of the following key instruments:



The
Communications Framework applies to all forms of communications networks carrying publicly available communications services, whether used for voice, fax, data or images, including
fixed and mobile telecommunications networks, cable television networks, networks used for terrestrial broadcasting, satellite networks and networks using Internet protocol. It aims to bring the
sector-specific rules for electronic communications more into line with the general competition rules. For example, the Framework Directive bases the notion of significant market power on the concept
of a dominant position used in EU competition law. The new form of significant market power embraces single company dominance and joint dominance.Ex
anteregulatory measures are designed to redress identified competition concerns on the market.

In
July 2002, the European Commission published guidelines on market analysis and the assessment of significant market power. The European Commission supplemented these guidelines
with a recommendation on relevant product and service markets, issued in February 2003 (the "Relevant Market Recommendation"). National regulatory authorities ("NRAs") are expected to take the
markets listed in the Relevant Market Recommendation as the starting point for their own market analyses. NRAs then determine and designate companies having significant market power. They can also
impose or maintainex antesector-specific obligations whenex postremedies of competition law are not
adequate to meet the market problems identified.

The
Relevant Market Recommendation may have a material effect on our business. Much will depend on (i) how the relevant regulatory authority defines the market, and
(ii) what measures it takes to address a particular competition problem identified on these markets. The European Commission will examine the need for any update to the Relevant Market
Recommendation no later than June 30, 2004.

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Directive
2002/20/EC on the authorization of electronic communications networks and services (the "Authorization Directive") aims to create a legal framework to ensure the freedom to
provide electronic communications networks and services. It provides that all services and networks should be covered under a general authorization, and that specific rights of use should be limited
to the assignment of frequencies and numbers only.

Directive
2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities (the "Access Directive") establishes rights and obligations for
operators and for seeking interconnection and/or access to their networks or associated facilities. It requires EU member states to ensure there are no restrictions that prevent entities from
negotiating agreements on arrangements for access and/or interconnection. When an NRA has carried out a market analysis in light of the Relevant Market Recommendation and designated an operator as
having significant market power, it may then impose proportionate obligations on that operator, such as a non-discrimination obligation, a requirement for accounting separation, an access
requirement for specific facilities, price control and cost accounting obligations or a requirement for transparency of accounting information, technical specifications, network characteristics, terms
and conditions, and prices.

Directive
2002/22/EC on universal service and users' rights relating to electronic communications networks and services (the "Universal Service Directive") defines the minimum service to
which all end-users must have access at an affordable price, namely connection at a fixed location to the public telephone network enabling the end-user to make and receive
local, national and international telephone calls, facsimile communications and data communications (sufficient to permit functional Internet access). End-users should also have access to
public telephone services, including directory enquiries and directories. When an NRA considers that the provision of universal services represents an unfair burden on entities designated to provide
that service, EU member states are obliged to share the net cost between providers of electronic communications networks and services, or to arrange funding via the state budget. NRAs may maintain or
impose obligations on entities identified as having significant market power, including price caps on retail services. NRAs should require carrier selection and carrier pre-selection to be
provided by operators having significant market power in the market for connection to and use of fixed telephony.

The
Framework Directive, the Authorization Directive, the Access Directive and the Universal Service Directive were to be implemented by EU member states by July 25, 2003.

Directive
2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector (the "Privacy and Electronic Communications
Directive") requires the provider of a publicly available electronic communications service to safeguard the security of its services. It prohibits the interception and surveillance of communications
without the consent of users unless legally authorized, although communications and traffic data may be recorded in the course of lawful business practices as evidence of a commercial transaction.
Traffic data must be erased or made anonymous when no longer needed for transmission or billing, and may be used for marketing only with the user's consent. Subscribers have the right to receive
non-itemized bills, to restrict calling line identification, to object to the processing of location data and to decide whether their personal data should be included in a public
directory. The Privacy and Electronic Communications Directive prohibits the sending of unsolicited communications by fax, automatic calling machines or electronic mail without the prior consent of
the subscriber. It was required to have been implemented into national law by the end of October 2003.

Unbundling of the Local Loop

In December 2000 the European Parliament and the Council adopted Regulation 2887/2000 on unbundled access to the local loop (the "ULL Regulation"),
which entered into force in January 2001. Local loop unbundling means the granting by incumbent operators of full unbundled access, and shared

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access,
to the twisted metallic pair circuit connecting the network termination point at the subscriber's premises to the main distribution frame or equivalent facility in the fixed public telephone
network local loop.

Under
the ULL Regulation, operators with significant market power must publish and keep updated a reference offer for unbundled access to their local loops and related facilities. They
must meet reasonable requests for unbundled access to their local loops under fair conditions, and except if specifically exempted, prices charged for unbundled access to the local loop must be
cost-oriented.

Radio Spectrum Policy

In March 2002 the European Parliament and the Council adopted Decision 676/2002/EC on a regulatory framework for radio spectrum policy in the European
Community (the "Radio Spectrum Decision"). The Radio Spectrum Decision facilitates the development of spectrum policy in the EU, sets up procedures for the adoption of technical implementation
measures, provides for the coordination of spectrum policy decisions among EU member states and aims to ensure the efficient use of the radio spectrum.

Electronic Commerce and Liability of Internet Service Providers

In June 2000, the European Parliament and the Council adopted Directive 2000/31/EC on certain legal aspects of information society services, in particular
electronic commerce in the internal market (the "Electronic Commerce Directive"). The Electronic Commerce Directive regulates the legal recognition of electronic contracts, the formation of electronic
contracts, the information to be provided by the service provider to the consumer, and solicited and unsolicited commercial communications with consumers. It also contains rules that limit the
liability of intermediary service providers acting as a provider of mere conduit, as well as for caching and hosting activities.

Sweden

Overview

In March 2003 the Swedish Government proposed a new Act on Electronic Communication to replace the Telecommunications Act and the Radio Communications Act.
The new Act on Electronic Communication entered into force on July 25, 2003, and implements the legislation relating to the new EU Communications Framework. See "European UnionNew
Communications Framework."

The
new Act on Electronic Communication has been designed to create a more flexible system for the supervision of the telecommunications market. Consequently, under the Act, fewer
obligations will flow directly from the law. For example, the Act abandons the general requirement to obtain a license to conduct telecommunications activities. Instead, the Swedish National Post and
Telecommunications Agency or the NPTA, the Swedish regulatory authority, will be given the authority to render specific binding decisions imposing obligations on operators who have significant market
power. The NPTA is currently preparing those decisions, which are expected to be rendered in summer 2004. Meanwhile certain provisions of the Telecommunications Act are still in force, such as those
on interconnection, carrier pre-selection and national roaming.

While
the new Act will bring significant changes to telecommunications regulation in Sweden, we are not currently in a position to assess the impact of these changes on our business,
financial condition or results of operations.

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Licensing Requirements

Currently, we have four mobile licenses (NMT 450 service, GSM 900 and other mobile services, GSM 1800 service and terrestrial flight telecommunications service).
On March 31, 2004 the NPTA decided to prolong our GSM licenses until 2010. Our NMT license will expire on December 31, 2007. In addition, we own 50 percent of Svenska
UMTS-nät, which has a wholly owned subsidiary that holds a UMTS license.

A
license under the Act on Electronic Communications may be revoked, in whole or in part, if the operator violates the terms of the Act or any condition of the license. However, the NPTA
must notify the operator and provide him with an opportunity to rectify the violation before revocation can take effect. The NPTA may also impose conditional fines on license-holders in connection
with injunctions and prohibitions to ensure compliance with the conditions set forth in the licenses.

Universal Service

Under an NPTA interim measure, we are required to provide a connection to our publicly available fixed-line network on similar terms and conditions to
anyone requesting the service. We can satisfy this requirement with our fixed line and NMT 450 services. Currently, no other fixed telecommunications operator in Sweden is required to provide this
universal service.

Under
the Act on Electronic Communication, the universal services requirement will no longer be a licensing condition. However, the NPTA may oblige any appropriate telecommunications
operator to provide universal services. The NPTA has not yet decided on universal service obligations under the Act.

Retail Price Regulation

The Act on Electronic Communication increased the NPTA's power to regulate prices applied by telecommunications operators with significant market power on an
end-user market. The NPTA will have the power to impose a lowest or highest price on an operator, or oblige an operator to apply a specific price within a certain geographical area.
However, the NPTA will only have the power to regulate the prices applied by an operator if it is clear that other measures such as interconnection obligations are insufficient to ensure effective
competition and satisfy the public interest on the end-user market. There is no general rule under the Act requiring tariffs for basic fixed-line telecommunications and leased
lines to be cost-based. However, the NPTA will have the power to impose a requirement for cost-based services on operators with significant market power.

Access to Infrastructure

Interconnection

Until the NPTA decides on new access and interconnection provisions, the interconnection provisions of the Telecommunications Act remain in force. One underlying
principle is that a notified or licensed telecommunications service provider must allow interconnection to its network and services by other service providers. A service provider holding a significant
market position must offer interconnection on a non-discriminatory basis, and in particular may not put other service providers in a worse position than its internal departments or
affiliates. In Sweden, both fixed-line and mobile interconnection access and rates are subject to regulation. If operators are unable to negotiate voluntary interconnection agreements, the
NPTA has the power to mediate and decide the matter. The Telecommunications Act requires operators with significant market power to meet certain conditions, which include publishing tariffs for fixed
interconnection services and offering equivalent terms to operators requesting interconnection services. In addition, all the interconnection rates we charge for fixed and mobile telecommunications
must be cost-based. We are also required to maintain separate

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accounts
for our fixed interconnection business in Sweden. The Telecommunications Act imposes cost-based pricing requirements for traffic terminating on mobile networks of operators with
significant market power in the national market for interconnection. TeliaSonera is the only operator under the Telecommunications Act that has significant market power.

The
Act on Electronic Communication does not include a general obligation for operators of public communication networks to allow interconnection to their network by other service
providers. Instead, the NPTA will have the power to impose an obligation on operators controlling access to end-users to allow interconnection to their network at market prices. The NPTA
may also impose additional obligations on an operator with significant market power, in order to ensure efficient competition. For example, an operator with significant market power may be required to
apply cost-based prices when allowing interconnection or other forms of access to its network.

Carrier Pre-selection

The NPTA requires license holders operating fixed networks to implement carrier pre-selection. Carrier pre-selection refers to the ability
of a user to choose a local, long-distance, mobile or international carrier independent of its local loop provider. Currently carrier pre-selection is available for all
national, international and fixed-to-mobile calls in Sweden. In February 2002 carrier pre-selection for local calls was introduced in Sweden. There is no
regulation of carrier pre-selection for mobile calls.

The
Act on Electronic Communication did not introduce any substantial amendments for TeliaSonera as regards carrier pre-selection.

Number Portability

Number portability for fixed telecommunications access, premium rate calls and free-phone services were made available in December 1999. Mobile
number portability was implemented in September 2001. The regulations apply to all operators offering digital mobile telecommunications subscription.

The
Act on Electronic Communication allows a service provider transferring a number to recover the entire costs incurred by the transfer.

Regulatory Institutions

Responsibility for regulating the telecommunications sector and the promotion of fair and open competition in Sweden has been allocated among several regulatory
bodies. Under the Act on Electronic Communications, the principal body is the NPTA, which is responsible for the day-to-day supervision of the telecommunications sector in
Sweden. For various administrative purposes the NPTA falls under the responsibility of the Swedish Government (Ministry of Industry, Employment and Communications).

Finland

Overview

We are subject to the comprehensive regulatory regime applicable to the Finnish telecommunications industry under the Finnish Communications Market Act 393/2003,
as amended (the "Communications Market Act"), and related regulations, decrees and administrative decisions.

The
Communications Market Act came into effect as from July 25, 2003 and implements the EU regulatory framework for electronic communications networks and services.

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Under
the Communications Market Act, the obligations imposed on telecommunications operators will apply principally to telecommunications operators with significant market power. The
Finnish Communications Regulatory Authority (FICORA) is given the authority to decide, based on its market analysis, which obligations should be applied to telecommunications operators. Until FICORA
has completed those market analyses and decided on obligations under the Communications Market Act, the provisions of the preceding Act remain applicable.

According
to a FICORA decision of February 6, 2004, Sonera Carrier Networks Oy, a subsidiary of TeliaSonera Finland, has significant power in the markets for (i) call
origination on the public telephone
network provided at a fixed location, (ii) call termination on individual public telephone networks provided at affixed location, and (iii) wholesale unbundled access; while Sonera
Mobile Networks Oy, a subsidiary of TeliaSonera Finland, has significant power in the market for voice call termination on individual mobile networks. Also according to FICORA decisions, Sonera
Carrier Networks and Sonera Mobile Networks respectively are subject to obligations on (i) interconnection, (ii) publishing of delivery terms and tariff information, (iii) setting
cost-oriented and non-discriminatory prices, (iv) use of cost-accounting procedures, and (v) separation of accounts.

According
to a FICORA decision of March 5, 2004, TeliaSonera Finland has significant market power, in all geographical areas where Posts and Telecommunications of Finland had an
unrestricted right to provide local telephony in December 31, 1993, in the following product markets; (i) access to the public telephone network at a fixed location for residential
customers, (ii) access to the public telephone network at a fixed location for non-residential customers, (iii) publicly available local telephone services provided at a
fixed location for residential customers, and (iv) publicly available local telephone services provided at a fixed location for non-residential customers. TeliaSonera Finland is
subject to certain obligations in these markets, including (i) the obligation to offer end-users the right to a subscription to the fixed network, (ii) the obligation to
offer end-users the right to select a telephone service provider, and (iii) the obligation to publish general delivery terms and tariff information.

FICORA's
decisions may be appealed to the Supreme Administrative Court. Such appeal has been made with regard to FICORA's decision of February 6, 2004 relating to the market of
voice call termination on individual mobile networks.

We
are currently not in a position to assess the impact of these changes on our business, financial condition or results of operations. See "European UnionNew Communications
Framework."

Licensing Requirements

Under the Communications Market Act, a license from the Council of State is required for the provision of telecommunications network services in the public mobile
network. Licenses are granted for a maximum of 20 years and are renewable. Our current GSM license was granted in 1997 and is in force until 2017. The license covers the DCS, GSM 900 and GSM
1800 networks in Finland.

In
1999 we received a third generation mobile license for a term of 20 years (UMTS license). Our license currently covers the operation of a public third generation mobile network
throughout Finland.

Universal Service

Under the Communications Market Act, an operator with significant market power in a fixed network in a particular area has a universal service obligation to
provide a subscriber connection at the user's permanent place of residence/location, at a reasonable price. We have this obligation in our traditional operating area (mainly the eastern and northern
parts of Finland). The connection provided is required to allow outgoing and incoming local, long-distance, international and other ordinary calls, as well as outgoing and incoming
facsimile transmissions and an appropriate Internet connection.

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Access to Infrastructure

Interconnection

Under the Communications Market Act, operators of public telecommunications networks in Finland have an obligation to negotiate interconnection agreements with
each other for the purpose of offering their telecommunications services. Interconnection should be granted without delay at the requested interface. FICORA may require a telecommunications operator
with significant market power to connect a communications network or service to the communications network or service of another telecommunications operator. FICORA may also require a
telecommunications operator to set the interconnection prices in such a way that they are either cost-oriented, non-discriminatory or cost-oriented and
non-discriminatory.

The
fixed-to-mobile interconnection model in Finland is different from the model used in most other EU member states. According to the Communications Market Act,
a telecommunications operator is not obliged to specify a separate termination price for incoming traffic if the connection is made from a fixed telephone network to a mobile network. The Commission
has stated that FICORA's draft decision regarding voice call termination in individual mobile networks is not compatible with the Framework Directive and the Access Directive. As a result of the
Commission's statement, the current fixed-to-mobile price regime is subject to a potential change.

Because
FICORA has not fully concluded its market analysis and imposed final obligations on operators under the Communications Market Act (393/2003) and because some of its decisions
imposing interconnection obligations have been appealed, we are currently not in a position to assess the impact of the new interconnection regulation in the Communications Market Act on our business,
financial condition or results of operations.

National Roaming

A holder of third-generation mobile telecommunications licenses has the right to allow its subscribers to roam on the GSM network of operators with a significant
market power if its own third generation network covers at least one-fifth of the population in the licensed area.

FICORA
has not yet taken a final decision regarding possible national roaming obligations based on the current Communications Market Act.

Should
national roaming be mandated on terms and conditions that do not provide an adequate return on our investment in our GSM networks, the business, financial condition and results of
operations of our mobile communications operations in Finland could be materially adversely affected.

Carrier Pre-selection

Carrier selection refers to the ability of a user to choose a local, long-distance, mobile or international carrier independent of its local loop
provider. This can be achieved by: (1) pre-selection, where the carrier is chosen by the user; or (2) call-by-call procedures, where the user
typically inserts a prefix before a dialed number.

Fixed
network operators with significant market power must offer carrier pre-selection on request. Thus a call dialed without an operator prefix or with the "00" prefix is
automatically routed to a local, long-distance or international telecommunications service operator selected by the user. The proportional allocation system previously used was terminated
at the beginning of 2004, since which time a fixed network operator with significant market power is entitled to allocate such traffic to a long-distance or international service provider
of its choice. Mobile operators with significant market power may be required by a FICORA decision to offer carrier selection and pre-selection for international calls.

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Number Portability

Mobile number portability was introduced in July 2003. Local number portability (within an existing numbering area), and nation-wide number
portability using a separately allocated numbering area in the fixed-line network has been mandatory in the whole of Finland since September 1998. In March 2004, FICORA
issued a new decision that gradually enlarges the fixed-line number portability, among others, in the corporate segment.

Norway and Denmark

The regulatory environment in Norway and Denmark is similar to that in Sweden and Finland. Both Norway, as a party to the European Economic Area Agreement, and
Denmark, as a member of the EU, have implemented the EU's new regulatory framework for electronic communications.

The Baltic Countries

As countries acceding to the EU, Lithuania, Latvia and Estonia have agreed to implement the 1998 EU regulatory framework for telecommunications in their national
legislation. They are also required to implement the new regulatory framework before May 1, 2004, their scheduled date of entry into the EU. It is not certain whether their new legislation will
enter into force on or before the accession date. There can be no assurance that the interpretation and implementation of the new telecommunications legislation in the Baltic countries will have no
adverse effects on our business, financial condition or operating results in the Baltic region.

Competition Laws

We are subject to the competition laws of the countries in which we operate, in particular Swedish, Finnish and EU competition laws.

The European Union

The EU competition rules set out in the EC Treaty and EU legislation are binding on EU member states and are therefore applicable to our operations in the EU. If
those rules are breached, the European Commission may impose fines of up to ten percent of a company's revenues on a consolidated basis in the preceding financial year. Regulation 1/2003 on the
implementation of the rules on competition laid down in Articles 81 and 82 of the EC Treaty, which enters into force on May 1, 2004, may lead to a more rigorous application of the EU
competition rules at national level. The European Commission has prepared notices and guidelines implementing Regulation 1/2003. The EU competition rules will remain applicable to restrictions
on competition which may have an appreciable effect on trade between member states. Under the new regulation, it is no longer possible to notify agreements which may at first sight be considered as
anti-competitive to the European Commission, with a view to obtaining an individual exemption.

So
long as the Kingdom of Sweden exercises a significant influence over our company, the European Commission will have the authority to address individual decisions to the Kingdom of
Sweden to ensure that we comply with the EU competition rules. The European Commission could bring proceedings against us directly, under Articles 81 and 82 of the EC Treaty, or bring proceedings
against the Kingdom of Sweden under Article 86 of the EC Treaty. This means that we might face two different proceedings, the latter of which we could not directly influence and to which we
would not be a party.

Given
that the Swedish State and the Finnish State hold 45.3 percent and 19.1 percent of our shares, respectively, there is always a risk that our competitors might allege
that our transactions with the Finnish State or the Swedish State involve an element of state aid, or that the European

43

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Commission
may launch a formal investigation of such a transaction on its own initiative. The EU state aid rules are designed to prevent EU member states from granting aid that distorts or threatens
to distort competition. The European Commission has the power to order suspension of aid payments and require the recovery of aid already granted, including accrued interest. These rules do not apply
when a state contributes capital in circumstances that would be acceptable to a private investor operating under normal market economy conditions.

Sweden

In July 1993, a new Competition Act entered into effect in Sweden. The Swedish Competition Authority is empowered to issue injunctions, and to enjoin a
party to discontinue immediately practices that are not permitted under the Competition Act. The Swedish Competition Authority and the NPTA cooperate to facilitate investigations of
anti-competitive behavior in the telecommunications services sector. The Competition Act will be amended in order to harmonize it with Regulation 1/2003. Those amendments are
expected to enter into force in July 2004.

Finland

In February 2004 the Finnish Government submitted to the Parliament a bill aimed at harmonizing the Act on Competition Restrictions with
Regulation 1/2003. According to the bill, decisions terminating a prohibited procedure would be taken by the Finnish Competition Authority. The Market Court would have the power to impose
pecuniary penalties on parties that have committed infringements.

International Obligations

Over 70 member countries of the World Trade Organization (WTO), representing over 90 percent of the world's basic telecommunications revenues, including
the United States and the EU member states, have entered into a Basic Telecommunications Agreement (BTA), to provide market access to some or all of their basic telecommunications services. The BTA,
which took effect in February 1998, is the fourth protocol to the General Agreement on Trade in Services, which is administered by the WTO. Under the BTA, Sweden and Finland, like the other
signatories have made commitments to provide "market access," which require them to refrain from imposing certain quotas or other quantitative restrictions in specified telecommunications services
sectors, and to provide "national treatment" by ensuring that foreign telecommunications service suppliers are accorded the same treatment as national service suppliers. In addition, a number of
signatories, including Sweden and Finland, have agreed to abide by certain pro-competitive principles set forth in a reference paper relating to the prevention of
anti-competitive behavior, interconnection, universal service, transparency of licensing criteria, independence of the regulator and non-discriminatory allocation of scarce
resources.

Environmental Matters

The principal environmental impact of our operations arises from vehicle use, travel, transport, energy use and the consumption and use of materials. Our waste
and residue products are handled by environmentally certified contractors and source-sorting is applied in all large office buildings.

Historically,
we have operated sites in Finland that have been used for impregnating telephone poles. We have cleaned up the majority of these sites and have plans to clean up the
remainder of those sites in co-operation with Finnish environmental authorities. The responsibilities for costs are usually determined on a case-by-case basis.
TeliaSonera Finland has assessed that the clean up costs of the sites would not exceed €1.5 million, even in the event we were to bear such costs alone.

44

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In
Sweden we have also investigated the possible environmental effect of lead sheathed cables and impregnated poles used in our operations. These investigations have indicated that any
spread of substances from lead cables or impregnated poles is essentially negligible.

Pursuant
to European Union legislation, we may be responsible for the recycling costs of used telephone poles in several of the jurisdictions in which we operate. We do not believe that
such costs will be material.

As
mobile phone use has increased, an active debate has emerged on the possible health risks posed by electromagnetic fields (EMF) from mobile handsets or base stations. See "Item 3.D
Risk Factors" for a discussion of the possible health risks associated with mobile phone use.

4.C  Organizational Structure

TeliaSonera AB is the ultimate parent company of the TeliaSonera group and is also responsible for carrying out our Swedish fixed network operations. TeliaSonera
carries out the remainder of its operations through subsidiaries, the most significant of which are listed below:

|Name of company                      |  | Domicile                   |  | Ownership
(%) |     | External net sales for
the year ended
December 31, 2003 |    
|------------------------------------ |  | -------------------------- |  | ------------- | --- | ------------------------------------------------------- | ---
|
|Parent Company:                      |  |                            |  |               |    
|TeliaSonera AB                       |  | Stockholm, Sweden          |  |              |     | 4,750                                                   |    
|Significant Subsidiaries:            |  |                            |  |               |    
|TeliaSonera Sverige AB               |  | Stockholm, Sweden          |  | 100.0         |     | 27,372                                                  |    
|TeliaSonera Finland Oyj              |  | Helsinki, Finland          |  | 100.0         |     | 14,232                                                  |    
|NetCom AS                            |  | Oslo, Norway               |  | 100.0         |     | 6,011                                                   |    
|TeliaSonera Mobile Networks AB       |  | Nacka, Sweden              |  | 100.0         |     | 5,955                                                   | (1)
|Telia Communications AB              |  | Stockholm, Sweden          |  | 100.0         |     | 4,160                                                   |    
|Fintur Holdings B.V.                 |  | Rotterdam, the Netherlands |  | 74.0          | (2) | 2,740                                                   |    
|AB Lietuvos Telekomas                |  | Vilnius, Lithuania         |  | 60.0          |     | 2,020                                                   |    
|UAB Omnitel                          |  | Vilnius, Lithuania         |  | 90.0          |     | 1,911                                                   |    
|Latvijas Mobilais Telefons SIA       |  | Riga, Latvia               |  | 60.3          | (2) | 1,835                                                   |    
|Sonera Carrier Networks Oy           |  | Helsinki, Finland          |  | 100.0         |     | 1,389                                                   |    
|TeliaSonera International Carrier AB |  | Stockholm, Sweden          |  | 100.0         |     | 1,336                                                   |    
|Sonera Mobile Networks Oy            |  | Helsinki, Finland          |  | 100.0         |     | 1,058                                                   |    

---

4.D  Property, Plants and Equipment

TeliaSonera's principal executive offices are located at Sturegatan 1 in Stockholm, Sweden, where we lease approximately 5,000 square meters of office space.

As
of December 31, 2003, our real estate fixed assets had a carrying value of SEK 3,670 million. Our real estate holdings include some 4,000 properties, mainly in Sweden
and Finland. The substantial majority of these properties are used solely for technical facilities, such as network installations, computer installations, research centers and service outlets.

We
also own a limited number of office premises. Most of our office space is leased rather than owned. At the end of 2003, our office space and technical site leases covered
approximately 967,000

45

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square
meters. Apart from certain short-term leases, our lease terms range mainly between 3 and 15 years, with an average term of approximately 6 years. Each of our leases
has been entered into on conventional commercial terms. Certain contracts include renewal options for various periods of time. We engage in some limited subleasing of office space.

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion should be read in conjunction with our consolidated financial statements and the related notes that are included
elsewhere in this document.

5.A  Operating Results

Introduction

We are the leading provider of telecommunications services in the Nordic and Baltic region. We are also a leading provider of mobile services in Eurasia and have
significant holdings in leading mobile operators in Turkey and Russia. Our company, TeliaSonera, was created as a result of the merger of Telia AB and Sonera Corporation in December 2002.

The
discussion of our operating results that follows is intended to provide information that will assist in understanding our consolidated financial statements and the changes in certain
key items from year to
year, as well as how certain accounting policies and estimates affect our consolidated financial statements.

The
historical results section below presents a discussion of our operating results using our historical audited financial statements as of and for the years ended December 31,
2003, 2002 and 2001. These financial statements represent the results of operations of the newly merged group beginning December 3, 2002. Consequently, TeliaSonera's historical financial
statements for the years ended December 31, 2002 and 2001 are not representative of the business of the newly merged company. Therefore, to provide additional insight into our operating
results, prior period trends and current position, we also present a combined company results section, discussing our combined operating results as if Telia and Sonera had been a combined company in
2002 and 2001.

The
discussion of our results of operations at the consolidated level is followed by a more detailed analysis of results of operations by reporting segment. This analysis is presented on
a historical basis, including the results of operations of the newly merged group beginning December 3, 2002. In order to provide additional insight into our segment operating results, prior
period trends and current position, we also present combined company information, as if Telia and Sonera had been a combined company in 2002 and 2001.

Our
consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS/IAS). The principal differences between IFRS/IAS and U.S. GAAP
that affect our net income or loss, as well as our shareholders' equity, relate to the treatment of revenue from access, connection and similar fees, impairment charges, sale and leasebacks,
restructuring costs, associated companies in hyperinflationary economies, amortization of goodwill and fair value adjustments. See note 45 to our consolidated financial statements for a
description of these principal differences and for a description of the anticipated impact of the adoption of recently issued U.S. GAAP accounting standards.

In
the three-year period ended December 31, 2003, the following factors have had an especially significant effect on our operating results, cash flows and financial
condition:



46

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The Merger of Telia and Sonera

The merger of Telia and Sonera, first announced on March 26, 2002, was carried out through an exchange offer in which Sonera shareholders received shares
in Telia. Upon completion of the exchange offer in December 2002, Telia changed its name to TeliaSonera. TeliaSonera owns 100 percent of the shares in Sonera (subsequently renamed
TeliaSonera Finland).

We
have accounted for the merger as an acquisition by TeliaSonera of Sonera using the purchase method of accounting. Under the purchase method of accounting, as of December 31,
2003, we have allocated the approximately SEK 59.1 billion to acquire the Sonera shares, including transaction costs, to Sonera's assets and liabilities based on their respective fair values.
We have made the determination of fair values on the basis of an independent appraisal. The financial results of Sonera and the new Baltic subsidiaries, Omnitel, Lietuvos Telekomas and Latvijas
Mobilais Telefons, which became consolidated entities as a result of the merger, have been included in TeliaSonera's consolidated financial statements since December 3, 2002.

In
2003, we finalized the preliminary purchase price allocation included in our consolidated financial statements as of December 31, 2002. In that connection, we came to the
conclusion that certain deferred taxes included in the preliminary purchase price allocation would never materialize and, accordingly, we decided to reverse deferred tax liabilities of SEK
3,919 million and deferred tax assets of SEK 545 million. We also finalized the allocation of goodwill to the various businesses directly and indirectly acquired in the merger with
Sonera which resulted, among other things, in a reduction of goodwill allocated to the interest we acquired in Turkcell by SEK 2,618 million with a commensurate increase in residual group
goodwill. Other adjustments to the preliminary purchase price allocation mainly reflect the acquisition of the remaining five percent of Sonera's outstanding shares in early 2003.

See
Note 40 to our consolidated financial statements for more details regarding the purchase price allocation used in connection with the merger of Telia and Sonera.

Synergies from the Merger

In connection with the merger between Telia and Sonera, we estimated that we would derive significant synergies as a result of the merger and we identified and
quantified cost and capital

47

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expenditure
synergies within a number of areas. We estimated that synergies would be derived mainly from the combined company's wholly owned operations in the Nordic countries.

We
define synergies as savings in costs and capital expenditures, or increases in revenues, which could not have been achieved by either Telia or Sonera on a stand-alone basis. Synergy
implementation costs are one-off costs that are a direct result of actions taken to achieve synergies. These costs are usually in the form of write-downs, redundancy expenses, or other
restructuring expenses related to the elimination of overlapping activities or assets.

In
connection with the merger, we quantified and estimated the magnitude of the expected synergies as follows:



We
have established a process whereby, as of January 1, 2003, we determine and report the synergy implementation decisions taken each month. To qualify as a synergy decision in
our reporting, such decisions must meet certain criteria, and must be accompanied by a detailed implementation plan and the appropriation of resources to carry out the decision. We also determine and
report the impact of these decisions in our operating expenses and capital expenditure.

Currently,
we expect to reach the synergy goals announced in connection with the merger between Telia and Sonera. The actions we had taken by the end of 2003 are expected to yield, by
the end of 2005, annual cost savings of SEK 1,751 million and annual capital expenditure savings of SEK 374 million. We expect to be able to take further actions in 2004 and 2005 so that
our synergy targets (annual level of SEK 2.3 billion for cost synergies and SEK 0.6 billion for capital expenditure synergies by the end of 2005) will be reached. One-off
costs for the implementation of the decisions already taken are estimated to be approximately SEK 952 million in the aggregate.

The
initiatives taken during 2003 include the following:



48

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During
2003, the first full year subsequent to the merger, actual cost savings from these initiatives totaled SEK 882 million and capital expenditure savings totaled SEK
481 million, while implementation costs totaled SEK 685 million. Therefore, the savings for the first year after the merger exceeded the targets we set in connection with the merger.

The
following table sets forth a breakdown of our realized and expected synergy savings from decisions that we have taken through the end of 2003:

|                                |  | Synergies Achieved
in 2003 |  | Annual Synergies
Expected by the end of 2005(1)
|------------------------------- |  | -------------------------- |  | -----------------------------------------------
|
|Operating expenditure           |  |                            |  |                                                
|Product and service development |  | 205                        |  | 529                                            
|IT systems and infrastructure   |  | 100                        |  | 276                                            
|Purchasing                      |  | 254                        |  | 303                                            
|Network operations              |  | 178                        |  | 490                                            
|Corporate functions             |  | 145                        |  | 153                                            
|                                |  |                            |  |                                                
|Total                           |  | 882                        |  | 1,751                                          
|                                |  |                            |  |                                                
|Capital expenditure             |  |                            |  |                                                
|Product and service development |  | 46                         |  | 13                                             
|IT systems and infrastructure   |  | 53                         |  | 22                                             
|Purchasing                      |  | 348                        |  | 324                                            
|Network operations              |  | 34                         |  | 15                                             
|                                |  |                            |  |                                                
|Total                           |  | 481                        |  | 374                                            
|                                |  |                            |  |                                                

---

Restructuring Costs and Write-downs

Since the beginning of 2001, we have taken several actions to streamline our operations and improve our efficiency, which have had a negative impact on our
results of operations, especially in 2002. These actions mainly relate to:



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We
have recorded significant restructuring costs and provisions for future cash outflows in relation to these actions, which reduced our operating income by SEK 0.5 billion in
2001 and SEK 5.9 billion in 2002. In 2003, our operating income increased by SEK 0.1 billion, mainly due to a partial reversal of the provision for the refocusing of our International
Carrier operations, based on lower than expected restructuring costs in France and Sweden.

The
most extensive actions and the largest restructuring expenses have related to former Telia international carrier operations and our Danish fixed network operations, each of which has
struggled in recent years and recorded significant losses.



For
a detailed discussion of each of these restructuring efforts, see Note 37 to our consolidated financial statements.

Since
the beginning of 2001, we have also recorded significant non-cash write-downs, mainly related to:



Of
these, the write-downs related to SmartTrust and the German, Italian and Spanish 3G operations in 2002 are not included in our consolidated financial statements, since the write-downs
were recorded by Sonera before the merger. However, they are included in our combined company information. See "Results of Operations (Combined Company Results)."

The
aggregate amount of these write-downs in our historical consolidated financial statements was SEK 4.8 billion in 2001, SEK 9.2 billion in 2002 and SEK
1.0 billion in 2003. The aggregate amount of write-downs, on a combined company basis and including write-downs recorded by Sonera before the merger, would have totalled SEK 4.8 billion
in 2001 and SEK 48.7 billion in 2002.

50

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CRITICAL ACCOUNTING POLICIES, ESTIMATES AND ASSUMPTIONS

The following discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been
prepared in accordance with IFRS/IAS. The preparation of these financial statements requires management to make estimates and judgments that affect our reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of our contingent assets and liabilities. We base these estimates on historical experience and various other assumptions that management believes are
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions.

An
accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is
made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial
statements.

After
discussing the development and selection of the critical accounting estimates, and related disclosure with respect to our operating and financial review and prospects, with the
audit committee of our board of directors, management believes that the following critical accounting policies reflect its more significant estimates and assumptions used in the preparation of our
consolidated financial statements.

Revenue recognition

Our recording of net sales is described in Note 6 to our consolidated financial statements. We maintain a reserve for doubtful receivables for estimated
losses that result from the inability of our customers to make required payments. We base our reserve on the likelihood of recoverability of accounts receivable based on past experience and taking
into account current collection trends. If economic or specific industry conditions worsen beyond our estimates, we could increase our reserve by recording additional expense. See also the section
entitled "Credit risk" in Note 30 to our consolidated financial statements for a description of how we mitigate credit risks related to our trade receivables and our bad debt expense in
relation to our consolidated net sales in the latest three-year period.

Service
and construction contract revenues are recognized using the percentage of completion method. Assessment of the degree of completion is based on the value of contractual phases
completed as a percentage of total undertakings.

Within
our international carrier operations, sales of Indefeasible Rights of Use (IRU) regarding fibre and duct are recognized as revenue over the period of the agreement. See the
section entitled "TeliaSonera as operating lessor" in Note 28 to our consolidated financial statements. Within our international carrier operations, we also sign swap contracts for
infrastructure and capacity with other carriers. See Note 6 to our consolidated financial statements for a detailed description of our accounting treatment of evenly balanced and unbalanced
swap-deals, as well as the cash and non-cash parts of the deals.

Valuation of Intangible and Other Long-lived Assets

Our long-term assets represent approximately 80 percent of our total assets. The carrying value of intangible fixed assets is mainly
attributable to goodwill and other intangible fixed assets arising from the merger of Telia and Sonera in December 2002 and the acquisition of NetCom in June 2000. See Note 40 to
our consolidated financial statements for a description of the purchase price allocation in connection with the merger of Telia and Sonera. Other intangible fixed assets consist mainly of trade

51

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names,
licenses and contractual agreements. Our tangible fixed assets consist mainly of fixed and mobile telecommunications equipment and related assets.

Intangible
and tangible fixed assets are recorded in the balance sheet at acquisition value less accumulated scheduled amortization and write-downs. New installations under construction
are valued at the expense already incurred, including interest during the installation period. To the extent a legal or constructive obligation to a third party exists, the acquisition cost for a
tangible asset includes estimated costs of dismantling and removing the asset and restoring the site. See Notes 15 and 16 to our consolidated financial statements for a more detailed description and
information about the distribution of the carrying values with respect to our intangible and tangible fixed assets.

Our
financial fixed assets mainly consist of investments in associated companies, financial and operating leasing receivables and deferred tax assets. See "Income Taxes"
below. The carrying value of investments in associated companies is accounted for using the equity method. Individual carrying values of investments in associated companies are presented in
Note 41 to our consolidated financial statements. Financial leasing receivables comprise information technology related equipment leased to customers under financial leasing contracts. These
assets are reported at the gross investment
cost in the lease, less unearned financial revenues. Some of our leasing receivables have been securitized. Based on the terms of the securitization contracts, the leasing receivables have been
included in our consolidated balance sheets. See also Note 28 to our consolidated financial statements.

Amortization
and depreciation of intangible and tangible long-lived assets are based on the assets' historical acquisition value, with appropriate adjustments for impairment
and taking into account the estimated economic life of the assets. For assets acquired during a year, amortization and depreciation is calculated from the date of acquisition. Amortization and
depreciation is mainly recorded on a straight-line basis. See also Note 10 to our consolidated financial statements.

We
review our long-lived assets for impairment at least annually and else whenever events or changes in circumstances indicate that the carrying value of an asset may not be
recoverable, by analyzing individual assets or classes of assets that naturally belong together. If an analysis indicates that the value recorded is too high, the asset's recoverable value is set,
which is the higher of the net realizable value of the asset and its value in use. Value in use is measured based on the expected future discounted cash flows (DCF model) attributable to the asset. A
write-down consists of the difference between the carrying value and recoverable value of the asset.

As
a result of such impairment analysis we recorded significant write-downs in the years ended December 31, 2003, 2002 and 2001. See also Notes 10 and 11 to our consolidated
financial statements.

A
number of significant assumptions and estimates are involved in the application of a DCF model to forecast operating cash flows, including market growth rates, revenue volumes, market
prices for telecommunications services, costs to maintain and develop communications networks and working capital requirements. Our forecasts of future cash flows are based on our best estimates of
future revenues and operating expenses using historical trends, general market conditions, industry trends and forecasts and other available information. These assumptions are subject to review by
management and the audit committee of our board of directors. Our cash flow forecasts are adjusted by an appropriate discount rate derived from our cost of capital plus a reasonable risk premium at
the date of evaluation.

If
our projections for future cash flows for any of our long-lived assets change as a result of changes in business model or strategy, competitive pressures, or regulatory
environment, we may have to recognize impairment charges on our intangible, tangible and financial fixed assets.

Restructuring

We have engaged, and may in the future need to engage, in restructuring activities, which require management to utilize significant estimates related to
realizable values of assets made redundant or

52

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obsolete
(see "Valuation of Intangible and Other Long-lived Assets" above) and expenses for severance and other employee separation costs, lease cancellation and other exit
costs, which we recorded as write-downs or provisions at the time of the restructuring decision. Should the actual amounts differ from our estimates, our future results could be materially impacted.
For a description of our restructuring activities, see Note 37 to our consolidated financial statements.

Provisions for Pensions

Our recording of pension provisions is described in Note 22 to our consolidated financial statements. Almost all of our employees in Sweden, Finland and
Norway are covered by defined benefit plans. Provisions for these benefits represent obligations that will not be definitively settled for a long period of time. Pension obligations are calculated
annually, on the balance sheet date, based on actuarial principles. Our obligations for defined benefit plans in these countries are mainly secured by pension fund arrangements. The assets of the
funds, consisting primarily of various fixed income instruments, constitute plan assets for pensions and are valued at fair market value. See also the section entitled "Strategic asset allocation" in
Note 22 to our consolidated financial statements.

Management
has to make a number of significant assumptions in connection with the calculation of pension benefit obligations. The most significant assumptions that management makes in
connection with the actuarial calculation of pension obligations and pension expenses are the discount rate, the expected rate of compensation increase, the employee turnover rate, the average
expected remaining working-life, the increase in income base amount, the annual adjustments to pensions, and the expected return on plan assets. See the section entitled "Actuarial
calculation assumptions" in Note 22 to our consolidated financial statements for a detailed discussion of this process and actual estimates we have used for the last three years. A change in
any of these key assumptions may have a significant impact on our projected benefit obligations, funding requirements and periodic pension cost. See the section entitled "Pension obligation risk" in
Note 30 to our consolidated financial statements for a sensitivity analysis related to a change in the weighted average discount rate in calculating pension provisions.

Income Taxes

Significant management judgment is required in determining current tax liabilities and assets as well as provisions for deferred tax liabilities and assets, in
particular as regards valuation of deferred tax assets. As part of this process, we have to estimate our income taxes in each of the jurisdictions in which we operate. The process involves estimating
the actual current tax exposure together with assessing temporary differences resulting from the different valuation of certain assets and liabilities in our financial statements and tax returns.
Management must also assess the likelihood that the deferred tax assets will be recovered from future taxable income. Actual results may differ from these estimates due to, among other factors, future
changes in business environment, currently unknown changes in income tax legislation or results of the final review of tax returns by tax authorities or by courts of law.

Deferred
tax assets are reduced by means of a valuation allowance, to the extent that the ability of realizing the underlying tax asset within the foreseeable future is not likely. To
the extent the likely recovery of a deferred tax asset changes, the effect of such changes is recorded in the income statement for the relevant period. See also Note 14 to our consolidated
financial statements.

Litigation and Contingent Liabilities

Determination of the treatment of contingent liabilities in our consolidated financial statements is based on management's view of the expected outcome of the
applicable contingency. Management consults with legal counsel on matters related to litigation and other experts both within and outside the company with respect to matters in the ordinary course of
business. A provision is recognized if an adverse outcome is probable and the amount is estimable. If the likelihood of an adverse outcome is

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less
than probable but reasonably possible, or an estimate is not determinable, the matter is disclosed in the notes to our consolidated financial statements provided that the contingency is material.
See also Note 31 to our consolidated financial statements.

RESULTS OF OPERATIONS (Historical Results)

The following discussion compares our historical audited results, which include the results of operations of Sonera and our newly consolidated Baltic
subsidiaries, Omnitel, Lietuvos Telekomas and Latvijas Mobilais Telefons, only for the period beginning December 3, 2002. Therefore, the fluctuations in the
historical operating results in 2003 as compared to 2002 and 2001 are due principally to the merger of Telia and Sonera.

|                                                              |  | Year ended December 31, |  
|------------------------------------------------------------- |  | ----------------------- | -
|
|
|Net sales                                                     |  | 82,425                  |  
|Cost of sales                                                 |  | (46,688                 | )
|                                                              |  |                         |  
|Gross income                                                  |  | 35,737                  |  
|Selling, administrative and research and development expenses |  | (23,161                 | )
|Other operating revenues and expenses                         |  | 1,752                   |  
|Income from associated companies                              |  | 382                     |  
|                                                              |  |                         |  
|Operating income                                              |  | 14,710                  |  
|Financial revenues and expenses                               |  | (811                    | )
|                                                              |  |                         |  
|Income after financial items                                  |  | 13,899                  |  
|Income taxes                                                  |  | (3,850                  | )
|Minority interests                                            |  | (969                    | )
|                                                              |  |                         |  
|Net income                                                    |  | 9,080                   |  
|                                                              |  |                         |  

Analysis of Components within Operating Income

Our total net sales increased by 39 percent in 2003 and by four percent in 2002, in both cases primarily due to the merger with Sonera, which resulted in
the inclusion of net sales from Finland, certain Baltic subsidiaries, Eurasia, as well as certain subsidiaries included within TeliaSonera Holding beginning December 3, 2002. In 2002, the
increase in net sales due to the merger with Sonera was SEK 2,345 million. Increases in total net sales in 2003 and 2002 were partially offset by the divestiture of many non-core
operations. See Note 34 to our consolidated financial statements.

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The
following table sets forth our operating expenses by function and the percentage change in operating expenses for the periods indicated:

Year ended December 31,

Change2003

2002

2001

2003/2002

2002/2001(SEK in millions)

(%)Cost of sales(1)

46,688

38,182

40,435

22.3

(5.6
)Selling

12,786

9,225

8,738

38.6

(5.6
)Administration

7,832

8,275

7,902

(5.4
)
4.7Research and development

2,543

1,167

1,303

117.9

(10.4
)Total

69,849

56,849

58,378

22.9

(2.6
)


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The
following table sets forth our operating expenses by type of cost and the percentage change in operating expenses for the periods indicated:

Year ended December 31,

Change2003

2002

2001

2003/2002

2002/2001(SEK in millions)

(%)Total goods and services purchased

26,013

22,736

18,822

14.4

20.8Personnel expenses

12,401

9,933

13,158

24.8

(24.5
)Depreciation, amortization and write-downs

17,655

12,356

13,921

42.9

(11.2
)Other expenses

13,780

11,824

12,477

16.5

(5.2
)Total

69,849

56,849

58,378

22.9

(2.6
)


Total
operating expenses in 2003 were higher than in 2002 due to the inclusion of Sonera and the new Baltic subsidiaries in the consolidated financial statements beginning
December 3, 2002, partly offset by lower restructuring costs and write-downs recorded in 2003 as compared to 2002. Operating expenses in 2002 were lower than in 2001 primarily due to
divestments, reductions in personnel and the amount of consultant work in 2002, as well as lower depreciation and amortization, partly offset by the inclusion of Sonera and the new Baltic subsidiaries
in the consolidated financial statements beginning by December 3, 2002. See Note 7 to our consolidated financial statements.

The
increase in personnel expenses in 2003 was primarily attributable to the inclusion of Sonera and the new Baltic subsidiaries in the consolidated financial statements beginning
December 3, 2002, partly offset by divestitures of our non-core business operations and other reductions of personnel. The decrease in personnel expenses in 2002 was primarily
attributable to the divestiture of our non-core operations and other reductions in personnel as part of our refine and focus initiative. See Notes 7 and 36 to our consolidated financial
statements.

The
following table sets forth other operating revenues and expenses for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions)Other operating revenues

2,743

1,095

1,818Other operating expenses

(991
)
(15,152
)
(1,312
)Net effect on income

1,752

(14,057
)
506


55

---

Changes
in other operating revenues were mainly related to the amount of capital gains in each of the years presented, and changes in other operating expenses were mainly related to the
amount of restructuring costs in each of the years presented. The high level of other operating expenses in 2002 was due to impairment charges and restructuring provisions relating to our
international carrier operations and our fixed network operations in Denmark. See Note 8 to our consolidated financial statements.

The
following table sets forth our total depreciation, amortization and write-downs and percentage change therein for the periods indicated, according to the following types of fixed
assets:

Year ended December 31,

Change2003

2002

2001

2003/2002

2002/2001(SEK in millions)

(%)Goodwill

3,488

1,938

1,403

80.0

38.1Other intangible assets

1,987

738

340

169

117Buildings and land improvements

343

447

142

(23.3
)
215Fixed and mobile networks

10,205

15,500

9,868

(34.2
)
57.0Other machinery and equipment

1,684

2,221

2,222

(24.2
)
(0.0
)Total

17,707

20,844

13,975

(15.0
)
49.2


Depreciation,
amortization and write-downs are distributed in cost of sales, selling, administrative, research and development, and other operating expenses, depending on the nature of
the assets. The majority of depreciation, amortization and write-downs for each year are included in cost of sales. See Note 10 to our consolidated financial statements.

We
amortize goodwill according to original useful lives determined for each asset individually, but not longer than 20 years. In addition, we reassess goodwill annually to
determine if additional write-downs are required. Amortization periods for mobile and fixed line licenses equal the period of the license. Other intangible fixed assets are amortized according to
their useful lives, generally over a period of 5 to 10 years.

We
did not implement any significant changes in our depreciation rates in 2003, 2002 or 2001. Effective January 1, 2004, we have changed our economic life estimate for copper
cable in the fixed local access network in Sweden from 8 years to 20 years and for switching equipment for ADSL customers from three years to ten years.

Our
depreciation, amortization and write-down expense in 2003 decreased mainly due to significantly lower write-downs than in 2002, partly offset by the inclusion of Sonera
and the new Baltic subsidiaries in the consolidated financial statements beginning December 3, 2002. The increase in 2002 was primarily due to write-downs that related to Telia's mobile
operations in Finland and to the restructuring of our Danish fixed network operations and our international carrier operations. See Note 10 to our consolidated financial statements.

56

---

The
following table sets forth the effect on income from our share of net income in our associated companies for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions)Share in net income for the period

2,096

293

(903
)Amortization of goodwill and fair value adjustments

(565
)
(112
)
(465
)Write-down of goodwill and other carrying values

(1,436
)
(33
)
(1,820
)Net capital gains

287

380

9,324Net effect on income

382

528

6,136


The
decrease in income from associated companies in 2003 and 2002, as compared to 2001, was mainly due to significantly lower capital gains than in 2001. The significant increase in
share of net income before goodwill and capital gains in 2003 is principally due to inclusion of Sonera's interest in Turkcell and MegaFon beginning December 3, 2002. Significant write-downs of
goodwill and carrying values related to our investment in Infonet and Metro One in 2003 and to Netia in 2001. Significant capital gains related to Bharti Mobile in 2003 and to Eniro and Tess in 2001.
See Note 11 to our consolidated financial statements.

Operating Income and EBITDA Excluding Items Not Reflecting Underlying Business Operations

Our operating income in 2003 improved significantly after an operating loss in 2002, due to improved profitability in Sweden, Norway, Denmark and former Telia
International Carrier, to the consolidation of Sonera and the new Baltic subsidiaries, and to higher capital gains and significantly lower write-downs and restructuring charges in 2003 compared to
2002. The write-downs and restructuring charges recorded in 2002 mainly related to our international carrier operations and our fixed network operations in Denmark. Our operating income in 2002 was
weaker than in 2001, and we recorded a net loss mainly due to these write-downs and restructuring charges, as well as lower capital gains than in 2001.

In
addition to operating income, we use "EBITDA excluding items not reflecting underlying business operations" as the other principal measure for monitoring our performance. We believe
that, besides operating income, EBITDA excluding items not reflecting underlying business operations is also one of the measures commonly reported and widely used by analysts, investors and other
interested parties in the telecommunications industry. Accordingly, EBITDA excluding items not reflecting underlying business operations is presented to enhance the understanding of our historical
operating performance.

We
define EBITDA excluding items not reflecting underlying business operations as operating income net of items not reflecting underlying business operations and excluding depreciation,
amortization and write-downs, and excluding income from associated companies.

Items
not reflecting underlying business operations include write-downs, capital gains/losses, restructuring/phase-out of operations and personnel redundancy costs. We
believe that excluding these items provides a better view of the underlying business operations and economic performance of the company and our reporting units. We, for example, exclude write-downs,
personnel redundancy and other restructuring costs that result from our decisions to restructure operations or remove overlapping activities, since we believe such costs do not reflect the historical
performance of the underlying business operations. We also exclude capital gains and losses, since we believe that such items do not reflect the historical performance of our underlying business
operations. When calculating EBITDA excluding items not reflecting underlying business operations, we do not exclude items that are part of the underlying business operations, even though such items
may not recur in the near future. In 2003,

57

---

we
have not, for example, excluded from EBITDA excluding items not reflecting underlying business operations a write-down of SEK 400 million on certain development projects in
Sweden, a negative adjustment of SEK 242 million in Finland to correct the accrual of revenues, and a SEK 400 million release of reserve relating to an interconnection dispute in Sweden,
since we believe that such items reflect the historical performance of the underlying business operations in 2003 or reflect adjustments to our historical performance in prior periods.

EBITDA
excluding items not reflecting underlying business operations, however, is not a measure of financial performance under IFRS/IAS or U.S. GAAP, and may not be directly comparable
to other similarly titled measures for other companies.

For
illustrative purposes, the following table sets forth the relationship between operating income, as reported under IFRS/IAS, and EBITDA excluding items not reflecting underlying
business operations for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions)EBITDA excluding items not reflecting underlying business operations

30,700

15,692

12,915Items not reflecting underlying business operations

1,335

(6,271
)
384Depreciation, amortization and write-downs

(17,707
)
(20,844
)
(13,975
)Income from associated companies(1)

382

528

6,136Operating income under IFRS/IAS

14,710

(10,895
)
5,460


The
following table sets forth items not reflecting underlying business operations within EBITDA for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions)Restructuring charges(2)

88

(5,924
)
(478
)Implementation costs to gain synergies and integrate Telia and Sonera

(456
)


Transaction expenses regarding TeliaSonera merger



(13
)
Certain pension-related items



(248
)
88Net capital gains/losses(3)

1,703

(86
)
774Total

1,335

(6,271
)
384


---

Our
EBITDA excluding items not reflecting underlying business operations increased by 96 percent in 2003. This was mainly due to the inclusion of Sonera and the new Baltic
subsidiaries in the consolidated financial statements beginning December 3, 2002, improved results in Sweden due to streamlining efforts implemented in 2002 and 2003, profitable growth in
Norway, and the successful restructuring of our Danish fixed-line business and our international carrier operations. EBITDA excluding items not reflecting underlying business operations
increased by 22 percent in 2002. This was mainly due to the one-month impact from the merger with Sonera, improved results in Sweden due to

58

---

streamlining
efforts begun in 2002, profitable growth in Norway, and lower losses in our international carrier and TeliaSonera Holding operations, partly offset by increased losses in our Danish
fixed-line operations.

Other Components Affecting our Net Income

In addition to operating profit, our net income is also affected by financial revenues and expenses, income taxes and minority interest.

The
following table sets forth financial income and expense items for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions)Dividends, capital gains and write-downs on financial investments

(7
)
(181
)
(142
)Other financial revenues

1,763

1,274

1,693Other financial expenses

(2,567
)
(1,814
)
(2,203
)Net financial expenses

(811
)
(721
)
(652
)


Our
net financial expenses increased by 12 percent in 2003 and by 11 percent in 2002. Other financial revenues increased in 2003 mainly due to higher exchange rate gains,
and decreased in 2002 due to lower interest income. Other financial expenses increased in 2003 due to higher interest expenses, as a
result of higher debt levels after the merger of Telia and Sonera. Other financial expenses decreased in 2002 due to lower interest expenses.

The
following table sets forth our recorded income taxes and our effective tax rate for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions, except effective tax rate)Current tax expense

2,761

594

945Deferred tax expense (benefit)

1,089

(4,213
)
1,972Total tax expense (benefit)

3,850

(3,619
)
2,917Effective tax rate (%)(1)

27.7

31.2

60.7


---

Our
current tax expense increased in 2003 due to better profitability and lower tax-deductible write-downs than in 2002. Current tax expense decreased slightly in 2002,
mainly due to changes in the business model of our former Telia international carrier operations. In 2003, we recorded a deferred tax expense, mainly due to the use of existing deferred tax assets,
while in 2002 we recorded a deferred tax benefit from the write-downs and restructuring provisions related to our fixed network operations in Denmark and our international carrier operations. The
effective tax rate in 2001 was high due to losses in our former Telia international carrier operations, for which deferred tax assets were not recognized, and due to adjustments for new tax
legislation in Sweden.

59

---

The corporate income tax rate in Sweden is 28 percent. In 2003, the Finnish government announced its intention to propose Parliament to reduce the Finnish corporate income tax
rate from 29 percent to 26 percent. If the change had already been enacted by the Parliament during 2003, our deferred tax expense for 2003 would have increased by SEK
1,018 million and our effective tax rate would have increased from 27.7 percent to 35.0 percent.

Our
net income improved by SEK 17,147 million, from a net loss of SEK 8,067 million in 2002 to a net income of SEK 9,080 million in 2003. The improvement was
primarily due to the increase in operating income. In 2002 as compared to 2001, net income decreased by SEK 9,936 million from a net income of SEK 1,869 million in 2001 to a net loss of
SEK 8,067 million in 2002. The decrease was primarily due to the decrease in operating income.

RESULTS OF OPERATIONS (Combined Company Results)

As previously stated, the following discussion includes the combined results of operations of Telia and Sonera as if the merger had occurred as of
January 1, 2001. The combined financial information presented below assumes (i) that TeliaSonera held a 100 percent interest in Sonera for the periods presented and
(ii) that the divestments of Com Hem and Telia Mobile Finland that were required by the EU Commission to obtain clearance for the merger had occurred as of January 1, 2001.

Year ended December 31,2003

2002

2001(SEK in millions)Net sales

81,772

80,979

80,925Operating expenses (except depreciation, amortization and write-downs)

(51,450
)
(65,579
)
(51,865
)Depreciation, amortization and write-downs

(17,564
)
(28,319
)
(20,867
)Income from associated companies

382

(33,039
)
1,392Operating income

13,140

(45,958
)
9,586Financial revenues and expenses

(794
)
(833
)
(4,333
)Income after financial items

12,346

(46,791
)
5,253Income taxes

(3,706
)
14,409

(2,512
)Minority interests

(969
)
(508
)
(598
)Net income

7,671

(32,890
)
2,143


The
combined company results have been derived from our historical audited results for 2003, 2002 and 2001 as follows:

Year ended December 31, 2003Historical

Adjustments

Combined
company(SEK in millions)Net sales

82,425

(653
)
81,772Operating income

14,710

(1,570
)
13,140Income after financial items

13,899

(1,553
)
12,346Net income

9,080

(1,409
)
7,671


For
2003, we have adjusted the historical audited results by excluding the results of Com Hem and Telia Mobile Finland up to the date of their divestment in June 2003 and the
related net capital gain from the divestment, because the divestment of these units was required by the EU Commission to

60

---

obtain
clearance for the merger. After the divestment of Com Hem and Telia Mobile Finland in June 2003, the combined company results are the same as our historical audited results.

Year ended December 31, 2002Historical

Adjustments

Combined
company(SEK in millions)Net sales

59,483

21,496

80,979Operating income

(10,895
)
(35,063
)
(45,958
)Income after financial items

(11,616
)
(35,175
)
(46,791
)Net income

(8,067
)
(24,823
)
(32,890
)


For
2002, we have adjusted the historical audited results by including the results of operations of Sonera and the new Baltic subsidiaries, together with the related amortization of
goodwill and similar fair value adjustments, for the period between January 1 and December 3, 2002, the date of the merger. We have also excluded the results of Com Hem and Telia Mobile
Finland for the full year 2002.

Year ended December 31, 2001Historical

Adjustments

Combined
company(SEK in millions)Net sales

57,196

23,729

80,925Operating income

5,460

4,126

9,586Income after financial items

4,808

445

5,253Net income

1,869

274

2,143


For
2001, we have adjusted the historical audited results by including the results of operations of Sonera and the new Baltic subsidiaries, together with the related amortization of
goodwill and similar fair value adjustments, for the full year 2001. We have also excluded the results of Com Hem and Telia Mobile Finland for the full year 2001.

Analysis of Components within Operating Income

On a combined company basis, our net sales increased by 1.0 percent in 2003 and by 0.1 percent in 2002, mainly due to growth in Norway and the
consolidation of our Eurasian operations beginning in September 2002. Increases in net sales in 2003 and 2002 were partially offset by divestitures of certain non-core operations.

On
a combined company basis, our operating expenses (except depreciation, amortization and write-downs) decreased in 2003, mainly due to lower restructuring costs and write-downs
recorded in 2003 as compared to 2002, and improved efficiency across most of our operations. Operating expenses in 2002 were higher than in 2001 primarily due to significant restructuring costs and
write-downs recorded in 2002, which mainly related to our international carrier operations and the Italian 3G operations. Significant capital gains/losses from divestments reported within operating
expenses were zero, SEK 1,269 million and SEK 8,177 million in 2003, 2002 and 2001, respectively.

On
a combined company basis, our depreciation, amortization and write-down expense in 2003 decreased mainly due to significantly lower write-downs than in 2002. The increase
in 2002 was primarily due to write-downs that related to the former Telia mobile operations in Finland, to the restructuring of our Danish fixed network operations and our international carrier
operations, and to the goodwill write-down relating to our former software subsidiary Sonera SmartTrust. Excluding write-downs, our depreciation and amortization expense was SEK
17,361 million, SEK 18,086 million and SEK 17,587 million in 2003, 2002 and 2001, respectively.

61

---

On
a combined company basis, our income from associated companies improved significantly in 2003 due to lower write-downs recorded on associated companies. In 2002, we recorded a SEK
34 billion write-down on our investment in German 3G operations, which resulted in a significant loss recorded from associated companies as a whole. Net capital gains recorded from
divestments of shares in associated companies were SEK 231 million, SEK 2,386 million and SEK 9,180 million in 2003, 2002 and 2001, respectively.

Operating Income and EBITDA Excluding Items Not Reflecting Underlying Business Operations

On a combined company basis, our operating income in 2003 improved significantly from an operating loss in 2002 due to improved profitability in Sweden, Norway,
Denmark, Russia, Turkey, for former Telia International Carrier and TeliaSonera Holding, as well as to the full-year consolidation of Eurasia, and to significantly lower write-downs and
restructuring charges. The write-downs and restructuring charges recorded in 2002 mainly related to our international carrier operations and our fixed network operations in Denmark, and our 3G
investments in Germany, Italy and Spain. Our operating income in 2002 was weaker than in 2001 and we recorded a significant operating loss mainly due to these write-downs and restructuring charges, as
well as lower capital gains than in 2001.

As
discussed previously, we use both operating income and "EBITDA excluding items not reflecting underlying business operations" as the principal measures for monitoring profitability.
For illustrative purposes, the following table sets forth the relationship between operating income under IFRS/IAS and EBITDA excluding items not reflecting underlying business operations for the
periods indicated, and on combined company basis:

Year ended December 31,2003

2002

2001(SEK in millions)EBITDA excluding items not reflecting underlying business operations

30,690

25,457

21,768Items not reflecting underlying business operations

(368
)
(10,057
)
7,293Depreciation, amortization and write-downs

(17,564
)
(28,319
)
(20,867
)Income from associated companies(1)

382

(33,039
)
1,392Operating income under IFRS/IAS

13,140

(45,958
)
9,586


The
following table sets forth items not reflecting underlying business operations within EBITDA for the periods indicated:

Year ended December 31,2003

2002

2001(SEK in millions)Restructuring charges(2)

88

(5,960
)
(764
)Implementation costs to gain synergies and integrate Telia and Sonera

(456
)


Transaction expenses TeliaSonera merger



(13
)
Certain pension-related items



(248
)
91Write-downs of shares



(2,568
)
(212
)Net capital gains/losses(3)



(1,269
)
8,177Total

(368
)
(10,058
)
7,292


---

62

---

On
a combined company basis, our EBITDA excluding items not reflecting underlying business operations increased by 21 percent in 2003 due to improved results across most of our
operations. Accordingly, EBITDA excluding items not reflecting underlying business operations in relation to net sales improved from 31.4 percent in 2002 to 37.5 percent in 2003. Our
EBITDA excluding items not reflecting underlying business operations increased by 17 percent in 2002 mainly due to improved results in Sweden, Finland, Norway and our Holding operations, and
the consolidation of our Eurasian operations beginning in September 2002.

Other Components Affecting our Net Income

On a combined company basis, our net financial expenses decreased by five percent in 2003, reflecting the lower average indebtedness in 2003. Net financial
expenses decreased significantly in 2002 as compared to 2001, mainly due to significant write-downs and capital losses recorded in 2001 that related to Deutsche Telekom shares temporarily held by
former Sonera.

On
a combined company basis, our effective tax rate was 30.0 percent in 2003, 30.8 percent in 2002, and 47.8 percent in 2001. In 2002, we recorded significant
deferred tax benefits from write-downs and restructuring charges related to our fixed network operations in Denmark and our international carrier operations, and from write-downs related to the German
and Italian 3G investments. Our effective tax rate in 2001 was high mainly due to losses in our former Telia international carrier operations, for which deferred tax assets were not recognized, and
due to adjustments for new tax legislation in Sweden.

On
a combined company basis, our net income improved by SEK 40,561 million from a net loss of SEK 32,890 million in 2002 to a net income of SEK 7,671 million in
2003. The improvement was primarily due to the increase in operating income. In 2002 as compared to 2001, net income decreased by SEK 35,033 million from a net income of SEK
2,143 million in 2001 to a net loss of SEK 32,890 million in 2002. The decrease was primarily due to the decrease in operating income.

SEGMENT ANALYSIS

Immediately after the completion of the merger of Telia and Sonera, as of January 1, 2003, we implemented a new reporting unit structure based principally
on the following geographic areas in which we operate:



63

---



Prior
to the merger, both Telia and Sonera had reporting segments based on product areas, including mobile services, fixed network services, Internet services, and certain other product
areas. We have restated the segment financial data for the years ended December 31, 2002 and 2001 to reflect our new reporting structure. See Note 34 to our consolidated financial
statements for further details.

The
historical results discussion below includes the historical results of each of our reporting segments in 2003, 2002 and 2001, including the results of operations of Sonera and the
new Baltic subsidiaries only for the period beginning December 3, 2002. Therefore, the fluctuations in the historical operating results, except for Sweden, Norway and Denmark, in 2003 as
compared to 2002 and 2001 were principally due to the merger of Telia and Sonera.

Consistent
with the supplemental disclosures above in the consolidated operating results discussion, we have also presented a combined company segment results discussion that includes
the results of each of our segments as if the merger had occurred as of January 1, 2001. The combined company information assumes (i) that TeliaSonera held a 100 percent interest
in Sonera for the periods presented and (ii) that the divestments of Com Hem and Telia Mobile Finland that were required by the EU Commission to obtain clearance for the merger had occurred as
of January 1, 2001.

Sweden

Historical and Combined Company Results

|                                                                                                  |                       | Year ended December 31, |        | Change |       
|------------------------------------------------------------------------------------------------- | --------------------- | ----------------------- | ------ | ------ | ------
|
|
|Net sales                                                                                         |                       |                         |        |        |       
|                                                                                                  | Mobile Communications |                         | 12,312 |        | 11,846
|                                                                                                  | Fixed Communications  |                         | 30,052 |        | 31,716
|                                                                                                  |                       |                         |        |        |       
|                                                                                                  | Total                 |                         | 42,364 |        | 43,562
|                                                                                                  |                       |                         |        |        |       
|Operating income                                                                                  |                       | 10,809                  |        | 8,035  |       
|In relation to net sales (%)                                                                      |                       | 25.5                    |        | 18.4   |       
|Additional information:                                                                           |                       |                         |        |        |       
|EBITDA excluding items not reflecting underlying business operations                              |                       |                         |        |        |       
|                                                                                                  | Mobile Communications |                         | 5,529  |        | 5,217 
|                                                                                                  | Fixed Communications  |                         | 12,108 |        | 10,679
|                                                                                                  |                       |                         |        |        |       
|                                                                                                  | Total                 |                         | 17,637 |        | 15,896
|                                                                                                  |                       |                         |        |        |       
|EBITDA excluding items not reflecting underlying business operations in relation to net sales (%) |                       |                         |        |        |       
|                                                                                                  | Mobile Communications |                         | 44.9   |        | 44.0  
|                                                                                                  | Fixed Communications  |                         | 40.3   |        | 33.7  
|                                                                                                  |                       |                         |        |        |       
|                                                                                                  | Total                 |                         | 41.6   |        | 36.5  
|                                                                                                  |                       |                         |        |        |       

We
are the largest provider of mobile communications, fixed voice, Internet access, broadband and corporate data services in Sweden.

Our
net sales in Sweden decreased in 2003 and 2002 mainly due to lower intercompany sales and lower net sales in fixed communications. Our total external sales decreased by
0.7 percent in 2003 and by 0.4 percent in 2002. Net sales for mobile communications increased in 2003 and 2002 mainly due to our growing customer base. Net sales for fixed communications
decreased in 2003 and 2002 mainly due

64

---

to
our reduced market share in fixed communications and, in 2003, also due to a decline in the size of the overall telecommunications market in Sweden.

Our
operating income in Sweden increased in 2003 mainly due to reduced operating expenses, the results of continued streamlining and tight focus on costs, the impact of the efficiency
improvement measures implemented in 2002 and the effect of synergies from the merger. Operating income in 2003 was also improved by lower restructuring costs and lower depreciation and amortization
expense compared to 2002. Operating income in 2002 decreased mainly due to higher restructuring costs and higher depreciation and amortization expense as a result of the high capital expenditure level
in 2001.

Our
EBITDA excluding items not reflecting underlying business operations in Sweden increased in 2003 and 2002, both in absolute terms and in relation to net sales. This was due to
continued streamlining and tight focus on costs, the impact of the efficiency improvement measures implemented in 2002, and in 2003, the effect of synergies from the merger. This development is also
reflected in improved margins in 2003 and 2002 for both mobile and fixed communications.

Finland

Historical Results

|                                                                     |  | Year ended December 31, |  | Change
|-------------------------------------------------------------------- |  | ----------------------- |  | ------
|
|
|Net sales                                                            |  | 17,697                  |  | 1,461 
|Operating income                                                     |  | 1,981                   |  | (70   
|In relation to net sales (%)                                         |  | 11.2                    |  | (4.8  
|Additional information:                                              |  |                         |  |       
|EBITDA excluding items not reflecting underlying business operations |  | 6,738                   |  | 502   
|In relation to net sales (%)                                         |  | 38.1                    |  | 34.4  

The
fluctuations in the historical year-over-year operating results for Finland in 2003 and 2002 were due entirely to the merger of Telia and Sonera. We have
presented below a supplementary discussion of the operating results for Finland for 2003, 2002 and 2001, including trends that affected historical as well as combined company results.

65

---

Combined Company Results

|                                                                                                  |                       | Year ended December 31, |        | Change |       
|------------------------------------------------------------------------------------------------- | --------------------- | ----------------------- | ------ | ------ | ------
|
|
|Net sales                                                                                         |                       |                         |        |        |       
|                                                                                                  | Mobile Communications |                         | 10,898 |        | 11,208
|                                                                                                  | Fixed Communications  |                         | 6,799  |        | 6,307 
|                                                                                                  |                       |                         |        |        |       
|                                                                                                  | Total                 |                         | 17,697 |        | 17,515
|                                                                                                  |                       |                         |        |        |       
|Operating income                                                                                  |                       | 1,981                   |        | 2,112  |       
|In relation to net sales (%)                                                                      |                       | 11.2                    |        | 12.1   |       
|Additional information:                                                                           |                       |                         |        |        |       
|EBITDA excluding items not reflecting underlying business operations                              |                       |                         |        |        |       
|                                                                                                  | Mobile Communications |                         | 5,200  |        | 5,662 
|                                                                                                  | Fixed Communications  |                         | 1,538  |        | 1,207 
|                                                                                                  |                       |                         |        |        |       
|                                                                                                  | Total                 |                         | 6,738  |        | 6,869 
|                                                                                                  |                       |                         |        |        |       
|EBITDA excluding items not reflecting underlying business operations in relation to net sales (%) |                       |                         |        |        |       
|                                                                                                  | Mobile Communications |                         | 47.7   |        | 50.5  
|                                                                                                  | Fixed Communications  |                         | 22.6   |        | 19.1  
|                                                                                                  |                       |                         |        |        |       
|                                                                                                  | Total                 |                         | 38.1   |        | 39.2  
|                                                                                                  |                       |                         |        |        |       

We
are the largest provider of mobile communications, broadband and corporate data services in Finland, and one of the three largest providers of fixed voice services.

Our
net sales in Finland increased in 2003 and 2002 mainly due to higher net sales for fixed communications. Net sales for mobile communications decreased in 2003 mainly due to price
erosion and a SEK 242 million adjustment to accrued revenues. Despite slight growth in our customer base, net sales for mobile communications remained flat in 2002 as compared to 2001, mainly
due to price erosion. Net sales for fixed communications increased in 2003 mainly due to the acquisition of Auria, which increased net sales by SEK 172 million, higher sales of Internet and
data services, and higher equipment sales. In 2002, net sales for fixed communications increased mainly due to higher sales of Internet and data services.

Our
operating income in Finland decreased in 2003 mainly due to lower net sales and lower margins in our mobile operations compared to 2002, due to an adjustment of SEK
242 million to accrued revenues. Operating income in 2002 decreased due to lower capital gains in 2002 as compared to 2001. Our operating income in Finland is also affected by goodwill and
similar amortization expenses related to the merger, which totalled SEK 2,240 million, SEK 2,201 million and SEK 2,203 million in 2003, 2002 and 2001, respectively. Changes in
annual goodwill and similar amortization levels were mainly due to exchange rate effects.

Our
EBITDA excluding items not reflecting underlying business operations in Finland decreased in 2003, both in absolute terms and in relation to net sales. This was due to the adjustment
to accrued revenues in mobile communications. EBITDA excluding items not reflecting underlying business operations for fixed communications increased in 2003 mainly due to increased net sales,
efficiency improvements and synergy savings. In 2002, EBITDA excluding items not reflecting underlying business operations in Finland increased, both in absolute terms and in relation to net sales,
mainly due to the

66

---

full-year
impact of the efficiency improvement measures implemented in 2001, and in the fixed communications, also due to increased net sales.

Regarding
the market of voice call termination on individual mobile telephone networks, the three mobile operators in Finland that have their own networks have recently achieved mutual
agreements on their new mobile-to-mobile termination fees. We estimate that the new prices will have a slightly negative effect on revenues, and an approximately SEK
50 million negative effect per annum on operating income.

Norway

Historical and Combined Company Results

|                                                                     |  | Year ended December 31, |  | Change
|-------------------------------------------------------------------- |  | ----------------------- |  | ------
|
|
|Net sales                                                            |  | 6,081                   |  | 5,537 
|Operating income                                                     |  | 423                     |  | (38   
|In relation to net sales (%)                                         |  | 7.0                     |  | (0.7  
|Additional information:                                              |  |                         |  |       
|EBITDA excluding items not reflecting underlying business operations |  | 2,499                   |  | 2,129 
|In relation to net sales (%)                                         |  | 41.1                    |  | 38.5  

We
are the second largest provider of mobile communications in Norway, where we operate through our wholly owned subsidiary, NetCom, which we acquired in 2000.

Net
sales in Norway increased in 2003 and 2002 due to growth in our customer base and increased usage per customer. In local currency, our net sales grew by 17 percent and
21 percent in 2003 and 2002, respectively. In 2003, price cuts resulted in a four percent decline in our net sales.

Our
operating income in Norway has steadily improved from a negative margin of nine percent in 2001 to a positive margin of seven percent in 2003, due to strong growth in net sales and
improved economies of scale as our customer base has continued to grow. Our operating income in Norway is also affected by goodwill amortization expense, which totalled SEK 1,260 million, SEK
1,347 million and SEK 1,270 million in 2003, 2002 and 2001, respectively. Changes in annual goodwill amortization levels were due to exchange rate effects only.

Our
EBITDA excluding items not reflecting underlying business operations in Norway increased in 2003 and 2002, both in absolute terms and in relation to net sales. This was due to strong
growth in net sales and improved economies of scale.

67

---

Denmark

Historical and Combined Company Results

|                                                                                                  |                       | Year ended December 31, |       | Change |       
|------------------------------------------------------------------------------------------------- | --------------------- | ----------------------- | ----- | ------ | ------
|
|
|Net sales                                                                                         |                       |                         |       |        |       
|                                                                                                  | Mobile Communications |                         | 1,552 |        | 1,021 
|                                                                                                  | Fixed Communications  |                         | 1,726 |        | 1,762 
|                                                                                                  |                       |                         |       |        |       
|                                                                                                  | Total                 |                         | 3,278 |        | 2,783 
|                                                                                                  |                       |                         |       |        |       
|Operating income                                                                                  |                       | (561                    | )     | (5,764 | )     
|In relation to net sales (%)                                                                      |                       | (17.1                   | )     | (207.1 | )     
|Additional information:                                                                           |                       |                         |       |        |       
|EBITDA excluding items not reflecting underlying business operations                              |                       |                         |       |        |       
|                                                                                                  | Mobile Communications |                         | (91   | )      | (505  
|                                                                                                  | Fixed Communications  |                         | 161   |        | (804  
|                                                                                                  |                       |                         |       |        |       
|                                                                                                  | Total                 |                         | 70    |        | (1,309
|                                                                                                  |                       |                         |       |        |       
|EBITDA excluding items not reflecting underlying business operations in relation to net sales (%) |                       |                         |       |        |       
|                                                                                                  | Mobile Communications |                         | (5.9  | )      | (49.5 
|                                                                                                  | Fixed Communications  |                         | 9.3   |        | (45.6 
|                                                                                                  |                       |                         |       |        |       
|                                                                                                  | Total                 |                         | 2.1   |        | (47.0 
|                                                                                                  |                       |                         |       |        |       

We
are the fourth largest mobile network operator in Denmark, the third largest provider of fixed voice services, the second largest in fixed wholesale products, and the second largest
cable TV operator.

Our
net sales in Denmark increased in 2003 and 2002 due to growth in our mobile operations. Net sales for mobile communications increased in 2003 and 2002 mainly due to the
82 percent growth in our customer base from 288,000 customers on January 1, 2001 to 525,000 customers on December 31, 2003. Net sales for fixed communications decreased in 2003
and 2002 mainly due to the restructuring of fixed-line operations in 2002 and the streamlining of product portfolio. This decrease was partly offset by growth in 2003 and 2002 in the cable
TV operations due to increased customer base.

Our
operating loss in Denmark decreased significantly in 2003 compared to 2002 due to growth in net sales from mobile communications, improved margins overall, and because we recorded
significant write-downs and restructuring costs in 2002. Our operating loss in 2002 increased from the loss in 2001 due to these write-downs and restructuring costs and also due to increasingly
negative margins recorded by our fixed communications business.

Our
EBITDA excluding items not reflecting underlying business operations in Denmark turned positive in 2003, after significant losses in 2002 and 2001. This was due to increased revenues
and economies of scale in our mobile operations, as well as the successful restructuring of our fixed-line operations. We also recorded positive EBITDA excluding items not reflecting
underlying business operations for mobile communications in the last quarter of 2003.

68

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The Baltic Countries

Historical Results

|                                                                     |  | Year ended December 31, |  | Change
|-------------------------------------------------------------------- |  | ----------------------- |  | ------
|
|
|Net sales                                                            |  | 5,881                   |  | 578   
|Operating income                                                     |  | 994                     |  | 229   
|In relation to net sales (%)                                         |  | 16.9                    |  | 39.6  
|Additional information:                                              |  |                         |  |       
|EBITDA excluding items not reflecting underlying business operations |  | 2,846                   |  | 207   
|In relation to net sales (%)                                         |  | 48.4                    |  | 35.8  

The
fluctuations in the historical year-over-year operating results for the Baltic countries in 2003 and 2002 were due in substantial part to the
merger of Telia and Sonera. We have presented below a supplementary discussion of the operating results for the Baltic countries for 2003, 2002 and 2001, including trends that affected historical as
well as combined company results.

Combined Company Results

|                                                                                                  |                        | Year ended December 31, |       | Change |      
|------------------------------------------------------------------------------------------------- | ---------------------- | ----------------------- | ----- | ------ | -----
|
|
|Net sales                                                                                         |                        |                         |       |        |      
|                                                                                                  | Lithuania mobile       |                         | 2,032 |        | 1,840
|                                                                                                  | Lithuania fixed        |                         | 2,136 |        | 2,557
|                                                                                                  | Latvia mobile          |                         | 1,855 |        | 1,815
|                                                                                                  | Other and eliminations |                         | (142  | )      | (149 
|                                                                                                  |                        |                         |       |        |      
|                                                                                                  | Total                  |                         | 5,881 |        | 6,063
|                                                                                                  |                        |                         |       |        |      
|Operating income                                                                                  |                        | 994                     |       | 1,182  |      
|In relation to net sales (%)                                                                      |                        | 16.9                    |       | 19.5   |      
|Additional information:                                                                           |                        |                         |       |        |      
|EBITDA excluding items not reflecting underlying business operations                              |                        |                         |       |        |      
|                                                                                                  | Lithuania mobile       |                         | 900   |        | 736  
|                                                                                                  | Lithuania fixed        |                         | 1,059 |        | 1,373
|                                                                                                  | Latvia mobile          |                         | 944   |        | 927  
|                                                                                                  | Other and eliminations |                         | (57   | )      | (16  
|                                                                                                  |                        |                         |       |        |      
|                                                                                                  | Total                  |                         | 2,846 |        | 3,020
|                                                                                                  |                        |                         |       |        |      
|EBITDA excluding items not reflecting underlying business operations in relation to net sales (%) |                        |                         |       |        |      
|                                                                                                  | Lithuania mobile       |                         | 44.3  |        | 40.0 
|                                                                                                  | Lithuania fixed        |                         | 49.6  |        | 53.7 
|                                                                                                  | Latvia mobile          |                         | 50.9  |        | 51.1 
|                                                                                                  | Other and eliminations |                         | 40.1  |        | 10.7 
|                                                                                                  |                        |                         |       |        |      
|                                                                                                  | Total                  |                         | 48.4  |        | 49.8 
|                                                                                                  |                        |                         |       |        |      
|Income from associated companies                                                                  |                        |                         |       |        |      
|                                                                                                  | Latvia fixed           |                         | 205   |        | 207  
|                                                                                                  | Estonia mobile         |                         | 136   |        | 144  
|                                                                                                  | Estonia fixed          |                         | 41    |        | 7    
|                                                                                                  | Other and eliminations |                         | (3    | )      | 0    
|                                                                                                  |                        |                         |       |        |      
|                                                                                                  | Total                  |                         | 379   |        | 358  
|                                                                                                  |                        |                         |       |        |      

69

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We
operate in all three Baltic countries through majority and minority owned companies, all of which are the largest mobile or fixed-line operators in their
markets. We consolidate three operators in the Baltic region in our financial statements: Lithuania mobile (Omnitel, 90 percent ownership), Lithuania fixed (Lietuvos Telekomas,
60 percent ownership), and Latvia mobile (Latvijas Mobilais Telefons, 60 percent ownership). We also have a minority interest in three operators that we account for as associated
companies: Latvia fixed (Lattelekom, 49 percent ownership), Estonia mobile (EMT, 49 percent ownership), and Estonia fixed (Elion, 49 percent ownership).

Our
total net sales in the Baltic countries decreased in 2003 due to lower revenues from our fixed-line operations in Lithuania, while total net sales increased in 2002 due
to increased revenues in our Lithuanian and Latvian mobile operations. Total operating income decreased in 2003 and in 2002 mainly due to poorer results from our fixed-line operations in
Lithuania. Our operating income in the Baltic countries also includes our share of net income in the three associated companies in the region, which was relatively stable during the
three-year period ended December 31, 2003. Our operating income in the Baltic countries is also affected by goodwill and similar amortization expenses mainly related to the merger,
which totalled SEK 563 million, SEK 550 million and SEK 535 million in 2003, 2002 and 2001, respectively. Changes in the amount of goodwill and similar amortization levels we
recorded were mainly due to exchange rate effects.

Our
Lithuanian and Latvian mobile operations recorded increased EBITDA excluding items not reflecting underlying business operations in 2003 and 2002, due to the growth in the customer
base. Our Lithuanian fixed-line operations recorded decreased EBITDA excluding items not reflecting underlying business operations in 2003 and 2002, due to price cuts and strong
competition from the mobile sector, which has led to a decrease in our Lithuanian fixed-line customer base.

Eurasia

Historical Results

|                                                                     |  | Year ended December 31, |  | Change
|-------------------------------------------------------------------- |  | ----------------------- |  | ------
|
|
|Net sales                                                            |  | 2,742                   |  | 211   
|Operating income                                                     |  | 889                     |  | 88    
|In relation to net sales (%)                                         |  | 32.4                    |  | 41.7  
|Additional information:                                              |  |                         |  |       
|EBITDA excluding items not reflecting underlying business operations |  | 1,490                   |  | 118   
|In relation to net sales (%)                                         |  | 54.3                    |  | 55.9  

The
fluctuations in the historical year-over-year operating results for Eurasia in 2003 and 2002 were due entirely to the merger of Telia and Sonera. We have
presented below a supplementary discussion of the operating results for Eurasia for 2003, 2002 and 2001, including trends that affected historical as well as combined company results.

70

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Combined Company Results

|                                                                     |  | Year ended December 31, |  | Change
|-------------------------------------------------------------------- |  | ----------------------- |  | ------
|
|
|Net sales                                                            |  | 2,742                   |  | 847   
|Operating income                                                     |  | 889                     |  | (76   
|In relation to net sales (%)                                         |  | 32.4                    |  | (9.0  
|Additional information:                                              |  |                         |  |       
|EBITDA excluding items not reflecting underlying business operations |  | 1,490                   |  | 457   
|In relation to net sales (%)                                         |  | 54.3                    |  | 54.0  
|Income from associated companies                                     |  |                        |  | (283  

We
provide mobile communications services in four Eurasian countries through Fintur, in which we increased our direct and indirect interest to 74.0 percent in
September 2002. Before our acquisition of a majority interest, Fintur also had media, Internet and digital TV operations, and we held a direct 35 percent interest in Fintur and accounted
for it as an associated company. In two of the biggest Eurasian markets, Kazakhstan and Azerbaijan, we are the largest mobile operator. In Georgia, we are the second largest operator, and in Moldova,
we have a 50 percent market share in a two-operator market.

Our
net sales in Eurasia increased in 2003 due to the acquisition of majority interest and consolidation of Fintur beginning in September 2002. Pro forma net sales for the current
Fintur operations increased by 44 percent and 37 percent in local currency in 2003 and 2002, respectively. The increase was due to the rapid growth in our customer base.

Our
operating income in Eurasia turned positive in 2003 compared to a loss in 2002 due to the disposal of Fintur's loss-making media, Internet and digital TV businesses as
part of a restructuring process where we acquired the majority interest, and due to an increase in net sales and margins in Fintur's current mobile operations. Our operating loss in 2002 decreased
from the loss in 2001 due to smaller losses recorded from Fintur's media, Internet and digital TV businesses in January-August 2002 before the restructuring. Our operating income in Eurasia was
also affected by goodwill and similar amortization expenses, which totalled SEK 176 million, SEK 40 million and SEK 51 million in 2003, 2002 and 2001, respectively. Changes in
annual goodwill and similar amortization levels were mainly due to the merger of Telia and Sonera and the acquisition of a majority interest in 2002.

Our
EBITDA excluding items not reflecting underlying business operations in Eurasia increased in 2003 due to the acquisition of a majority interest in Fintur in September 2002.
Pro forma EBITDA excluding items not reflecting underlying business operations for the current Fintur operations increased by 44 percent and 75 percent in 2003 and 2002, respectively.
The increase was due to growth in revenues and increased economies of scale. Pro forma EBITDA excluding items not reflecting underlying business operations in relation to pro forma net sales was
52.1 percent and 40.9 percent for the full year 2002 and 2001, respectively.

71

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Russia

Historical Results

|                                 |  | Year ended December 31, |  | Change | 
|-------------------------------- |  | ----------------------- |  | ------ | 
|
|
|Income from associated companies |  | 509                     |  | 51     | 

The
fluctuations in the historical year-over-year operating results for Russia in 2003 and 2002 were due partly to the merger of Telia and Sonera. We have
presented below a supplementary discussion of the operating results for Russia for 2003, 2002 and 2001, including trends that affected historical as well as combined company results.

Combined Company Results

|                                                    |  | Year ended December 31, |   | Change |  
|--------------------------------------------------- |  | ----------------------- | - | ------ | -
|
|
|Share of net income                                 |  | 709                     |   | 168    |  
|Amortization of goodwill and fair value adjustments |  | (200                    | ) | (231   | )
|                                                    |  |                         |   |        |  
|Income from associated companies                    |  | 509                     |   | (63    | )
|                                                    |  |                         |   |        |  

We
hold a 43.8 percent direct and indirect interest in MegaFon, the third largest mobile operator in Russia.

Our
share of MegaFon's net income increased in 2003 as compared to 2002 due to strong growth in both net sales and earnings for MegaFon in 2003. The growth was mainly due to the rapid
growth of MegaFon's customer base, which more than doubled in 2003 from 3.0 million to 6.2 million. Our share of MegaFon's net income decreased in 2002 as compared to 2001 due to
start-up losses in the Moscow area.

Changes
in annual goodwill and similar amortization levels were mainly due to exchange rate effects.

Turkey

Historical Results

|                                 |  | Year ended December 31, |  | Change
|-------------------------------- |  | ----------------------- |  | ------
|
|
|Income from associated companies |  | 618                     |  | 115   

The
fluctuations in the historical year-over-year operating results for Turkey in 2003 and 2002 were due entirely to the merger of Telia and Sonera. We have
presented below a supplementary discussion of the operating results for Turkey for 2003, 2002 and 2001, including trends that affected historical as well as combined company results.

72

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Combined Company Results

|                                                    |  | Year ended December 31, |   | Change
|--------------------------------------------------- |  | ----------------------- | - | ------
|
|
|Share of net income (U.S. GAAP)                     |  | 600                     |   | 70    
|IFRS/IAS adjustments                                |  | 706                     |   | 551   
|Amortization of goodwill and fair value adjustments |  | (688                    | ) | (954  
|                                                    |  |                         |   |       
|Income from associated companies                    |  | 618                     |   | (333  
|                                                    |  |                         |   |       

We
hold a 37.3 percent direct and indirect interest in Turkcell, the largest mobile operator in Turkey.

Turkcell's
net income improved considerably in 2003 due to growth in its customer base and traffic volumes per customer. While price pressure intensified in 2003, Turkcell successfully
defended its leading position using loyalty programs and volume-based offerings. Turkcell's net sales increased at a higher rate than expenses, which led to a significantly improved operating income
margin. The result for 2003 was further improved by an appreciation of the Turkish lira against the U.S. dollar. The financial turmoil in Turkey in 2001 and part of 2002 had a negative effect on the
results of 2001 and 2002 through decreasing volumes per customer and decreasing prices. The result of 2001 was further influenced by a foreign exchange loss of $151.5 million as a result of the
devaluation of the Turkish lira in 2001.

Turkcell
prepares its accounts under U.S. GAAP, using the U.S. dollar as its reporting currency, in accordance with SFAS No. 52 "Foreign Currency Translation" as applied to
hyperinflationary economies. In our IFRS/IAS accounts, we have restated Turkcell's results to Turkish lira to account for the impact of inflation, before translating the results into Swedish krona.
The major part of the line item "IFRS/IAS adjustments" in the above table represents the difference in techniques between IFRS/IAS and U.S. GAAP in restating the financial statements of entities in
hyperinflationary economies.

The
IFRS/IAS adjustment for Turkcell was positive in 2003 and 2002 due to a continuously high inflation rate not being offset by a matching devaluation in the Turkish lira against other
currencies. The IFRS/IAS adjustment for Turkcell was negative in 2001 due to a significant devaluation of the Turkish lira against all major currencies, which outweighed the impact of inflation in
2001.

The
change in annual goodwill and similar amortization levels in 2003 as compared to 2002 and 2001 were due to the adjustment of goodwill in 2003, as discussed in "The
Merger of Telia and Sonera." The change in 2002 as compared to 2001 was due to exchange rate effects.

TeliaSonera International Carrier

Historical Results

|                                                                     |  | Year ended December 31, |   | Change  |  
|-------------------------------------------------------------------- |  | ----------------------- | - | ------- | -
|
|
|Net sales                                                            |  | 4,892                   |   | 5,306   |  
|Operating income                                                     |  | (259                    | ) | (12,060 | )
|In relation to net sales (%)                                         |  | (5.3                    | ) | (227.3  | )
|Additional information:                                              |  |                         |   |         |  
|EBITDA excluding items not reflecting underlying business operations |  | 144                     |   | (1,285  | )
|In relation to net sales (%)                                         |  | 2.9                     |   | (24.2   | )

73

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The
fluctuations in the historical year-over-year operating results for TeliaSonera International Carrier in 2003 and 2002 were due partly to the
merger of Telia and Sonera. We have presented below a supplementary discussion of the operating results for TeliaSonera International Carrier for 2003, 2002 and 2001, including trends that affected
historical as well as combined company results.

Combined Company Results

|                                                                     |  | Year ended December 31, |   | Change  |  
|-------------------------------------------------------------------- |  | ----------------------- | - | ------- | -
|
|
|Net sales                                                            |  | 4,892                   |   | 6,861   |  
|Operating income                                                     |  | (259                    | ) | (12,080 | )
|In relation to net sales (%)                                         |  | (5.3                    | ) | (176.1  | )
|Additional information:                                              |  |                         |   |         |  
|EBITDA excluding items not reflecting underlying business operations |  | 144                     |   | (1,225  | )
|In relation to net sales (%)                                         |  | 2.9                     |   | (17.9   | )

We
are one of the major providers of wholesale telecommunications services on the European market. We are the largest provider of wholesale services in the Nordic and Baltic regions and
in the European part of Russia, and have a strong position in Central and Western Europe and with respect to trans-Atlantic traffic.

International
Carrier's net sales decreased in 2003 due to the integration of Telia's and Sonera's international carrier operations and the restructuring of Telia's carrier business,
which included closing down operations in Asia, domestic capacity operations in the United States and domestic voice reseller operations in the United Kingdom and Germany. In 2002, net sales increased
due to strong sales efforts in our former Telia international carrier business before the decision to restructure the operations.

TeliaSonera
International Carrier's operating loss decreased significantly in 2003 as compared to 2002. In 2003, we also recorded provisions and charges of SEK 455 million to
integrate Telia's and Sonera's carrier operations, and a reversal of SEK 427 million relating to existing restructuring reserves for Telia international carrier. In the fourth quarter of 2003,
TeliaSonera International Carrier reported positive operating income. In 2002, operating income included a total of SEK 10,127 million of restructuring provisions, write-downs and other charges
in relation to the restructuring of Telia international carrier. In 2001, we recorded write-downs of SEK 3,027 million in relation to Telia international carrier. The changes in operating
income in 2003 as compared to 2002, and in 2002 as compared to 2001, are principally due to changes in write-downs and restructuring charges each year.

Despite
decreased net sales, TeliaSonera International Carrier's EBITDA excluding items not reflecting underlying business operations turned positive in 2003 due to successful
restructuring measures. In 2002, EBITDA loss excluding items not reflecting underlying business operations remained at the level of 2001, despite increased net sales, mainly due to
non-profitable growth before the restructuring of former Telia international carrier and also, to a lesser extent, the decrease in positive EBITDA excluding items not reflecting underlying
business operations for our former Sonera international carrier operations.

74

---



TeliaSonera Holding

Historical Results

|                                                                     |  | Year ended December 31, |   | Change |  
|-------------------------------------------------------------------- |  | ----------------------- | - | ------ | -
|
|
|Net sales                                                            |  | 2,940                   |   | 3,382  |  
|Operating income                                                     |  | 206                     |   | (1,026 | )
|In relation to net sales (%)                                         |  | 7.0                     |   | (30.3  | )
|Additional information:                                              |  |                         |   |        |  
|EBITDA excluding items not reflecting underlying business operations |  | 205                     |   | (100   | )
|In relation to net sales (%)                                         |  | 7.0                     |   | (3.0   | )
|Income from associated companies                                     |  | (1,176                  | ) | 183    |  

The
fluctuations in the historical year-over-year operating results for TeliaSonera Holding in 2003 and 2002 were due partly to the merger of Telia and Sonera.
The historical results also include the results of operations and the net capital gain from Com Hem and Telia Mobile Finland, which we sold in June 2003 to fulfil certain EU conditions for the
merger of Telia and Sonera.

We
have presented below a supplementary discussion of the operating results for TeliaSonera Holding for 2003, 2002 and 2001, including trends that affected historical as well as combined
company results. The combined company results do not include operating results and the net capital gain from Com Hem and Telia Mobile Finland.

Combined Company Results

|                                                                     |  | Year ended December 31, |   | Change  |  
|-------------------------------------------------------------------- |  | ----------------------- | - | ------- | -
|
|
|Net sales                                                            |  | 1,982                   |   | 2,180   |  
|Operating income                                                     |  | (1,363                  | ) | (38,438 | )
|In relation to net sales (%)                                         |  | (68.8                   | ) | N/A     |  
|Additional information:                                              |  |                         |   |         |  
|EBITDA excluding items not reflecting underlying business operations |  | 196                     |   | 243     |  
|In relation to net sales (%)                                         |  | 9.9                     |   | 11.1    |  
|Income from associated companies                                     |  | (1,176                  | ) | (32,773 | )

TeliaSonera
Holding is responsible for the management and rationalization of our interests in certain companies outside our core business areas. As of December 31, 2003,
TeliaSonera Holding managed approximately 200 investments in subsidiaries, associated companies and other minority holdings.

Net
sales for TeliaSonera Holding decreased in 2003 and 2002 due to the divestment of various subsidiaries in 2001 and 2002.

75

---



Apart
from consolidated operations, the operating income for TeliaSonera Holding was affected by capital gains/losses and income from associated companies, as set forth in the following
table:

|                                                                                         |                                                     | Year ended December 31, |       
|---------------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------- | ------
|
|
|Capital gains/losses from sale of subsidiaries and write-downs/provisions for Italian 3G |                                                     |                        |       
|Income from associated companies:                                                        |                                                     |                         |       
|                                                                                         | Share of net income                                 |                         | (271  
|                                                                                         | Capital gains/losses                                |                         | 251   
|                                                                                         | Write-downs                                         |                         | (1,435
|                                                                                         | Amortization of goodwill and fair value adjustments |                         | 279   
|                                                                                         |                                                     |                         |       
|                                                                                         | Total                                               |                         | (1,176
|                                                                                         |                                                     |                         |       

TeliaSonera
Holding's operating loss decreased in 2003 compared to 2002 mainly due to write-downs and provisions recorded by Sonera in 2002 for its German, Italian and Spanish 3G
investments. TeliaSonera Holding's operating income turned into a loss in 2002 as compared to profit in 2001 mainly due to write-downs and provisions relating to these 3G investments, and also due to
large capital gains in 2001 that mainly related to the sale of our interests in Eniro, Tess, VoiceStream and Powertel.

EBITDA
excluding items not reflecting underlying business operations decreased slightly in 2003 mainly due to the decrease in net sales. EBITDA excluding items not reflecting underlying
business operations turned positive in 2002 as compared to a loss in 2001 mainly due to the narrowing of losses in the former Sonera service businesses, especially in Sonera Zed and SmartTrust.

5.B  Liquidity and Capital Resources

CASH FLOWS (Historical)

The following table and discussion is based on our historical results, which include the results of operations of Sonera and our new Baltic subsidiaries, Omnitel,
Lietuvos Telekomas and Latvijas Mobilais Telefons, only for the period beginning December 3, 2002. Therefore, the fluctuations in the historical cash flows in 2003 as compared to 2002 and 2001
are due principally to the merger of Telia and Sonera.

|                                                      |                | Year ended December 31, |       
|----------------------------------------------------- | -------------- | ----------------------- | ------
|
|
|Cash from operating activities                        |                | 26,443                  |       
|Cash used in capital expenditure                      |                | (9,092                  | )     
|                                                      | Free cash flow |                         | 17,351
|Cash from other investing activities                  |                | 5,649                   |       
|                                                      |                |                         |       
|Cash flow before financing activities                 |                | 23,000                  |       
|                                                      |                |                         |       
|Cash used in financing activities                     |                | (16,412                 | )     
|                                                      |                |                         |       
|Cash and cash equivalents, opening balance            |                | 5,465                   |       
|Net cash flow for the period                          |                | 6,588                   |       
|Exchange rate difference in cash and cash equivalents |                | 16                      |       
|                                                      |                |                         |       
|Cash and cash equivalents, closing balance            |                | 12,069                  |       
|                                                      |                |                         |       

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Our principal source of liquidity is cash generated from operations. Historically, we have also generated significant amounts of cash from asset sales as part of our strategy to focus on
our core business. Cash derived from asset sales was especially significant in 2001. Our liquidity requirements arise primarily from the need to fund capital expenditures for the maintenance of our
facilities, to expand our business should management deem that such an expansion is in the interest of shareholders, to fund our working capital requirements and to make dividend payments.

Cash
flow from operating activities increased in 2003 primarily due to the merger and due to improved profitability of our operations. Cash flow from operating activities increased in
2002 primarily due to improved profitability of our operations and, to a lesser extent, due to the merger.

Cash
used in capital expenditure increased in 2003 due to the merger. Cash used in capital expenditure decreased in 2002 mainly due to reduced capital expenditure in international
carrier activities and in the fixed network in Sweden.

Free
cash flow (cash flow from operating activities less capital expenditure) increased in 2003 mainly due to increased cash flow from operating activities. In 2002, free cash flow
turned positive from the negative free cash flow in 2001 mainly due to a decrease in capital expenditure.

Cash
from other investing activities increased in 2003 mainly due to higher proceeds from divestments, lower investment in new financial leasing receivables and compensation received
from our pension fund in Sweden. Cash from other investing activities decreased in 2002 mainly due to significantly lower proceeds from divestments in 2002 as compared to significant proceeds from
divestments in 2001. See also "Recent acquisitions, investments and divestitures."

Cash
used in financing activities increased in 2003 compared to 2002, and in 2002 compared to 2001, primarily due to higher repayments of loans each year.

CASH FLOWS (Combined Company)

Consistent with the supplemental disclosures above in the operating results discussion, we also present a combined company cash flows discussion that indicates
the cash flows as if the merger had occurred as of January 1, 2001. The combined company information assumes (i) that TeliaSonera held a 100 percent interest in Sonera for the
periods presented and (ii) that the divestments of Com Hem and Telia Mobile Finland that were required by the EU Commission to obtain clearance for the merger had occurred as of
January 1, 2001.

For the years ended December 31,2003

2002

2001(SEK in million)Cash from operating activities

26,554

20,717

14,181Cash used in capital expenditure

(9,055
)
(11,183
)
(21,189
)Free cash flow

17,499

9,534

(7,008
)Cash from other investing activities

3,334

7,685

35,200Cash flow before financing activities

20,833

17,219

28,192Cash used in financing activities

(14,162
)
(21,889
)
(20,511
)Net cash flow for the period

6,671

(4,670
)
7,681


On
a combined company basis, our cash flow from operating activities increased by 28 percent in 2003 principally due to increased margins in Sweden and Norway, significantly
reduced losses in Denmark and international carrier, and the consolidation of our Eurasian operations since September 2002. In 2002, our cash flow from operating activities increased by
46 percent principally

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due
to improved results in Norway, reduced losses recorded by Sonera's service businesses, and the consolidation of our Eurasian operations since September 2002.

On
a combined company basis, our capital expenditures decreased by 19 percent in 2003 and 47 percent in 2002 mainly due to tighter control on capital expenditure throughout
the operations, lower levels of required investment in restructured operations and, in 2003, due to synergy savings from the merger.

On
a combined company basis, our free cash flow (cash flow from operating activities less capital expenditure) increased steadily from the negative free cash flow of SEK
7.0 billion in 2001 to a positive free cash flow of SEK 17.5 billion in 2003, due to both improved cash flow from operations and reduced capital expenditure.

On
a combined company basis, cash flow from other investing activities decreased in 2003 mainly due to lower proceeds from divestments than in 2002. Cash flow from other investing
activities also decreased in 2002 due to significantly higher proceeds from asset sales in 2001.

On
a combined company basis, cash used in financing activities decreased in 2003 mainly due to lower repayments of loans than in 2002. Cash used in financing activities increased only
slightly in 2002 compared to 2001. However, in 2001, cash used in financing activities was offset in part by funds received in connection with Sonera's rights issue in 2001.

CREDIT FACILITIES

We believe that our bank credit facilities and open-market financing programs are sufficient for our present liquidity requirements. We had cash and
cash equivalents of SEK 12,347 million as of December 31, 2003. In addition, the aggregate principal unutilized amount we had available under our committed credit facilities amounted to
approximately SEK 13,700 million as of December 31, 2003.

We
currently have a credit rating of A for long-term borrowing and A-1 for short-term borrowing from Standard & Poor's Ratings Services, with a
stable outlook. Our credit rating from Moody's Investor Services is A2 for long-term borrowing and Prime-1 for short-term borrowing, with a negative outlook.

We
generally seek to arrange our financing through our parent company TeliaSonera AB. We have the following primary means of external borrowing:

Significant Committed Facilities



Significant Uncommitted Facilities



78

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RECENT ACQUISITIONS, INVESTMENTS AND DIVESTITURES

We have made a number of significant acquisitions and equity investments as well as divestitures since the beginning of 2001. Our most significant transaction
during the three-year period ended December 31, 2003 was the merger of Telia and Sonera in December 2002.

Acquisitions, Investments and Divestitures before the merger

Before their merger, Telia and Sonera had each made a number of significant acquisitions and equity investments as well as divestitures, including the following:

Principal Acquisitions and Investments



Principal Divestitures



79

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80

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Acquisitions and Divestitures after the merger of Telia and Sonera

After the merger of Telia and Sonera, we have made the following significant acquisitions and divestitures:



MARKET RISKS

The following discussion is based on our historical consolidated financial statements, which include the results of operations of Sonera and the new Baltic
subsidiaries only for the period beginning

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December 3,
2002. Therefore, some of the information below relating to year ended December 31, 2002 and 2001 may not be representative of our business after the merger of Telia and
Sonera.

Our
financial policy contains guidelines for interest rates and the average maturity of borrowings. Our policy is that the duration of interest-bearing loans should be from six months to
four years. We arrived at this duration interval by balancing the estimated running cost of borrowing and the risk of a significant negative impact on earnings should there be a sudden, major change
in interest rates. Our basic goal is to optimize interest rate risk for the TeliaSonera group as a whole. We use Swedish krona as our accounting currency. Our borrowings are therefore normally
converted into or denominated in Swedish krona, unless directly linked to the setting-up or financing of international
operations or similar events. If the available loan form does not directly reflect the desired loan portfolio structure, in terms of interest or currency, various forms of derivative instruments are
used to adapt the structure in terms of duration and currency. This adaptation is achieved chiefly through interest rate swaps and foreign currency interest rate swaps. Foreign currency interest rate
swaps, normally, relate to loans denominated in foreign currencies that are swapped into Swedish krona, and thus do not entail any currency risk.

We
typically use our uncommitted facilities for our financing needs, since we normally have good access to those market facilities.

Normally,
our borrowings denominated in foreign currencies are swapped into Swedish krona, except for funds borrowed to finance our operations and investments outside of Sweden.

The
following table sets forth our portfolio of foreign currency interest rate swaps represented by the following currencies, including maturity dates, as of December 31, 2003:

|                                                |  | Maturities |  
|----------------------------------------------- |  | ---------- | -
|
|
|Foreign currency interest rate swaps, received: |  |            |  
|Buy EUR                                         |  |           |  
|Buy DEM                                         |  | 547        |  
|Buy USD                                         |  | 25         |  
|Buy JPY                                         |  |           |  
|                                                |  |            |  
|Total received                                  |  | 572        |  
|Foreign currency interest rate swaps, paid      |  | (526       | )
|                                                |  |            |  
|Net position                                    |  | 46         |  

As
of December 31, 2003, borrowings by TeliaSonera AB had a present value of SEK 14,193 million as compared to SEK 21,294 million as of December 31, 2002, and
the weighted average time to maturity of borrowings was approximately 2.9 as compared to 2.4 as of December 31, 2002.

As
of December 31, 2003, borrowings by TeliaSonera Finland Oyj had a present value of € 1,613 million as compared to
€ 2,406 million as of December 31, 2002, and the weighted average time to maturity of borrowings was approximately 1.9 years as compared to 2.6 as of
December 31, 2002.

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The
average cost, including relevant hedges, of outstanding long-term and short-term borrowings as of December 31 in the past three years was as follows:

As of December 31,2003

2002

2001(%)TeliaSonera AB (SEK)Long-term borrowings

5.32

5.92

5.62Short-term borrowings

5.52

5.48

5.03TeliaSonera Finland Oyj (EUR)Long-term borrowings

5.39



Short-term borrowings

3.03






As
of December 31, 2003, TeliaSonera AB and TeliaSonera Finland Oyj had interest-bearing liabilities of SEK 28,733 million with a duration of interest of approximately
1.5 years, including derivatives. The volume of loans exposed to changes in interest rates over the next 12-month period was, as of the same date, approximately SEK
9,200 million, assuming that existing loans maturing during the year are refinanced and after accounting for derivatives. The exact effect of a change in interest rates on the financial net
depends on the timing of maturity of the debt as well as reset dates for floating rate debt, and that the volume of loans may vary over time, thereby affecting the estimate. The fair value of the loan
portfolio would, however, change by approximately SEK 450 million, should the level in market interest rates make a parallel shift of one percentage point, and assuming the same volume of loans
and a similar duration on those loans as per year-end 2003.

The
following table sets forth our portfolio of long-term and short-term borrowings (including accrued interest):

As of December 31, 2003Book value

Fair value(SEK in millions)Long-term loans

25,940

27,023Short-term loans

4,686

4,710Interest rate swaps, gains

(94
)
(94
)Foreign currency interest rate swaps, gains

(406
)
(406
)Interest rate swaps, losses

128

128Foreign currency interest rate swaps, losses

132

132Other currency derivatives (net losses)

1

1Total borrowings (including derivatives)

30,387

31,494


The
TeliaSonera group's operational transaction exposure is not significant at present, but it is expected to increase over time. Assuming an operational transaction exposure equivalent
to that for the applicable year and provided that no hedging measures were taken and not including any potential impact on income due to currency translation of other income statement items, the
negative impact on pre-tax income of our Swedish operations would have been approximately SEK 12 million for the year 2003 and SEK 16 million for the year 2002 on a
full-year basis if the Swedish krona weakened by one percentage point against all the transaction currencies of our Swedish operations.

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The
following table sets forth our portfolio of foreign exchange derivatives hedging loans, investments and operational transaction exposure represented by the following currencies,
including maturity dates, as of December 31, 2003:

Maturities2004

2005

2006

Later years

Total(SEK in millions)Sell EUR

493

11

5



509Sell DKK

2,651







2,651Sell NOK

760







760Sell USD

569

5





574Sell GBP

206







206Sell CZK

152







152Sell LVL

86







86Sell CHF

64







64Sell PLN

43







43Sell HUF

10







10Sell LTL

12







12Sell SGD

4







4Sell HKD

4







4Sell total

5,054

16

5



5,075Buy EUR

(10,915
)






(10,915
)Buy NOK

(3,516
)






(3,516
)Buy USD

(106
)






(106
)Buy GBP

(485
)






(485
)Buy CHF

(7
)






(7
)Buy PLN

(1
)






(1
)Buy total

(15,030
)






(15,030
)Net position

(9,976
)
16

5



(9,955
)


TeliaSonera
Corporate Finance and Treasury is responsible for group-wide financial risk management, including netting and pooling of capital requirements and payment flows.
TeliaSonera Corporate Finance and Treasury also seeks to optimize the cost of financial risk management, which in certain cases may mean that, for example, an intra-group transaction is not replicated
with an identical transaction outside the group. TeliaSonera Corporate Finance and Treasury's deviation mandates are clearly defined, however, and the impact on earnings of deals made within those
mandates is therefore not deemed to be substantial. TeliaSonera Corporate Finance and Treasury's risk mandate in the currency markets is currently capped at the equivalent of a nominal plus or minus
SEK 200 million. As of December 31, 2003, the risk mandate was utilized by less than SEK 50 million.

Our
conversion exposure has increased significantly due to the merger of Telia and Sonera, and is expected to continue to grow due to ongoing expansion of our operations outside of
Sweden. We do not typically hedge our conversion exposure, unless the exposure is short-term and relates to a large amount of a freely-convertible foreign currency of a country with
smoothly functioning financial markets.

Net
foreign assets, which equal the sum of equity and goodwill from acquisitions, amounts as of December 31, 2003 to approximately SEK 116.4 billion (and as of
December 31, 2002 to approximately SEK 115.9 billion). As of December 31, 2003, we had no hedges relating to net foreign assets. The positive impact on the TeliaSonera group's
equity would be approximately SEK 1.2 billion as of December 31, 2003, and approximately SEK 1.2 billion as of December 31, 2002, if the Swedish krona weakened by one
percentage point against all the currencies related to net foreign assets. This impact

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on
the TeliaSonera group's equity does not include any potential negative impact due to our operational need to net purchase foreign currency.

The
TeliaSonera group employs derivatives in its financial management activities. Derivatives are primarily used to obtain the duration of interest desired on the loans within the
portfolio, and the risk profile desired in foreign exchange dealings. We accept only creditworthy counterparties for financial transactions such as interest rate swaps, foreign currency swaps and
other transactions in derivatives. We require each counterparty to have an approved rating and an International Swaps and Derivatives Association, Inc. (ISDA) agreement. The permitted exposure
to each counterparty depends on the rating of that counterparty. As of December 31, 2003, TeliaSonera group's aggregate exposure to counterparties in derivatives was SEK 168 million,
calculated as the sum of net claims on all of the respective counterparties.

The
credit risk with respect to our trade receivables is diversified among a large number of customers, both private individuals and companies in various industries. Solvency information
is required for credit sales to minimize the risk of unnecessary bad debt expense and is based on group-internal information on payment behaviour and, if necessary, credit and business information
derived from external sources. Bad debt expense in relation to consolidated revenues was 0.7 percent, 1.4 percent and 1.6 percent in 2003, 2002 and 2001, respectively.

Almost
all our employees in Sweden, Finland and Norway are covered by defined benefit pension plans, pursuant to which individuals are guaranteed a pension equal to a certain percentage
of his or her salary. The pension plans mainly include old-age pensions, disability pensions and family pensions. The pension obligations are secured principally by pension funds, but also
through provisions reflected in our balance sheet and through insurance policies. In Finland, a part of the pension is funded in advance and the remaining part financed as a
pay-as-you-go pension. Our employees outside Sweden, Finland and Norway are usually covered by defined contribution pension plans. Contributions to the latter are
normally set at a certain percentage of the employee's salary. Pension obligations are calculated annually, on the balance sheet date, based on actuarial principles. The assets of the pension funds
constitute plan assets for pensions and are valued at market value. When the net cumulative unrecognized actuarial gain or loss on pension obligations and plan assets goes outside a "corridor" equal
to ten percent of the greater of either pension obligations or the market value of plan assets, the surplus amount is amortized over the remaining employment period. See Note 22 to our
consolidated financial statements for further reference regarding actuarial calculation assumptions.

The
following provisions for pension obligations were reflected in the balance sheet.

December 31,SEK in millions2003

2002

2001Present value of pension obligations

16,977

16,398

14,683Fair value of plan assets

(14,295
)
(13,987
)
(13,464
)Pension obligations less plan assets

2,682

2,411

1,219Unrecognized past service cost

34

36

Unrecognized transition gains

152

200

240Unrecognized actuarial gains (+)/losses (-)

(2,346
)
(2,423
)
899Provisions for pension obligations

522

224

2,358


As
of December 31, 2003, we had pension obligations with a net present value of SEK 16,977 million. To secure these obligations we maintain pension funds, with plan assets
equivalent to SEK 14,295 million based on market values as of December 31, 2003. The pension funds assets are used as the primary funding source for the pension obligations, and at the
end of 2002, these assets consisted of approximately 62 percent of fixed income instruments and approximately 38 percent of shares and other equity instruments. The expected return on
plan assets is approximately 6.5 percent

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annually.
The portion of the Swedish liabilities not covered by plan assets and the taxed reserve for employment contracts are recorded as provisions in our balance sheet. Pension obligations not
covered by plan assets are secured through an external credit guarantee. Except for the taxed reserve for employment contracts, our pension obligations are thus secured through pension funds and/or
external credit guarantees.

The
pension obligations would have been SEK 2,200 million higher, if the weighted average discount rate had been one percentage point lower than the 5.5 percent that we
have used as of December 31, 2003. Such an increase in the pension obligations, were interest rates to fall, would be partly offset by a positive impact from the fixed income assets in the
pension funds. Based on the duration of the Swedish and Finnish pension funds' fixed income portfolios (including index-linked bonds) as of December 31, 2003, and assuming that the value of the
other assets in the pension funds were unchanged, a similar reduction in interest rates is estimated to increase the value of the pension funds assets by some SEK 700 million.

5.C  Research and Development, Patents and Licenses

The information discussed below is presented based on TeliaSonera's historical results, which include the results of Sonera and our new Baltic subsidiaries,
Omnitel, Lietuvos Telekomas and Latvijas Mobilais Telefons, only for the period beginning December 3, 2002.

Rapid
advances in telecommunications make it critical for us to renew and refine our businesses and products. To assist us in rapidly responding technological changes, we are shifting
part of our research and development efforts from in-house development to cooperation with suppliers, universities, customers and research institutions. In 2003, we incurred research and
development expenses of SEK 2,543 million as compared to SEK 1,167 million for 2002 and SEK 1,303 million for 2001.

The
overarching focus of our research and development program is to develop services that are reliable and easy to use and that enable users to access the desired services regardless of
the mode of access.

Our
shorter-term development initiatives in 2003 have mainly focused on simplifying and developing new customer offers, MMS, achieving increased speed and quality in fixed
and mobile networks, managed IT services, pan-Nordic data communications services based on MPLS technology and private company networks.

As
of December 31, 2003, we had approximately 700 patent "families" and over 2,000 patents and patent applications, none of which, individually, is material to our business.
However, some of our subsidiaries have patents and other intellectual property that are material to their respective businesses. Although our intellectual property is, as a general matter, protected
at a level in line with the standards of international telecommunications companies, we plan to continue to leverage our investment in research and development by seeking, where appropriate,
international patent protection with respect to our innovations. There can be no assurance, however, that any patent, if granted, will not be invalidated, circumvented, opposed or canceled or that the
steps taken by us to protect our rights will be adequate to prevent unauthorized use of our technology or to preclude competitors from developing products with features similar to our products.

5.D  Trend Information

This section contains management estimates and other forward-looking statements. We refer you to the cautionary statement under the heading "Forward-looking
statements" contained in this report.

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Our business and results of operations have been affected during the last several years by a number of important trends. The global communications market has experienced rapid growth,
especially as the areas of voice and data transmission have converged and become digitalized. Overall growth, however, has slowed down in the Nordic markets, but has continued to be rapid in the
Baltic, Russian, Turkish and Eurasian mobile services markets.

In
the Swedish and Finnish mobile communications market, growth has slowed as penetration levels have risen. We believe that future growth depends on the increased usage of new services
as well as the potential for continuing to increase mobile voice traffic as a percentage of the total voice traffic. The non-voice share of our mobile revenues has been growing and we
believe that there is further potential for growth as we introduce new, more attractive services to the market. However, price erosion has had and will continue to have a negative effect on our
revenue growth.

Retail
revenues from our fixed telephony operations in Sweden have declined in the past four years as a result of the introduction of carrier pre-selection in
long-distance, international and fixed to mobile calls in 1999 and in local calls in 2002 as well as fierce competition, which together have contributed to our declining market shares
within the fixed telephony traffic market. The competition in the Swedish fixed telephony traffic market is expected to continue to be intense, although we aim to regain market shares in selected
segments. In Finland, our fixed telephony business has steadily decreased over the past few years, mainly due to fixed-to-mobile migration and people moving out from our
traditional service areas in Eastern and Northern Finland. We expect this trend to continue in the future.

The
Swedish and Finnish broadband market has continued to expand with high demand for ADSL accesses. On the other hand, the trend of customers to switch from dial-up Internet
services to ADSL has decreased the number of minutes per subscriber in our fixed line operations.

Our
mobile operations in Norway have experienced revenue growth due to expanded customer base, increased average minutes of use, and substantial increase in the use of SMS messaging. We
believe that increased competition, especially from the incumbent operator in Norway, could have a hampering effect on our growth in 2004.

In
our Danish mobile operations, fast customer growth has contributed to an increase in revenues and the operation has been reducing its operating losses. However, further customer
growth is needed before the operations can become profitable. Restructuring of the Danish fixed network business has significantly improved its results during 2003.

Our
consolidated and non-consolidated Baltic mobile operations continue to show growth. As a consequence, however, our Baltic fixed network operations have suffered from
fixed-to-mobile migration and declining revenues. The shift has been especially dramatic in Lithuania. We believe that due to relatively low penetration levels, there is
additional growth potential in the Baltic countries, especially in the mobile communications, Internet access and broadband markets.

Our
Eurasian mobile operations in Azerbaijan, Georgia, Kazakhstan and Moldova have continued to show customer growth. These countries currently have low GDP per capita but have been
exhibiting strong economic development. The mobile penetration rate in these countries is low, which we believe offers opportunities for further growth.

Russia,
where our associated company MegaFon operates, has continued to exhibit growth both generally and for the mobile market. The mobile penetration rate in Russia is still low, and
we believe that there is continued growth potential in this market. Turkey, where our associated company Turkcell is the largest mobile operator, has exhibited strong recent economic growth after
experiencing economic difficulties in 2000-2002, and we believe that there is continued growth potential in the Turkish mobile market.

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Our
TeliaSonera International Carrier operations still face difficult market conditions. However, our restructuring efforts regarding our international carrier activities have been
successful and we have reduced losses significantly. In the fourth quarter of 2003, TeliaSonera International Carrier recorded positive operating income. The closing down of unprofitable businesses
within TeliaSonera International Carrier has, however, resulted in declining revenues. We expect that the current market conditions will prevail during 2004, with continued price erosion due to
surplus capacity on the market.

Outlook for 2004

During 2004, we expect that the overall market in which we operate will show growth in mobile, decline in fixed voice and strong growth in Internet based
services. We remain committed to pursuing profitable growth in our current markets. Our goal in 2004 is to achieve organic revenue growth that equals or exceeds the market average.

Our
home market remains very competitive and we will continue to adapt our cost structures to reflect market conditions in our different operating segments.

We
expect that our margins will be positively affected by continued efficiency improvements and increased volumes and negatively by lower prices. Our free cash flow is expected to remain
strong even though we expect it to be negatively affected by higher cash taxes, somewhat increased capital expenditure and higher provisioning levels.

Our
ambition is to achieve majority control in all our operations by increasing our shareholding in our associated companies, if possible. Our strong financial position together with our
recent experience in implementing a successful cross-border merger, allows us to take an active role in the consolidation of the European telecommunications service industry. Our starting point is to
build on or increase our strength in the Nordic and Baltic home market, if and when the right opportunity occurs. We will only seek acquisitions where we believe such acquisitions would satisfy our
return requirements and allow us to maintain a solid financial position.

5.E  Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

For
a description of credit and performance guarantees we have issued, see "5F. Tabular Disclosure of Contractual ObligationsOther Commercial Commitments".

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5.F   Tabular Disclosure of Contractual Obligations

The table below sets forth certain information on our other contractual obligations as of December 31, 2003:

Total
Amount
Outstanding

Within
1 year

More than
1 year
but within
3 years

More than
3 years
but within
5 years

After
5 years(SEK in millions)Long-term loans

25,867



18,875

1,845

5,147Short-term loans(1)

4,687

4,687





Operating leases

8,363

1,533

2,142

1,766

2,922Financial leases

583

236

220

98

29License fees

494

74

148

148

124Unconditional purchase obligations

2,522

661

1,013

848

Other contractual obligations

6,972

5,152

952

555

313Total contractual cash obligations

49,488

12,343

23,350

5,260

8,535


---



We had long-term loans amounting to SEK 25,867 million as of December 31, 2003. Of such amount, SEK 468 million was in the form
of loans incurred through long-term financial leasing, foreign currency interest rate swaps and interest rate swaps. Further, SEK 19,269 million was in the form of other foreign
currency loans and EMTN program loans and SEK 1,227 million was in the form of other loans. Finally, SEK 4,903 million was in the form of FTNs. Our short-term loans include
loans from associated companies, short-term financial leasing, short-term FTNs, short-term EMTNs, loans, foreign currency interest rate swaps and interest rate
swaps.

Our
interest-bearing liabilities, consisting of long-term and short-term loans and our pension liability, totaled SEK 31,076 million as of
December 31, 2003, compared to SEK 44,956 million as of December 31, 2002, and SEK 31,482 million as of December 31, 2001. Our interest-bearing liabilities decreased
in 2003 as compared to 2002 due to scheduled repayments and early redemptions of debt, financed by our free cash flow and asset sales. Our interest-bearing liabilities increased in 2002 as compared to
2001 due to the merger as we consolidated Sonera's interest-bearing debt beginning December 3, 2002.

In
2004, our scheduled debt repayments are significantly lower than they were in 2003. In addition to scheduled amortizations, we from time to time decide on redeeming outstanding debt
prior to its maturity. During the first quarter of 2004, we repurchased and canceled in advance approximately SEK 2.2 billion of our public notes and bank loans.

In
general, our policy is to place debt at the parent company level. However, as of December 31, 2003, our wholly owned subsidiary TeliaSonera Finland Oyj had interest-bearing
liabilities to external parties of approximately SEK 14.7 billion outstanding. These credit facilities were assumed as a result of the merger of Telia and Sonera in December 2002.
Additionally, our partly owned subsidiaries in the Baltic countries had external interest-bearing debt of approximately SEK 500 million as of December 31, 2003.

Leasing Activities

Our operating and financial lease obligations primarily relate to office space, technical sites, land, computers and other equipment.

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As
of December 31, 2003, we also had significant leasing activities where we acted as lessor. We subsequently sold most of these operations in the beginning of 2004. See
note 28 to our consolidated financial statements for additional information relating to our operating and financial leasing activities.

We
are also a party to a cross-border finance lease-leaseback agreement under which TeliaSonera Finland has leased some of its mobile telecommunications network equipment to a group of
equity trusts based in the United States, which have in turn leased the equipment back to TeliaSonera Finland. See Note 31 to our consolidated financial statements for more details regarding
this transaction.

License fees

License fees in the above table relate to our remaining annual payments for the UMTS licence in Denmark, which we obtained in 2001.

Unconditional purchase obligations

Uncondititional purchase obligations consist mainly of future payments under our restructuring provision related to Telia's former international carrier
activities.

Other contractual obligations

Other contractual commitments consist of our contractual obligations to acquire intangible, tangible and financial fixed assets, and to make payments under our
guarantees that we have recorded as provisions in the balance sheet.

As
of December 31, 2003, we had a capital commitment to invest €332 million (SEK 3,013 million) in Xfera Móviles S.A., our
14.2 percent held UMTS investment in Spain, under the shareholders' agreement between the shareholders of Xfera. Should we breach our obligations under the shareholders' agreement, the
non-breaching shareholders have the right to purchase all of our shares at fair value. In the first quarter of 2004, we purchased an additional 2.23 percent stake in Xfera as a
result of arbitration proceedings relating to another shareholder in Xfera, for a purchase price of approximately €9.5 million, including interest and arbitration expenses.
Accordingly, our capital commitment under the shareholder's agreement increased by €36 million to €368 million. The existing capital commitment is due by
the end of 2004 according to Xfera's initial business plan. However, we anticipate our commitment to invest in Xfera to be reduced and possibly postponed as a result of the ongoing negotiations among
Xfera's owners.

As
of December 31, 2003, we had contractual obligations to acquire tangible fixed assets totaling SEK 2,140 million, mainly related to supplier contracts for the
construction of our fixed network in Finland and our mobile network in Kazakhstan.

We
have guarantee commitments on behalf of Ipse 2000 S.p.A., our 12.55 percent held UMTS investment in Italy, which we have recorded in our balance sheet as provisions. These
commitments, consisting of our portion of Ipse's 3G license payments to the Italian government, as well as rental payments for base station sites, have been secured by bank guarantees. As of
December 31, 2003, the amount of provision for our future payments totaled SEK 1,093 million.

Other
contractual commitments mainly relate to our commitments under the shareholders' agreements to fund certain associated companies that have negative equity and to certain guarantees
in respect of disposed businesses, which we have recorded as provisions in the balance sheet as we expect to make payments under the guarantees.

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Other commercial commitments

In addition to our contractual commitments presented above, we also have certain other commercial commitments (contingent liabilities), which mainly relate to
guarantees issued by us. If exercised or called, these guarantees would affect our liquidity.

The
table below sets forth certain information on our other commercial commitments as of December 31, 2003:

Total
Amount
Committed

Within
1 year

More than
1 year
but within
3 years

More than
3 years
but within
5 years

After
5 years(SEK in millions)Lines of credit(1)

250



250



Credit and performance guarantees

3,099

648

934

1,106

411


---

For
all guarantees, except the credit guarantee on behalf of Svenska UMTS-nät AB, stated amounts, included in the table above, equal the maximum potential
amount of future payments that we could be required to make under the respective guarantee. As security for certain amounts borrowed by Svenska UMTS-nät under a third-party
credit facility totalling SEK 7,000 million, we have issued a guarantee of a maximum of SEK 3,500 million to the lenders and granted pledges of our shares in Svenska
UMTS-nät. As of December 31, 2003, Svenska UMTS-nät had, under the credit facility, borrowed SEK 725 million, of which we guarantee
50 percent, or SEK 363 million.

Guarantees
on behalf of Xfera, included in the above table, totaled SEK 1,159 million as of December 31, 2003. We believe that our investments pursuant to our contractual
capital commitment will enable Xfera to meet the performance requirements in relation to its UMTS license. Therefore, we do not expect that we will be required to make any significant additional
payments with respect to our counter guarantees on behalf of Xfera's performance commitments. The Spanish government reduced its requirements on performance guarantees for Xfera during 2003. The
counter guarantees issued by us to the Spanish state were thereby reduced from €383 million to €98 million. In addition, we have provided guarantees of
€29 million as our pro rata share to cover the payment of Xfera's spectrum fees for 2001-2003, which are currently the subject of dispute with the Spanish
government.

In
the first quarter of 2004, in connection with our purchase of an additional 2.23 percent stake in Xfera as a result of arbitration proceedings, our counter guarantees increased
by €11 million to approximately €110 million. In addition, our guarantees in relation to the spectrum fee payments increased by
€3 million to €32 million.

As
of December 31, 2003, other guarantees included a credit guarantee of SEK 338 million on behalf of MegaFon, guarantees of approximately SEK 800 million related to
divested businesses, and certain other guarantees in the normal course of business.

ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A    Directors and Senior Management

Board of Directors

Under the Swedish Companies Act, the TeliaSonera board of directors is responsible for TeliaSonera's organization and the management of TeliaSonera's affairs. The
members of the board of directors are elected by TeliaSonera's shareholders and the board of directors must, according to

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TeliaSonera's
articles of association, consist of no fewer than four and no more than nine directors and no more than three deputy directors.

Swedish
law provides that the unions that represent TeliaSonera's employees may appoint three additional directors and three deputy directors.

Under
Swedish law, the managing director and at least half of the members of the board of directors must be resident in a European Economic Area country, unless the Swedish Patent and
Registration Office grants an exemption. Under Swedish law, a director's term of office (other than a union appointee) may not be more than four years, but is normally one year. TeliaSonera's articles
of association provide that directors shall be elected at the annual general meeting of shareholders for a period of one year. A director may, however, serve any number of consecutive terms. The
unions representing TeliaSonera's employees may decide the term for the union-appointed directors, which may not exceed four years, and such directors may also serve any number of consecutive terms.
Directors elected by the general meeting of the shareholders may be removed from office by a general meeting of the shareholders at any time, and vacancies on the board of directors, except when
filled by a deputy director, may only be filled by a resolution of the shareholders.

At
present, TeliaSonera's board of directors has 11 ordinary members, three of whom are employee representatives and, as such, union appointees. TeliaSonera also has three deputy
directors who are each union appointees. The former chairman of our board of directors, Tapio Hintikka, resigned from our board of directors on March 29, 2004. On April 2, 2004, our
board of directors appointed Tom von Weymarn as our new chairman of the board. The current members of our board of directors and certain information relevant to such persons is set forth below:

|Name                  |  | Year born |  | Number of shares owned
as of March 31, 2004 |     | Position          
|--------------------- |  | --------- |  | ------------------------------------------- | --- | ------------------
|Ordinary Members:     |  |           |  |                                             |     |                   
|Tom von Weymarn       |  | 1944      |  | 4,316                                       |     | Chairman          
|Carl Bennet           |  | 1951      |  | 11,000                                      | (1) | Vice Chairman     
|Ingvar Carlsson       |  | 1934      |  | 400                                         |     | Director          
|Eva Liljeblom         |  | 1958      |  | 999                                         |     | Director          
|Sven-Christer Nilsson |  | 1944      |  | 0                                           |     | Director          
|Paul Smits            |  | 1946      |  | 0                                           |     | Director          
|Caroline Sundewall    |  | 1958      |  | 2,000                                       | (1) | Director          
|Roger Talermo         |  | 1955      |  | 0                                           |     | Director          
|Yvonne Karlsson       |  | 1959      |  | 175                                         |     | Director(2)       
|Berith Westman        |  | 1945      |  | 650                                         |     | Director(2)       
|Elof Isaksson         |  | 1942      |  | 750                                         | (1) | Director(2)       
|Deputy Members:       |  |           |  |                                             |     |                   
|Magnus Brattström     |  | 1953      |  | 0                                           |     | Deputy Director(2)
|Stefan Carlsson       |  | 1956      |  | 650                                         |     | Deputy Director(2)
|Arja Kovin            |  | 1964      |  | 0                                           |     | Deputy Director(2)

---

Below
is a summary biography of the members of the board of directors of TeliaSonera:

Tom von Weymarnis the Chairman of the board of TeliaSonera.Mr. von Weymarn was
elected to the board of directors of TeliaSonera in 2002 and to the board of directors of Sonera in 2001. In addition to being a member of the board of directors of TeliaSonera, Mr. von Weymarn
is the Chairman of the board of directors of Lännen Tehtaat Plc., a board member of Oy Telko Ab, CPS

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Color
Group Oy and Hydrios Biotechnology Oy and a member of the supervisory board of Industri Kapital. Mr. von Weymarn served as the President and Chief Executive Officer of Oy Rettig Ab
between 1997 and 2004, as Executive President of Cultor Plc between 1991 and 1997 and as a member of the board of directors of Oy Karl Fazer Ab between 1983 and 1991the last
2 years as President and Chief Executive Officer of Oy Karl Fazer Ab.

Carl Bennetis the Vice Chairman of the board of directors of TeliaSonera. Mr. Bennet was elected to the TeliaSonera board of
directors in 2000. In addition to being a member of the board of directors of TeliaSonera, Mr. Bennet is the Chairman of the boards of directors of Elanders AB, Getinge AB, Lifco AB, Scanrec
AB, Sorb Industri AB and Håells Modul-System and the Vice Chairman of the boards of directors of Boliden AB and SNS (Center for Business and Policy Studies). Mr. Bennet is a
member of the board of AMS (the National Labor Market Board) and also a member of the Swedish Government's Research Advisory Council. Mr. Bennet served as President and Chief Executive Officer
of Getinge AB between 1989 and 1997.

Ingvar Carlssonwas elected to the TeliaSonera board of directors in 2000. Mr. Carlsson is the former Prime Minister of Sweden, a
position he held from 1986 to 1991 and from 1994 to 1996. In addition to being a member of the board of TeliaSonera, Mr. Carlsson is the Chairman of the Olof Palme International Center.

Eva Liljeblomwas elected to the board of directors of TeliaSonera in 2002 and elected to the board of directors of Sonera in 2001. In
addition to being a member of the board of directors of TeliaSonera, Ms. Liljeblom is Professor of Finance and the Head of the Department of Finance and Statistics at the Swedish School of
Economics and Business Administration in Helsinki, Finland. Furthermore, Ms. Liljeblom is a member of the boards of directors of Stockmann Oyj, Fennia Mutual Insurance Company and Municipal
Finance (Kuntarahoitus). Ms. Liljeblom is also the Official Controller of the HEX-index for the HEX Integrated Markets Oy and Chairman of the Investment Committee of the Finnish
Government Pension Fund.

Sven-Christer Nilssonwas elected to the board of directors of TeliaSonera in 2003. Mr. Nilsson was the Chief Executive
Officer and President of Telefonaktiebolaget LM Ericsson in 1998 and 1999. He is the founder, a partner and a member of the board of directors of Startupfactory BV, a member of the boards of directors
of Assa Abloy AB and CEVA, Inc. Mr. Nilsson is also the Chairman of the board of directors of the Swedish Public Service Broadcasting Foundation, the Swedish Institute for Quality
Development (SIQ) and Xelerated, Inc.

Paul Smitswas elected to the board of directors of TeliaSonera in 2003. Mr. Smits was the Chairman of the board of directors and
Chief Executive Officer of Royal KPN N.V. between 2000 and 2002. In addition to being a board member of TeliaSonera, Mr. Smits is a member of the supervisory boards of Travel Unie
International, Enertel BV Rotterdam and Unit 4 Agresso, a member of the advisory board of Rabo Bank NV, a member of the board of Stichting Fevenoord Rotterdam; Chairman of the advisory board of Media
Plaza and Chairman of the board of Stichting Centrale Discotheek Rotterdam.

Caroline Sundewallwas elected to the TeliaSonera board of directors in 2001. In addition to being a member of the TeliaSonera board of
directors, Ms. Sundewall is a board member of Lifco AB, Strålfors AB, Haldex AB and Perbio Science AB. Ms. Sundewall has previously served as business editor for
Finanstidningen and business commentator and business editor of Sydsvenska Dagbladet. Ms. Sundewall has also held the position of business controller of Ratos AB.

Roger Talermowas elected to the board of directors of TeliaSonera in 2002 and to the board of directors of Sonera in 2001. In addition to
being a member of the board of directors of TeliaSonera, Mr. Talermo is the President, Chief Executive Officer and a board member of Amer Group Plc.

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Yvonne Karlsson, an employee representative, was appointed by the trade union to the board of directors of TeliaSonera in 2002. In
addition to being a member of the board of directors of TeliaSonera, Ms. Karlsson is the Vice Chairman of the Swedish Union of Clerical and Technical Employees in Industry, telecommunications
section (SIF-TELE).

Berith Westman,an employee representative, was appointed by the trade union to the board of directors of TeliaSonera in 1995. In addition
to being a member of the board of directors of TeliaSonera, Ms. Westman is the Chairman SIF-TELE and a board member of Telia Pension Fund.

Elof Isaksson, an employee representative, was appointed by the trade union to the board of directors of TeliaSonera in 2000. In addition
to being a member of the board of directors of TeliaSonera, Mr. Isaksson is the Chairman of the Union of Service and Communication Employees (SEKO) within TeliaSonera and a board member of the
Telia Pension Fund.

Below
is a summary biography of the deputy members of the TeliaSonera board of directors:

Magnus Brattström, an employee representative, was appointed by the trade union to serve as a deputy member of the board of
directors of TeliaSonera in 2001. In addition to being a deputy member of the board of directors of TeliaSonera, Mr. Brattström is the Vice Chairman of the Union of Service and
Communication Employees (SEKO) within TeliaSonera.

Stefan Carlsson, an employee representative, was appointed by the trade union to serve as a deputy member of the board of directors of
TeliaSonera in 2002.

Arja Kovin, an employee representative, was appointed by the trade union to serve as a deputy member of the board of directors of
TeliaSonera in 2002.

No
member or deputy member of the board of directors currently holds a management position in TeliaSonera. No member or deputy member of the board of director has a family relationship
with any other board member or any group management member.

No
board member has been elected pursuant to an arrangement or understanding between us and any major shareholder, customer, supplier or other person.

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Executive Management and Group Vice Presidents

The members of our executive management and group vice presidents, and certain information relevant to such persons is set forth below:

|Name                  |  | Year born |  | Number of Shares
owned as of
March 31, 2004 |     | Principal Occupation                                                            
|--------------------- |  | --------- |  | ------------------------------------------- | --- | --------------------------------------------------------------------------------
|Anders Igel           |  | 1951      |  | 35,100                                      |     | President and Chief Executive Officer                                           
|Harri Koponen         |  | 1962      |  | 12,069                                      |     | Deputy Chief Executive Officer President of TeliaSonera International           
|Kim Ignatius          |  | 1956      |  | 3,028                                       |     | Chief Financial Officer                                                         
|Lars-Gunnar Johansson |  | 1944      |  | 2,550                                       | (1) | Group Vice President Responsible for Corporate Networks and Technology          
|Rune Nyberg           |  | 1949      |  | 1,000                                       |     | Group Vice President Responsible for Corporate Human Resources                  
|Michael Kongstad      |  | 1960      |  | 1,000                                       |     | Group Vice President Responsible for Corporate Communications                   
|Jan Henrik Ahrnell    |  | 1959      |  | 2,500                                       |     | Group Vice President and General Counsel Responsible for Corporate Legal Affairs
|Marie Ehrling         |  | 1955      |  | 1,000                                       |     | President of TeliaSonera Sweden                                                 
|Anni Vepsäläinen      |  | 1963      |  | 1,500                                       |     | President of TeliaSonera Finland                                                
|Kenneth Karlberg      |  | 1954      |  | 2,000                                       | (1) | President of TeliaSonera Norway, Denmark and the Baltic Countries               
|Terje Christoffersen  |  | 1952      |  | 0                                           |     | Responsible for Corporate Marketing, Products and Services                      

---

Below
is a summary biography of the members of the executive management and group vice presidents:

Anders Igelis President and Chief Executive Officer of TeliaSonera. Previously, Mr. Igel has served as President and Chief
Executive Officer of Esselte AB and, before that, Executive Vice President of Telefonaktiebolaget LM Ericsson. While at Ericsson, Mr. Igel was, over the course of his career, the Head of
Infocom Systems, which was one of Ericsson's three global business areas comprising fixed networks, Internet and IP-communication, the Head of Ericsson's Public Networks business area, the
Head of Ericsson UK, and an operations executive for Ericsson in the Middle East, South-East Asia and Latin America. Mr. Igel left Ericsson to become the President and Chief
Executive Officer of Esselte in 1999.

Harri Koponenis Deputy Chief Executive Officer of TeliaSonera and President of TeliaSonera International. Mr. Koponen was
appointed President and Chief Executive Officer of Sonera in 2001. Mr. Koponen joined Sonera from Ericsson, where he was employed in various positions beginning in 1994. As from 1999,
Mr. Koponen was Executive Vice President and General Manager of Ericsson's consumer products division in North America. Prior to joining Ericsson, Mr. Koponen held various positions at
Hewlett-Packard.

Kim Ignatiusis Chief Financial Officer of TeliaSonera. Mr. Ignatius was appointed Executive Vice President and Chief Financial
Officer of Sonera in 2000. Prior to joining Sonera, Mr. Ignatius was Chief Financial Officer and a member of the executive board of Tamro Corporation. Mr. Ignatius has also held various
management positions at Amer Group Plc.

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Lars-Gunnar Johanssonis a Group Vice President and head of the unit Corporate Networks and Technology. Mr. Johansson
has been employed by TeliaSonera since 1969 and was previously head of TeliaSonera's wholesale business Skanova, head of business area Carrier and Networks, responsible for network planning with Telia
Region West and head of network planning in the Gothenburg telecom district.

Rune Nybergis a Group Vice President and head of Corporate Human Resources. Mr. Nyberg was employed by TeliaSonera in 2003. Prior
to joining TeliaSonera, Mr. Nyberg was Group Vice President of Human Resources at Sandvik AB, President of Pair Ltd. and Personnel Manager at Sandvik, JS Saba and Distributions AB DAGAB.

Michael Kongstadis a Group Vice President and head of Corporate Communications. Mr. Kongstad joined TeliaSonera and became a
member of the group management team in 2001. He has served as managing director of the Burson-Marsteller International Inc.'s Swedish operations and as communications director for Posten AB,
WASA Insurance Group and the OM Group.

Jan Henrik Ahrnellis a Group Vice President and General Counsel of TeliaSonera. Mr. Ahrnell has been employed by TeliaSonera since
1989 and has served as General Counsel since 1999. Prior to his service as General Counsel, Mr. Ahrnell was the head of various legal departments within the TeliaSonera group and served as
corporate counsel in various TeliaSonera companies.

Marie Ehrlingis President of TeliaSonera Sweden. Ms. Ehrling was employed by TeliaSonera in 2003 and previously held the position
of Deputy Chief Executive Officer of SAS AB and Head of SAS Airline. Ms. Ehrling has held several executive positions within SAS. In addition, Ms. Ehrling has served as Information
Officer at the Swedish Ministry of Finance and the Swedish Ministry of Education and Science and as financial analyst for the Fourth National Pension Insurance Fund (Fjärde
AP-fonden).

Anni Vepsäläinenis President of TeliaSonera Finland. Ms. Vepsäläinen
has been employed by Sonera since 1987 and has been a member of Sonera's executive management team since 2001. Ms. Vepsäläinen has held several executive positions
within Sonera, including Head of Products and Services and Head of Human Resources and Competencies, and was in charge of Sonera's former business unit Mobile Operations in Finland.

Kenneth Karlbergis President of TeliaSonera Norway, Denmark and the Baltic countries. Mr. Karlberg has been employed by
TeliaSonera since 1987 and a member of the executive management since 1999. Previously, Mr. Karlberg has served as Vice President of TeliaSonera and Head of the Telia Mobile business area.
Mr. Karlberg has been active in the mobile communications area since 1995, first as regional head and production manager and subsequently as business area head of Telia and President of Telia
Mobile.

Terje Christoffersenis responsible for Corporate Marketing, Products and Services. Mr. Christoffersen has been employed by
TeliaSonera since 2001 and a member of the executive management since 2004. Previously, Mr. Christoffersen has served as country manager for Hewlett Packard in Norway and Sweden and CEO of
Netcom in Norway.

The
business address of each of the members of the TeliaSonera board of directors, the President and Chief Executive Officer of TeliaSonera and each other member of TeliaSonera's
executive management and group vice presidents is c/o TeliaSonera AB, Sturegatan 1, SE-106 63 Stockholm, Sweden, telephone +46-8-504 550 00.

In
certain cases, management's areas of responsibility comprise more than one reporting unit. The areas of responsibility for TeliaSonera Sweden and TeliaSonera Finland cover the
reporting units Sweden and Finland, respectively. The TeliaSonera Norway, Denmark and the Baltic countries area of responsibility covers each of the reporting units Norway, Denmark and the Baltic
Countries. The TeliaSonera International area of responsibility covers the reporting units Eurasia, Russia, Turkey and TeliaSonera International Carrier. Our Chief Financial Officer is responsible for
TeliaSonera Holding.

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No member of the executive management and group vice presidents has a family relationship with any other member of the executive management and group vice presidents or any board member.

6.B  Compensation

The following table shows the aggregate compensation of the Chairman of the board of directors, the President and Chief Executive Officer, the Deputy Chief
Executive Officer and the other members of the executive management of TeliaSonera, for the year ended December 31, 2003. "Other members of the executive management," as the term is used below,
refers to the seven individuals who, with the President and Chief Executive Officer and the Deputy Chief Executive Officer, constituted TeliaSonera group executive management as of December 31,
2003.

|                                          |  | Base salary/board
remuneration |  | Variable
salary |  | Other
benefits(1) |  | Pension
expense(2) |  | Total     
|----------------------------------------- |  | ------------------------------ |  | --------------- |  | ----------------- |  | ------------------ |  | ----------
|
|Chairman of the board of directors(3)     |  | 629,879                        |  |                |  |                  |  |                   |  | 629,879   
|President and Chief Executive Officer     |  | 6,067,200                      |  | 3,000,000       |  | 656,083           |  | 3,585,701          |  | 13,308,984
|Deputy Chief Executive Officer            |  | 5,226,356                      |  | 1,294,659       |  |                  |  | 2,390,501          |  | 8,911,516 
|Other members of the executive management |  | 19,012,084                     |  | 4,918,672       |  | 4,039,823         |  | 8,662,552          |  | 36,633,132
|                                          |  |                                |  |                 |  |                   |  |                    |  |           
|Total                                     |  | 30,935,520                     |  | 9,213,331       |  | 4,695,906         |  | 14,638,754         |  | 59,483,511

---

In
addition to general employment benefits, TeliaSonera offers the following benefits to members of the executive management and group vice presidents: health insurance (including
coverage for the spouse of an employee), an annual medical examination, a telephone subscription for private use free
of charge and the choice of the following: use of a company car, domestic service or a salary increase of an equivalent amount. All benefits, except for health insurance for the employee and the
annual medical examination, are treated as taxable income in Sweden. The members of the executive management that have their employment contracts with TeliaSonera Finland have standard local benefits
provided to other TeliaSonera Finland managers.

Board Remuneration and Base Salary

At TeliaSonera's annual general meeting held on May 8, 2003, the following director's fees were approved. The Chairman of the board of directors of the
company is to receive SEK 750,000 per year in compensation, the Deputy Chairman is to receive SEK 550,000 per year in compensation and each other member of the board of directors is to receive SEK
400,000 per year in compensation. No separate compensation is paid to directors for committee work. Directors appointed as employee representatives are not remunerated.

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Our
President and Chief Executive Officer Anders Igel has received a base salary of SEK 6,067,200 in 2003, and his base salary for 2004 amounts to SEK 6,240,000. Our Deputy Executive
Officer Harri Koponen has received a base salary of SEK 5,226,356 in 2003, and as of January 1, 2004, his base salary was equivalent to SEK 5,094,449.

Stock Options

Sonera

Members of the executive management who had their employment contracts with Sonera and had Sonera warrants before the merger were granted separate TeliaSonera
warrants when Sonera warrants were exchanged into TeliaSonera warrants. As of March 31, 2004, the following members of the executive management and group vice presidents held the following
number of warrants:

2002/2005 AHarri Koponen

255,000Anni Vepsäläinen

117,500


Telia

Two of the other Swedish members of the executive management who were employed in 2001 were each allotted 1,000 employee stock options in the 2001 option program
on terms equal to those applicable to other employees of the group.

For
a further description of the stock option plans, see subsection "Employee Stock Option Plans," below.

Variable Salary

Our President and Chief Executive Officer and also our Deputy Chief Executive Officer are eligible for variable salary that is capped at an amount equal to
50 percent of the base salary. For other members of the executive management, the variable salary is capped at 35 percent of the base salary. Variable salary is based on the financial
performance of the Group, financial performance of the unit and individual performance objectives.

Variable
salary for 2003 corresponded to 50 percent of the base salary for the President and Chief Executive Officer, to 25 percent for the Deputy Chief Executive Officer
and, for other members of the executive management, to between 17.5 and 35 percent of the base salary. No variable salary for 2002 was paid to our current President and Chief Executive Officer
in 2003. Variable salary with respect to employment in 2002 was paid in 2003 to our Deputy Chief Executive Officer in an amount equivalent to SEK 3,942,785 and to other members of the executive
management in an amount of SEK 3,212,367

Pensions

Our President and Chief Executive Officer Anders Igel is guaranteed early retirement at the age of 60, pursuant to which his total annual pension payments will
equal 70 percent of his base salary. From the age of 65, pension benefits will be paid under the ITP-Tele plan as well as a supplementary pension, which will be paid for the portion
of his salary that exceeds 20 income base amounts, as that term is defined under Swedish law, so that the total annual pension equals 50 percent of his base salary.

The
early retirement age for members of the executive management other than the President and Chief Executive Officer varies between 60 and 62. Members of the executive management who
have their employment contracts in Sweden have pension benefits that correspond to 70 percent of pensionable salary between age 60 (62) and 65, with the exception that one member of the
executive management has pension benefits equal to 43 percent of pensionable salary. Annual pension benefits

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after
age 65 are to be paid in accordance with the ITP-Tele plan with supplementary benefits, amounting to 32.5 percent of the pensionable salary, for that part of salary exceeding
20 income base amounts. Pensionable salary corresponds to base salary and variable salary for those employed prior to July 1, 2002 and solely to base salary for those employed on or after that
date.

Our
Deputy Chief Executive Officer Harri Koponen and one other member of the executive management who both have their employment contracts in Finland have pension benefits that provide
for early retirement at the age of 60. Pension benefits between age 60 and 65 equal 60 percent of base salary and variable salary. From the age of 65, pension benefits will be paid under the
Finnish statutory TEL pension.

Severance Pay

TeliaSonera's employment contract with our President and Chief Executive Officer requires both parties to provide six months' notice of resignation or termination
of employment. Upon termination by the company, the President and Chief Executive Officer shall be entitled to severance pay equal to his fixed monthly salary for a period of 24 months. Other
income shall be deducted from the severance amount. If the President and Chief Executive Officer resigns his position, he shall not be entitled to severance pay.

TeliaSonera's
employment contract with our Deputy Chief Executive Officer requires both parties to provide six months' notice of resignation or termination of employment. Upon
termination by the company, the deputy chief executive officer shall be entitled to severance pay corresponding to 18 months' salary. If the Deputy Chief Executive Officer resigns his position,
he shall not be entitled to severance pay.

TeliaSonera's
employment contract with other members of the executive management requires a period of notice of six months from the employee and 12 months from the company with
respect to resignation or termination of employment. Upon termination by TeliaSonera, such member of the executive management and group vice presidents will be entitled to a severance pay equal to the
fixed monthly salary for a period of 12 months. Other income shall be deducted against the salary during the notice period and the severance amount. If a member of the executive management
resigns his or her position, he or she shall not be entitled to severance pay.

Planning and Decision Process

The compensation of our President and Chief Executive Officer for 2003 was decided by our board of directors based on the recommendation of the compensation
committee of the board of directors. The compensation of other members of the executive management is decided by our President and Chief Executive Officer in consultation with the compensation
committee.

Employee Stock Option Plans

2001 Employee Stock Option Program.Our shareholders at the 2001 annual general meeting voted in favor of establishing an
employee stock option program involving the issuance of debt instruments that carries the right to subscribe for shares in TeliaSonera. A total of 1,000 stock options were allotted free of charge to
all employees with a permanent employment contract as of December 31, 2001. A portion of the options was issued to employees on May 15, 2001, and a second portion was sent out to all
other employees during the first half of 2002. Due to legal and/or administrative reasons, stock options could not be offered to employees in certain countries and in certain states in the United
States.

The
program encompasses the issuance of a maximum of 21,000,000 options, which entitle the holder thereof to acquire a corresponding number of shares in TeliaSonera. The options are
exercisable

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between
May 31, 2003 and May 31, 2005. In addition, up to a maximum of 6,500,000 additional options may be issued and sold in the open market to compensate for any social costs incurred
in connection with the option program.

The
increase in share capital following a full subscription under the stock option plan would amount to SEK 88,000,000, or 0.9 percent of the total number of TeliaSonera shares.
The current subscription price is set at SEK 69 per TeliaSonera share, however, the subscription price may be subject to adjustment following new issuances of shares, stock-splits and similar
transactions.

2002 Stock Option Planseries 2002/2005:A.In exchange for Sonera warrants of series 1999A, the
extraordinary meeting of our shareholders held on November 4, 2002 adopted a resolution to issue a maximum of 7,500,000 warrants of series 2002/2005:A.

Each
series A warrant entitles the warrant holder to subscribe for 1.5 new shares in TeliaSonera. The current subscription price is set at SEK 71.62 per TeliaSonera share for
series A warrants. The increase in share capital following a full subscription of the series A warrants would be no more than SEK 36 million, or 0.2 percent of the total
number of our shares. Series A warrants are exercisable and they were listed on the Helsinki Stock Exchange on December 9, 2002. A warrant holder can sell series A warrants on the
stock exchange at a price determined by public quotes.

Pension Benefits

Almost all of our employees in Sweden, Finland and Norway are covered by defined pension benefit plans, providing a pension equal to a certain percentage of the
employee's final salary. The pension plans mainly include old-age pension, disability pension and family pension. The pension obligations are secured mostly by pension funds, but also by
provisions in the balance sheet and by insurance premiums.

TeliaSonera's
employees outside Sweden, Finland and Norway are usually covered by defined contribution pension plans. Contributions to these plans are normally set at a certain
percentage of the employee's salary.

Sweden.Currently, substantially all of TeliaSonera's employees in Sweden are eligible for retirement benefits under a
benefit plan called ITP-Tele. TeliaSonera and most of its subsidiaries in Sweden use the ITP-Tele plan.

Finland.TeliaSonera's employees in Finland are entitled to statutory pension benefits pursuant to the Finnish Employees'
Pension Act (395/1961), as amended, a defined benefit pension arrangement with retirement, disability, unemployment and death benefits. In addition, certain employees have additional pension coverage
through a supplemental pension plan.

6.C  Board Practices

The Board of Directors

TeliaSonera's articles of association stipulate that the board of directors shall consist of, besides employee representatives appointed in accordance with
Swedish law, no less than four and no more than nine members and no more than three deputy members. The members and deputy members are elected annually at the annual general meeting to serve until the
end of the following annual general meeting.

TeliaSonera's
board of directors currently has eight ordinary members. In addition, the employee organizations are represented by three ordinary members and three deputy members. The
current term of office of the members, who are not employee representatives, expire at the end of the annual general meeting in 2004, at which point each member may be re-elected for
consecutive one-year

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terms.
For information on the period during which each person has served on the board of TeliaSonera, see "Item 6.A Directors and Senior Management."

Except
for the employee representatives, the members of the board of directors of TeliaSonera are not employed by TeliaSonera. No service contracts providing for benefits upon
termination of employment exist between the company or any of its subsidiaries, on one hand, and any director, on the other hand.

The
board of directors held ten ordinary meetings during 2003 as well as a number of extra meetings. The guidelines for the work of the board of directors and instructions defining the
responsibilities of the board members and our President and Chief Executive Officer, and the provisions governing the President and Chief Executive Officer's reporting to the board, are provided by
the standing orders adopted by the board on February 19, 2003. The standing orders lay down rules regarding the number of ordinary board meetings (at least five ordinary meetings per calendar
year), the business on the agenda of ordinary board meetings, responsibilities within the board, including the obligations of the Chairman of the board, responsibilities of members of the board and
the President and Chief Executive Officer, and how work is carried out by committees.

Committees of the Board of Directors

The Audit Committee

The board of directors appointed an audit committee on January 7, 2003. The audit committee is to consist of independent and qualified
non-executive members of the board. The Committee currently consists of the following three members of the board, each of whom is independent and qualified: Caroline Sundewall, Tom von
Weymarn and Eva Liljeblom.

The
purpose of the audit committee is to assist the board in fulfilling its responsibilities to oversee the accounting and financial reporting processes of TeliaSonera. These include the
oversight of the quality and integrity of TeliaSonera's consolidated financial statements and related disclosure and the performance of its internal control and risk management and audit functions.
The audit committee further oversees the performance, qualifications and independence of TeliaSonera's external auditor. Under Swedish law, the external auditor is elected by the shareholders at the
annual general meeting. The audit committee holds meetings at least four times per year. The audit committee also meets with representatives of management and the external auditor at least four times
a year.

The Nomination Committee

The shareholders at the annual general meeting of TeliaSonera held on May 10, 2001 resolved to establish a nomination committee consisting of
representatives from the four largest shareholders in TeliaSonera from time to time and the Chairman of the TeliaSonera board of directors. The primary purpose of the nomination committee is to
nominate the TeliaSonera board of directors and present proposals regarding the compensation of members of the TeliaSonera board of directors. The
nomination committee of the board of directors also devotes special attention to the need for greater equality between women and men. The recommendations of the nomination committee are to be reported
in the notice of the annual general meeting and at the annual general meeting.

At
the extraordinary meeting of the shareholders on November 4, 2002, it was decided that the Company's nomination committee should be comprised of the Chairman and the Vice
Chairman. As a result, the current nomination committee members are Tom von Weymarn and Carl Bennet.

The Compensation Committee

The TeliaSonera board of directors has appointed a compensation committee, which considers certain matters relating to compensation and submits recommendations to
the board of directors. In

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particular,
the committee deals with matters that affect remuneration paid to the President and Chief Executive Officer and certain senior managers. Its responsibilities also include incentive
programs that target a broader group of employees within the TeliaSonera group. The current members of the compensation committee are Tom von Weymarn, Carl Bennet, Ingvar Carlsson and Roger Talermo.

6.D  Employees

As of December 31, 2003, the TeliaSonera group had 26,694 employees as compared to 29,173 as of December 31, 2002, a net decrease of 2,479 employees
in 2003. Divestitures in 2003 decreased the number of personnel by 1,173 and our streamlining efforts further decreased personnel by 2,029. At the same time, the acquisition of Auria in Finland added
723 employees.

In
profit center Sweden, the number of employees decreased by 549 due to our streamlining efforts, while the number of employees increased in Finland despite streamlining efforts due to
the acquisition of Auria. In other reporting units, the number of employees decreased by 2,356, of which 950 in the Baltic countries due to streamlining and 1,176 in TeliaSonera Holding due to
divestments.

The
table below lists the number of employees by reporting unit based on our current organizational structure as if our current organizational structure had been in effect already at the
end of 2002 and 2001:

As of December 31,2003

2002(1)

2001(1)Sweden

10,712

11,261

11,915Finland

6,661

6,235

6,505Norway

722

734

712Denmark

1,030

1,105

1,259The Baltic countries

4,741

5,691

6,730Eurasia

1,024

879

Russia

1

1

Turkey

3

3

2International Carrier

555

914

1,004TeliaSonera Holding

947

1,410

4,604Corporate

298

227

217Total

26,694

28,460

32,948


---

Sweden.The TeliaSonera group is a member of ALMEGA, the Swedish employer association of the IT Trade & Industry.
There are three Swedish trade unions at the TeliaSonera group level, namely Seko, Sif-Tele and Akademikerna i Telia. Approximately 85 percent of TeliaSonera group's Swedish
employees are trade union members. In addition to the Swedish Co-determination at Work Act, there is a TeliaSonera group agreement with the trade unions regarding active union
participation, negotiating procedure and working environment. According to the Swedish Act on Board Representation for Private Sector Employees, the unions are entitled to appoint members of
TeliaSonera's board of directors. There are currently two board members from Sif-Tele and one from Seko on TeliaSonera's board of directors. TeliaSonera considers its relations with its
employees and the trade unions to be good.

In
Sweden, we have entered into a redeployment agreement with the trade unions effective as of April 1, 2002, in order to continue to develop our human resources to keep
TeliaSonera competitive. Our strategy is to create favorable conditions for skills development, redeployment and increased employee mobility.

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Finland.Approximately 55 percent of our employees in Finland are members of trade unions, with the majority of
unionized workers belonging to the Finnish Telecommunications Union. All employees in Finland, with the exception of some top officers, are covered by one collective bargaining agreement that is valid
until February 15, 2005. We consider our relations with our employees and the trade unions in Finland to be good.

6.E  Share Ownership

Please see "Item 6.A Directors and Senior Management" and "Item 6.B Compensation."

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A    Major Shareholders

As of March 31, 2004, TeliaSonera's issued and outstanding share capital was SEK 14,960,742,620.80 consisting of 4,675,232,069 TeliaSonera shares with a
par value of SEK 3.20 each. The shares are registered with the Swedish Central Securities Depository & Clearing Organization (VPC).

Each
share of TeliaSonera represents one vote at the general meeting of the shareholders and thus no shareholder has different voting rights than what such shareholder's respective
shareholding represents.

According
to information provided by Citigroup, there were 1,777,754 ADSs outstanding as of March 31, 2004, and 39 registered holders of such ADSs. Each ADS represents five
TeliaSonera shares. A significant number of the ADSs are held of record by brokers and other nominees. Based on available information from Citigroup, the number of beneficial owners of ADSs as of
March 31, 2004, was approximately 4,250.

The
calculation of percentages in the "Percentage of outstanding shares" column in the table below is based upon the number of TeliaSonera shares issued and outstanding on
March 31, 2004, plus TeliaSonera shares subject to options held by the respective persons or entities on March 31, 2004, and exercisable within 60 days of that date. The following
table sets forth the shareholders known by TeliaSonera to hold five percent or more of the voting rights of TeliaSonera as of March 31, 2004, and their respective holdings:

Shareholder

Number of
Shares/Votes

Percent (%) of
outstanding sharesSwedish State(1)

2,118,278,261

45.3Finnish State(2)

891,800,230

19.1Other shareholders

1,665,153,578

35.6Total

4,675,232,069

100.0


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During
the past three years, the only shareholders we have known to hold five percent or more of our voting securities have been the Swedish State and, following the merger of Telia and
Sonera, the Finnish State. See "Item 4.A History and Development of the Company."

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Interest of TeliaSonera's Management

As of March 31, 2004, members and deputy members of TeliaSonera's board of directors and members of the TeliaSonera executive management and group vice
presidents in aggregate held 82,687 shares of TeliaSonera, including shares of TeliaSonera held by affiliated persons of such members, which represented an insignificant percentage of the outstanding
shares of TeliaSonera. See "Item 6. Directors, Senior Management and Employees."

7.B  Related Party Transactions

Described below are certain material transactions between us and our associated companies and other related parties since the beginning of 2001. See Note 9
to our consolidated financial statements.

The Swedish State and the Finnish State

The Swedish State currently owns 45.3 percent and the Finnish State 19.1 percent of the shares in TeliaSonera AB. Our services and products are
offered to the Swedish and Finnish State, their agencies, and state-owned companies in competition with other operators and on commercial terms. Certain state-owned companies run businesses that
compete with us. Likewise, we buy services from state-owned companies at market prices and on otherwise commercial terms. Neither the Swedish and Finnish State and their agencies, nor state-owned
companies represent a significant share of our net sales or income.

See
Note 9 of our consolidated financial statements for a further discussion of fees we pay to the Swedish and Finnish national regulatory authorities under the acts and
ordinances governing the telecommunications markets in the two countries.

Svenska UMTS-nät AB

On March 15, 2001, we established a 50/50-percent owned company, Svenska UMTS-nät AB, together with Tele2 to develop the Swedish
UMTS license awarded to Tele2. As of December 31, 2003, we had made an aggregate capital contribution of SEK 500 million to Svenska UMTS-nät. In 2003, we sold
services and products worth SEK 131 million to Svenska UMTS-nät.

In
2002, Svenska UMTS-nät signed a SEK 11 billion credit facility for the construction of its UMTS network infrastructure in Sweden in accordance with
the license conditions. In 2003, the maximum amount of the credit facility was reduced to SEK 7 billion. See Note 31 to our consolidated financial statements for details concerning the
credit facility.

Lattelekom SIA

Under a management agreement that expired on January 14, 2004, Tilts Communications A/S, our wholly owned subsidiary holding a 49 percent equity
interest in the Latvian telecommunications provider Lattelekom, provided Lattelekom management services, employee training and assistance in the procurement of equipment and supplies for which we
received fees. Tilts has also agreed to improve Lattelekom's network and infrastructure, and we have provided performance guarantees to Lattelekom in respect of Tilts's foregoing obligations.

In
2003, we sold services and products to Lattelekom worth SEK 114 million and purchased services and products worth SEK 73 million. Further, in 2003, the Annual General
Meeting of shareholders of Lattelekom decided to annul the company's class C shares, resulting in a repayment to us of SEK 350 million.

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MegaFon

We hold a participating interest in the Russian mobile operator OAO MegaFon. As of December 31, 2003, we had interest-bearing and
non-interest-bearing claims against MegaFon of SEK 379 million for the construction of its GSM network.

Unisource N.V./AUCS

We previously held an interest in Unisource N.V. together with Swisscom and KPN. All operations in Unisource, with the exception of AUCS Communications Services
(AUCS) and its subsidiaries, were sold or shut down in 1999 and Unisource was dissolved on July 1, 2000. In May 2003, we and the other shareholders of AUCS approved a liquidation plan
for the AUCS group of companies.

Unisource
and its joint owners, including us, signed a three-year management agreement with Infonet Services Corp. in 1999 regarding AUCS. The agreement provides for the sale
of a large part of AUCS's operations to Infonet. The management agreement was supplemented in December 2002 by a termination agreement, valid until the first quarter of 2004. See Note 9
to our consolidated financial statements for a description of the financial implications of these contracts.

Infonet Services Corp.

As described above, we hold a participating interest in Infonet. In 2003, 2002 and 2001 we sold services and products to Infonet worth SEK 48 million, SEK
41 million and SEK 29 million, respectively, and purchased services and products worth SEK 225 million, SEK 260 million and SEK 320 million, respectively.

Comsource/Eircom

Until April 2002, we held a 40 percent interest in Comsource. In April 2002, Comsource partly redeemed the shares held by us and paid
€ 87.0 million to us, of which € 84.4 was used to satisfy outstanding loans made by Comsource in favor of us. Shortly thereafter, we
sold our interest in Comsource to KPN, which held the remaining 60 percent interest in Comsource, for € 13.5 million in cash. Comsource owned a
35 percent interest in Eircom plc, the leading Irish fixed-line telecommunications operator, which it divested in November 2001 in connection with a cash tender offer made by
Valentia Telecommunications for all outstanding shares in Eircom.

See
"Item 5.B Liquidity and Capital ResourcesRecent Acquisitions, Investments and Divestitures" for a discussion of the divestment of our interest in Eircom.

Telefos AB

We own 49 percent of the shares of Telefos AB, which until June 2001 was a wholly owned subsidiary. As of December 31, 2003, we had
interest-bearing claims against the Telefos Group of SEK 875 million and had signed guarantees of SEK 200 million for commitments made by Telefos companies. These interest-bearing
obligations of the Telefos Group are secured by Telefos's shareholdings in its various subsidiaries as well as by guarantees from Telefos's subsidiaries. In addition, Telefos has pledged all its
claims of payment against various companies within the TeliaSonera Group to us. On January 2, 2004, Telefos divested some of its operations, whereby our claims and guarantees were reduced to
SEK 434 million and SEK 120 million, respectively.

In
2003 and 2002 and for 2001, in the period after the change in ownership, we sold services and products to the Telefos Group worth SEK 139 million, SEK 324 million and
SEK 279 million, respectively, and bought services and products worth SEK 2,675 million, SEK 3,534 million and SEK 1,210 million, respectively. Some of the services
purchased by us relate to the construction of fixed assets.

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Eniro AB

Until November 2000, the directory company Eniro was our wholly owned subsidiary. In 2000 and 2001, we completely divested our shareholding in Eniro. We
had also granted Eniro an option to purchase our shares in the Polish directory company Panorama Polska, should we become the sole shareholder of Panorama Polska. After we acquired a
100 percent interest in Panorama Polska in May 2001, we promptly thereafter sold our Panorama Polska shares to Eniro under the terms of the option.

See
"Item 5.B Liquidity and Capital ResourcesRecent Acquisitions, Investments and Divestitures" for a discussion of our divestment of Eniro.

INGROUP Sweden AB

Until February 20, 2004, we held an indirect 37 percent participating interest in INGROUP Sweden AB (IN), which was formerly a wholly owned
subsidiary of Telia. In 2003, 2002 and 2001, we sold services and products to IN totalling SEK 13 million, SEK 46 million and SEK 67 million, respectively, and in 2003, 2002 and
2001, we bought services and products from IN totalling SEK 249 million, SEK 267 million and SEK 245 million, respectively.

Other Relationships

In addition, we sell and buy services and products to a limited extent to and from other associated companies. The transactions between us and these associated
companies, as well as the transactions mentioned above, are based on commercial terms, unless otherwise indicated.

7.C  Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

8.A  Consolidated Statements and Other Financial Information

8.A.1See Item 18 for our audited consolidated financial statements.

8.A.2See Item 18 for our audited consolidated financial statements, which cover the last three financial years.

8.A.3See page F-3 for the report of our auditors entitled "Report of Independent Auditors."

8.A.4Not applicable.

8.A.5Not applicable.

8.A.6See Note 6 to our consolidated financial statements included in Item 18 of this Form 20-F for
the amount of our export sales.

8.A.7Legal and Regulatory Proceedings

We
are involved in a number of legal proceedings in the ordinary course of our business. These proceedings primarily involve claims arising out of commercial law issues and regulatory
matters. We are also involved in administrative proceedings relating principally to telecommunications regulations, competition law and consumer protection issues. Except for the proceedings described
below, we or our subsidiaries are not involved in any legal, arbitration or regulatory proceedings which we believe could have a material adverse effect on our business, financial condition or results
of operations.

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The
following is a brief summary of certain regulatory proceedings to which we or one of our subsidiaries is a party:



107

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The
following is a brief summary of certain legal proceedings to which we or one of our subsidiaries is a party:



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In
addition to the legal and regulatory proceedings described above, our associated company, Turkcell, is presently subject to numerous legal and regulatory proceedings relating to,
among other things, the following:



There
can be no assurance that these or other proceedings will be determined in favor of Turkcell. Turkcell's failure to successfully defend itself against any such proceedings could
have a material adverse effect on its consolidated financial position, results of operations, liquidity and prospects, which, in turn, could have a material effect on the value of our holding in
Turkcell and on our results of operations.



For 2003, the TeliaSonera board of directors proposes an increase of the dividend to SEK 1.00 per share, consisting of an ordinary dividend of SEK 0.80 and an
extra dividend of SEK 0.20, reflecting the exceptionally strong cash flow. This results in a total distribution of SEK 4,675 million with respect to the fiscal year ended December 31,
2003.

At
an annual general meeting of shareholders of TeliaSonera, shareholders may declare dividends upon the recommendation of the TeliaSonera board of directors. The amount of dividends may
not exceed the amount proposed or approved by the TeliaSonera board of directors and is limited by Swedish law.

According
to Swedish law, shareholders' equity is divided into funds available for distribution, which are called non-restricted funds, and funds not available for
distribution, which are called restricted funds. TeliaSonera's shareholders can receive as a distribution only the non-restricted funds of the parent company or the group, whichever is
lower. See the section titled "Restricted and non-restricted equity" in Note 21 to our consolidated financial statement for more details.

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According
to our dividend policy, the board of directors is required to take into consideration the outlook for operating cash flow generation, capital expenditure requirements, earnings
growth and the amount of funds available for distribution when proposing the level of dividend to the annual general meeting of shareholders. Our intention is to increase the dividend annually.

Although
we currently intend to pay annual dividends on our shares, we cannot assure you that dividends will be paid or of the amount of any dividends. Future dividends will depend on a
number of factors, including:



As
of December 31, 2003, the total non-restricted funds for the parent company TeliaSonera AB amounted to SEK 23,209 million and, for TeliaSonera on a
consolidated basis, to SEK 26,148 million.

The
following table sets forth the annual dividends paid per share with respect to each of the fiscal years indicated.

Dividend paid per TeliaSonera shareYearSEK

$(1)Year1998

0.49

0.061999

0.52

0.062000

0.50

0.052001

0.20

0.022002

0.40

0.052003(2)

1.00

0.13


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Because
we will pay dividends in Swedish kronor, exchange rate fluctuations will affect the U.S. dollar amounts received as dividends by holders of our ADSs.

8.B  Significant Changes

No significant changes have occurred since the date of our consolidated financial statements included in this annual report. See "Item 5.D Trend Information."

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ITEM 9. THE OFFER AND LISTING

9.A  Offer and Listing Details

The principal trading market for TeliaSonera's shares is the Stockholm Exchange. The table below sets forth, for the periods indicated, the reported high and low
market quotations for our shares on the Stockholm Exchange.

Price Per ShareLow

High(in SEK)2000 (beginning June 13, 2000)

49.60

94.002001

36.00

71.002002

21.60

47.902001First Quarter

45.50

64.50Second Quarter

49.50

71.00Third Quarter

36.00

57.00Fourth Quarter

44.10

54.002002(1)First Quarter

33.00

48.60Second Quarter

21.20

36.80Third Quarter

21.10

32.20Fourth Quarter

24.00

36.202003First Quarter

23.70

34.90Second Quarter

24.00

34.00Third Quarter

30.20

36.50Fourth Quarter

32.40

38.70Most recent six monthsOctober 2003

32.40

37.00November 2003

33.10

34.90December 2003

33.70

38.70January 2004

36.90

40.20February 2004

32.80

37.90March 2004

32.30

34.50


---

Since
December 9, 2002, TeliaSonera's shares have been traded in Finland on the Helsinki Exchanges under the symbol "TLS" and in the United States on the Nasdaq National Market
under the symbol "TLSN" in the form of ADSs, which are evidenced by ADRs. Each TeliaSonera ADS represents five TeliaSonera shares. The depositary for the TeliaSonera ADSs is Citibank, N.A.

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The
table below sets forth, for the periods indicated, the reported high and low market quotations for our shares on the Helsinki Exchanges.

Price Per ShareLow

High(€)2002(from December 9)

3.30

4.152003First Quarter

2.57

3.80Second Quarter

2.60

3.70Third Quarter

3.28

3.98Fourth Quarter

3.61

4.24Most recent six monthsOctober 2003

3.61

4.15November 2003

3.68

3.89December 2003

3.74

4.24January 2004

4.01

4.42February 2004

3.61

4.13March 2004

3.46

3.74


The
table below sets forth, for the periods indicated, the reported high and low closing sales prices for the TeliaSonera ADSs on the Nasdaq National Market.

Low

High(U.S. dollars per ADS)2002(from December 9)

17.35

18.512003First Quarter

14.05

20.00Second Quarter

14.80

21.49Third Quarter

18.75

22.38Fourth Quarter

21.11

26.20Most recent six monthsOctober 2003

21.11

23.84November 2003

21.45

22.82December 2003

23.20

26.20January 2004

24.71

27.95February 2004

22.31

25.63March 2004

21.12

23.05


9.B  Plan of Distribution

Not applicable.

9.C  Markets

The principal trading markets for the shares are the Stockholm Exchange and the Helsinki Exchanges, in the form of shares, and the Nasdaq National Market, in the
form of ADSs.

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9.D  Selling Shareholders

Not applicable.

9.E  Dilution

Not applicable.

9.F   Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A  Share Capital

Not applicable.

10.B  Memorandum and Articles of Association

Organization and Register

TeliaSonera is a public limited company organized under the laws of Sweden. TeliaSonera is registered in the Swedish Trade and Industry Register kept by the
Companies Department of the Swedish Patent and Registration Office, under the company registration number 556103-4249.

Line of Business

Pursuant to Section 3 of TeliaSonera's articles of association, TeliaSonera's corporate purpose is to offer, directly and indirectly, in a broad sense,
telecommunications services and thereto related information services, as well as to conduct other activities which are compatible with such services.

Corporate Governance

TeliaSonera's articles of association do not stipulate anything regarding: (1) a director's power to vote on a proposal, arrangement or contract in which
the director is materially interested; (2) borrowing powers exercisable by the directors; (3) retirement or non-retirement of directors; and (d) shareholding
requirements for a director's qualifications.

Pursuant
to TeliaSonera's articles of association, the general meeting of shareholders decides on the amount of compensation for the members of the board of directors and, as a result,
the directors do not have the power to vote regarding their own compensation.

Matters
pertaining to corporate governance are mainly regulated under the Swedish Companies Act. Pursuant to the Companies Act, members of our board of directors are prohibited from
participating in the preparation or making of decisions in which they have a personal interest. This prohibition includes the participation in the negotiation or performance of contracts between
TeliaSonera and a third party if such member of the board of directors would receive a material benefit in conflict with our interests. In addition, pursuant to the Companies Act the company is
prevented from lending money to
shareholders, board members or the president. Consequently there are no borrowing powers exercisable by the directors.

Rights, Preferences and Restrictions

Dividends are declared and paid annually on the basis of income and retained earnings as of the end of the preceding year. For a description of TeliaSonera's
dividend policy and the dividend rights attached to the shares, see "Item 8.A Consolidated Statement and Other Financial Information."

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Each
share confers the right of one vote at the general meetings of the shareholders. Each of the shares also confers an equal right to share in TeliaSonera's profits.

In
connection with future offerings of TeliaSonera shares for cash, the existing shareholders have a pre-emptive right to subscribe for shares offered in proportion to the
amount of shares in their possession. However, a general meeting of the shareholders may vote, by a majority of two-thirds of the votes cast and two-thirds of the shares
represented at the meeting, to waive this pre-emptive right.

Pursuant
to the Companies Act, preferential rights attached to certain shares or pre-emptive rights to the existing shareholders, which are not conferred upon the
shareholders by law, must be stated in the company's articles of association. Our current articles of association do not confer any such rights nor do they restrict the pre-emptive right
described in the preceding paragraph.

Amendments
to the articles of association generally require a decision by the general meeting of the shareholders, supported by two-thirds of the votes cast and
two-thirds of the shares represented at such meeting. For certain changes to the articles of association, for example changes creating pre-emptive or preferential rights, the
decision has to be supported by all the shares represented at the general meeting of the shareholders, provided that such represented shares constitute nine-tenths of all the shares of the
company. Similarly, decisions limiting voting rights must be supported by two-thirds of the votes cast and nine-tenths of the shares represented at the general meeting of the
shareholders.

Possible Unavailability of Pre-Emptive Rights For U.S. Holders

U.S. holders of TeliaSonera shares and ADSs may not be able to exercise any preemptive rights and preferential rights in respect of their shares unless a
registration statement under the Securities Act of 1933, as amended, is effective with respect to these rights or an exemption from the registration requirements thereunder is available.

General Meeting of Shareholders

Under the Companies Act, shareholders exercise their power to decide on corporate matters at the general meeting of the shareholders. At the annual general
meeting, financial statements, including the income statement, the balance sheet, the annual report and the consolidated income statement, and the auditor's report are presented to the shareholders
for adoption. Also, at the annual general meeting the shareholders decide any measure warranted by the profit or loss shown in the adopted balance sheet or consolidated balance sheet, discharge
members of the board of directors and the chief executive officer from liability, decide on the number of members of the board of directors and their remuneration and elect members of the board of
directors. When required, the number of auditors and deputy auditors is decided and they are elected.

Under
our articles of association, a shareholder must give notice to TeliaSonera of his or her intention to attend a general meeting no later than 4:00 p.m. on the day stated in
the notice of the general meeting. This day must not be a Saturday, Sunday, Midsummer Eve, Christmas Eve, New Year's Eve or other public holiday and must not be earlier than the fifth working day
before the general meeting. Under our articles of association, a notice of an annual general meeting and a notice of any extraordinary general meeting at which resolutions to amend TeliaSonera's
articles of association will be considered, shall be issued no earlier than 6 weeks and no later than 4 weeks prior to the meeting in question. Notice of any other extraordinary general meeting shall
be issued no earlier than 6 weeks and no later than 2 weeks prior to the meeting. Notice of a general meeting shall be made in the form of an advertisement placed in the Swedish Official Gazette, the
Swedish newspapers Dagens Nyheter and Svenska Dagbladet or, if it is not possible to advertise in any of these publications, another Swedish daily newspaper with daily national coverage.

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In
order to have the right to attend a general meeting, a shareholder must be registered on the tenth day prior to the relevant general meeting in the register of shareholders kept by
VPC and must also notify TeliaSonera of his or her intention to attend the meeting in the manner stated in the previous paragraph. At the general meeting, a shareholder may be accompanied at the
meeting by at most 2
persons assisting him or her, but only if the shareholder notifies TeliaSonera of the number of accompanying persons in the manner stated in the previous paragraph.

Voting

Each shareholder is, at the general meeting, entitled to vote for the total number of shares he or she owns or represents. Each share is entitled to one vote. A
shareholder may attend and vote at the general meeting in person or by proxy. Proxies are not valid for a longer period than one year from the date of issuance.

Voting
rights may not be exercised by a shareholder if such shareholder's shares are registered in the name of a nominee, as is the case for registered holders and beneficial owners of
the ADSs. A registered holder or a beneficial owner of the ADSs, like other beneficial owners whose shares are registered in the name of a nominee, may vote such shares provided that such holder or
owner arranges to have his or her name temporarily entered in the register of shareholders as of the record date of meeting, which must be on the tenth day prior to a general meeting.

Pursuant
to the Companies Act, most resolutions at a general meeting are passed by a simple majority of the votes cast with the chairman of the meeting having the decisive vote (except
in the situation of an election where a tie is decided by coin-toss or similar methods). Certain resolutions require a higher rate of approval amongst the shareholders in order to be
passed.

Normally,
resolutions to amend the articles of association will require two-thirds of the votes cast as well as two-thirds of the shares present or represented at
the meeting. However, under certain circumstances where such resolution limits shareholders' right to dividends or other asset distribution, restricts the transferability of shares or alters the legal
relationship between shares, unanimous support by the shareholders attending the meeting, which has to constitute nine-tenths of all shares in the company, is required. In addition, under
certain circumstances where such resolution restricts the voting rights or requires the company to retain a larger amount of the net profit than otherwise required under the Companies Act or amends
shareholders' rights in a liquidation or dissolution, approval by shareholders representing two-thirds of the votes cast and nine-tenths of the shares present or represented at
the meeting is required. Slightly different supermajority requirements are applied in situations where the resolution described above will only adversely affect certain groups of shareholders.

In
addition, the following resolutions will normally require a two-thirds majority of votes cast at the general meeting as well as two-thirds of the shares
present or represented at the meeting: (1) a resolution to issue, approve or authorize the issuance for cash of new shares or convertible debt or debt instruments with the right to subscribe
for new shares, if such issuance deviates from the preferential right for existing shareholders under the Companies Act; (2) a resolution
to redeem any or all of the outstanding share capital of the company; and (3) a resolution approving the merger of the company with another entity. A resolution described in (2) above,
may under certain circumstances require the unanimous approval of the shareholders present at the meeting, with nine-tenths of all outstanding shares present or represented at the meeting.

Disclosure of Shareholder Ownership

Pursuant to prevailing market practice in Sweden, which takes the form of rules issued by the Swedish Industry and Commerce Stock Exchange Committee (NBK), any
seller or purchaser of securities of a Swedish limited company listed on the Stockholm Exchange is required to disclose any

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transaction
in which such purchaser or seller acquires or disposes of five percent or any subsequent percentage that is a multiple of five, up to and including 90 percent, of either the voting
rights of all shares or the total number of shares in the company. Disclosure shall be made no later than 9:00 a.m. on the day following the trading on the Stockholm Exchange and in the form of
reports to the Stockholm Exchange and the company and press releases to an established news agency and to a nationally published newspaper in Sweden.

In
addition, pursuant to the Swedish Financial Instruments Trading Act, a person acquiring or disposing of certain numbers of shares in a Swedish limited company with shares listed on a
stock exchange within the European Economic Area or otherwise quoted on an exchange or an authorized market place in Sweden, shall within seven days thereafter report in writing such acquisition or
transfer to the company and the Swedish exchange or market place in question (and to the Swedish Financial Supervisory Authority, if the shares are not quoted on a Swedish exchange or market place).
The relevant thresholds for the reporting requirement are acquisitions where the acquirer reaches or exceeds ten, 20, 331/3, 50 and 662/3 percent of the number of votes
for all shares in the company or where the transferor's shareholding falls below any such number.

Pursuant
to the Swedish Act on Reporting Obligations Regarding Certain Holdings of Financial Instruments, certain individuals who own shares representing ten percent or more of the share
capital or the voting rights in a publicly traded Swedish limited company shall report such shareholding and any changes thereto to the Swedish Financial Supervisory Authority.

Liquidation

If TeliaSonera were to be liquidated, any liquidation proceeds remaining after all of our liabilities were paid would be distributed to our shareholders in
proportion to their shareholdings.

Purchase Obligations

Pursuant to prevailing market practice in Sweden, which takes the form of rules issued by NBK, a person who obtains 30 percent or more of the votes for all
shares in a publicly traded Swedish limited company as a result of purchase, subscription, conversion or some other form of acquisition of shares in the company, either alone or together with a
related party, must make a public offer both for the acquisition of all remaining shares in the company, not held by the company or its subsidiaries, and for other financial instruments issued by the
company whose price might be materially affected if the listing of shares covered by the offer were to cease. The terms of such mandatory offer shall be the same as the terms of the acquisition
triggering the mandatory offer.

Pursuant
to the Companies Act, a Swedish limited company owning more than 90 percent of the shares in another Swedish limited company may initiate a compulsory acquisition process
for the remaining minority shareholdings. Similarly, the holders of such minority interest may require the Swedish parent company to acquire their holdings in the company.

Restrictions of Foreign Ownership

There are no restrictions of foreign ownership of TeliaSonera shares under Swedish law.

10.C  Material Contracts

In March 2001, we entered into a cooperation agreement with Tele2, the holder of a UMTS license in Sweden, to jointly build and operate a UMTS network in
Sweden. Under the agreement, the parties have organized a Swedish limited liability company, Svenska UMTS-nät, to carry out the building and operations relating to the UMTS
network in Sweden. The company is owned on an equal basis by the parties. The UMTS license is held by a wholly owned subsidiary of Svenska UMTS-nät.

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The
cooperation between TeliaSonera and Tele2 has been reviewed by the Swedish Competition Authority and, in March 2002, the cooperation was given a five year exemption from the
anti-competitive agreements prohibition under the Swedish Competition Act. The exemption expires in February 2007, at which time the cooperation will be reassessed from a
competition law perspective. TeliaSonera and Tele2 will, on a pro rata basis, finance the construction of the UMTS network through capital contributions and the issuance of guarantees that are
necessary in order for Svenska UMTS-nät to obtain third party financing to build a UMTS network in accordance with the license conditions. TeliaSonera has made an aggregate
capital contribution of SEK 500 million to Svenska UMTS-nät.

In
September 2002, Svenska UMTS-nät signed a SEK 11 billion term loan and revolving credit facility, which amount was decreased to SEK
7 billion in September 2003, for the construction of its UMTS network infrastructure in Sweden. TeliaSonera and Tele2 have each severally but not jointly guaranteed up to a maximum of
SEK 3.5 billion of the principal amount borrowed by Svenska UMTS-nät under the credit facility and have pledged their shares in Svenska
UMTS-nät as security for such amount. The indebtedness under the credit facility may become due on an accelerated basis, under certain circumstances, including if either
TeliaSonera or Tele2 ceases to hold, directly or indirectly, 50 percent of Svenska UMTS-nät, unless the lenders provide their advance consent. TeliaSonera is not
contractually required to provide any further capital contributions to or guarantees in favor of Svenska UMTS-nät.

In
June and September 2002, we entered into agreements with each of the Kingdom of Sweden and the Republic of Finland granting them identical registration rights with respect to
their shares of TeliaSonera. Pursuant to these agreements, the Kingdom of Sweden and the Republic of Finland have the right to severally require us to file a registration statement with the
Securities and Exchange Commission covering offers and sales of their shares in a public offering in the United States. Under the agreements, the Kingdom of Sweden and the Republic of Finland have the
right to demand one registration of at least 2.5 percent of their respective shares of TeliaSonera in any six-month period for up to a maximum of two registrations. In addition to
the demand registration rights and subject to certain conditions, the Kingdom of Sweden and the Republic of Finland were also granted piggy-back registration rights that entitle them to
sell their shares as part of any registered offering in the United States either by us or by us on behalf of another party. We have agreed to pay, subject to certain exceptions, all expenses
reasonably incurred by the
Kingdom of Sweden, the Republic of Finland or both parties in connection with any demand registration or piggy-back registration.

10.D  Exchange Controls

There are currently no Swedish laws, which may affect the import or export of capital, or the remittance of interest or other payments.

10.E  Taxation

The following summary is based on the tax laws of Sweden and the United States as of the date of this report, and is subject to changes in Swedish or U.S. law,
including changes that could have a retroactive effect. The following summary is not exhaustive and does not take into account or discuss the tax laws of any countries other than Sweden or the United
States. Prospective investors and current holders of TeliaSonera shares, TeliaSonera ADSs or TeliaSonera warrants are advised to consult their own tax advisors as to Swedish, U.S. or other tax
consequences of the purchase, ownership and disposition of TeliaSonera shares, including, in particular, the effect of tax laws in any other jurisdiction.

Swedish Taxation

The following is a description of the material Swedish income and net wealth tax consequences with respect to holders of TeliaSonera shares that are not Swedish
residents ("Non-residents"). This

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section
applies only to holders of portfolio investments representing less than 10 percent of the capital and votes of TeliaSonera and is not applicable if the TeliaSonera shares pertain to a
permanent establishment or fixed base of business in Sweden. Holders of TeliaSonera shares should consult their own tax advisors regarding the Swedish and other tax consequences of acquiring, owning
and disposing of shares.

The
description below is based on the Income Tax Act (1999:1229), the Net Wealth Tax Act (1997:323), the Withholding Tax Act (1970:624) and relevant tax treaties as currently in effect.

Taxation of Capital Gains

Non-residents are generally not liable for Swedish capital gains taxation with respect to the sale of TeliaSonera shares. However, under Swedish tax
law, capital gains from the sale of certain Swedish securities, such as the TeliaSonera shares, by private individuals may be taxed in Sweden if such individuals have been residents of Sweden or have
lived permanently in Sweden at any time during the year of the sale or the ten calendar years preceding the year of the sale. This provision may, however, be limited by tax treaties which Sweden has
concluded with other countries. The Nordic tax treaty currently in force reduces this period to the five years following the year when the individual became a Non-resident. The tax treaty
currently in force between Sweden and the United States gives Sweden the right to tax gains at any time during the ten years following the date on which the individual has ceased to be a resident of
Sweden. Capital losses are deductible if the Non-resident would have been taxable for a corresponding capital gain.

Taxation of Dividends

According to Swedish internal law, a dividend withholding tax at a rate of 30 percent is imposed on dividends paid by a Swedish company, such as
TeliaSonera, on Non-residents. Exemption from the withholding tax or a lower tax rate may apply by virtue of a tax treaty. Under both the current Nordic tax treaty and the tax treaty
currently in force between Sweden and the United States, the withholding tax on dividends paid on portfolio investments, to eligible U.S. holders or Nordic holders, as the case may be, is limited to
15 percent.

Under
all Swedish tax treaties, with the exception of the tax treaty currently in force between Sweden and Switzerland, the withholding tax at the applicable treaty rate should be
withheld by the payer of the dividends. With regard to dividends paid for shares in companies registered with the VPC (such as the TeliaSonera shares), a reduced rate of dividend withholding tax under
a tax treaty is generally applied at the source by VPC or, if the shares are registered with a nominee, by the nominee, so long as the person entitled to the dividend is registered as a
Non-resident and sufficient information regarding the tax residency of the beneficial owner is available to VPC or the nominee.

In
those cases where Swedish tax is withheld at the rate of 30 percent and the person that received the dividends is entitled to a reduced rate of withholding tax under an
applicable tax treaty, a refund may be claimed from the Swedish tax authorities not later than at the end of the fifth calendar year after the distribution.

It
should be noted that, due to technical issues, a Swedish withholding tax of 30 percent may also be withheld for dividends and similar payments to Swedish tax residents on
TeliaSonera shares that are registered at the Finnish Central Securities Depositary.

Net Wealth Taxation

Swedish net wealth tax is based on the conditions at the end of each calendar year. The TeliaSonera shares are not subject to Swedish net wealth taxation in the
hands of a holder that is not a resident in Sweden at the end of a calendar year.

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United States Federal Income Taxation

The following is a description of the material U.S. federal income tax consequences that may be relevant with respect to the acquisition, ownership and
disposition of our shares or ADSs, which are evidenced by American Depositary Receipts. This description addresses only the U.S. federal income tax considerations of holders that are initial
purchasers of our shares or ADSs at the initial issue price and that will hold shares or ADSs as capital assets. This description does not address tax considerations applicable to holders that may be
subject to special tax rules, such as:



Moreover,
this summary does not address the U.S. federal estate and gift or alternative minimum tax consequences of the acquisition, ownership and disposition of shares or ADSs. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), U.S. Treasury Regulations and judicial and administrative interpretations thereof, in each case as in effect and
available on the date hereof. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below.

The
U.S. Treasury Department has expressed concern that depositaries for American Depositary Receipts, or other intermediaries between the holders of shares of an issuer and the issuer,
may be taking actions that are inconsistent with the claiming of U.S. foreign tax credits by U.S. holders of such receipts or shares. Accordingly, the analysis regarding the availability of a U.S.
foreign tax credit for Finnish taxes and sourcing rules described below could be affected by future actions that may be taken by the U.S. Treasury Department.

For
purposes of this summary, a "U.S. Holder" is a beneficial owner of our shares or ADSs that, for U.S. federal income tax purposes, is:



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A
"Non-U.S. Holder" is a beneficial owner of our shares or ADSs that is not a U.S. Holder.

If
a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds receipts or shares, the tax treatment of the partnership and a partner in such
partnership will generally depend on the status of the partner and the activities of the partnership. Such partner or partnership should consult its own tax advisor as to its consequences.

Ownership of ADSs in General

For U.S. federal income tax purposes, a holder of ADSs generally will be treated as the owner of the shares represented by such ADSs.

Distributions

Subject to the discussion below under "Passive Foreign Investment Company Considerations," if you are a U.S. Holder, for U.S. federal income tax purposes, the
gross amount of any distribution by TeliaSonera of cash or property (other than certain distributions, if any, of our shares or ADSs distributedpro
ratato all shareholders of TeliaSonera including holders of ADSs) with respect to your
shares or ADSs will be includible in your income as dividend income to the extent such distributions are paid out of the current or accumulated earnings and profits of our Company as determined under
U.S. federal income tax principles. Subject to the discussion below under "Passive Foreign Investment Company Considerations," individuals who are U.S. Holders may be taxed on certain
distributions received in a taxable year ending after December 31, 2003 at the lower rates applicable to long-term capital gains. Such dividends will not be eligible for the
dividends received deduction generally allowed to corporate U.S. Holders. Subject to the discussion below under "Passive Foreign Investment Company Considerations," to the extent, if any,
that the amount of any distribution by our Company exceeds our current and accumulated earnings and profits as determined under U.S. federal income tax principles, it will be treated first as a
tax-free return of your adjusted tax basis in your shares or ADSs and thereafter as capital gain. TeliaSonera does not maintain calculations of our earnings and profits under U.S. federal
income tax principles.

If
you are a U.S. Holder, any such dividend paid in Swedish kronor (or any currency other than U.S. dollars) will be included in your gross income in an amount equal to the U.S. dollar
value of the Swedish kronor (or, if not Swedish kronor, the currency in which the dividend was paid) on the date of receipt, which, in the case of ADSs, is the date they are received by the
depositary. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution.

If
you are a U.S. Holder, dividends paid to you with respect to your shares or ADSs will be treated as foreign source income, which may be relevant in calculating your foreign tax credit
limitation. Subject to certain conditions and limitations, any Swedish tax withheld on dividends may be deducted from your taxable income or credited against your U.S. federal income tax liability.
The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us generally will constitute
"passive income," or, in the case of certain U.S. Holders, "financial services income."

Subject
to the discussion below under "Backup Withholding Tax and Information Reporting Requirements," if you are a Non-U.S. Holder of shares or ADSs, you generally will not
be subject to U.S. federal income or withholding tax on dividends received by you on your shares or ADSs, unless you conduct a trade or business in the United States and such income is effectively
connected with that trade or business.

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Shares received by Employees Subject to U.S. Taxation

Any employee who is subject to U.S. federal income tax on his or her compensation from TeliaSonera who purchases our shares or ADSs at a price representing a
discount from the fair market value of those shares or ADSs will be subject to U.S. federal income and employment taxes with respect to such discount. Such employee should recognize ordinary income at
the time of the receipt of such shares or ADSs equal to the fair market value of such shares or ADSs minus the amount paid for such shares or ADSs. The issuance of such shares or ADSs at a discount to
such employee may be subject to U.S. wage withholding.

Sale or Exchange of Shares or ADSs

Subject to the discussion below under "Passive Foreign Investment Company Considerations," if you are a U.S. Holder, you generally will recognize gain or loss on
the sale or exchange of your shares or ADSs equal to the difference between the amount realized on such sale or exchange and your adjusted tax basis in your shares or ADSs. Such gain or loss will be
capital gain or loss. If you are a noncorporate U.S. Holder, the maximum marginal U.S. federal income tax rate applicable to such gain will be lower than the maximum marginal U.S. federal income tax
rate applicable to ordinary income (other than certain dividends received in a taxable year ending after December 31, 2003) if your holding period for such shares or ADSs exceeds one year. Gain
or loss, if any, recognized by you generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

If
you are a U.S. Holder, the initial tax basis of your shares or ADSs will be the U.S. dollar value of the euro denominated purchase price determined on the date of purchase. If the
shares or ADSs are treated as traded on an "established securities market," a cash basis U.S. Holder (or, if it elects, an accrual basis U.S. Holder) will determine the dollar value of the cost of
such shares or ADSs by translating the amount paid at the spot rate of exchange on the settlement date of the purchase. If you are a U.S. Holder, the conversion of U.S. dollars to euros and the
immediate use of that currency to purchase shares or ADSs generally will not result in taxable gain or loss.

With
respect to the sale or exchange of shares or ADSs, the amount realized generally will be the U.S. dollar value of the payment received determined on (1) the date of receipt
of payment in the case of a cash basis U.S. Holder and (2) the date of disposition in the case of an accrual basis U.S. Holder. If the shares or ADSs are treated as traded on an "established
securities market," a cash basis taxpayer (or, if it elects, an accrual basis taxpayer) will determine the U.S. dollar value of the amount realized by translating the amount received at the spot rate
of exchange on the settlement date of the sale.

Subject
to the discussion below under "Backup Withholding Tax and Information Reporting Requirements," if you are a Non-U.S. Holder of shares or ADSs, you generally will not
be subject to U.S. federal income or withholding tax on any gain realized on the sale or exchange of such shares or ADSs unless (1) such gain is effectively connected with your conduct of a
trade or business in the United States or (2) you are an individual Non-U.S. Holder and you have been present in the United States for 183 days or more in the taxable year of
such sale or exchange and certain other conditions are met.

Passive Foreign Investment Company Considerations

A Non-U.S corporation will be classified as a passive foreign investment company, or a PFIC, for U.S. federal income tax purposes in any taxable year
in which, after applying the look-through rules for 25 percent or more owned subsidiaries, either (1) at least 75 percent of its gross income is passive income or
(2) on average at least 50 percent of the gross value of its assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income
for this

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purpose
generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions.

We
believe that we were not a PFIC in our 2003 taxable year. Our status in future years will depend on our assets and activities in those years. We have no reason to believe that our
assets or activities will change in a manner that would cause us to be classified as a PFIC. However, since our status will depend on the nature of our income, assets and business from time to time,
we cannot give you assurance that we will not be a PFIC in any future year.

Notwithstanding
the discussions above under the captions "Distributions" and "Sale or Exchange of Shares or American Depositary Shares," if we were to become a PFIC, and you are a U.S.
Holder of our shares or ADSs, you generally would be subject to imputed interest charges and other disadvantageous tax treatment (including the denial of the taxation of certain dividends received
from such PFIC at the lower rates applicable to long-term capital gains (as discussed above under "Distributions")) with respect to any gain from the sale or exchange of, and
excess distributions with respect to, your shares or ADSs. If we were to become a PFIC and you are a U.S. Holder of our shares or ADSs, you could make a variety of elections that may alleviate the tax
consequences referred to above, and one of these elections may be made retroactively.

However,
it is expected that the conditions necessary for making some of these elections will not apply in the case of our shares or ADSs. You should consult your own tax advisors
regarding the tax consequences that would arise if we were to become a PFIC.

The above description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, holding and disposing of our shares
or ADSs. You should consult your own tax advisor concerning the tax consequences of your particular situation.

10.F  Dividends and Paying Agents

Not applicable.

10.G  Statement by Experts

Not applicable.

10.H  Documents on Display

The documents referred to in this report can be read at the Securities and Exchange Commission's public reference facilities at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549.

10.I  Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please see "Item 5.B Liquidity and Capital Resources."

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

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

None.

ITEM 15. CONTROLS AND PROCEDURES



ITEM 16. [RESERVED]

ITEM 16.A AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors has determined that each of the members of the Audit Committee qualify as an "audit committee financial expert" as defined in Item 16A of
Form 20-F.

ITEM 16.B CODE OF ETHICS

We have adopted a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer and principal accounting officers. The purpose of the code
is to implement a system to deter dishonest conduct and to promote business ethics, in conformity with the requirements of the Sarbanes-Oxley Act of 2002.

A
copy of our code of ethics can be obtained free of charge by sending a request via e-mail to: investor-relations@teliasonera.com.

ITEM 16.C PRINCIPAL ACCOUNTANT FEES AND SERVICES

Ernst & Young AB and KPMG Bohlins AB have jointly served as TeliaSonera's independent auditors for fiscal 2003, and Ernst & Young AB has served as
TeliaSonera's independent auditor for the fiscal years 2002 and 2001, for which years financial statements appear in this annual report on Form 20-F. Auditors are elected by the
Annual General Meeting. The Board of Directors will propose to the Annual General Meeting convening on April 28, 2004 that PricewaterhouseCoopers AB be elected as independent auditor for a
four-year period.

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The
following table presents the aggregate fees for professional services and other services rendered by Ernst & Young to TeliaSonera in 2003 and in 2002.

2003

2002(SEK in millions)Audit Fees

28

28Audit-related Fees

11

31Tax Fees

7

6All Other Fees

0

Total

46

65


The
following table presents the aggregate fees for professional services and other services rendered by KPMG to TeliaSonera in 2003.

2003(SEK in millions)Audit Fees

25Audit-related Fees

12Tax Fees

3All Other Fees

0Total

40


Audit Committee Pre-approval Policies and Procedures

Our audit committee is responsible, among other matters, for the oversight of our independent auditors, subject to the requirement of Swedish law. Our board of
directors has adopted a policy regarding pre-approval of audit and permissible non-audit services provided by our independent auditors.

This
policy outlines the procedures for the approval of four categories of audit and non-audit services provided by our independent auditors, namely, (i) audit,
(ii) audit related, (iii) tax and (iv) other services.





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Any
services pre-approved by the chairman of our audit committee must be reported to the full audit committee at the next scheduled meeting of the audit committee.

No
professional services and other services have been approved by using thede minimisexception to the pre-approval
requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The following financial statements are filed as part of this Annual Report on Form 20-F:

Consolidated Financial Statements of TeliaSonera AB and subsidiariesReport of Independent AuditorsConsolidated Income StatementsConsolidated Balance SheetsConsolidated Statements of Cash FlowsConsolidated Statements of Changes in Shareholders' EquityNotes to Consolidated Financial Statements


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ITEM 19. EXHIBITS

|1.   |  | Articles of Association of TeliaSonera AB (incorporated herein by reference to Exhibit 3.2 to Post-Effective Amendment No. 1 to the Registration Statement on Form F-4 filed by TeliaSonera AB with the Securities and Exchange Commission
on December 18, 2002).                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1  |  | Combination Agreement, dated as of March 26, 2002, by and between Telia AB and Sonera Corporation (incorporated herein by reference to Exhibit 2.1 to the Registration Statement on Form F-4 filed by Telia AB with the Securities and
Exchange Commission on October 1, 2002 (the "Form F-4")).
|4.2  |  | Amendment to the Combination Agreement, dated as of September 27, 2002, by and between Telia and Sonera (incorporated herein by reference to Exhibit 2.2 to the Form F-4).                                                                                                                      
|4.3  |  | Framework Agreement, dated as of March 15, 2001, between Telia AB and Telia Mobile AB, and NetCom AB and Tele2 AB (incorporated herein by reference to Exhibit 10.1 to the Form F-4).                                                                                                           
|4.4  |  | Shareholder Agreement, dated as of March 15, 2001, between Telia AB, Telia Mobile AB, NetCom AB and Tele2 AB (incorporated herein by reference to Exhibit 10.2 to the Form F-4).                                                                                                                
|4.5  |  | Registration Rights Agreement, dated as of September 27, 2002 between Telia AB and the Kingdom of Sweden (incorporated herein by reference to Exhibit 10.3 to the Form F-4).                                                                                                                    
|4.6  |  | Registration Rights Agreement, dated as of September 27, 2002 between Telia AB and the Republic of Finland (incorporated herein by reference to Exhibit 10.4 to the Form F-4).                                                                                                                  
|6.   |  | See Note 21 to our consolidated financial statements included in Item 18 of this Form 20-F for information on how earnings per share information was calculated.                                                                                                                                
|8.   |  | For significant subsidiaries as of the end of the year covered by this annual report, see "Item 4.C Organizational Structure" and Note 41 to our consolidated financial statements included in Item 18 of this Form 20-F.                                                                       
|12.1 |  | Certification by the Chief Executive Officer of TeliaSonera AB pursuant to Section 302 of the Sarbanes-Oxley Act 2002.                                                                                                                                                                          
|12.2 |  | Certification by the Chief Financial Officer of TeliaSonera AB pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       
|13.1 |  | Certification by the Chief Executive Officer of TeliaSonera AB pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                        
|13.2 |  | Certification by the Chief Financial Officer of TeliaSonera AB pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                        

126

---





INDEX TO FINANCIAL STATEMENTS

|                                                                     |  | Page
|-------------------------------------------------------------------- |  | ----
|Consolidated Financial Statements of TeliaSonera AB and subsidiaries |  | F-2 
|Report of Independent Auditors                                       |  | F-3 
|Consolidated Income Statements                                       |  | F-7 
|Consolidated Balance Sheets                                          |  | F-8 
|Consolidated Statements of Cash Flows                                |  | F-9 
|Consolidated Statements of Changes in Shareholders' Equity           |  | F-10
|Notes to Consolidated Financial Statements                           |  | F-11

F-1

---

Consolidated Financial Statements  of TeliaSonera AB and subsidiaries  as of and for the years ended  December 31, 2003, 2002 and 2001

F-2

---



REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
and shareholders of TeliaSonera AB

We have audited the accompanying consolidated balance sheet of TeliaSonera AB as of December 31, 2003, and the related consolidated income
statement, statement of cash flows and statement of changes in shareholders' equity for the year ended December 31, 2003. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of TeliaSonera AB at
December 31, 2003, and the consolidated results of its operations and its cash flows for the year ended December 31, 2003, in conformity with International Financial Reporting Standards.

International
Financial Reporting Standards differ in certain respects from accounting principles generally accepted in the United States of America. Information relating to the nature
and effect of such differences is presented in Note 45 to the consolidated financial statements.

|Ernst & Young AB                |  | KPMG Bohlins AB             
|------------------------------- |  | ----------------------------
|Lars Träff                      |  | Thomas Thiel                
|Authorized Public Accountant    |  | Authorized Public Accountant
|Stockholm, Sweden
March 3, 2004 |  |                             

F-3

---



REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
and shareholders of TeliaSonera AB

We have audited the accompanying consolidated balance sheets of TeliaSonera AB as of December 31, 2002 and 2001 and the related consolidated income
statements, statements of cash flows and statements of changes in shareholders' equity for each of the two years in the period ended December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the historical cost basis consolidated
balance sheet of Sonera Corporation, a wholly-owned subsidiary, representing 23 percent of consolidated assets at December 31, 2002. That balance sheet was presented in conformity
with accounting principles generally accepted in Finland. We also did not audit the financial statements of Netia Holdings, S.A., an associated company, representing 28 percent of
consolidated net income for the year ended December 31, 2001. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to amounts included for Sonera Corporation (before conversion to International Financial Reporting Standards) and Netia Holdings, S.A., is based solely on the reports of other auditors.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation
(including the conversion of the balance sheet of Sonera Corporation to International Financial Reporting Standards). We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of TeliaSonera AB at December 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of the two years in the period ended
December 31, 2002, in conformity with International Financial Reporting Standards.

International
Financial Reporting Standards differ in certain respects from accounting principles generally accepted in the United States of America (see Note 45 to the
consolidated financial statements).

Ernst & Young AB

Torsten
Lyth
Authorized Public Accountant

Stockholm,
Sweden
March 19, 2003

F-4

---



REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of Sonera Corporation

We have audited the consolidated balance sheet of Sonera Corporation and subsidiaries as of December 31, 2002 and the related consolidated income statement
and consolidated statement of cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In
our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sonera Corporation and
subsidiaries as of December 31, 2002, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in Finland.

KPMG Wideri Oy Ab

Solveig
Törnroos-Huhtamäki
Authorized Public Accountant

Helsinki,
Finland
February 19, 2003

F-5

---



REPORT OF INDEPENDENT AUDITORS

To the Supervisory Board
and Shareholders of Netia Holdings S.A.

We
have audited the accompanying consolidated balance sheet of Netia Holdings S.A. and its subsidiaries (the "Company") as at December 31, 2001, and the related
consolidated statements of operations, changes in shareholders' equity and cash flows for the year ended December 31, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with International Standards on Auditing and auditing standards generally accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements audited by us present fairly, in all material respects, the consolidated financial position of the Company as at December 31,
2001 and the consolidated results of its operations, changes in shareholders' equity and cash flows for the year ended December 31, 2001, in conformity with International Accounting Standards.

Without
qualifying our opinion, we draw attention to Note 2 in the accompanying consolidated financial statements, which indicates that as at December 31, 2001 the
Company's current liabilities exceeded its current assets by PLN 3,473,185 and an event of default has occurred with respect to the Company's long term debt as a result of its failure to make
certain interest payments. As a result of the occurrence of the event of default the liabilities relating to long term debt have been reclassified as current liabilities. Management of the Company is
in discussions with bondholders and the final outcome of those discussions cannot be determined. These conditions, along with other matters as set forth in Note 2, indicate the existence of
material uncertainties, which cast significant doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any other adjustments that might
result from the outcome of these uncertainties.

The
convenience translations are disclosed as part of the consolidated financial statements. We have not audited these translations and accordingly we do not express an opinion thereon.

International
Accounting Standards vary in certain important respects from accounting principles generally accepted in the United States of America. The application of the latter would
have affected the determination of consolidated net loss for the year ended December 31, 2001 and the determination of consolidated shareholders' deficit and consolidated financial position as
at December 31, 2001 to the extent summarized in Note 26 to the consolidated financial statements.

PricewaterhouseCoopers Sp. z.o.o.

Warsaw,
Poland
February 18, 2002

F-6

---





TELIASONERA AB AND SUBSIDIARIES        Consolidated Income Statements

|                                                           |         |            |  | January-December
|---------------------------------------------------------- | ------- | ---------- |  | ----------------
|
|
|Net sales                                                  |         | 6, 34, 35  |  | 82,425          
|Costs of production                                        |         | 7, 10      |  | -46,688         
|                                                           |         |            |  |                 
|Gross income                                               |         |            |  | 35,737          
|Sales, administrative, and research & development expenses |         | 7, 10      |  | -23,161         
|Other operating revenues and expenses                      |         | 8, 10      |  | 1,752           
|Income from associated companies                           |         | 11, 34, 35 |  | 382             
|                                                           |         |            |  |                 
|Operating income                                           |         | 34, 35     |  | 14,710          
|Financial revenues and expenses                            |         | 13         |  | -811            
|                                                           |         |            |  |                 
|Income after financial items                               |         |            |  | 13,899          
|Income taxes                                               |         | 14         |  | -3,850          
|Minority interests                                         |         |            |  | -969            
|                                                           |         |            |  |                 
|Net income                                                 |         |            |  | 9,080           
|                                                           |         |            |  |                 
|Earnings/loss per share (SEK)                              |         | 21         |  |                 
|                                                           | Basic   |            |  |                 
|                                                           | Diluted |            |  |                 
|                                                           |         |            |  |                 

F-7

---

TELIASONERA AB AND SUBSIDIARIES        Consolidated Balance Sheets

|                                                 |  |            |  | December 31,
|------------------------------------------------ |  | ---------- |  | ------------
|
|
|Assets                                           |  |            |  |             
|Intangible fixed assets                          |  | 15         |  | 61,820      
|Tangible fixed assets                            |  | 16, 28     |  | 49,161      
|Equity participations in associated companies    |  | 17, 30     |  | 20,401      
|Other financial fixed assets                     |  | 17, 28, 30 |  | 21,660      
|                                                 |  |            |  |             
|Total fixed assets                               |  |            |  | 153,042     
|                                                 |  |            |  |             
|Inventories, etc.                                |  | 18         |  | 501         
|Receivables                                      |  | 19, 28, 30 |  | 24,170      
|Short-term investments                           |  | 20         |  | 8,658       
|Cash and bank                                    |  |            |  | 3,689       
|                                                 |  |            |  |             
|Total current assets                             |  |            |  | 37,018      
|                                                 |  |            |  |             
|Total assets                                     |  |            |  | 190,060     
|                                                 |  |            |  |             
|Shareholders' equity and liabilities             |  |            |  |             
|Restricted equity                                |  |            |  |             
|Share capital                                    |  |            |  | 14,961      
|Restricted reserves                              |  |            |  | 71,284      
|Non-restricted equity                            |  |            |  |             
|Non-restricted reserves                          |  |            |  | 17,068      
|Net income                                       |  |            |  | 9,080       
|                                                 |  |            |  |             
|Total shareholders' equity                       |  |            |  | 112,393     
|                                                 |  |            |  |             
|Minority interests in equity                     |  |            |  | 3,441       
|                                                 |  |            |  |             
|Provisions for pensions and employment contracts |  | 22         |  | 522         
|Deferred tax liability                           |  | 14, 23     |  | 8,537       
|Other provisions                                 |  | 23         |  | 6,238       
|                                                 |  |            |  |             
|Total provisions                                 |  |            |  | 15,297      
|                                                 |  |            |  |             
|Interest-bearing liabilities                     |  |            |  |             
|Long-term loans                                  |  | 24, 28, 30 |  | 25,867      
|Short-term loans                                 |  | 25, 28, 30 |  | 4,687       
|Non-interest-bearing liabilities                 |  |            |  |             
|Long-term liabilities                            |  | 26, 28     |  | 2,489       
|Current liabilities                              |  | 27, 30     |  | 25,886      
|                                                 |  |            |  |             
|Total liabilities                                |  |            |  | 58,929      
|                                                 |  |            |  |             
|Total shareholders' equity and liabilities       |  |            |  | 190,060     
|                                                 |  |            |  |             
|Contingent assets                                |  | 31         |  |            
|Collateral pledged                               |  | 31         |  | 2,789       
|Contingent liabilities                           |  | 31         |  | 3,099       
|                                                 |  |            |  |             

F-8

---



TELIASONERA AB AND SUBSIDIARIES        Consolidated Statements of Cash Flows

|                                                                         |  | January-December
|------------------------------------------------------------------------ |  | ----------------
|
|
|Net income                                                               |  |                 
|Adjustments:                                                             |  |                 
|Depreciation, amortization and write-downs                               |  |                 
|Capital gains/losses on sales/discards of fixed assets                   |  |                 
|Income from associated companies                                         |  |                 
|Pensions and other provisions                                            |  |                 
|Financial items                                                          |  | 33              
|Income taxes                                                             |  | 33              
|Minority interest, miscellaneous non-cash items                          |  |                 
|Cash flow before change in working capital                               |  |                 
|                                                                         |  |                 
|Increase (-)/Decrease (+) in operating receivables                       |  |                 
|Increase (-)/Decrease (+) in inventories etc.                            |  |                 
|Increase (+)/Decrease (-) in operating liabilities                       |  |                 
|Change in working capital                                                |  |                 
|                                                                         |  |                 
|Cash flow from operating activities                                      |  |                 
|Intangible and tangible fixed assets acquired                            |  |                 
|Intangible and tangible fixed assets divested                            |  |                 
|Compensation received for divested IRU                                   |  |                 
|Compensation paid for acquired IRU                                       |  |                 
|Shares, participations and operations acquired                           |  | 33              
|Shares, participations and operations divested                           |  | 33              
|Loans made and other investments                                         |  |                 
|Repayment of loans made and other investments                            |  |                 
|Investment in financial leasing receivables                              |  |                 
|Amortization of financial leasing receivables                            |  |                 
|Compensation from/Payment to pension fund                                |  |                 
|Net change in advances and short-term loans to associated companies etc. |  |                 
|Cash flow from investing activities                                      |  |                 
|                                                                         |  |                 
|Cash flow before financing activities                                    |  |                 
|Dividend                                                                 |  |                 
|Transactions with minority shareholders                                  |  |                 
|Loans raised                                                             |  |                 
|Loans amortized                                                          |  |                 
|Net change in interest-bearing liabilities with short maturities         |  |                 
|Cash flow from financing activities                                      |  |                 
|                                                                         |  |                 
|Cash flow for the year                                                   |  |                 
|                                                                         |  |                 
|Cash and cash equivalents, opening balance                               |  |                 
|Cash flow for the year                                                   |  |                 
|Exchange rate differences in cash and cash equivalents                   |  |                 
|Cash and cash equivalents, closing balance                               |  | 33              
|                                                                         |  |                 

F-9

---

TELIASONERA AB AND SUBSIDIARIES        Consolidated Statements of Changes in Shareholders' Equity

|SEK in millions                                                  |  | Share
capital |  | Share
premium
reserve |  | Equity
method
reserve |  | Other
restricted
reserves |  | Acc. exchange
rate diff.,
restricted
reserves |  | Non-
restricted
equity |  | Acc. exchange
rate diff.,
non-restricted
reserves |  | Total
equity
|---------------------------------------------------------------- |  | ------------- |  | --------------------- |  | --------------------- |  | ------------------------- |  | --------------------------------------------- |  | ---------------------- |  | ------------------------------------------------- |  | ------------
|Closing balance, December 31, 2000                               |  | 9,604         |  | 13,894                |  | 1,297                 |  | 17,512                    |  | 1,440                                         |  | 11,689                 |  | 552                                               |  | 55,988      
|Changes in accounting principles (Note 21)                       |  |              |  |                      |  |                      |  | -342                      |  |                                              |  |                       |  |                                                  |  | -342        
|Adjusted closing balance, December 31, 2000                      |  | 9,604         |  | 13,894                |  | 1,297                 |  | 17,170                    |  | 1,440                                         |  | 11,689                 |  | 552                                               |  | 55,646      
|New share issue expenses after taxes                             |  |              |  | -16                   |  |                      |  |                          |  |                                              |  |                       |  |                                                  |  | -16         
|Transactions with non-related parties                            |  |              |  |                      |  | -155                  |  |                          |  |                                              |  |                       |  |                                                  |  | -155        
|Exchange rate difference (Note 21)                               |  |              |  |                      |  |                      |  |                          |  | 3,286                                         |  |                       |  | 499                                               |  | 3,785       
|Reporting financial instruments at fair value (Note 21)          |  |              |  |                      |  |                      |  | 257                       |  |                                              |  |                       |  |                                                  |  | 257         
|Net income recognized directly in equity                         |  |              |  | -16                   |  | -155                  |  | 257                       |  | 3,286                                         |  |                       |  | 499                                               |  | 3,871       
|Dividend                                                         |  |              |  |                      |  |                      |  |                          |  |                                              |  | -1,501                 |  |                                                  |  | -1,501      
|Transfer between restricted and non-restricted equity            |  |              |  |                      |  | -655                  |  | -257                      |  |                                              |  | 912                    |  |                                                  |  |            
|Net income                                                       |  |              |  |                      |  |                      |  |                          |  |                                              |  | 1,869                  |  |                                                  |  | 1,869       
|Closing balance, December 31, 2001                               |  | 9,604         |  | 13,878                |  | 487                   |  | 17,170                    |  | 4,726                                         |  | 12,969                 |  | 1,051                                             |  | 59,885      
|New share issue expenses after taxes                             |  |              |  | 16                    |  |                      |  |                          |  |                                              |  |                       |  |                                                  |  | 16          
|Transactions with non-related parties                            |  |              |  |                      |  |                      |  |                          |  |                                              |  | -57                    |  |                                                  |  | -57         
|Exchange rate difference (Note 21)                               |  |              |  |                      |  |                      |  |                          |  | 1,692                                         |  |                       |  | 35                                                |  | 1,727       
|Reporting financial instruments at fair value (Note 21)          |  |              |  |                      |  |                      |  | 20                        |  |                                              |  |                       |  |                                                  |  | 20          
|Net income recognized directly in equity                         |  |              |  | 16                    |  |                      |  | 20                        |  | 1,692                                         |  | -57                    |  | 35                                                |  | 1,706       
|Dividend                                                         |  |              |  |                      |  |                      |  |                          |  |                                              |  | -600                   |  |                                                  |  | -600        
|New share issue                                                  |  | 5,134         |  | 50,771                |  |                      |  |                          |  |                                              |  |                       |  |                                                  |  | 55,905      
|Transfer from restricted to non-restricted equity decided by EGM |  |              |  | -11,957               |  |                      |  |                          |  |                                              |  | 11,957                 |  |                                                  |  |            
|Transfer between restricted and non-restricted equity            |  |              |  |                      |  | 130                   |  | 29                        |  |                                              |  | -159                   |  |                                                  |  |            
|Net income                                                       |  |              |  |                      |  |                      |  |                          |  |                                              |  | -8,067                 |  |                                                  |  | -8,067      
|Closing balance, December 31, 2002                               |  | 14,738        |  | 52,708                |  | 617                   |  | 17,219                    |  | 6,418                                         |  | 16,043                 |  | 1,086                                             |  | 108,829     
|Transactions with non-related parties                            |  |              |  |                      |  | -13                   |  |                          |  |                                              |  |                       |  |                                                  |  | -13         
|Exchange rate difference (Note 21)                               |  |              |  |                      |  |                      |  |                          |  | -8,266                                        |  |                       |  | 165                                               |  | -8,101      
|Inflation adjustments                                            |  |              |  |                      |  | 2,427                 |  |                          |  |                                              |  |                       |  |                                                  |  | 2,427       
|Reporting financial instruments at fair value (Note 21)          |  |              |  |                      |  | -10                   |  |                          |  |                                              |  |                       |  |                                                  |  | -10         
|Net income recognized directly in equity                         |  |              |  |                      |  | 2,404                 |  |                          |  | -8,266                                        |  |                       |  | 165                                               |  | -5,697      
|Dividend                                                         |  |              |  |                      |  |                      |  |                          |  |                                              |  | -1,870                 |  |                                                  |  | -1,870      
|New share issue                                                  |  | 223           |  | 1,828                 |  |                      |  |                          |  |                                              |  |                       |  |                                                  |  | 2,051       
|Transfer between restricted and non-restricted equity            |  |              |  |                      |  | 1,192                 |  | -2,836                    |  |                                              |  | 1,644                  |  |                                                  |  |            
|Net income                                                       |  |              |  |                      |  |                      |  |                          |  |                                              |  | 9,080                  |  |                                                  |  | 9,080       
|Closing balance, December 31, 2003                               |  | 14,961        |  | 54,536                |  | 4,213                 |  | 14,383                    |  | -1,848                                        |  | 24,897                 |  | 1,251                                             |  | 112,393     
|                                                                 |  |               |  |                       |  |                       |  |                           |  |                                               |  |                        |  |                                                   |  |             

F-10

---



TELIASONERA AB AND SUBSIDIARIES        Notes to Consolidated Financial Statements

1.     Basis for Presentation

General

TeliaSonera's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS/IAS).

Accounting principles

The applied accounting principles are described in the respective notes.

Discrepancies
between Swedish, Finnish and U.S. GAAP and the accounting principles that TeliaSonera applies are discussed in separate notes.

Amounts and dates

Unless otherwise specified, all amounts are in millions of Swedish kronor (SEK) or other currency specified and are based on the twelve-month period ended
December 31 for income statement items and as of December 31 for balance sheet items, respectively.

Changes and innovations

New accounting standards

IAS 41 "Agriculture" became effective on January 1, 2003. IAS 41 does not affect TeliaSonera's operations.

On
December 17, 2003, revisions to IAS 32 "Financial Instruments: Disclosure and Presentation" and IAS 39 "Financial Instruments: Recognition and Measurement" were published. On
December 18, 2003, IAS 15 "Information Reflecting the Effects of Changing Prices" was withdrawn and revisions were published to IAS 1 "Presentation of Financial Statements," IAS 2
"Inventories," IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors," IAS 10 "Events after the Balance Sheet Date," IAS 16 "Property, Plant and Equipment," IAS 17 "Leases," IAS 21
"The Effects of Changes in Foreign Exchange Rates," IAS 24 "Related Party Disclosures," IAS 27 "Consolidated and Separate Financial Statements," IAS 28 "Investments in Associates," IAS 31 "Interests
in Joint Ventures," IAS 33 "Earnings per Share" and IAS 40 "Investment Property." The effective date for all revised standards is January 1, 2005. Earlier application is encouraged.
TeliaSonera's adoption of the revisions of IAS 2, IAS 8, IAS 10, IAS 16, IAS 17, IAS 21, IAS 24, IAS 28, IAS 31, IAS 32, IAS 33 and IAS 39 will not entail any restatements of comparative figures. When
adopting IAS 1 and IAS 27, TeliaSonera will have to recognize the share of equity owned by external shareholders not as a separate line item on the face of the balance sheet but as a separate
component within shareholders' equity. Likewise, the minority share of income will not be recognized as a separate line item on the face of the income statement but as a disclosure on the face of the
income statement of the allocation of profit or loss for the period. TeliaSonera does not own assets of the type regulated by IAS 40.

Restated segment reporting

TeliaSonera's business organization was changed on January 1, 2003. Hence, segment information in this annual report has been restated.

F-11

---



2.     Use of Estimates

To be able to prepare accounts according to generally accepted accounting principles, management and the Board of Directors must make estimates and assumptions
that affect the asset and liability items and revenue and expense items recorded in the final accounts as well as other information, such as that provided on contingent liabilities. These estimates
are based on historical experience and various other assumptions that management and the Board believe are reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Areas
comprising critical judgment that may significantly impact TeliaSonera's earnings and financial position are revenue recognition and revenue collection, valuation of intangible and
other fixed assets, restructuring activities, provisions for pensions, income taxes, and litigation and contingent liabilities, all of which are discussed in the respective notes.

3.     Consolidated Financial Statements

General

The consolidated financial statements comprise the parent company TeliaSonera AB and all companies in which TeliaSonera directly or indirectly controls more than
50 percent of the voting rights or otherwise has control. TeliaSonera's consolidated financial statements are based on accounts prepared
by all Group companies as of December 31, and have been prepared using the purchase method of accounting, as in previous years.

Values
for companies acquired or divested during the year are included in the consolidated income statement only for the period during which they were owned. Goodwill and fair value
adjustments arising from the acquisition of foreign entities are considered to be denominated in the foreign currency.

In
subsidiaries not wholly owned, the share of equity and untaxed reserves owned by external shareholders is recorded as minority interest. The income statement shows the minority share
of income after tax.

Internal
sales and other intercompany transactions and profits within the Group have been eliminated in the consolidated financial statements.

Foreign currency translation and inflation adjustments

A majority of the Group's subsidiaries outside Sweden are independent. A few subsidiaries in the Group have independent branch offices outside Sweden. The
accounts for foreign operations are kept in the currency used for the normal conduct of business by that Group unit.

The
consolidated financial statements are presented in Swedish kronor (SEK), which is the measurement currency of the parent company. The income statements and balance sheets of foreign
independent operations (subsidiaries, associated companies, and branch offices) are translated into SEK based on the current method, that is, the exchange rate prevailing on the balance sheet date
(closing rate) is used to convert all items in the balance sheets except for equity, which is converted at the historical rate. Each income statement is translated using the average rate for that
period. Differences resulting from translation, as well as realized and unrealized gains or losses after tax on financial

F-12

---



instruments
used to hedge net foreign investments, do not affect income but are charged directly to equity.

When
the measurement currency for a subsidiary or an associated company is the currency of a hyperinflationary economy, the reported non-monetary assets and liabilities, and
equity are restated in terms of the measuring unit current at the balance sheet date. The restated financial
statements are translated into SEK at the closing rate. The restating effects are recorded as financial revenue or expense and in income from associated companies, respectively.

Associated companies

Companies in which the TeliaSonera Group has a long-term interest and directly or indirectly owns shares or participations granting control of
20-50 percent of the voting rights or otherwise has a significant influence are recorded as associated companies.

Holdings
in associated companies are recorded in the consolidated income statement and balance sheet according to the equity method of accounting. In the income statement, the Group's
share of net income in associated companies is recorded in operating income because the operations of associated companies are related to telecommunications and it is the Group's strategy to
capitalize on industry know-how by means of investing in jointly owned operations. The income statement item Income from associated companies also includes amortization and
write-down of goodwill and similar assets on consolidation in associated companies as well as gains and losses on the sale of participations in associated companies.

Any
internal profits are eliminated in relation to the share of equity owned.

Business segments

The Group's operations are managed and reported primarily by profit center and reported secondarily by product area. Segments are consolidated based on the same
principles as the Group as a whole. When operations are transferred from one business area to another, comparative period figures are restated.

4.     Transactions in Foreign Currencies

Transactions denominated in foreign currencies are translated into Swedish kronor (SEK) at the exchange rates prevailing at the time of each transaction. Monetary
assets and liabilities denominated in foreign currencies and related forward contracts for foreign exchange are translated at the closing rate, any resulting exchange rate differences being charged to
income. Accordingly, realized as well as unrealized exchange rate differences are recorded in the income statement. Exchange rate differences
arising from operating receivables or liabilities are recorded in operating income, while differences attributable to financial assets or liabilities are recorded as earnings or losses on financial
investments.

5.     Changes in Group Composition

Events in 2003 and after the balance sheet date

Sonera

As a result of a mandatory redemption offer, which expired on January 31, 2003, TeliaSonera acquired Sonera shares, including shares in the form of ADSs,
representing 4.4 percent of the shares

F-13

---



and
votes. Following the completion of the mandatory redemption offer, TeliaSonera in total held 99.4 percent of Sonera shares and votes.

In
addition, in December 2002, TeliaSonera commenced a separate compulsory acquisition proceeding under Finnish law pursuant to which the remaining holders of Sonera shares were
required to surrender their Sonera shares to TeliaSonera for redemption at a fair price as determined under Finnish law. As required under Finnish law, an arbitral panel was appointed to hear and
resolve any disputes concerning TeliaSonera's right of redemption and the redemption price in the compulsory acquisition proceeding. On March 20, 2003, at the request of the arbitral panel,
TeliaSonera issued a counter-indemnity for a bank guarantee for the payment of the redemption price plus accrued interest with respect to all outstanding Sonera shares not held by TeliaSonera.
According to Finnish law, as a result of the arbitral panel's acceptance of the bank guarantee, TeliaSonera became the sole record and beneficial owner of Sonera's shares. Simultaneously, the Sonera
share was delisted from the main list of Helsinki Exchanges. On June 26, 2003, the arbitral panel determined the redemption price for the remaining Sonera shares. The redemption price for the
remaining Sonera shares plus accrued interest was paid on July 11, 2003.

Com Hem/Telia Mobile Finland

On June 5, 2003, TeliaSonera sold its Swedish cable TV operator Com Hem AB to EQT Northern Europe and on June 6, 2003, Telia's Finnish mobile
operations were sold to Finnet Oy. Telia agreed to dispose of these operations as part of its undertakings to the European Commission in the context of the merger between Telia and Sonera.

Bharti

In May 2002, an agreement was signed with the Indian company Bharti Tele-Ventures for the sale of TeliaSonera's holding of 26 percent of
the shares in the mobile operator Bharti Mobile Ltd. The transaction was completed on June 16, 2003.

Netia

As of December 31, 2002, TeliaSonera owned 48 percent of the share capital in the Polish company Netia S.A. (formerly Netia Holdings S.A.) As part
of a financial restructuring, a conversion of lenders' claims to equity in the company was completed on January 30, 2003, reducing TeliaSonera's shareholding to 4.4 percent. On
May 16, 2003, the final step of Netia's restructuring, which required the issuance of warrants to pre-restructuring shareholders of Netia, including TeliaSonera, was completed.
TeliaSonera received subscription warrants entitling it to acquire an aggregate of 31,300,532 Netia shares.

On
May 22, 2003, TeliaSonera's 11 percent stake in the Polish long-distance operator Netia 1 Sp z o.o. was sold to the other shareholder Netia.

Starting
in June 2003, TeliaSonera has sold all of its shares and most of its subscription warrants in Netia. Given the remaining holdings of subscription warrants as at the end
of February 2004 and assuming that all subscription warrants issued by Netia will be exercised and exchanged for shares, TeliaSonera would hold 1.2 percent of Netia's share capital.
TeliaSonera has entered into agreements to completely divest its holdings in Netia.

F-14

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Reveko/Esdata

On July 1, 2003, TeliaSonera's 55 percent stake in the Estonian company Reveko Telekom AS was sold to the Elion Group. On December 12, 2003,
Elion acquired TeliaSonera's 70 percent shareholding in AS Esdata.

Omnitel

On August 26, 2003, an agreement was reached with Motorola to acquire Motorola's 35 percent shareholding in the Lithuanian mobile operator UAB
Omnitel. After approval by the Lithuanian Competition Council, the deal was finally closed on December 17, 2003, whereby TeliaSonera holds 90 percent of the shares in Omnitel.

Suomen Erillisverkot

On December 19, 2003, TeliaSonera sold its 40 percent shareholding in Suomen Erillisverkot Oy to the Finnish state.

Auria Group

On September 17, 2003, TeliaSonera announced its intention in three consecutive steps to acquire full ownership in the Finnish fixed-line
operator Auria Group. The parent company of the group is Loimaan Seudun Puhelin Oy (LSP). The first step was executed in September, increasing TeliaSonera's shareholding in LSP from 29 percent
to 40 percent. On October 1, TeliaSonera increased its holding to 55 percent and launched a tender offer in cash to the other shareholders in LSP. As of December 31,
TeliaSonera held 96.85 percent of the shares in LSP. A compulsory acquisition proceeding under Finnish law has been initiated to redeem the remaining LSP shares.

Metro One

During December 2003, TeliaSonera sold most of its shares in Metro One Telecommunications, Inc., reducing TeliaSonera's shareholding from
24.2 percent to 6.6 percent. All remaining shares in Metro One were sold on January 14, 2004.

Satellite companies and venture capital investments

In 2003 TeliaSonera divested its minority holdings in New Skies Satellites N.V. and Inmarsat Ventures plc as well as in a number of venture capital companies. The
minority holding in Eutelsat S.A. was sold in February 2004.

INGROUP

At year-end 2003, the shareholders of INGROUP Holding AB, including TeliaSonera holding a 37 percent share, signed an agreement to sell all of
their shares to Manpower. After approval by relevant competition authorities, the divesture was completed on February 20, 2004.

Sonera Zed

On January 13, 2004, Yahoo!, with reference to an existing put option, sold back its 16 percent holding in Sonera Zed Oy to TeliaSonera, whereby
Sonera Zed became a wholly owned subsidiary of TeliaSonera.

F-15

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Telia Finans

On January 15, 2004, TeliaSonera signed an agreement to sell its wholly owned subsidiary, the Swedish leasing company Telia Finans AB, to De Lage Landen
International B.V. After approval by the Swedish Financial Supervisory Authority (Finansinspektionen), the sale was completed on March 1, 2004.

Sturenportti

On February 27, 2004, TeliaSonera purchased all shares in the real estate company Kiinteistö Oy Sturenportti from Sonera Pension Fund.

Major acquisitions and divestitures during 2001-2003

In fiscal 2003, 2002 and 2001, TeliaSonera acquired and divested a number of companies and businesses from and to independent parties outside the Group. Apart
from the merger with Sonera Oyj (now TeliaSonera Finland Oyj) in 2002 (see also note "Merger with Sonera Oyj"), none of those acquisitions or divestitures, individually or collectively, was of a size
that would have had a material effect on the Group's pro forma net sales or net income for the year in which the transaction was executed or the year immediately preceding. The following table shows
the TeliaSonera Group pro forma net sales, net income and earnings/loss per share, had the merger with Sonera taken place at January 1, 2001, including the effects of the fact that due to the
merger, three entities in Latvia and Lithuania that were previously associated companies to Telia and Sonera, became controlled subsidiaries to TeliaSonera.

January-DecemberSEK in millions, except per share data2003

2002

2001Pro forma net sales

82,425

83,090

82,200Pro forma net income

9,080

-34,049

1,140Pro forma basic and diluted earnings/loss per share (SEK)

1.95

-10.90

0.38


6.     Net Sales

Net sales are recorded at the sales value, adjusted for discounts granted and sales-related taxes. Sales principally consist of traffic charges including
interconnect and roaming, subscription fees, connection fees, and service charges as well as sales of customer premises equipment.

Revenue
is recognized for the period in which the service is performed or the product is delivered. Subscription fees are recognized as revenue over the subscription period. Sales
relating to pre-paid phone cards, primarily mobile, are deferred and recorded in revenue based on the actual usage of the cards.

Customer
cable TV hookup fees were recorded as cost reductions over the depreciation period for the facility in question. Other connection and installation fees received from new or
existing subscribers are recognized as revenue at the time of sale to the extent of direct costs incurred. Direct costs consist primarily of technical installation work, changes in customer support
systems, costs for modems, SIM cards and other equipment, distributor commissions and credit checks, and costs for supplying the customer with the printed telephone directory and a printed customer
information package. To date,

F-16

---



direct
costs associated with connection fees have exceeded such revenues. Therefore, no connection revenues have been deferred.

In
the portal operations, ad swapping with another portal provider is not recognized as revenue. Service and construction contract revenues are recognized using the percentage of
completion method. Assessment of the degree of completion is based on the value of contractual phases completed as a percentage of total undertakings.

Within
the international carrier operations, sales of Indefeasible Rights of Use (IRU) regarding fiber and duct are recognized as revenue over the period of the agreement (see also
section "TeliaSonera as operating lessor" in note "Leasing Agreements and Contractual Obligations"). When entering into swap contracts for infrastructure and capacity with other carriers, evenly
balanced swap-deals and the non-cash part of unbalanced swap-deals are not recorded as revenue or expense in the consolidated accounts, as the contracts refer to
assets of similar nature and value. Therefore, they are recognized based on the carrying value of the assets exchanged, rather than at fair value. In an unbalanced swap-deal, any cash paid
is recorded as an asset and any cash received is recorded as deferred revenue. These amounts are recognized in operations over the term of the related contracts on a straight-line basis.
In transactions where the monetary consideration received is at least 25 percent of the fair value of the exchange, and the fair value of the assets transferred is reasonably determinable, the
exchange is treated as part monetary and part non-monetary. Until both parties have fulfilled all deliveries as agreed, the value provided might differ from the value received. The value
of the unfulfilled deliveries in a swap-deal is recorded as a current liability (net received) or a current receivable (net provided). The corresponding asset or deferred revenue is not
amortized until delivery has occurred.

Sales
are broken down geographically by business segment in the "Profit Center Breakdown" note. Sales (including exports) were distributed among economic regions as follows.

|                                            |                                        | January-December
|------------------------------------------- | -------------------------------------- | ----------------
|
|European Union (EU)                         |                                        | 65,472          
|European Economic Area (EEA)                |                                        | 6,352           
|Rest of Europe                              |                                        | 6,941           
|North-American Free Trade Agreement (NAFTA) |                                        | 657             
|Rest of world                               |                                        | 3,003           
|                                            |                                        |                 
|Total                                       |                                        | 82,425          
|                                            | of which outside Sweden                |                 
|                                            | of which Nordic markets outside Sweden |                 
|                                            |                                        |                 

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---



Net
sales are broken down by product category as follows.

|                                             |  | January-December
|-------------------------------------------- |  | ----------------
|
|
|Mobile communications                        |  | 36,737          
|Fixed telephony                              |  | 27,791          
|Internet                                     |  | 4,325           
|Data communications and network capacity     |  | 8,524           
|Service, installation and customer equipment |  | 1,324           
|Cable TV                                     |  | 981             
|Financial services                           |  | 382             
|Other                                        |  | 2,361           
|                                             |  |                 
|Total                                        |  | 82,425          

Invoiced
advertising tax totaled SEKmillion, SEK 0 million and SEK 1 million for the years 2003, 2002 and 2001, respectively.

The
distribution of sales change between volume effects, structural effects, exchange rate effects, and price effects was as follows.

|                       |  | January-December
|---------------------- |  | ----------------
|
|
|Sales change           |  | 38.6            
|of which volume growth |  | 6.1             
|structural changes     |  | 37.7            
|exchange rate effects  |  | -1.3            
|price reductions       |  | -3.9            
|                       |  |                 

7.     Operating Costs

The production function includes all costs for services and products sold as well as for installation, maintenance, service, and support.

Costs
for commissions to retailers, advertising, and other marketing are expensed as incurred. The same applies to expenses for maintenance and adaptation of existing software for euro
conversion. Costs for customer-specific product development and applied research are expensed in the period in which they occur.

Operating
costs were distributed by function as follows.

|                         |  | January-December
|------------------------ |  | ----------------
|
|
|Production               |  | 46,688          
|Other functions          |  |                 
|Sales                    |  | 12,786          
|Administration           |  | 7,832           
|Research and development |  | 2,543           
|                         |  |                 
|Total other functions    |  | 23,161          
|                         |  |                 
|Total                    |  | 69,849          

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---



Each
function includes depreciation, amortization, and write-downs as specified in note "Depreciation, Amortization, and Write-Downs." This is also broken down by class of asset.

Operating
costs were distributed by nature as follows.

|                                           |  | January-December
|------------------------------------------ |  | ----------------
|
|
|Goods purchased                            |  | 13,947          
|Network expenses                           |  | 11,816          
|Change in inventories                      |  | 250             
|                                           |  |                 
|Total                                      |  | 26,013          
|Salaries and remuneration                  |  | 8,460           
|Employer's social security contributions   |  | 1,950           
|Capitalized work by employees              |  | -2              
|Pension expenses                           |  | 1,406           
|Other personnel expenses                   |  | 587             
|                                           |  |                 
|Total                                      |  | 12,401          
|Rent and leasing fees                      |  | 1,771           
|Energy expenses                            |  | 434             
|Travel expenses                            |  | 654             
|Consultants' services                      |  | 1,739           
|Marketing expenses                         |  | 4,475           
|Bad debt expense                           |  | 476             
|Information technology                     |  | 1,760           
|Other expenses                             |  | 2,471           
|                                           |  |                 
|Total                                      |  | 13,780          
|Depreciation, amortization and write-downs |  | 17,655          
|                                           |  |                 
|Total                                      |  | 69,849          

Costs
for advertising totaled SEK 1,022 million, SEK 524 million and SEK 417 million for the years 2003, 2002 and 2001, respectively.

8.     Other Operating Revenues and Expenses

Other operating revenues and other operating expenses include: gains and losses on the sale of shares or operations in companies that are not associated companies
(cf. note "Income from Associated Companies"), gains or losses on the sale or retirement of intangible or tangible fixed assets, and public grants. Exchange rate differences on operating transactions
are also recorded here, including value changes in derivatives for hedging operational transaction exposure and possible hedging ineffectiveness (see note "Financial Instruments and Financial Risk
Management"). This item also includes restructuring costs, non-capitalizable costs in 2003 and 2002 related to the merger with Sonera and other items of a non-recurring nature.

F-19

---





Other operating revenues and expenses were distributed as follows.

|                                    |  | January-December
|----------------------------------- |  | ----------------
|
|
|Other operating revenues            |  |                 
|Capital gains, shares               |  | 1,868           
|Capital gains, divested operations  |  | 20              
|Capital gains, other                |  | 86              
|Exchange rate gains                 |  | 450             
|Commissions etc.                    |  | 13              
|Grants, etc.                        |  | 27              
|Recovered accounts receivable       |  | 275             
|Damages received                    |  | 4               
|                                    |  |                 
|Total                               |  | 2,743           
|Other operating expenses            |  |                 
|Capital losses, shares              |  | -13             
|Capital losses, divested operations |  | -43             
|Capital losses, other               |  | -296            
|Provisions for onerous contracts    |  | -3              
|Exchange rate losses                |  | -294            
|Sonera merger expenses              |  | -3              
|Restructuring costs                 |  | -247            
|Damages paid                        |  | -92             
|                                    |  |                 
|Total                               |  | -991            
|                                    |  |                 
|Net effect on income                |  | 1,752           

9.     Related Party Transactions

Group companies

Commercial terms and market prices apply for the supply of goods and services between Group companies. Intercompany sales totaled SEK 50,914 million, SEK
53,852 million and SEK 52,794 million for the years 2003, 2002 and 2001, respectively.

The Swedish State and the Finnish State

The Swedish State currently owns 45.3 percent and the Finnish State 19.1 percent of the shares in TeliaSonera AB. The TeliaSonera Group's services
and products are offered to the Swedish and the Finnish State, their agencies, and state-owned companies in competition with other operators and on conventional commercial terms. Certain state-owned
companies run businesses that compete with TeliaSonera. Likewise, TeliaSonera buys services from state-owned companies at market prices and on otherwise conventional commercial terms. Neither the
Swedish and Finnish State and their agencies, nor state-owned companies represent a significant share of TeliaSonera's net sales or earnings.

The
Swedish telecommunications market is governed mainly by the Electronic Communications Act and ordinances, regulations and decisions in accordance with the Act. Operators that have a
significant publicly available communications network are required to pay a fee to finance measures to prevent serious threats and disruptions to electronic communications during peacetime. To date,

F-20

---

TeliaSonera
has been the only operator obliged to pay this fee. The required fee was SEK 50 million in 2003, SEK 50 million in 2002 and SEK 100 million in 2001. Under the new act
the fee will be apportioned to more operators. In addition, TeliaSonera, like other operators, pays annual fees to Post- och Telestyrelsen (PTS; the Swedish National Post and Telecom
Agency) to fund the Agency's activities under the Electronic Communications Act and the Radio and Telecommunications Terminal Equipment Act. TeliaSonera paid fees of SEK 64 million in 2003, SEK
64 million in 2002 and SEK 59 million in 2001.

The
Finnish telecommunications market is governed mainly by the Communications Market Act and the Act on the Protection of Privacy and Data Security in Telecommunications as well as by
regulations, decisions and technical directions in accordance with these acts. In 2003, TeliaSonera paid EUR 2.8 million (EUR 2.5 million in 2002) for the use of radio frequencies and
EUR 1.6 million (EUR 1.3 million in 2002) for the use of numbers.

Svenska UMTS-nät

TeliaSonera owns 50 percent of Svenska UMTS-nät AB. In 2003, TeliaSonera sold services and products worth SEK 131 million
to Svenska UMTS-nät. As security for certain amounts borrowed by Svenska UMTS-nät under a third-party credit facility, TeliaSonera had, as of
December 31, 2003, issued a guarantee of a maximum of SEK 3,500 million to the lenders and granted pledges of its shares in Svenska UMTS-nät.

Lattelekom

TeliaSonera holds a participating interest in the Latvian company Lattelekom SIA. In 2003, TeliaSonera sold services and products to Lattelekom worth SEK
114 million and purchased services and products worth SEK 73 million. Further, in 2003, the Annual General Meeting of shareholders in Lattelekom decided to annul the company's
class C shares, resulting in a repaymentof SEK 350 million to TeliaSonera.

MegaFon

TeliaSonera holds a participating interest in the Russian company OAO MegaFon. As of December 31, 2003, TeliaSonera had interest-bearing and
non-interest-bearing claims on MegaFon of SEK 379 million.

Unisource/AUCS

TeliaSonera previously held equal stakes in Unisource N.V. together with Swisscom and KPN of the Netherlands. All operations in Unisource, with the exception of
AUCS Communications Services (AUCS) and its subsidiaries, were sold or shut down in 1999 and the company was dissolved on July 1, 2000. In May 2003, TeliaSonera and the other
shareholders of AUCS approved a liquidation plan for the AUCS group of companies.

Unisource
and its joint owners, including TeliaSonera, signed a three-year management agreement with Infonet Services Corp. (see below) in 1999 on the operations in AUCS. The
agreement provided for the sale of a large part of AUCS's operations to Infonet. The management agreement was supplemented in December 2002 by a termination agreement, valid until the first
quarter of 2004. Under the terms of various contracts, Unisource was required to provide services to Infonet. Unisource and its joint owners will also be liable for any losses in AUCS and will pay
Infonet a bonus if the losses are lower than an amount specified in the contract. In total, this means that TeliaSonera's share of

F-21

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Unisource's
expenses as per the agreement will be at least SEK 1,348 million. TeliaSonera received compensation for these undertakings through the acquisition of shares in Infonet at a price
less than market value shortly prior to Infonet's listing on the stock exchange. Based on the selling price at the time of listing, the value of the shares was SEK 2,758 million, while Telia
paid SEK 110 million. The future profit on this transaction, that is, the difference between the market value of the shares after deducting the purchase price (SEK 2,648 million) and the
obligations that Telia has undertaken (SEK 1,348 million, as explained above), will be recorded as share of earnings in AUCS over the term of the management agreement and other
agreements.

In
2003, 2002 and 2001 TeliaSonera sold services to AUCS worth SEK 0 million, SEK 27 million and SEK 44 million, respectively.

Infonet

TeliaSonera owns a participating interest in the American company Infonet Services Corp. In 2003, 2002 and 2001 TeliaSonera sold services and products to Infonet
worth SEK 48 million, SEK 41 million and SEK 29 million, respectively, and purchased services and products worth SEK 225 million, SEK 260 million and SEK
320 million, respectively.

Telefos

Since June 2001, TeliaSonera owns 49 percent of the shares in the former subsidiary Telefos AB. As of December 31, 2003, TeliaSonera had
interest-bearing claims on the Telefos Group of SEK 875 million and had signed guarantees of SEK 200 million for commitments made by Telefos companies. On January 2, 2004,
Telefos divested some of its operations, whereby TeliaSonera's claims and guarantees were reduced to SEK 434 million and SEK 120 million, respectively. In 2003 and 2002 and for 2001, in
the period after the change in ownership, TeliaSonera sold services and products to the Telefos Group worth SEK 139 million, SEK 324 million and SEK 279 million, respectively, and
bought services and products worth SEK 2,675 million, SEK 3,534 million and SEK 1,210 million. Some of the services purchased by TeliaSonera relate to construction of fixed
assets.

IN

TeliaSonera holds an indirect participating interest in INGROUP Sweden AB (IN). In 2003, 2002 and 2001 TeliaSonera sold services and products to IN worth
SEK 13 million, SEK 46 million and SEK 67 million, and bought services and products worth SEK 249 million, SEK 267 million and
SEK 245 million.

Overseas Telecom

In 2003, the Annual General Meeting of shareholders in TeliaSonera's associated company Overseas Telecom AB decided to reduce the company's equity, resulting in a
repayment of SEK 274 million to TeliaSonera.

Service Factory

In 2003, 2002 and 2001, TeliaSonera bought services from the associated company Service Factory SF AB worth SEK 35 million, SEK 32 million and SEK
94 million, respectively.

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Other relationships

In addition, TeliaSonera sells and buys services and products to a limited extent to and from other associated companies. The transactions between TeliaSonera and
these associated companies, as well as the transactions mentioned above, are based on commercial terms.

10.   Depreciation, Amortization and Write-Downs

Scheduled depreciation on tangible assets and amortization on intangible assets are based on the historical acquisition value (purchase cost), with appropriate
adjustment for impairment and taking into account the estimated economic life of various classes of assets. No general changes in depreciation schedules were applied in 2003, 2002 or 2001. Effective
January 1, 2004, the depreciation rate for copper cables in the fixed local access network in Sweden will be changed from 12.5 percent to 5 percent annually and for switching
equipment for ADSL customers from 33.3 percent to 10 percent annually. For assets acquired during the year, depreciation is calculated from the date of acquisition.

Depreciation
is mainly recorded on a straight-line basis at the following rates.

|Goodwill                                                                      |  | Individual evaluation, minimum 5%                                            
|----------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------
|Sonera and NetCom goodwill                                                   |  | 5%                                                                           
|Trade names                                                                   |  | Individual evaluation, minimum 10%                                           
|Licenses for fixed and mobile telephony and related goodwill                  |  | License period, minimum 5%                                                   
|Other intangible assets                                                       |  | 7-20%                                                                        
|Buildings                                                                     |  | 2-10%                                                                        
|Land improvements                                                             |  | 5-20%                                                                        
|Expenditure on improvements to property not owned by the Group Fixed networks |  | Remaining term of corresponding lease                                        
|Switching systems and transmission systems                                   |  | 10-33%                                                                       
|Transmission media (cable)                                                   |  | 5-12.5%                                                                      
|Equipment for special networks                                               |  | 20-33%                                                                       
|Usufruct agreements of limited duration                                      |  | Agreement period or time corresponding to the underlying tangible fixed asset
|Other installations                                                          |  | 3-33%                                                                        
|Mobile networks                                                               |  |                                                                              
|Base stations                                                                |  | 9.5-14.5%                                                                    
|Other installations                                                          |  | 10-33%                                                                       
|Cable TV networks and alarm systems                                           |  | 10-33%                                                                       
|Equipment, tools and installations                                            |  | 12.5-33%                                                                     

The
carrying values of the Group's intangible, tangible, and financial fixed assets are reassessed, at least annually and else whenever events or changes in circumstances indicate that
the carrying value of an asset may not be recoverable, by analyzing individual assets or classes of assets that naturally belong together. If an analysis indicates that the value recorded is too high,
the asset's recoverable value is set, which is the higher of the net realizable value of the asset and its value in use. Value in use is measured as expected future discounted cash flows (DCF model).
A write-down consists of the difference between carrying value and recoverable value.

A
number of significant assumptions and estimates are involved in the application of a DCF model to forecast operating cash flows, including market growth rates, revenue volumes, market
prices for

F-23

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telecommunications
services, costs to maintain and develop communications networks and working capital requirements. Forecasts of future cash flows are based on the best estimates of future revenues
and operating expenses using historical trends, general market conditions, industry trends and forecasts and other available information. These assumptions are subject to review by management and the
audit committee of the board of directors. The cash flow forecasts are adjusted by an appropriate discount rate derived from our cost of capital plus a reasonable risk premium at the date of
evaluation.

If
the projections for future cash flows for any of TeliaSonera's fixed assets change as a result of changes in business model or strategy, competitive pressures, or regulatory
environment, TeliaSonera may have to recognize impairment charges on the intangible, tangible and financial fixed assets.

Substantially
all goodwill recorded (see specification in note "Intangible Fixed Assets") has been recognized in connection with the merger with Sonera Oyj in 2002 and the acquisition of
NetCom ASA in 2000. According to standard procedures, the carrying value of TeliaSonera Finland (formerly Sonera) was tested for impairment as of December 31, 2003. The recoverable value was
found to be in excess of the carrying value. Hence, the related goodwill was not impaired.

NetCom
constitutes a cash-generating unit. Lower market valuations of mobile operators triggered testing the carrying value of NetCom for impairment on a quarterly basis,
starting in 2002. The recoverable value of NetCom was measured as value in use, applying a DCF model. The discount rate (weighted average cost of capital, WACC) used in calculating the recoverable
value was set at 11.4 percent in 2003 and 13.2 percent in 2002. Using what management believes are reasonable assumptions based on the best information available as of the date of the
financial statements, the recoverable value of NetCom was found to be in excess of its carrying value at December 31, 2003 and 2002 and therefore the related goodwill was not impaired.

The
whole of the former business area Telia International Carrier constituted a cash-generating unit. Weak profitability in the business area and surplus capacity in the
industry in 2001 led Telia to review the need for write-downs in the operations. The recoverable value, measured as the value in use as there was no market, was found to fall short of the book value
by SEK 3,027 million. The amount was recognized as cost in the Production function and the Fixed networks class of assets. WACC used was 11.2 percent. In 2002, TeliaSonera completed a
comprehensive review of the international carrier operations. Management decided to change the strategic focus of Telia International Carrier and significantly restructure its operations (see also
note "Restructuring Costs"). Under the new strategic focus the recoverable value of assets was found to fall SEK 6,131 million below book value, which was written down (of which SEK
824 million refers to financial assets). The amount was recognized as Other operating expenses in the Fixed networks class of assets. WACC used in calculating the recoverable value was
16.2 percent.

In
2002, the Danish fixed network operations were reviewed in order to value their assets and determine a new focus (se also note "Restructuring Costs"). As a result of the review, the
recoverable value was found to be SEK 3,033 million lower than the book value. The resulting write-down was recognized as Other operating expenses in the Goodwill, Other intangible
assets, Fixed assets and Other machinery and equipment classes of assets. In calculating the recoverable value, WACC used was 13.7 percent.

F-24

---



Depreciation, amortization and write-downs on intangible and tangible fixed assets were distributed by function as follows.

|                            |  | January-December
|--------------------------- |  | ----------------
|
|
|Production                  |  | 14,503          
|Sales                       |  | 1,533           
|Administration              |  | 1,136           
|Research and development    |  | 483             
|Other operating expenses    |  | 52              
|                            |  |                 
|Total                       |  | 17,707          
|Proportion of net sales (%) |  | 21.5            
|                            |  |                 

Depreciation,
amortization and write-downs are broken down by business segments in the notes "Profit Center Breakdown" and "Product Area Breakdown."

Depreciation,
amortization and write-downs were distributed by asset class as follows.

|                              |  | January-December
|----------------------------- |  | ----------------
|
|
|Goodwill                      |  | 3,488           
|Other intangible assets       |  | 1,987           
|Buildings                     |  | 335             
|Land improvements             |  | 8               
|Fixed networks                |  | 6,372           
|Mobile networks               |  | 3,833           
|Other machinery and equipment |  | 1,684           
|                              |  |                 
|Total                         |  | 17,707          

Accelerated
depreciation, to the extent allowed by local tax legislation, is recorded in the individual Group companies as appropriations and untaxed reserves (see corresponding section
in note "Income Taxes").

11.   Income from Associated Companies

Shares of earnings are calculated on the associated companies' net income. Earnings for each associated company are based on the company's most recent accounts,
adjusted for any discrepancies in accounting principles, and with estimated adjustments for significant events and transactions up to TeliaSonera's close of books.

F-25

---



This
item also includes amortization of goodwill and other consolidation adjustments made upon the acquisition of associated companies as well as gains or losses on the divestiture of
stakes in associated companies.

|                                 |  | January-December
|-------------------------------- |  | ----------------
|
|
|Share in net income for the year |  | 2,096           
|Amortization of goodwill         |  | -565            
|Write-down of goodwill etc.      |  | -1,436          
|Net capital gains                |  | 287             
|                                 |  |                 
|Net effect on income             |  | 382             

Income
from associated companies is broken down by business segments in the notes "Profit Center Breakdown" and "Product Area Breakdown."

Large
individual stakes (including stakes held through subsidiaries) have impacted earnings as follows.

|                                          |  | January-December
|----------------------------------------- |  | ----------------
|
|
|UAB Omnitel, Lithuania                    |  |                
|AB Lietuvos Telekomas, Lithuania          |  |                
|Latvijas Mobilais Telefons SIA, Latvia    |  |                
|Lattelekom SIA, Latvia                    |  | 205             
|AS Eesti Telekom, Estonia                 |  | 177             
|OAO MegaFon, Russia                       |  | 509             
|Turkcell Iletisim Hizmetleri A.S., Turkey |  | 618             
|Overseas Telecom AB, Sweden               |  | 141             
|Telefos AB, Sweden                        |  | 254             
|Eniro AB, Sweden                          |  |                
|Scandinavia Online AB, Sweden             |  |                
|INGROUP Holding AB, Sweden                |  | -123            
|COOP Bank AB, Sweden                      |  | 20              
|Netia S.A., Poland                        |  |                
|Unisource N.V./AUCS, the Netherlands      |  | 227             
|Comsource UnLtd/Eircom plc, Ireland       |  |                
|SI.MOBIL, Slovenia                        |  |                
|Infonet Services Corp., USA               |  | -1,517          
|Metro One Telecommunications, Inc., USA   |  | -309            
|Tess S/A, Brazil                          |  |                
|Bharti Mobile Ltd., India                 |  | 341             
|Other holdings                            |  | -161            
|                                          |  |                 
|Net effect on income                      |  | 382             

Due
to the merger with Sonera Oyj (now TeliaSonera Finland Oyj); Latvijas Mobilais Telefons SIA, UAB Omnitel AB and Lietuvos Telekomas are consolidated subsidiaries since
December 3, 2002. The comparative year values for the then subsidiary Overseas Telecom AB refer to Overseas' holdings

F-26

---



in
certain associated companies. See also note "Financial Fixed Assets" and note "Specification of Shareholdings and Participations."

Turkcell's
financials are included in TeliaSonera's reporting with a one-quarter lag. In 2003, the merger with Sonera was legally completed and consequently the purchase
price allocation was finalized, including reallocation of part of the Turkcell goodwill (see note "Merger with Sonera Oyj").

As
of September 30, 2001, TeliaSonera wrote down all remaining goodwill in Netia S.A., amounting to SEK 1,820 million, and discontinued recognition of its share of losses
in Netia. For the year and the 15-month period ended December 31, 2002, the unrecognized share of losses in Netia was SEK 1,459 million and SEK 2,182 million,
respectively. As of January 30, 2003, Netia is no longer an associated company. For the one-month period then ended the unrecognized share of losses in Netia was SEK
27 million.

In
the second quarter of 2003 management concluded that TeliaSonera's ownership interest in Infonet Services Corp. is not strategic and it is now defined as an asset possible to divest
in light of market conditions or otherwise in an effort to maximize TeliaSonera's return on the investment. Simultaneous with this decision, Infonet announced its full year earnings and indicated
lower margins and the recording of certain impairment charges. As a result of the management decision and Infonet's reported operating performance, the carrying value was written down by SEK
1,028 million.

12.   Reconciliation of EBITDA Excluding Items Not Reflecting Underlying Business Operations Items to Operating Income

TeliaSonera's management uses "EBITDA excluding items not reflecting underlying business operations" as one of the principal measures for monitoring profitability
in segment reporting. Management believes that, besides operating income, EBITDA excluding items not reflecting underlying business operations is also a measure commonly reported and widely used by
analysts, investors and other interested parties in the telecommunications industry. Accordingly, EBITDA excluding items not reflecting underlying business operations is presented to enhance the
understanding of TeliaSonera's historical operating performance.

EBITDA
equals operating income before depreciation, amortization and write-downs and excluding income from associated companies. Items not reflecting underlying business operations
include write-downs, capital gains/losses, restructuring/phase-out of operations and personnel redundancy costs, and non-capitalized expenses in conjunction with the merger
with Sonera in 2002. Effective January 1, 2003, only capital gains/losses, write-downs, restructuring programs or similar items that represent more than SEK 100 million on an individual
basis, are considered to be reported as not reflecting underlying business operations. Earlier periods have not been restated. When calculating EBITDA excluding items not reflecting underlying
business operations, management does not exclude items that are part of the underlying business operations, even though such items may not recur in the near future.

EBITDA
excluding items not reflecting underlying business operations, however, should not be considered as an alternative to operating income as an indicator of operating performance or
as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA excluding items not reflecting underlying business operations is not a measure of consolidated financial
performance under IFRS/IAS or U.S. GAAP and may not be comparable to other similarly titled measures for other companies. EBITDA excluding items not reflecting underlying business operations is not
meant to be predictive of potential future results.

F-27

---



For
illustrative purposes, the following table sets forth the relationship between operating income, EBITDA and EBITDA excluding items not reflecting underlying business operations.

|                                                                     |  | January-December
|-------------------------------------------------------------------- |  | ----------------
|
|
|EBITDA excluding items not reflecting underlying business operations |  | 30,700          
|Items not reflecting underlying business operations                  |  | 1,335           
|                                                                     |  |                 
|EBITDA                                                               |  | 32,035          
|Depreciation, amortization and write-downs (Note 10)                 |  | -17,707         
|Income from associated companies (Note 11)                           |  | 382             
|                                                                     |  |                 
|Operating income                                                     |  | 14,710          

The
following table sets forth items not reflecting underlying business operations.

|                                                                                                                                                                                       |  | January-December
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------
|
|
|Restructuring charges (excluding depreciation, amortization and write-downs on intangible and tangible assets but including reversals of provisions and foreign exchange rate effects) |  | 88              
|Implementation costs to gain synergies and integrate Telia and Sonera                                                                                                                  |  | -456            
|Transaction expenses related to the merger with Sonera                                                                                                                                 |  |                
|Certain pension-related items                                                                                                                                                          |  |                
|Net capital gains/losses (excluding associated companies)                                                                                                                              |  | 1,703           
|                                                                                                                                                                                       |  |                 
|Total                                                                                                                                                                                  |  | 1,335           

EBITDA
excluding items not reflecting underlying business operations, items not reflecting underlying business operations, EBITDA and operating income are broken down by business
segments in note "Profit Center Breakdown."

13.   Financial Revenues and Expenses

Financial items are expensed as incurred, with the exception of interest during installation periods, which is capitalized (see also note "Intangible Fixed
Assets" and note "Tangible Fixed Assets").

Revenues
and costs relating to guarantee commissions are included in Other interest income and Interest expense. Interest expenses include loan-related bank fees and fees to
rating institutions and market makers. The interest component of the change in fair value of derivatives is included in Other interest income (gain) and Interest expense (loss). The corresponding
exchange rate components are

F-28

---



recorded
in Exchange rate gains and Exchange rate losses, respectively. This item also includes any hedging ineffectiveness. See also note "Financial Instruments and Financial Risk Management."

|                                    |  | January-December
|----------------------------------- |  | ----------------
|
|
|Earnings from financial investments |  |                 
|Dividends                           |  | 3               
|Capital gains/losses                |  | 685             
|Write-downs                         |  | -695            
|                                    |  |                 
|Total                               |  | -7              
|Other financial revenues            |  |                 
|Interest on financial leases        |  | 611             
|Other interest income               |  | 608             
|Exchange rate gains                 |  | 544             
|                                    |  |                 
|Total                               |  | 1,763           
|Other financial expenses            |  |                 
|Interest expenses                   |  | -2,065          
|Capitalized interest                |  | 43              
|Exchange rate losses                |  | -545            
|                                    |  |                 
|Total                               |  | -2,567          
|                                    |  |                 
|Net effect on income                |  | -811            

14.   Income Taxes

Tax expense

The income statement item Income Taxes shows current and deferred corporate income tax for Swedish and non-Swedish Group units. TeliaSonera Group
companies are liable for taxation under current legislation in the countries where they are domiciled. The corporate income tax rate in Sweden was 28 percent in 2003, 2002 and 2001, and is
applied to the nominal income recorded, plus non-deductible items and less non-taxable revenues and other deductions, mainly tax-free dividends from subsidiaries.

The
liability method is used to report income taxes. According to this method, deferred tax liabilities and assets are recorded for all temporary differences between book values and
tax-effective values of assets and liabilities and for other tax-effective deductions or losses. Deferred tax liabilities and assets are calculated based on the tax rate
expected when the temporary difference will be reversed. The effects of changes in applicable tax rates are charged to income in the period when the change is substantively enacted. Deferred tax
assets are reduced by means of a valuation allowance to the extent that the ability of realizing the underlying tax asset within the foreseeable future is not likely. To the extent the likely recovery
of a deferred tax asset changes, the effect is brought to income for the relevant period.

Deferred
tax liabilities on undistributed earnings in foreign subsidiaries are not recorded if such retained earnings are regarded as permanently invested in the countries in question.
Deferred tax liabilities for undistributed earnings in Swedish companies and in foreign associated companies are not recorded because such retained earnings can be withdrawn as non-taxable
dividends. However, some

F-29

---



foreign
jurisdictions impose withholding tax on dividends. In such cases, a deferred tax liability calculated based on the respective withholding tax rate is recorded.

Significant
management judgment is required in determining current tax liabilities and assets as well as provisions for deferred tax liabilities and assets, in particular valuation of
deferred tax assets. As part of this process, income taxes have to be estimated in each of the jurisdictions in which TeliaSonera operates. The process involves estimating the actual current tax
exposure together with assessing temporary differences resulting from the different valuation of certain assets and liabilities in the financial statements and tax returns. Management must also assess
the likelihood that the deferred tax assets will be recovered from future taxable income. Actual results may differ from these estimates, among others due to future changes in business environment,
currently unknown changes in income tax legislation or results from the final review of tax returns by tax authorities or by courts of law.

Pre-tax
income was distributed as follows.

|                                                           |  | January-December
|---------------------------------------------------------- |  | ----------------
|
|
|Sweden, Group companies (including foreign branch offices) |  | 9,878           
|Sweden, associated companies                               |  | 103             
|                                                           |  |                 
|Total Sweden                                               |  | 9,981           
|Finland, Group companies                                   |  | -14             
|Finland, associated companies                              |  | 22              
|Rest of world, Group companies                             |  | 3,939           
|Rest of world, associated companies                        |  | -29             
|                                                           |  |                 
|Total outside Sweden                                       |  | 3,918           
|                                                           |  |                 
|Total                                                      |  | 13,899          

Recorded
tax expense was distributed as follows.

|              |  | January-December
|------------- |  | ----------------
|
|
|Current tax   |  |                 
|Sweden        |  | 1,994           
|Finland       |  | 7               
|Rest of world |  | 760             
|              |  |                 
|Total         |  | 2,761           
|Deferred tax  |  |                 
|Sweden        |  | 513             
|Finland       |  | 16              
|Rest of world |  | 560             
|              |  |                 
|Total         |  | 1,089           
|              |  |                 
|Total         |  | 3,850           

F-30

---



Current
tax expense for each fiscal year attributable to the previous years' earnings and tax booked directly to equity were as follows.

|                                  |  | January-December
|--------------------------------- |  | ----------------
|
|
|Tax attributable to previous year |  | -305            
|Tax booked directly to equity     |  | 7               
|                                  |  |                 

The
difference between the nominal rate of Swedish taxation and the effective tax rate comprises the following components.

|                                                               |  | January-December
|-------------------------------------------------------------- |  | ----------------
|
|
|Swedish income tax rate                                        |  | 28.0            
|Differences in tax rates on foreign operations                 |  | -0.7            
|Adjustment of taxes for previous periods                       |  | -4.6            
|Adjustment for new tax legislation                             |  |                
|Losses for which deferred tax assets were not recognized       |  | 4.1             
|Profits for which deferred tax liabilities were not recognized |  | -2.0            
|Non-deductible expenses                                        |  | 8.2             
|Non-taxable revenues                                           |  | -5.3            
|                                                               |  |                 
|Tax rate as per the income statement                           |  | 27.7            
|Tax booked directly to equity                                  |  | 0.1             
|                                                               |  |                 
|Effective tax rate                                             |  | 27.8            
|Tax rate, current tax                                          |  | 19.9            
|                                                               |  |                 

In
2003, the Finnish government announced its intention to propose Parliament to reduce the Finnish corporate income tax rate from 29 percent to 26 percent. As of
December 31, 2003, the tax rate change was not substantively enacted. The deferred tax expense for 2003 would have increased by approximately SEK 1,018 million and the effective tax rate
by approximately 7.3 percent, had the change of nominal tax rate been substantively enacted as of the said date.

In
2001, Swedish tax legislation changed so that capital losses on business-related shares and participations after December 7, 2001 may only be offset against capital gains on
shares and participations. Deferred tax assets attributable to holdings in which latent capital losses were deemed to exist were consequently valued only to the extent that the loss was estimated to
be offset by capital gains on shares. The remainder of deferred tax assets was expensed, increasing the tax expense for 2001.

F-31

---





The accumulated tax loss carry-forwards were distributed as follows.

|              |  | December 31,
|------------- |  | ------------
|
|
|Sweden        |  | 871         
|Finland       |  | 31,178      
|Rest of world |  | 5,725       
|              |  |             
|Total         |  | 37,774      

Swedish
tax loss carry-forwards have no expiration date, while Finnish tax loss carry-forwards expire after 10 years. Total loss carry-forwards as of
December 31, 2003 expire in the following years.

|Expiry    |  | SEK in millions
|--------- |  | ---------------
|2004      |  | 160            
|2005      |  | 117            
|2006      |  | 439            
|2007      |  | 124            
|2008      |  |               
|2009-2023 |  | 31,178         
|Unlimited |  | 5,756          
|          |  |                
|Total     |  | 37,774         

Deferred
tax liabilities and assets were distributed as follows.

|                                                          |  | December 31,
|--------------------------------------------------------- |  | ------------
|
|
|Deferred tax liability                                    |  |             
|Shares and participations                                 |  | 447         
|Other long-term assets                                    |  | 5,926       
|Provisions                                                |  | 1,994       
|Current receivables and liabilities                       |  | 2           
|Off-balance-sheet items                                   |  | 168         
|                                                          |  |             
|Total deferred tax liability                              |  | 8,537       
|Deferred tax asset                                        |  |             
|Shares and participations                                 |  | 131         
|Other long-term assets                                    |  | 5,258       
|Provisions and other long-term liabilities                |  | 1,282       
|Current receivables and liabilities                       |  | 32          
|Tax loss carry-forwards                                   |  | 10,561      
|                                                          |  |             
|Subtotal                                                  |  | 17,264      
|Valuation allowance                                       |  | -2,304      
|                                                          |  |             
|Total deferred tax asset                                  |  | 14,960      
|                                                          |  |             
|Net deferred tax asset (-)/liability (+)                  |  | -6,423      
|Net change in valuation allowance (increase +/decrease -) |  | 589         
|                                                          |  |             

The
deferred tax liability with respect to other long-term assets chiefly refers to untaxed reserves (see below). Unrecorded deferred tax liabilities for
undistributed earnings in subsidiaries totaled SEK 436 million in 2003, SEK 350 million in 2002, and SEK 515 million in 2001. The deferred tax asset originating from tax
loss carry-forwards mainly refers to extensive write-downs of investments in

F-32

---



foreign
associated companies and other minority holdings in 2002. By means of an intra-group asset transfer in 2003, a portion of the losses was utilized and a corresponding deferred tax asset with
respect to other long-term assets was established.

The
valuation allowance was distributed as follows.

|                          |  | December 31,
|------------------------- |  | ------------
|
|
|Other long-term assets    |  | 1,183       
|Provisions                |  | 402         
|Tax loss carry-forwards   |  | 719         
|                          |  |             
|Total valuation allowance |  | 2,304       

Appropriations and untaxed reserves

Tax legislation in Sweden, Finland and certain other countries allows companies to postpone tax payments by making allocations to untaxed reserves in the balance
sheet via the Appropriations line item in the income statement. Of particular interest to TeliaSonera, with its extensive capital expenditure in infrastructure, are Swedish and Finnish tax regulations
that make it possible to depreciate assets at an accelerated rate (see also note "Depreciation, Amortization, and Write-Downs"). However, appropriations and untaxed reserves are not recorded in the
consolidated financial statements.

In
the consolidated accounts, untaxed reserves after eliminations have been divided into a deferred tax liability and a restricted reserve in shareholders' equity. If recorded as income
and taxed, the latter would be transferred to non-restricted reserves (see note "Shareholders' Equity, Earnings per Share").

Overall,
the individual Group companies recorded the following untaxed reserves.

|                                |  | December 31,
|------------------------------- |  | ------------
|
|
|Profit equalization reserve     |  | 3,114       
|Accumulated excess depreciation |  | 14,136      
|Contingency reserve             |  | 353         
|                                |  |             
|Total                           |  | 17,603      

Excess
depreciation, applicable to intangible assets, buildings and plant and machinery, changed as follows.

|                             |  | December 31,
|---------------------------- |  | ------------
|
|
|Opening balance              |  | 582         
|Operations acquired/divested |  | 183         
|Provisions                   |  | 12          
|Reversals                    |  | -8          
|                             |  |             
|Closing balance              |  | 769         

F-33

---



15.   Intangible Fixed Assets

Intangible assets are recorded in the balance sheet at acquisition value less accumulated scheduled amortization, and write-downs. For assets acquired during the
year, amortization is calculated from the date of acquisition. The rates and other parameters applied are specified in note "Depreciation, Amortization, and Write-Downs."

Direct
external and internal charges for the development of software for in-house administrative use are capitalized, provided that probable future economic benefits exceed
accrued expenses. Activities in projects at the feasibility study stage as well as maintenance and training activities are expensed as incurred.

|                                               |  | December 31,
|---------------------------------------------- |  | ------------
|
|
|
|Acquisition value, opening balance             |  | 64,058      
|Purchases                                      |  | 1,903       
|Operations acquired                            |  |            
|Sales/discards                                 |  |            
|Operations divested                            |  |            
|Reclassifications                              |  | -679        
|Exchange rate differences                      |  | -4,047      
|                                               |  |             
|Accumulated acquisition value, closing balance |  | 61,235      
|Amortization, opening balance                  |  | -5,078      
|Purchases                                      |  | -1          
|Operations acquired                            |  |            
|Sales/discards                                 |  |            
|Operations divested                            |  |            
|Reclassifications                              |  | 221         
|Amortization for the year                      |  | -3,450      
|Exchange rate differences                      |  | 352         
|                                               |  |             
|Accumulated amortization, closing balance      |  | -7,956      
|Write-downs, opening balance                   |  | -396        
|Operations acquired                            |  |            
|Operations divested                            |  |            
|Write-downs for the year                       |  | -38         
|Exchange rate differences                      |  | 77          
|                                               |  |             
|Accumulated write-downs, closing balance       |  | -357        
|Advances                                       |  |            
|                                               |  |             
|Total book value, closing balance              |  | 52,922      

The
acquisition value includes accumulated interest of SEK 22 million for 2003, SEK 22 million for 2002, and SEK 22 million for 2001. Capitalized software for
in-house administrative use amounted to SEK 110 million, SEK 192 million in 2002, and SEK 182 million in 2001. In the three years, amortization was SEK
140 million, SEK 101 million, and SEK 45 million, respectively.

F-34

---





The total book value was distributed as follows.

|                                                             |  | December 31,
|------------------------------------------------------------ |  | ------------
|
|
|Goodwill, TeliaSonera Finland                                |  | 28,217      
|Goodwill, NetCom                                             |  | 19,857      
|Goodwill, other                                              |  | 4,848       
|Administrative software systems                              |  | 680         
|Trade names, licenses, contractual agreements, patents, etc. |  | 6,853       
|Leases, etc.                                                 |  | 908         
|Work in progress, advances                                   |  | 457         
|                                                             |  |             
|Total book value                                             |  | 61,820      

In
connection with the completion of the merger with Sonera Oyj (now TeliaSonera Finland Oyj), goodwill has been finally allocated to units concerned.

Given
the current ownership structure and the same exchange rates as in 2003, and that no events will occur that would trigger goodwill impairment charges, TeliaSonera expects the
following amortization of goodwill and other intangible assets during the next five-year period.

|SEK in millions                                               |  | 2004  |  | 2005  |  | 2006  |  | 2007  |  | 2008 
|------------------------------------------------------------- |  | ----- |  | ----- |  | ----- |  | ----- |  | -----
|Expected future amortization of goodwill                      |  | 3,388 |  | 3,388 |  | 3,388 |  | 3,355 |  | 3,355
|Expected future amortization of other intangible fixed assets |  | 1,623 |  | 1,323 |  | 1,323 |  | 1,123 |  | 777  
|                                                              |  |       |  |       |  |       |  |       |  |      
|Total                                                         |  | 5,011 |  | 4,711 |  | 4,711 |  | 4,478 |  | 4,132

16.   Tangible Fixed Assets

General

Tangible assets are recorded in the balance sheet at acquisition value less accumulated scheduled depreciation, and write-downs. In the case of cable TV
installations, a deduction is made for customer hookup fees paid in advance (fixed-asset contributions). Software that is a direct prerequisite for end-user service production is
capitalized as a tangible asset.

For
assets acquired during the year, depreciation is calculated from the date of acquisition. The rates and other parameters applied are specified in note "Depreciation, Amortization,
and Write-Downs."

New
installations under construction are valued at the expense already incurred, including interest during the installation period. For buildings, interest paid on construction loans is
capitalized. Otherwise capitalized interest is calculated based on the Group's estimated average cost of borrowing (5.0 percent for 2003, 5.75 percent for 2002 and 5.5 percent for
2001).

To
the extent a legal or constructive obligation to a third party exists, the acquisition cost includes estimated costs of dismantling and removing the asset and restoring the site. A
change in estimated expenditures for dismantling, removal and restoration is added to and/or deducted from the carrying value of the related asset. To the extent that the change would result in a
negative carrying amount, this effect is recognized as income. The change in depreciation charge is recognized prospectively.

F-35

---



Buildings and land

TeliaSonera's real estate holdings include some 4,000 properties, mainly in Sweden and Finland. The substantial majority is used solely for technical facilities,
like network installations, computer installations, research centers and service outlets.

|                                               |  | December 31,
|---------------------------------------------- |  | ------------
|
|
|Acquisition value, opening balance             |  | 5,859       
|Purchases                                      |  | 157         
|Operations acquired                            |  | 51          
|Sales/discards                                 |  | -102        
|Operations divested                            |  | -1          
|Reclassifications                              |  | 221         
|Exchange rate differences                      |  | -142        
|                                               |  |             
|Accumulated acquisition value, closing balance |  | 6,043       
|Depreciation, opening balance                  |  | -1,756      
|Operations acquired                            |  | -28         
|Sales/discards                                 |  | 44          
|Operations divested                            |  |            
|Reclassifications                              |  | 1           
|Depreciation for the year                      |  | -308        
|Exchange rate differences                      |  | 23          
|                                               |  |             
|Accumulated depreciation, closing balance      |  | -2,024      
|Write-downs, opening balance                   |  | -298        
|Sales/discards                                 |  | 7           
|Reclassifications                              |  | -32         
|Write-downs for the year                       |  | -35         
|Exchange rate differences                      |  | 4           
|                                               |  |             
|Accumulated write-downs, closing balance       |  | -354        
|Advances                                       |  | 5           
|                                               |  |             
|Total book value, closing balance              |  | 3,670       

No
interest is included in the acquisition value for the years 2003, 2002 or 2001.

The
Group's Swedish real estate holdings have been assessed for taxes at the following values.

|                           |  | December 31,
|-------------------------- |  | ------------
|
|
|Buildings                  |  | 199         
|Land and land improvements |  | 58          
|                           |  |             
|Tax-assessed value         |  | 257         

At
the 2003 property assessment for taxation purposes, a number of additional properties were assessed for the first time, while others had their assessments increased. The number of
real estate properties valued for tax purposes is limited as many of them are classified as non-taxable communication buildings.

F-36

---



Plant and machinery

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|Acquisition value, opening balance                     |  | 138,065     
|Purchases                                              |  | 7,545       
|Operations acquired                                    |  | 664         
|Dismantling/restoration                                |  | 106         
|Sales/discards                                         |  | -2,305      
|Operations divested                                    |  | -4,113      
|Reclassifications                                      |  | -2,294      
|Inflation adjustments                                  |  | -6          
|Exchange rate differences                              |  | -2,478      
|                                                       |  |             
|Accumulated acquisition value, closing balance         |  | 135,184     
|Depreciation, opening balance                          |  | -77,975     
|Operations acquired                                    |  | -584        
|Sales/discards                                         |  | 1,894       
|Operations divested                                    |  | 3,039       
|Reclassifications                                      |  | 1,292       
|Inflation adjustments                                  |  | -1          
|Depreciation for the year                              |  | -10,120     
|Exchange rate differences                              |  | 960         
|                                                       |  |             
|Accumulated depreciation, closing balance              |  | -81,495     
|Write-downs, opening balance                           |  | -10,929     
|Sales/discards                                         |  | 156         
|Reclassifications                                      |  | 382         
|Write-downs for the year                               |  | -289        
|Exchange rate differences                              |  | 233         
|                                                       |  |             
|Accumulated write-downs, closing balance               |  | -10,447     
|Fixed-asset contributions from cable TV customers, net |  |            
|Advances                                               |  | 45          
|                                                       |  |             
|Total book value, closing balance                      |  | 43,287      

The
acquisition value includes accumulated interest of SEK 617 million, SEK 574 million and SEK 555 million for the years 2003, 2002 and 2001, respectively.
In 2002 and 2001, the carrying value of the previous business area Telia International Carrier was written down and, in 2002, assets in the Danish fixed-line operations were impaired (see
also note "Restructuring Costs").

F-37

---



Equipment, tools and installations

|                                               |  | December 31,
|---------------------------------------------- |  | ------------
|
|
|Acquisition value, opening balance             |  | 10,092      
|Purchases                                      |  | 744         
|Operations acquired                            |  | 722         
|Sales/discards                                 |  | -661        
|Operations divested                            |  | -664        
|Reclassifications                              |  | -3,245      
|Exchange rate differences                      |  | -258        
|                                               |  |             
|Accumulated acquisition value, closing balance |  | 6,730       
|Depreciation, opening balance                  |  | -6,349      
|Operations acquired                            |  | -783        
|Sales/discards                                 |  | 611         
|Operations divested                            |  | 319         
|Reclassifications                              |  | 3,235       
|Depreciation for the year                      |  | -1,444      
|Exchange rate differences                      |  | 162         
|                                               |  |             
|Accumulated depreciation, closing balance      |  | -4,249      
|Write-downs, opening balance                   |  | -464        
|Operations acquired                            |  | 213         
|Sales/discards                                 |  |            
|Reclassifications                              |  | -15         
|Write-downs for the year                       |  | -8          
|Exchange rate differences                      |  | -3          
|                                               |  |             
|Accumulated write-downs, closing balance       |  | -277        
|                                               |  |             
|Total book value, closing balance              |  | 2,204       

No
interest is included in the acquisition value for the years 2003, 2002 or 2001.

F-38

---



Distribution by class of asset

The total book value was distributed as follows.

|                                                               |  | December 31,
|-------------------------------------------------------------- |  | ------------
|
|
|Buildings and land                                             |  |             
|Expenditure on improvements to property not owned by the Group |  | 123         
|Buildings                                                      |  | 3,152       
|Land and land improvements                                     |  | 395         
|                                                               |  |             
|Total                                                          |  | 3,670       
|Plant and machinery                                            |  |             
|Fixed networksswitching systems and peripheral equipment      |  | 9,480       
|Fixed networkstransmission systems                            |  | 13,837      
|Fixed networkstransmission media and other types of media     |  | 9,720       
|Mobile networks                                                |  | 7,271       
|Cable TV networks                                              |  | 550         
|Alarm systems                                                  |  | 16          
|New installations under construction, advances                 |  | 2,413       
|                                                               |  |             
|Total                                                          |  | 43,287      
|Equipment, tools and installations                             |  |             
|Financial leasing, vehicles                                    |  | 271         
|Other equipment, tools and installations                       |  | 1,933       
|                                                               |  |             
|Total                                                          |  | 2,204       
|                                                               |  |             
|Total                                                          |  | 49,161      

New
installations under construction under Plant and machinery are chiefly installations for fixed and mobile networks. Assets owned by Group companies and leased to other Group
companies are included in Plant and machinery and Other equipment, tools and installations as appropriate.

17.   Financial Fixed Assets

General

The principles for the consolidation of subsidiaries and associated companies are described in note "Consolidated Financial Statements." Negative equity
participations in associated companies are recognized only for companies for which the Group has contractual obligations to contribute additional capital. This is then recorded as Other provisions.

Other
holdings of securities are valued at fair value if listed (application of IAS 39 effective 2001), otherwise at acquisition cost unless an assessment of the market value indicates
that a write-down is necessary (see note "Depreciation, Amortization, and Write-downs").

F-39

---



Equity participations in associated companies

|                                                |  | December 31,
|----------------------------------------------- |  | ------------
|
|
|Book value, opening balance                     |  | 23,027      
|Acquisitions                                    |  | 748         
|Operations acquired                             |  |            
|Equity participation in former subsidiaries     |  |            
|Transactions with non-related parties           |  |            
|New shares issues and shareholder contributions |  | 10          
|Share in earnings                               |  | 2,096       
|Amortization and write-down of goodwill etc.    |  | -2,001      
|Divestitures                                    |  | -15         
|Dividends received                              |  | -697        
|Reclassifications                               |  | -3,060      
|Inflation adjustments                           |  | 2,457       
|Exchange rate differences                       |  | -2,164      
|                                                |  |             
|Book value, closing balance                     |  | 20,401      

The
book value was distributed as follows.

|                                             |  | December 31,
|-------------------------------------------- |  | ------------
|
|
|Goodwill and similar assets on consolidation |  | 8,934       
|Participation in equity                      |  | 11,467      
|                                             |  |             
|Total                                        |  | 20,401      

Book
value is broken down by business segments in the notes "Profit Center Breakdown" and "Product Area Breakdown."

The
following shows the associated companies' aggregate balance sheets and income statements in summary.

|                                     |  | December 31,
|------------------------------------ |  | ------------
|
|
|Fixed assets                         |  | 45,298      
|Current assets                       |  | 24,662      
|Provisions and long-term liabilities |  | 12,888      
|Current liabilities                  |  | 19,055      
|Net sales                            |  | 43,590      
|Gross income                         |  | 8,418       
|Net income                           |  | 4,711       
|                                     |  |             

F-40

---



Other holdings of securities

|                                     |  | December 31,
|------------------------------------ |  | ------------
|
|
|Book value, opening balance          |  | 1,164       
|Changes in accounting principles     |  |            
|Book value, adjusted opening balance |  | 1,164       
|Acquisitions                         |  | 102         
|Operations acquired                  |  |            
|Divestitures                         |  | -326        
|Write-ups                            |  |            
|Write-downs                          |  | -460        
|Reclassifications                    |  | 85          
|Share of earnings in partnerships    |  | -2          
|Exchange rate differences            |  | -5          
|                                     |  |             
|Book value, closing balance          |  | 558         

Other long-term financial assets

|                                     |  | December 31,
|------------------------------------ |  | ------------
|
|
|Book value, opening balance          |  | 24,343      
|Changes in accounting principles     |  |            
|Book value, adjusted opening balance |  | 24,343      
|Purchases                            |  | 1,124       
|Operations acquired                  |  |            
|Sales/discards                       |  | -3,187      
|Operations divested                  |  |            
|Write-downs                          |  | -550        
|Reclassifications                    |  | -335        
|Exchange rate differences            |  | -293        
|                                     |  |             
|Book value, closing balance          |  | 21,102      

Changes
in accounting principles in 2001 refer to the application of IAS 39 and gross recording of derivatives in the balance sheet (see also note "Financial Instruments and Financial
Risk Management").

F-41

---





Distribution by class of asset

The total book value was distributed as follows.

|                                              |  | December 31,
|--------------------------------------------- |  | ------------
|
|
|Associated companies                          |  |             
|Equity participations in associated companies |  | 20,401      
|Interest-bearing receivables                  |  | 809         
|Non-interest-bearing receivables              |  | 2           
|                                              |  |             
|Total                                         |  | 21,212      
|Other holdings of securities                  |  |             
|Shares and participations                     |  | 357         
|Other securities                              |  | 201         
|                                              |  |             
|Total                                         |  | 558         
|Deferred tax asset                            |  | 14,960      
|Other long-term receivables                   |  |             
|Interest-bearing                              |  |             
|Financial leasing agreements                  |  | 3,298       
|Service-financing agreements                  |  | 503         
|Loans to employees                            |  | 14          
|Interest rate swaps                           |  |            
|Foreign currency interest rate swaps          |  | 306         
|Other                                         |  | 624         
|Non-interest-bearing                          |  |             
|Operating lease agreements                    |  | 344         
|Other                                         |  | 242         
|                                              |  |             
|Total                                         |  | 5,331       
|                                              |  |             
|Total                                         |  | 42,061      

The
deferred tax asset is discussed in note "Income taxes" and leasing agreements in note "Leasing Agreements and Contractual Obligations." The valuation of financial fixed assets is
discussed in note "Financial Instruments and Risk Management." Shareholdings and participations in associated companies as well as other holdings of securities are specified in note "Specification of
Shareholdings and Participations."

18.   Inventories, etc.

Inventory and stock in trade are valued at acquisition value, based on FIFO (first in/first out), or net selling price, whichever is lower. Write-downs for
obsolescence are made separately for each individual stockholding. Obsolescence is assessed with reference to the age and rate of turnover of the articles. The entire difference between the opening
and closing balances of the reserve for obsolescence is charged to operating income for the year.

Construction
contracts are valued at expense incurred, applying the lower of original cost and replacement value. Interest paid during installation is not capitalized. Construction
contracts refer chiefly to short-term (one to three months) installation works on the customer's site. Installation work is recognized as revenue when all or nearly all undertakings have
been completed.

F-42

---

After
deductions for obsolescence amounting to SEK 7 million, SEK 10 million and SEK 35 million for the years 2003, 2002 and 2001, respectively, the total
book value is distributed as follows.

|                                         |  | December 31,
|---------------------------------------- |  | ------------
|
|
|Raw materials and essential inputs       |  | 244         
|Products at work                         |  | 7           
|Finished goods and goods for resale      |  | 206         
|Expense incurred, construction contracts |  | 24          
|Advances to suppliers                    |  | 20          
|                                         |  |             
|Total                                    |  | 501         

Finished
goods include purchased supplies that are mainly intended for use in constructing TeliaSonera's own installations and for repair and maintenance. Supplies valued at SEK
6 million, SEK 26 million and SEK 9 million for the years 2003, 2002 and 2001, respectively, were stored at a central location. The remainder was held at local warehouses
and worksites.

19.   Receivables

Allowance for doubtful receivables on mass invoicing is calculated primarily using a standardized method based on actual losses from previous years and taking
into account current collection trends. Should economic or specific industry trends worsen compared to the estimates, the allowance may have to be increased, negatively impacting earnings.

F-43

---

Net
receivables from clients for service and construction contracts are recorded as accruals and deferrals. Revenue is recognized progressively. Assessment of the degree of completion is
based on the value of phases completed as a percentage of total undertakings.

|                                           |  | December 31,
|------------------------------------------ |  | ------------
|
|
|Accounts receivable                        |  |             
|Invoiced receivables                       |  | 12,677      
|Reserve for doubtful receivables           |  | -904        
|                                           |  |             
|Total                                      |  | 11,773      
|Other current receivables                  |  |             
|Interest-bearing                           |  |             
|Receivable from associated companies       |  | 226         
|Financial leasing agreements               |  | 3,157       
|Foreign currency interest rate swaps       |  | 47          
|Receivable from others                     |  | 340         
|Non-interest-bearing                       |  |             
|Receivable from associated companies       |  | 628         
|Value-added tax                            |  | 296         
|Other tax assets                           |  | 244         
|International settlements                  |  | 237         
|Currency swaps, forward exchange contracts |  | 84          
|Receivable from others                     |  | 1,521       
|                                           |  |             
|Total                                      |  | 6,780       
|Accrued revenues and prepaid expenses      |  |             
|Metered call charges                       |  | 2,549       
|Interconnect and roaming charges           |  | 1,070       
|Other traffic charges                      |  | 122         
|Construction and service contracts         |  | 31          
|Prepaid rent and leasing fees              |  | 397         
|Other accrued or prepaid items             |  | 1,448       
|                                           |  |             
|Total                                      |  | 5,617       
|                                           |  |             
|Total                                      |  | 24,170      

Written-down
accounts receivable (bad debt expense) and recovered accounts receivable for the years 2003, 2002 and 2001 are recorded in note "Operating Costs" and note "Other
Operating Revenues and Expenses." For information on leases, see note "Leasing Agreements and Contractual Obligations."

F-44

---

20.   Short-term Investments

Short-term investments consist primarily of surplus funds invested in the overnight market and are valued at the acquisition value plus accrued
interest income (amortized cost). Investments with maturities over three months are valued at fair value.

|                                                             |  | December 31,
|------------------------------------------------------------ |  | ------------
|
|
|Investments with maturities over three months                |  | 278         
|Investments with maturities up to and including three months |  | 8,380       
|                                                             |  |             
|Total                                                        |  | 8,658       

See
also note "Financial Instruments and Financial Risk Management" and note "Cash Flow Information."

21.   Shareholders' Equity, Earnings per Share

Restricted and non-restricted equity

According to Swedish law, shareholders' equity is divided into funds available for distribution (non-restricted) and not available for distribution
(restricted). In a group the shareholders can receive as distribution only the non-restricted funds in the parent company or the group, whichever is lower.

Restricted
equity is made up of the share capital and share premium reserve/legal reserve. The Group's non-restricted equity in the consolidated accounts includes only that
part of a subsidiary's non-restricted equity that can be assigned to the parent company without having to write down the value of the shares in the subsidiary.

The
Group balance sheet also shows the equity component of untaxed reserves as restricted equity. Earnings in associated companies that have not been distributed are recorded in the
Group's equity as an equity reserve in restricted reserves. The equity effect of recording financial instruments at fair value (application of IAS 39 effective 2001) is attributed to a fair value
reserve in restricted reserves.

Share capital

According to the by-laws of TeliaSonera AB the authorized share capital shall amount to no less than SEK 8,000,000,000 and no more than SEK
32,000,000,000. All issued shares have been paid in full and carry equal rights to vote and participate in the assets of the company. No shares are held by the company itself or by its subsidiaries.

F-45

---

During
the last four years, the share capital changed as follows.

|                                 |                                    | Number of shares |               | Par value,
sek/share |          | Share capital,
sek
|-------------------------------- | ---------------------------------- | ---------------- | ------------- | -------------------- | -------- | ------------------
|Share capital, December 31, 1999 |                                    | 8,800,000        |               | 1,000.00             |          | 8,800,000,000     
|                                 | Bonus issue, May 20, 2000          |                  |              |                      | 1,036.80 |                   
|                                 | Split 324:1, May 20, 2000          |                  | 2,842,400,000 |                      | 3.20     |                   
|                                 | New share issue, June 16, 2000     |                  | 150,000,000   |                      | 3.20     |                   
|Share capital, December 31, 2000 |                                    | 3,001,200,000    |               | 3.20                 |          | 9,603,840,000     
|Share capital, December 31, 2001 |                                    | 3,001,200,000    |               | 3.20                 |          | 9,603,840,000     
|                                 | New share issue, December 3, 2002  |                  | 1,604,556,725 |                      | 3.20     |                   
|Share capital, December 31, 2002 |                                    | 4,605,756,725    |               | 3.20                 |          | 14,738,421,520    
|                                 | New share issue, February 10, 2003 |                  | 69,475,344    |                      | 3.20     |                   
|Share capital, December 31, 2003 |                                    | 4,675,232,069    |               | 3.20                 |          | 14,960,742,621    
|                                 |                                    |                  |               |                      |          |                   

Dividend
payments are proposed by the Board of Directors in accordance with the regulations of the Swedish Companies Act and decided by the General Meeting of shareholders. The proposed
but not yet decided dividend for 2003 totals SEK 4,675 million (SEK 1.00 per share). This amount has not been recorded as a liability.

Exchange rate differences

|                                                                        |  | December 31,
|----------------------------------------------------------------------- |  | ------------
|
|
|Translation of foreign operations                                       |  | -7,783      
|Forward contracts used as equity hedge                                  |  |            
|Operations divested                                                     |  | -318        
|Tax effect arising from the translation of foreign associated companies |  |            
|Other tax effect                                                        |  |            
|                                                                        |  |             
|Total                                                                   |  | -8,101      

The
cumulative exchange rate differences in restricted equity were distributed as follows.

|                          |  | December 31,
|------------------------- |  | ------------
|
|
|Equity method reserve     |  | -1,711      
|Other restricted reserves |  | -137        
|                          |  |             
|Total                     |  | -1,848      

Inflation adjustments

|                                                                                               |  | December 31,
|---------------------------------------------------------------------------------------------- |  | ------------
|
|
|Translation of operations in hyperinflationary economies                                       |  | 2,427       
|Tax effect arising from the translation of associated companies in hyperinflationary economies |  |            
|                                                                                               |  |             
|Total                                                                                          |  | 2,427       

F-46

---



Fair value reserve

|                                     |  | December 31,
|------------------------------------ |  | ------------
|
|
|
|Book value, opening balance          |  | -11         
|Changes in accounting principles     |  |            
|Tax effect                           |  |            
|Book value, adjusted opening balance |  | -11         
|Provisions                           |  |            
|Reversals                            |  |            
|Tax effect                           |  |            
|                                     |  |             
|Book value, closing balance          |  | -11         

No
part of the reversed amount referred to reversals that necessitate adjusting the acquisition value. See also the introduction to note "Financial Instruments and Financial Risk
Management."

Earnings per share

|                                                             |  | January-December
|------------------------------------------------------------ |  | ----------------
|
|Net income (SEK million)                                     |  | 9,080           
|Average number of shares (thousands)                         |  | 4,667,618       
|after dilution (thousands)                                  |  | 4,668,426       
|Earnings/Loss per share (SEK)                                |  |                 
|Basic                                                       |  | 1.95            
|Diluted                                                     |  | 1.95            
|Dividend per share (SEK) (for 2003 as proposed by the Board) |  | 1.00            
|Dividend (SEK million) (for 2003 as proposed by the Board)   |  | 4,675           
|                                                             |  |                 

In
2002 and 2001, General Meetings of shareholders decided to implement a number of stock option schemes (see section "Stock-Based Compensation" in note "Human Resources"). With the
terms and conditions that apply to the employee stock option schemes, they had a very limited dilution effect upon computation of earnings per share for 2003 and 2002, and no dilution effect for 2001.

22.   Provisions for Pensions and Employment Contracts

General

Almost all employees in Sweden, Finland and Norway are covered by defined benefit pension plans, which means that the individual is guaranteed a pension equal to
a certain percentage of his or her salary. The pension plans mainly include old-age pension, disability pension and family pension. The pension obligations are secured mostly by pension
funds, but also by provisions in the balance sheet and by insurance premiums. In Finland, a part of the pension is funded in advance and the remaining part financed as a
pay-as-you-go pension. The Group's employees outside Sweden, Finland and Norway are usually covered by defined contribution pension plans. Contributions to the
latter are normally set at a certain percentage of the employee's salary.

F-47

---

Pension
obligations that TeliaSonera AB assumed when it was converted into a limited liability company on July 1, 1993 and the remaining pension obligations of the parent company
as well as obligations of a number of Swedish subsidiaries are secured by Telia Pension Fund.

Pension
obligations are calculated annually, on the balance sheet date, based on actuarial principles.

The
assets of the pension funds constitute plan assets for pensions and are valued at market value. When the net cumulative unrecognized actuarial gain or loss on pension obligations and
plan assets goes outside a "corridor" equal to 10 percent of the greater of either pension obligations or the market value of plan assets, the surplus amount is amortized over the remaining
employment period.

The
following provisions for pension obligations were made in the balance sheet.

December 31,SEK in millions2003

2002

2001Present value of pension obligations

16,977

16,398

14,683Fair value of plan assets

-14,295

-13,987

-13,464Pension obligations less plan assets

2,682

2,411

1,219Unrecognized past service cost

34

36

Unrecognized transition gains

152

200

240Unrecognized actuarial gains (+)/losses (-)

-2,346

-2,423

899Provisions for pension obligations

522

224

2,358


Total
pension expenses were distributed as follows.

January-DecemberSEK in millions2003

2002

2001Current service cost

328

220

253Interest on pension provisions

878

784

883Expected return on assets

-892

-1,022

-1,122Amortization of past service cost

-3



Amortization of transition gains

-42

-40

-40Amortization of actuarial gains (-)/losses (+)

68



-80Pension expenses, defined benefit pension plans

337

-58

-106Settlement of pension obligations



-2

Early retirement pensions (excl. premiums and pension-related social charges)

150

28

43Pension premiums, defined benefit/defined contribution pension plans and pay-as-you-go systems

661

349

409Pension-related social charges, other pension expenses

258

654

267Total pension expenses

1,406

971

613


Actuarial calculation assumptions

The actuarial calculation of pension obligations and pension expenses is based on the following principal assumptions, each presented as a weighted average for
the respective pension plan. A change

F-48

---

in
any of these key assumptions may have a significant impact on the projected benefit obligations, funding requirements and periodic pension cost.

December 31,%2003

2002

2001Discount rate

5.5

5.5

5.5Expected rate of compensation increase

3.5

3.5

3.0Employee turnover rate

2.7

3.8

5.0Average expected remaining working life, years

15.1

14.7

15.0Increase in income base amount

2.5

2.5

Annual adjustments to pensions

2.0

2.0

2.0Expected return on plan assets

6.5

6.5

7.5


The
discount rate reflects the rates at which the pension benefits could be effectively settled, which means a period somewhere from 15 to 30 years. TeliaSonera has chosen to base
the estimated discount rate on the yields of domestic government bonds, as management regards such bonds as high-quality fixed income investments currently available and expected to be
available during the period to maturity of the pension benefits. However, the longest term of domestic nominal bonds is 15 years. The yields for terms over 15 years have been estimated
by extrapolating the yield curve. The final decision on the expected discount rate is made after analyzing the relationship of the spread of the yields between domestic government bonds and a
benchmark of euro government bonds (which are available at terms longer than 15 years).

The
expected annual rate of compensation increase reflects expected future salary increases as a compound of inflation, seniority and promotion. The estimate is based on historical data
on salary increases and on the expected future inflation rate (see also below). Historical data is also the basis for estimating the employee turnover rate, which reflects the expected level of
employees, by age class, leaving the company through natural attrition. The estimate for average expected remaining working life is based on current employee age distribution and the expected employee
turnover rate. The income base amount, existing only in Sweden, is set annually and inter alia used for determining the ceiling for pensionable income in the public pension system. The estimate for
the expected annual income base amount increase is based on the expected future inflation rate and the historical annual rate of compensation increase on the total labor market.

Expected
annual adjustments to pensions reflect the inflation rate. In determining this rate, TeliaSonera has chosen to use the inflation target rates set by the national and European
central banks.

The
expected return on plan assets reflects the average rate of earnings expected on the investments made (or to be made) to provide for the pension benefit obligations that are secured
by the pension fund. Plan assets chiefly consist of equity instruments and fixed income instruments. The asset portfolios are balanced to give the expected average return, chiefly based on historical
data, as further described below.

F-49

---

Specifications to pension obligation provision and pension expense

Changes in projected benefit obligation, plan assets, and the net liability in the balance sheet and actuarial net gains or losses for the defined benefit pension
plans were as follows.

December 31,SEK in millions2003

2002

2001Present value of pension obligationsOpening balance

16,398

14,683

15,801Current service cost

328

220

253Interest expenses

878

784

883Benefits paid

-1,089

-1,071

-1,141Early retirement pensions

150

28

43Operations acquired/divested

-93

1,448

-1,394Settlement of pension obligations



-2

Past service cost



-36

Actuarial gains (-)/losses (+)

430

314

238Exchange rate differences

-25

30

0Closing balance

16,977

16,398

14,683Plan assetsOpening balance

13,987

13,464

15,334Expected return on plan assets

892

1,022

1,122Contribution to pension fund

96

1,025

Payment from pension fund

-1,026

-3

-502Operations acquired (+)/divested (-)

-21

1,456

-744Actuarial gains (+)/losses (-)

395

-3,005

-1,746Exchange rate differences

-28

28

0Closing balance

14,295

13,987

13,464Expected return on plan assetsExpected return on plan assets

892

1,022

1,122Actuarial gains (+)/losses (-)

395

-3,005

-1,746Actual return

1,287

-1,983

-624Provisions for pension obligationsOpening balance

224

2,358

3,525Pension expenses, defined benefit pension plans

337

-58

-106Benefits paid

-1,089

-1,071

-1,141Contribution to pension fund

-96

-1,025

Payment from pension fund

1,026

3

502Early retirement pensions

150

28

43Operations acquired/divested, net

-29

-8

-465Settlement of pension obligations



-3

Exchange rate differences

-1

-0

0Closing balance

522

224

2,358


F-50

---

December 31,SEK in millions2003

2002

2001Actuarial gains/lossesOpening balance, actuarial gains (+)/losses (-)

-2,423

899

2,775Actuarial gains (-)/losses (+) to be recognized

68



-80Actuarial gains (-)/losses (+), settlement of pension obligations



-1

Actuarial gains (-)/losses (+), acquired/divested operations

43

-2

188Actuarial gains (+)/losses (-), pension obligations

-430

-314

-238Actuarial gains (+)/losses (-), plan assets

395

-3,005

-1,746Exchange rate differences

1

-0

0Closing balance, actuarial gains (+)/losses (-)

-2,346

-2,423

899Operations acquiredIncrease in pension obligations

29

1,448

Increase in plan assets

-12

-1,456

Net position

17

-8

Operations divestedDecrease in pension obligations

-122

-0

-1,394Decrease in plan assets

33

0

744Decrease in unrecognized net transition gain/loss, past service cost

0



Decrease in unrecognized net transition gain/loss

0

0

-3Changes in unrecognized actuarial gains (-)/losses (+)

43

0

188Net position

-46

-0

-465


Strategic asset allocation

As of the balance sheet date, plan assets market values were as follows.

|                                    |  | December 31,
|----------------------------------- |  | ------------
|
|
|Fixed income instruments            |  | 8,838       
|Shares and other equity instruments |  | 5,457       
|                                    |  |             
|Total                               |  | 14,295      

Plan
assets include shares in TeliaSonera AB with a market value of SEK 81 million, SEK 78 million and SEK 114 million as of December 31, 2003, 2002
and 2001, respectively.

As
of December 31, 2003, the strategic asset allocation for the Swedish pension fund, representing approximately 85 percent of total plan assets, was 60 percent
fixed income, 30 percent equities and 10 percent alternative investments. The alternative investments include hedge funds, private equity, emerging market debt and high yield bonds. Out
of the total assets 35 percent are domestic index

F-51

---

(inflation)
linked government bonds and 25 percent refers to other domestic fixed income assets with low credit risk. Out of the equity holdings one third is domestic and the rest is global
equities.

The
actual allocation may fluctuate from the strategic allocation in a range of +/-10 percent between equities and fixed income.

All
assets in the Swedish pension fund are managed by appointed external managers with specialist mandates, with the exception of the index-linked bonds, which are managed
in-house with no active trading mandate.

The
expected nominal return from the total Swedish pension fund portfolio is approximately 6.5 percent per annum over a 10-year period, where inflation is assumed to
be 2 percent per annum.

The
strategic asset allocation is composed to give the expected average return, based on historical data, with some adjustment reflecting the lower inflation rate that is currently in
place. More specifically the expected nominal return in the Swedish pension fund is based on the following assumptions; domestic fixed income 5 percent, domestic and global equity
8 percent and alternative investments 10 percent.

The
assumptions used in the Finnish and Norwegian pension funds are similar.

Future cash flows

Contributions

For companies in Sweden, part of the liabilities is secured also by credit insurance. This means, should the pension obligations increase, that each company can
choose if and when to contribute to the pension fund or otherwise to recognize a pension provision in the balance sheet.

To
pension funds outside Sweden, TeliaSonera expects to contribute SEK 181 million in 2004.

Estimated future benefits paid

Given the current actuarial calculation assumptions, TeliaSonera expects the following benefit payments during the next ten-year period.

|SEK in millions |  | 2004  |  | 2005  |  | 2006 |  | 2007 |  | 2008 |  | 2009-2013 |  | Total 
|--------------- |  | ----- |  | ----- |  | ---- |  | ---- |  | ---- |  | --------- |  | ------
|Benefits paid   |  | 1,020 |  | 1,011 |  | 984  |  | 961  |  | 964  |  | 5,951     |  | 10,891

F-52

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23. Deferred Tax Liability, Other Provisions

Changes in other provisions, including deferred tax liability, were as follows.

December 31,SEK in millions2003

2002

2001Book value, opening balance

18,182

10,749

7,826Provisions for the period

2,571

5,139

3,752Operations acquired

226

4,795

109Utilized provisions

-2,749

-1,889

-936Operations divested

-41

0

-53Reclassifications

-2,162



Reversals of provisions

-1,076

-617

-11Timing and interest-rate effects

67

16

24Exchange rate differences

-243

-11

38Book value, closing balance

14,775

18,182

10,749


The
book value of the provisions was distributed as follows.

December 31,SEK in millions2003

2002

2001Deferred tax liability

8,537

10,673

6,940Other provisionsPayroll taxes on future pension payments

302

302

314Restructuring

3,404

5,247

582Onerous contracts

87

188

528Guarantee reserves

2,294

1,673

2,329Other

151

99

56Total

6,238

7,509

3,809Total

14,775

18,182

10,749


The
deferred tax liability is discussed in note "Income Taxes" and provisions for restructuring in note "Restructuring Costs".

F-53

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24.   Long-term Loans

Long-term loans were distributed as follows.

December 31,SEK in millions2003

2002

2001Financial leasing, vehicles

201

220

255TeliaSonera FTN/FTO

4,903

5,082

7,509TeliaSonera EMTN, other foreign currency loans

7,272

7,363

14,072TeliaSonera Finland EMTN, other foreign currency loans

11,997

14,838

Other loans

1,227

4,098

3,206Interest rate swaps

108

66

90Foreign currency interest rate swaps

159

457

61Total

25,867

32,124

25,193


For
the years 2003, 2002 and 2001, SEK 4,995 million, SEK 5,359 million and SEK 3,325 million, respectively, of the loans were due more than five years after the
balance sheet date. See also note "Financial Instruments and Financial Risk Management."

25.   Short-term Loans

Short-term loans were distributed as follows.

December 31,SEK in millions2003

2002

2001Loans from associated companies

17

24

845Financial leasing, vehicles

73

80

59TeliaSonera ECP





1,001TeliaSonera FTN

300

1,923

1,128TeliaSonera EMTN, other foreign currency loans

523

6,388

319TeliaSonera Finland EMTN, other foreign currency loans

2,726

1,839

Other loans

953

2,322

577Interest rate swaps

25

32

2Foreign currency interest rate swaps

70



Total

4,687

12,608

3,931


Bank
overdraft facilities had a total limit of SEK 984 million, SEK 6,593 million and SEK 3,083 million for the years 2003, 2002 and 2001, respectively. See
also note "Financial Instruments and Financial Risk Management."

F-54

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26.   Long-term Liabilities

Long-term liabilities were distributed as follows.

December 31,SEK in millions2003

2002

2001Liabilities to associated companies



13

Prepaid leasing agreements

1,340

1,477

2,286License fees

494

545

619Other liabilities

655

315

144Total

2,489

2,350

3,049


In
September 2001, SEK 246 million was paid in cash for the UMTS license obtained in Denmark. The remainder will be paid over 10 years.

For
information on leases, see notes "Leasing Agreements and Contractual Obligations" and "Contingent Assets, Collateral Pledged and Contingent Liabilities." Of the other
long-term liabilities for the years 2003, 2002 and 2001, SEK 136 million, SEK 204 million and SEK 275 million, respectively, fell due more than five years after the
balance sheet date.

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27.   Current Liabilities

Current liabilities were distributed as follows.

|                                            |                                                        | December 31,
|------------------------------------------- | ------------------------------------------------------ | ------------
|
|
|Accounts payable                            |                                                        | 7,595       
|Liabilities to associated companies         |                                                        | 632         
|Tax liabilities                             |                                                        | 2,338       
|Other liabilities                           |                                                        |             
|                                            | Telephone card reserve, deductible calling charges     |             
|                                            | Advances, deposits, etc.                               |             
|                                            | Value-added tax, excise taxes                          |             
|                                            | Employee withholding tax, payable to employees         |             
|                                            | International settlements                              |             
|                                            | Currency swaps, forward exchange contracts             |             
|                                            | Liability to minority shareholders in subsidiaries     |             
|                                            | Other                                                  |             
|                                            |                                                        |             
|Total other liabilities                     |                                                        | 4,397       
|Accrued expenses and prepaid revenues       |                                                        |             
|                                            | Accrued payroll expenses                               |             
|                                            | Accrued employer's social security contributions, etc. |             
|                                            | Accrued leasing fees                                   |             
|                                            | Accrued interest                                       |             
|                                            | Subscription charges                                   |             
|                                            | Interconnect charges                                   |             
|                                            | Retailer commissions                                   |             
|                                            | Prepaid leasing agreements                             |             
|                                            | Other accrued or prepaid items                         |             
|                                            |                                                        |             
|Total accrued expenses and prepaid revenues |                                                        | 10,924      
|                                            |                                                        |             
|Total current liabilities                   |                                                        | 25,886      

28.   Leasing Agreements and Contractual Obligations

TeliaSonera as a lessee

As a lessee, TeliaSonera has entered into financial and operating leases and rental contracts. For a financial leasing agreement, the consolidated accounts
include the leased asset as a tangible fixed asset and the future obligation to the lessor as a liability in the balance sheet. Other agreements are operating leases, with the leasing costs amortized
evenly throughout the period of the agreement.

Financial leases

The Group's financial leasing concerns computers and other IT equipment, production vehicles, company cars to employees, and other vehicles. There is no
subleasing.

F-56

---

The
book value of the leased assets as of the balance sheet date was as follows.

December 31,SEK in millions2003

2002

2001Acquisition value

1,834

385

367Less accumulated depreciation

-1,302

-88

-59Net value of financial leasing agreements

532

297

308


Depreciation
and write-downs totaled SEK 274 million, SEK 56 million and SEK 134 million for the years 2003, 2002 and 2001, respectively. Leasing fees paid during
these years totaled SEK 301 million, SEK 72 million and SEK 147 million, respectively.

As
of December 31, 2003, future minimum leasing fees and their present value as per financial agreements that could not be canceled in advance and were longer than one year in
duration were as follows.

SEK in millions
Maturity

Future
leasing fees

Present value of future
minimum leasing fees2004

236

2252005

164

1492006

56

492007

48

402008

50

43Later years

29

20Total

583

526


As
of the balance sheet date, the present value of future minimum leasing fees under noncancelable financial leasing agreements was as follows.

December 31,SEK in millions2003

2002

2001Total future minimum leasing fees

583

342

362Less interest charges

-57

-43

-48Present value of future minimum leasing fees

526

299

314


Operating leases

TeliaSonera's operating lease agreements primarily concern office space, technical sites, land, computers and other equipment. Certain contracts include renewal
options for various periods of time. Subleasing consists mainly of home computers leased to employees and certain office premises.

F-57

---

Future
minimum leasing fees under operating lease agreements in effect as of December 31, 2003 that could not be canceled in advance and were in excess of one year were as
follows.

SEK in millions
Maturity

Future leasing fees

Subleasing2004

1,533

592005

1,126

412006

1,016

422007

908

412008

858

41Later years

2,922

189Total

8,363

413


Total
rent and leasing fees paid were SEK 1,771 million, SEK 1,540 million and SEK 1,572 million for the years 2003, 2002 and 2001, respectively. For these years,
revenue for subleased items totaled SEK 56 million, SEK 61 million and SEK 47 million, respectively.

At
the end of 2003 office space and technical site leases covered approximately 967,000 square meters. Apart from certain short-term leases, leasing terms range mainly
between 3 and 15 years with an average term of approximately 6 years. All leases have been entered into on conventional commercial terms. Certain contracts include renewal options for
various periods of time.

TeliaSonera as financial lessor

TeliaSonera owns assets that it leases to customers under financial leasing agreements. These assets are recorded at the gross investment cost in the lease, less
unearned financial revenues. Some of the leasing receivables have been securitized. Based on the terms of the securitization contracts, the leasing receivables have been included in the Group balance
sheet.

As
of the balance sheet date, the present value of future minimum lease payment receivables under noncancelable financial leasing agreements was as follows.

December 31,SEK in millions2003

2002

2001Gross investment in financial lease contracts

7,129

8,457

7,750Less unearned financial revenues

-674

-876

-803Net investment in financial lease contracts

6,455

7,581

6,947Less: Unguaranteed residual values of leased properties for the benefit of the lessor

-33

-15

-19Present value of future minimum lease payment receivables

6,422

7,566

6,928


F-58

---

As of December 31, 2003, the gross investment and present value of receivables relating to future minimum lease payments under non-cancelable financial
leasing agreements were distributed as follows.

SEK in millions
Maturity

Gross
investment

Present value of future minimum lease payments2004

3,325

3,1232005

2,126

1,9112006

1,043

8892007

401

3232008

166

127Later years

68

49Total

7,129

6,422


Reserve
for doubtful receivables regarding minimum lease payments totaled SEK 41 million as of December 31, 2003.

The
leasing portfolio comprises financing of products and services related to TeliaSonera's product and service offerings in Sweden and Denmark. At the end of 2003, the Danish part of
the total portfolio was 14 percent.

The
term of the contract stock is approximately 15 quarters. The term of new contracts signed in 2003 is 14 quarters. Of all contracts, 75 percent carry a floating interest rate
and 25 percent a fixed rate. Most contracts are renewable.

TeliaSonera as operating lessor

Fiber and duct are sold as part of the operations of TeliaSonera's international carrier business. TeliaSonera has decided to view these as integral equipment.
Under the agreements, title was not transferred to the lessee. The transactions are therefore recorded as operating lease agreements. Direct expenditures incurred in connection with agreements are
capitalized and written off over the term of the agreement. The contracted sales price is chiefly paid in advance and is recognized as revenue during the period of the agreement. Sales not recognized
in income are recorded as long-term liabilities and prepaid revenues.

The
book value of the leased assets as of the balance sheet date was as follows:

December 31,SEK in millions2003

2002

2001Acquisition value

3,260

2,535

1,750Less accumulated depreciation

-1,259

-595

-150Gross book value

2,001

1,940

1,600Plus prepaid sales costs

2

7

9Less prepaid lease payments

-1,030

-1,837

-2,286Net value of operating leasing agreements

973

110

-677


Depreciation
and write-downs totaled SEK 548 million, SEK 336 million and SEK 141 million for the years 2003, 2002 and 2001. Future minimum lease payment receivables
under operating agreements

F-59

---

in
effect as of December 31, 2003 that could not be canceled in advance and were in excess of one year were as follows.

SEK in millions
Maturity

Future lease payments2004

6152005

3572006

2082007

1242008

107Later years

7Total

1,418


The
leasing portfolio includes some twenty agreements with other international operators and over 100 other contracts. Contract periods range between 10 and 25 years, with an
average term of 20 years.

Other contractual obligations

As of December 31, 2003, the Group had the following contractual obligations regarding future acquisitions (or equivalent) of intangible, tangible and
financial fixed assets.

|SEK in millions
Maturity |  | 2004  |  | 2005 |  | 2006 |  | 2007 |  | Later years |  | Total
|------------------------ |  | ----- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Intangible fixed assets  |  | 39    |  | 1    |  |     |  |     |  |            |  | 40   
|Tangible fixed assets    |  | 1,745 |  | 306  |  | 89   |  |     |  |            |  | 2,140
|Associated companies     |  | 78    |  | 1    |  | 1    |  | 0    |  |            |  | 80   
|Xfera capital commitment |  | 3,013 |  |     |  |     |  |     |  |            |  | 3,013
|                         |  |       |  |      |  |      |  |      |  |             |  |      
|Total                    |  | 4,875 |  | 308  |  | 90   |  | 0    |  |            |  | 5,273

Most
of the obligations relating to tangible fixed assets cover the construction under contract of TeliaSonera's fixed network in Finland and mobile network in Kazakhstan. See note
"Contingent Assets, Collateral Pledged and Contingent Liabilities" for information related to the Xfera capital commitment.

29.   Dependency on Third Parties

The TeliaSonera Group offers a diversified portfolio of services and products in extremely competitive markets. Hence, the Group has limited exposure to
individual customers, suppliers, lenders, products or services sold, geographic markets, materials procured, personnel, services purchased, or licenses.

F-60

---



30.   Financial Instruments and Financial Risk Management

General

Financial assets and liabilities are recorded according to the "settlement date principle."

Financial
assets, with certain exceptions, are recorded at fair value. Official public quotes as of the close of books are used for determining fair value. If such a rate is not
available, the instrument is valued by discounting future cash flows at a quoted market rate of interest for each maturity. Currency swaps and forward exchange contracts are valued at the forward
rate. Conversion to Swedish kronor (SEK) is done at quoted exchange rates as per the close of books.

Assets
held to maturity, receivables arising from own lending and assets whose fair value cannot be reliably determined, e.g. unlisted shares and participations, are valued at their
amortized cost. TeliaSonera considers quoted securities as available for sale, with the unrealized gains and losses up to the date of sale recorded as a component of equity.

Financial
liabilities are valued primarily at their amortized cost. Liabilities that are not held for trading and that are hedged against changes in fair value, however, are recorded at
fair value.

Balances
and transactions are hedged and hedge accounting is applied if the hedging actions have the express purpose of serving as a hedge, have a direct correlation to the hedged
position and effectively hedge the position. An effective hedge produces financial effects that counteract the effects created by the position that is hedged.

TeliaSonera
uses derivative instruments (interest and foreign currency interest rate swaps, forward contracts, etc.) primarily to control exposure to fluctuations in exchange rates and
interest rates.

Derivatives
and embedded derivatives, when their economic characteristics and risks are not clearly and closely related to other characteristics of the host contract, are recognized at
fair value on the balance sheet. For fair value hedges, the effective and ineffective portions of the change in fair value of the derivative, along with the gain or loss on the hedged item
attributable to the risk being hedged, are recorded in the income statement as incurred. The effective portion of the change in fair value of outstanding derivatives used to hedge anticipated cash
flows is booked directly to equity until the underlying transaction is reflected in the income statement, at which time any deferred hedging gains or losses are recorded in earnings. The ineffective
portion of the change in fair value of a derivative used as a cash flow hedge is recorded as incurred on the same line item as the gain or loss on the item being hedged.

Amounts
to be paid or received as a result of foreign currency interest rate swaps or interest rate swaps, which are expressly intended to and do effectively hedge interest-bearing
assets or liabilities as specified above, are recorded on an ongoing basis as an interest revenue or expense.

Derivatives
used for hedging of foreign net investments are designated as cash flow hedges. Upon maturity of the derivative the accumulated change of value is retained in equity until
the subsidiary is divested or closed down.

Derivative
instruments that do not meet the criteria for hedge accounting are recorded on the balance sheet at fair value and changes in fair value are recorded in the income statement
immediately.

Book value and fair value of interest-bearing financial instruments

The table below presents book values and fair values distributed by type of interest-bearing financial instrument based on the following prerequisites.
Non-interest-bearing financial instruments,

F-61

---

like
accounts receivable from customers and accounts payable, are recorded at fair value and are not shown in the table.

The
estimated fair value is based on market rates and generally accepted valuation methods. Values recorded are indicative and will not necessarily be realized.

The
market value for publicly quoted associated companies is reduced by loans made by Group companies to the company in question. For leasing receivables, any credit losses arising are
reduced by gains from the sale of equipment returned.

Market
interest rates apply to other interest bearing long-term and current accounts receivable, including claims on associated companies and personnel. Thus, the book value
of these items is regarded as corresponding to the fair value.

The
values for interest rate swaps and foreign currency interest rate swaps include underlying principal and accrued interest. Swaps received and paid refer to the respective legs of a
swap (see notes

F-62

---

"Financial
Fixed Assets" and "Receivables", and "Long-term Loans" and "Short-term Loans", respectively).

|                                              |  | December 31,
|--------------------------------------------- |  | ------------
|
|
|
|Equity participations in associated companies |  | 20,401      
|Other holdings of securities                  |  | 558         
|Leasing receivables                           |  | 6,455       
|Other long-term and short-term receivables    |  | 2,369       
|Short-term investments                        |  | 278         
|Interest rate swaps received                  |  | 2,178       
|Interest rate swaps paid                      |  | -2,084      
|Foreign currency interest rate swaps received |  | 5,989       
|Foreign currency interest rate swaps paid     |  | -5,583      
|Other currency derivatives                    |  | 84          
|                                              |  |             
|Assets                                        |  | 30,645      
|Provisions for pensions                       |  | 522         
|Long-term loans                               |  | 25,940      
|Short-term loans                              |  | 4,686       
|Interest rate swaps received                  |  | -1,314      
|Interest rate swaps paid                      |  | 1,442       
|Foreign currency interest rate swaps received |  | -1,795      
|Foreign currency interest rate swaps paid     |  | 1,927       
|Other currency derivatives                    |  | 85          
|                                              |  |             
|Liabilities                                   |  | 31,493      
|Less book value of:                           |  |             
|pensions                                     |  | -522        
|accrued interest                             |  | -332        
|other currency derivatives                   |  | -85         
|                                              |  |             
|Book value of interest-bearing liabilities    |  | 30,554      

F-63

---

The
market capitalizations of the Group's holdings of publicly quoted shares as of the balance sheet date were as follows.

|                                                    |  | December 31,
|--------------------------------------------------- |  | ------------
|
|
|AB Lietuvos Telekomas, Lithuania                    |  | 2,018       
|AS Eesti Telekom, Estonia                           |  | 4,038       
|Turkcell Iletisim Hizmetleri A.S., Turkey           |  | 13,261      
|Netia S.A., Poland                                  |  |            
|Infonet Services Corp., USA                         |  | 1,154       
|eBay Inc., USA                                      |  |            
|Digital Telecommunications Phils. Inc., Philippines |  | 54          
|Other holdings                                      |  | 42          
|                                                    |  |             
|Total                                               |  | 20,567      

Principles of financing and financial risk management

TeliaSonera's financing and financial risks are managed under the control and supervision of TeliaSonera's Board of Directors. Financial management is centralized
within the TeliaSonera Corporate Finance & Treasury unit of TeliaSonera AB, which functions as TeliaSonera's internal bank and is responsible for the management of financing and financial
risks.

TeliaSonera
Corporate Finance & Treasury is responsible for Group-wide financial risk management including netting and pooling of capital requirements and payment
flows. TeliaSonera Corporate Finance & Treasury also seeks to optimize the cost of risk management, which in certain cases may mean that e.g. an inter company transaction is not replicated with
an identical transaction outside the Group. This means that situations may arise in which certain derivative transactions with parties outside the Group do not fully satisfy the requirements for hedge
accounting. TeliaSonera Corporate Finance & Treasury's deviation mandates are clearly defined, however, and the impact on earnings of deals made within those mandates is therefore not deemed to
be substantial. TeliaSonera Corporate Finance & Treasury's deviation mandate in the currency markets is currently capped at the equivalent of a nominal SEK +/-200 million. As
of December 31, 2003, the risk mandate was utilized by less than SEK 50 million.

SEK
is the measurement currency of TeliaSonera AB. Its borrowings are therefore normally denominated in, or swapped into, SEK unless directly linked to international operations.
TeliaSonera Finland Oyj's borrowings are denominated in EUR.

If
the available loan form does not directly reflect the desired loan portfolio structure in terms of interest or currency, various forms of derivative instruments are used to adapt the
structure in terms of duration and currency. This adaptation is achieved chiefly through interest rate swaps and foreign currency interest rate swaps. Foreign currency interest rate swaps are normally
used to hedge financial flows such as loans and investments longer than one year, while shorter terms are hedged using currency swaps or forward exchange contracts.

Liquidity and bank credit facilities

TeliaSonera's policy is to have a strong liquidity position in terms of available cash and/or unutilized committed credit facilities. As of December 31,
2003, the surplus liquidity amounted to an equivalent of SEK 12,347 million. Cash surplus is deposited in banks or invested in short-term interest-

F-64

---

bearing
instruments with good credit ratings. At year-end no such investments were made in interest-bearing securities with maturities exceeding one month. In addition to available cash,
TeliaSonera AB has a revolving credit facility, which is a committed syndicated bank credit facility with final maturity in March 2008, capped at EUR 1,400 million and used for
short-term financing and back-up purposes. This facility was not utilized as of December 31, 2003. In total, as of the balance sheet date, the available unutilized
amount under committed bank credit lines was approximately SEK 13,700 million.

Open-market financing programs

As of December 31, 2003, the equivalent of EUR 808 million (USD 1,170 million in 2002) had been utilized of TeliaSonera AB's Euro
Medium Term Note (EMTN) program, an uncommitted international program aimed at long-term borrowing with a limit of EUR 5,000 million (USD 3,000 million). The average term to
maturity was approximately 3.4 years.

TeliaSonera
AB's Euro Commercial Paper (ECP) program is an uncommitted international program aimed at short-term borrowing and has a limit of EUR 1,000 million (USD
1,000 million). As of December 31, 2003, the ECP program was not utilized (no utilization as of December 31, 2002).

In
the Swedish market, TeliaSonera AB's Flexible Term Note (FTN) program provides loan facilities, both short-term and long-term, on an uncommitted basis, of up
to SEK 12,000 million (12,000). FTNs outstanding at December 31, 2003, totaled SEK 5,100 million (7,040), with an average remaining maturity of approximately 2.2 years.

In
addition to this TeliaSonera AB has established a Finnish Commercial Paper (CP) program for non-domestic issuers, aimed at short-term borrowing, with a limit
of EUR 300 million. TeliaSonera Finland Oyj's (former Sonera Oyj's) Finnish Commercial Paper program has been cancelled. As of December 31, 2003, the CP program was not utilized
(utilization as of December 31, 2002 in Sonera's domestic Finnish CP amounted to EUR 24 million).

TeliaSonera
Finland Oyj has an old EMTN program with a limit of EUR 3,000 million (3,000). As of December 31, 2003, the equivalent of EUR 1,600 million (1,800) was
utilized under the EMTN program, with an average remaining maturity of approximately 1.9 years. This program will not be used for any new financing or refinancing.

The
intention is that TeliaSonera AB will make future refinancing of the outstanding TeliaSonera Finland debt.

Borrowings, maturity structure, interest rates and currencies

As of December 31, 2003, borrowings by TeliaSonera AB had a present value of SEK 14,193 million (SEK 21,294 million in 2002). The
average cost for the year was approximately 5.6 (5.7) percent and the weighted average time to maturity of borrowings was approximately 2.9 years (2.4).

As
of December 31, 2003, borrowings by TeliaSonera Finland Oyj had a present value of EUR 1,613 million (2,406 in 2002). The average cost for the year was
approximately 4.3 percent (4.9) and the weighted average time to maturity of borrowings was approximately 1.9 years (2.6).

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The
average cost, including relevant hedges, of outstanding long-term and short-term borrowings as per the balance sheet date was as follows.

December 31,%2003

2002

2001TeliaSonera AB (SEK)Long-term borrowings

5.32

5.92

5.62Short-term borrowings

5.52

5.48

5.03TeliaSonera Finland Oyj (EUR)Long-term borrowings

5.39



Short-term borrowings

3.03






As of December 31, 2003, the Group's interest-bearing borrowings had the following maturity structure.

|            |  | TeliaSonera AB
(incl debt derivatives) |  | TeliaSonera Finland |  |        |  |       |  |       
|----------- |  | -------------------------------------- |  | ------------------- |  | ------ |  | ----- |  | ------
|
|2004        |  | 847                                    |  |                    |  | 3      |  | 2,723 |  | 3,573 
|2005        |  | 2,880                                  |  | 600                 |  | 9,072  |  |      |  | 12,552
|2006        |  | 2,374                                  |  | 3,582               |  |       |  |      |  | 5,956 
|2007        |  | 843                                    |  |                    |  |       |  |      |  | 843   
|2008        |  | 58                                     |  | 777                 |  |       |  |      |  | 835   
|Later years |  | 1,384                                  |  | 665                 |  | 2,925  |  |      |  | 4,974 
|            |  |                                        |  |                     |  |        |  |       |  |       
|Total       |  | 8,386                                  |  | 5,624               |  | 12,000 |  | 2,723 |  | 28,733

Normally,
borrowings by TeliaSonera AB denominated in foreign currencies are swapped into SEK. The exceptions are funds borrowed to finance the Group's ventures abroad. TeliaSonera AB's
portfolio of interest rate swaps and foreign currency interest rate swaps as of December 31, 2003, 2002 and 2001 had a nominal value of SEK 10,708 million, SEK 15,721 million and
SEK 16,595 million, respectively.

TeliaSonera
Finland's borrowings are denominated in EUR. The portfolio of TeliaSonera Finland's interest rate swaps as of December 31, 2003, 2002 and 2001 had a nominal value of
EURmillion, EUR 1,424 million and EUR 2,207 million, respectively. TeliaSonera Finland's portfolio of interest options (cap) as of December 31, 2003, 2002 and 2001
had a nominal value of EUR 40 million, EUR 170 million and EUR 270 million, respectively.

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As
of the balance sheet date, the TeliaSonera Group's long-term loan portfolio was composed of the following currencies, with Swedish krona equivalents based on swap
contracts.

|                  |  | December 31,
|----------------- |  | ------------
|
|
|
|Swapped into SEK  |  |             
|EUR               |  | 5.9         
|DEM               |  |            
|GBP               |  |            
|JPY               |  | 3.8         
|                  |  |             
|Total SEK million |  | 5.9         
|Swapped into EUR  |  |             
|USD               |  | 3.6         
|LTL               |  |            
|LTL               |  |            
|                  |  |             
|Total SEK million |  | 3.6         
|Non-swapped       |  |             
|SEK               |  | 4.8         
|EUR               |  | 4.3         
|NOK               |  | 5.0         
|DKK               |  | 4.5         
|LKR               |  |            
|LVL               |  | 5.0         
|USD               |  |            
|                  |  |             
|Total SEK million |  |             
|                  |  |             
|Total SEK million |  |             

Financial risk management

Foreign exchange risk

Foreign exchange risk is the risk that fluctuations in exchange rates will adversely affect items in the Group's income statement, balance sheet and/or cash
flows. Foreign exchange risk can be divided into transaction exposure and conversion exposure. Transaction exposure is the risk that arises from net inflow or outflow of a foreign currency required by
operations (exports and imports) and financing (interest and amortization). Conversion exposure is the risk that arises from equity in a foreign subsidiary or associated company that is denominated in
a foreign currency and any goodwill arising from acquisitions.

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Transaction exposure

Net foreign exchange outflow (expressed as equivalent value in SEK million) on a full-year basis was distributed as follows in the Group's Swedish,
Finnish, Norwegian and Danish operations, respectively.

|                  |  | January-December
|----------------- |  | ----------------
|
|
|
|USD               |  | 556             
|EUR               |  | 523             
|GBP               |  | 70              
|SEK               |  |                
|DKK               |  | 41              
|NOK               |  | 23              
|Other currencies  |  | 18              
|                  |  |                 
|Total net outflow |  | 1,231           
|gross outflow    |  | 2,876           
|gross inflow     |  | -1,645          
|                  |  |                 

For
2001, recorded EUR values also include other EMU currencies.

The
operational need to net purchase foreign currency, is primarily due to settlement deficits in international telecom traffic and the import of equipment and supplies.

Emanating
from the operations in the above-mentioned countries, the negative impact on Group pre-tax income would be approximately SEK 12 million on a
full-year basis, should the Swedish krona weaken by one percentage point against all of the transaction currencies, assuming an operational transaction exposure equivalent to that in 2003,
and provided that no hedging measures were taken and not including any potential impact on income due to currency translation of other income statement items. Applying the same assumptions, the
positive impact on income would be approximately SEK 7 million on a full-year basis, should the euro weaken by one percentage point against all of the transaction currencies.

The
TeliaSonera Group's operational transaction exposure is not significant at present, but it is expected to increase over time. In order to limit earnings fluctuation, the general
policy is normally to hedge the majority of known operational transaction exposure up to 12 months into the future. This hedging is primarily initiated via forward exchange contracts and refers
to invoiced transactions. Financial flows, however, are usually hedged until maturity, even if that is longer than 12 months.

Foreign
currency interest rate swaps are normally used to hedge financial flows such as loans and investments longer than one year, while shorter terms are hedged using currency swaps or
forward exchange contracts. Currency options are also used from time to time.

F-68

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Conversion exposure

TeliaSonera's conversion exposure has increased significantly due to the merger with Sonera Oyj, and is expected to continue to grow due to on-going
expansion of TeliaSonera's operations outside of Sweden. TeliaSonera does not typically hedge its conversion exposure, unless the exposure would be short-term and relate to a large amount
of a freely convertible foreign currency of a country with smoothly functioning financial markets.

Net
foreign assets are distributed as follows.

|                 |  | December 31,
|---------------- |  | ------------
|
|
|EUR              |  | 60,320      
|NOK              |  | 26,156      
|TRL              |  | 10,428      
|LTL              |  | 6,009       
|USD              |  | 5,592       
|LVL              |  | 3,081       
|EEK              |  | 1,069       
|DKK              |  | 1,021       
|AZM              |  | 974         
|KZT              |  | 756         
|GBP              |  | 587         
|LKR              |  | 134         
|CZK              |  | 157         
|UGX              |  | 110         
|PLN              |  |            
|Other currencies |  | -20         
|                 |  |             
|Total            |  | 116,374     
|of which hedged  |  |            
|                 |  |             

For
2001, recorded EUR values also include other EMU currencies.

If
the Swedish krona weakened by one percentage point against all of the currencies related to net foreign assets, the positive impact on Group equity would be approximately SEK
1,200 million, based on the exposure as of December 31, 2003 and not including any potential equity impact due to TeliaSonera's operational need to net purchase foreign currency or to
currency translation of other income statement items.

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Foreign-exchange derivatives

As of December 31, 2003, TeliaSonera's portfolio of foreign currency interest rate swaps represented the following currencies and maturities. Amounts
indicated include underlying principal and accrued interest.

|SEK in millions                                |  | 2004 |  | 2005   |  | 2006   |  | 2007 |  | 2008 |  | Later
years |  | Total 
|---------------------------------------------- |  | ---- |  | ------ |  | ------ |  | ---- |  | ---- |  | ----------- |  | ------
|Foreign currency interest rate swaps, received |  |      |  |        |  |        |  |      |  |      |  |             |  |       
|Buy EUR                                        |  |     |  | 2,931  |  | 2,560  |  |     |  |     |  | 1,503       |  | 6,994 
|Buy DEM                                        |  | 547  |  |       |  |       |  |     |  |     |  |            |  | 547   
|Buy JPY                                        |  |     |  |       |  |       |  |     |  |     |  | 202         |  | 202   
|Buy USD                                        |  | 25   |  | 8      |  | 8      |  |     |  |     |  |            |  | 41    
|                                               |  |      |  |        |  |        |  |      |  |      |  |             |  |       
|Total, received                                |  | 572  |  | 2,939  |  | 2,568  |  |     |  |     |  | 1,705       |  | 7,784 
|Foreign currency interest rate swaps, paid     |  |      |  |        |  |        |  |      |  |      |  |             |  |       
|Total                                          |  | -526 |  | -2,693 |  | -2,648 |  |     |  |     |  | -1,643      |  | -7,510
|                                               |  |      |  |        |  |        |  |      |  |      |  |             |  |       
|Net position                                   |  | 46   |  | 246    |  | -80    |  |     |  |     |  | 62          |  | 274   

As
of December 31, 2003, the TeliaSonera Group's portfolio of other foreign exchange derivatives hedging loans, investments, and operational transaction exposures represented the
following currencies and maturities. Amounts indicated include underlying principal.

|SEK in millions |  | 2004    |  | 2005 |  | 2006 |  | Later years |  | Total  
|--------------- |  | ------- |  | ---- |  | ---- |  | ----------- |  | -------
|Sell DKK        |  | 2,651   |  |     |  |     |  |            |  | 2,651  
|Sell NOK        |  | 760     |  |     |  |     |  |            |  | 760    
|Sell USD        |  | 569     |  | 5    |  |     |  |            |  | 574    
|Sell EUR        |  | 493     |  | 11   |  | 5    |  |            |  | 509    
|Sell GBP        |  | 206     |  |     |  |     |  |            |  | 206    
|Sell CZK        |  | 152     |  |     |  |     |  |            |  | 152    
|Sell LVL        |  | 86      |  |     |  |     |  |            |  | 86     
|Sell CHF        |  | 64      |  |     |  |     |  |            |  | 64     
|Sell PLN        |  | 43      |  |     |  |     |  |            |  | 43     
|Sell LTL        |  | 12      |  |     |  |     |  |            |  | 12     
|Sell HUF        |  | 10      |  |     |  |     |  |            |  | 10     
|Sell SGD        |  | 4       |  |     |  |     |  |            |  | 4      
|Sell HKD        |  | 4       |  |     |  |     |  |            |  | 4      
|                |  |         |  |      |  |      |  |             |  |        
|Sell total      |  | 5,054   |  | 16   |  | 5    |  |            |  | 5,075  
|Buy EUR         |  | -10,915 |  |     |  |     |  |            |  | -10,915
|Buy NOK         |  | -3,516  |  |     |  |     |  |            |  | -3,516 
|Buy GBP         |  | -485    |  |     |  |     |  |            |  | -485   
|Buy USD         |  | -106    |  |     |  |     |  |            |  | -106   
|Buy CHF         |  | -7      |  |     |  |     |  |            |  | -7     
|Buy PLN         |  | -1      |  |     |  |     |  |            |  | -1     
|                |  |         |  |      |  |      |  |             |  |        
|Buy total       |  | -15,030 |  |     |  |     |  |            |  | -15,030
|                |  |         |  |      |  |      |  |             |  |        
|Net position    |  | -9,976  |  | 16   |  | 5    |  |            |  | -9,955 

F-70

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Interest rate risk

The TeliaSonera Group's sources of funds are primarily shareholders' equity, cash flows from operating activities, and borrowing. The interest-bearing borrowing
exposes the Group to interest rate risk.

Interest
rate risk is the risk that a change in interest rates will negatively affect the Group's net interest income and/or cash-flows. TeliaSonera's financial policy
provides guidelines for interest rates and the average maturity of borrowings. The Group aims at balancing the estimated running cost of borrowing and the risk of significant negative impact on
earnings, should there be a sudden, major change in interest rates. The Group's policy is that the duration of interest of the debt portfolio should be from six months to four years.

If
the available loan form does not directly reflect the desired loan portfolio structure, various forms of derivative instruments are used to adapt the structure in terms of duration
and currency. This adaptation is achieved chiefly through interest rate swaps and foreign currency interest rate swaps.

As
of December 31, 2003, TeliaSonera AB and TeliaSonera Finland Oyj had interest-bearing debt of SEK 28,733 million with duration of interest of approximately
1.5 years, including derivatives. The volume of loans exposed to changes in interest rates over the next 12-month period was at the same date approximately SEK 9,200 million,
assuming that existing loans maturing during the year are refinanced and after accounting for derivatives. The exact effect of a change in interest rates on the financial net stemming from this debt
portfolio depends on the timing of maturity of the debt as
well as reset dates for floating rate debt, and that the volume of loans may vary over time, thereby affecting the estimate. Fair value of the loan portfolio would, however, change by approximately
SEK 450 million, should the level in market interest rates make a parallel shift of one percentage point, and assuming the same volume of loans and a similar duration on those loans as
per year-end 2003.

TeliaSonera
AB has designated certain interest rate swaps as cash flow hedges to hedge against changes in the amount of future cash flows related to interest payments on existing
liabilities. Hedge ineffectiveness related to outstanding cash flow hedges was immaterial and recorded to earnings during the year. Net changes in fair value recorded in shareholders' equity are
presented in section "Fair value reserve" of note "Shareholders' Equity, Earnings per Share." There were no cash flow hedges discontinued during the year because it was probable that the original
forecasted transaction would not occur by the end of the originally specified time period.

As
of December 31, 2003, the TeliaSonera Group's portfolio of interest rate swap contracts was composed as follows. Amounts indicated include underlying principal and accrued
interest.

|SEK in millions        |  | 2004 |  | 2005 |  | 2006  |  | 2007 |  | 2008 |  | Later
years |  | Total
|---------------------- |  | ---- |  | ---- |  | ----- |  | ---- |  | ---- |  | ----------- |  | -----
|Interest received      |  |      |  |      |  |       |  |      |  |      |  |             |  |      
|Fixed interest rate    |  |     |  | 106  |  | 2,072 |  |     |  |     |  |            |  | 2,178
|Floating interest rate |  |     |  | 151  |  |      |  | 503  |  |     |  | 660         |  | 1,314
|                       |  |      |  |      |  |       |  |      |  |      |  |             |  |      
|Total                  |  |     |  | 257  |  | 2,072 |  | 503  |  |     |  | 660         |  | 3,492
|Interest paid          |  |      |  |      |  |       |  |      |  |      |  |             |  |      
|Fixed interest rate    |  |     |  | 161  |  |      |  | 557  |  |     |  | 724         |  | 1,442
|Floating interest rate |  |     |  | 101  |  | 1,983 |  |     |  |     |  |            |  | 2,084
|                       |  |      |  |      |  |       |  |      |  |      |  |             |  |      
|Total                  |  |     |  | 262  |  | 1,983 |  | 557  |  |     |  | 724         |  | 3,526

F-71

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Pension obligation risk

As of December 31, 2003, TeliaSonera had pension obligations, which net present value amounted to SEK 16,977 million (see note "Provisions for
Pensions and Employment Contracts"). The approximate impact on those obligations is SEK 2,200 million, should the weighted average discount rate be altered by one percentage point from the
approximately 5.5 percent which is currently used. Such an increase in the pension obligations, were interest rates to fall, should be partly offset by a positive impact from the
fixed income assets in the pension funds. Based on the duration of the Swedish and Finnish pension fund's fixed income portfolios (including index-linked bonds) as of December 31, 2003, and
assuming that the value of the other assets in the pension funds were unchanged, a similar reduction in interest rates is estimated to increase the value of the pension funds assets by some SEK
700 million.

To
secure these obligations TeliaSonera has pension funds, with plan assets equivalent to SEK 14,295 million based on market values as of December 31, 2003. The
pension funds assets are used as prime funding source for the pension obligations, and consisted of approximately 62 percent fixed income instruments and approximately 38 percent shares
and other equity instruments at year-end 2003. The expected return on plan assets is approximately 6.5 percent annually. The portion of the Swedish liabilities not covered by plan
assets and the taxed reserve for employment contracts are recorded as provisions in the balance sheet. Pension obligations not covered by plan assets are secured through an external credit guarantee.
Except for the taxed reserve for employment contracts, the Group's pension obligations are thus secured through pension funds and/or external credit guarantees.

Financing risk

TeliaSonera's aggregate borrowings usually have a longer maturity than duration (principal is fixed longer than interest rates). This allows the Group to obtain
the desired interest rate risk without having to assume a high financing risk. The Group's policy is that the average maturity of borrowings should normally exceed 2 years. In order to reduce
financing risk, the Group aims to spread loan maturity dates over a longer period.

TeliaSonera
AB enjoys a strong credit rating with the rating agencies Standard & Poor's and Moody's. Standard & Poor's has assigned TeliaSonera AB a credit rating of
A-1 for short-term borrowing and a rating of A for long-term borrowing, with a stable outlook. Moody's has given TeliaSonera AB a P-1 for
short-term borrowing and A2 for long-term borrowing, with a negative outlook. These ratings represent a solid investment grade level and are thus expected to allow TeliaSonera
continued good access to the financial markets.

TeliaSonera
finances its operations chiefly by borrowing under its uncommitted open-market financing programs directly in Swedish and international money markets and capital
markets. TeliaSonera AB and TeliaSonera Finland Oyj also use bank financing, which represented approximately 5 percent of the Group's total borrowing as of December 31, 2003. The
open-market financing programs provide a cost-effective and flexible alternative to bank financing. Most of the open-market borrowing is at fixed interest rates,
along with some floating rate notes.

Credit risk

TeliaSonera accepts only creditworthy counterparts for financial transactions such as interest rate swaps, foreign currency swaps and other transactions in
derivatives. TeliaSonera requires each counterpart to have an approved rating and an International Swaps and Derivatives Association, Inc.

F-72

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(ISDA)
agreement. The permitted exposure to each counterpart depends on the rating of that counterpart.

As
of December 31, 2003, the aggregate exposure to counterparts in derivatives was SEK 168 million, calculated as a net claim on each counterpart. Any surplus cash
is deposited in banks or invested in short-term interest-bearing instruments with good credit ratings. The permitted exposure to each counterpart depends on the rating of that counterpart.

The
credit risk with respect to TeliaSonera's trade receivables is diversified among a large number of customers, both private individuals and companies in various industries. Solvency
information is required for credit sales to minimize the risk of unnecessary bad debt expense and is based on group-internal information on payment behavior, if necessary completed by credit and
business information from external sources. Bad debt expense in relation to consolidated net sales was approximately 0.7 percent, 1.4 percent and 1.6 percent in 2003, 2002 and
2001, respectively.

Insurable risks

The insurance cover is governed by corporate guidelines. The business units and other units being responsible for assessing the risks decide the extent of actual
cover. In the Swedish operations, the Group's in-house insurance company TeliaSonera Försäkring AB manages all non-life and life insurances. Its
risks are in part reinsured in the international reinsurance market.

31.   Contingent Assets, Collateral Pledged and Contingent Liabilities

Determination of the treatment of contingent assets and liabilities is based on management's view of the expected outcome of the applicable contingency.
Management consults with legal counsel on matters related to litigation and other experts both within and outside the company with respect to matters in the ordinary course of business. A provision is
recognized if an adverse outcome is probable and the amount is estimable. If the likelihood of an adverse outcome is less than probable but

F-73

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reasonably
possible, or an estimate is not determinable, the matter is disclosed provided that the contingency is material.

|                                                          |  | December 31,
|--------------------------------------------------------- |  | ------------
|
|
|Contingent assets                                         |  |            
|Collateral pledged                                        |  |             
|For derivative instruments:                               |  |             
|Blocked funds in bank accounts                            |  |            
|For guarantee provisions:                                 |  |             
|Blocked funds in bank accounts                            |  | 1,168       
|For deposits from customers:                              |  |             
|Blocked funds in bank accounts                            |  | 91          
|For off-balance sheet items:                              |  |             
|Blocked funds in bank accounts                            |  |            
|For long-term liabilities to credit institutions:         |  |             
|Real estate mortgages                                     |  | 20          
|Chattel mortgages                                         |  | 262         
|Current receivables                                       |  | 36          
|Shares in Turun Puhelin Oy                                |  | 570         
|Shares in Suntel Ltd.                                     |  |            
|Shares in Svenska UMTS-nät AB                             |  | 489         
|Shares in OAO MegaFon                                     |  | 153         
|                                                          |  |             
|Total                                                     |  | 2,789       
|Contingent liabilities                                    |  |             
|Credit guarantees on behalf of Svenska UMTS-nät AB        |  | 363         
|Credit guarantees on behalf of OAO MegaFon                |  | 338         
|Credit guarantees on behalf of other associated companies |  | 25          
|Performance guarantees on behalf of Xfera Móviles S.A.    |  | 1,159       
|Guarantees on behalf of Ipse 2000 S.p.A.                  |  |            
|Other credit and performance guarantees, etc.             |  | 1,038       
|FPG/PRI, other pension guarantees                         |  | 176         
|                                                          |  |             
|Total                                                     |  | 3,099       

As
of December 31, 2003, total contingent liabilities represented the following maturities.

|SEK in millions        |  | 2004 |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | Later
years |  | Total
|---------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Contingent liabilities |  | 648  |  | 543  |  | 391  |  | 135  |  | 971  |  | 411         |  | 3,099

Some
loan covenants agreed limit the scope for divesting or pledging certain assets.

TeliaSonera
has a dispute with Tele2 and Vodafone concerning interconnect prices in Sweden. TeliaSonera believes that it has recorded sufficient provisions.

F-74

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For all guarantees, except the credit guarantee on behalf of TeliaSonera's 50 percent owned associated company Svenska UMTS-nät
AB, stated amounts equal the maximum potential amount of future payments that TeliaSonera could be required to make under the respective guarantee. As security for certain amounts borrowed by Svenska
UMTS-nät under a third-party credit facility totaling SEK 7,000 million, TeliaSonera and Tele2, the other shareholder of Svenska UMTS-nät,
have each severally but not jointly issued guarantees of a maximum of SEK 3,500 million to the lenders and granted pledges of their shares in Svenska UMTS-nät. The
indebtedness under the credit facility may become due on an accelerated basis, under certain circumstances, including if either TeliaSonera or Tele2 ceases to hold, directly or indirectly,
50 percent of the company, unless the lenders provide their advance consent. TeliaSonera is not contractually required to provide any further capital contributions to or guarantees in favor of
Svenska UMTS-nät. As of December 31, 2003, Svenska UMTS-nät had, under the credit facility, borrowed SEK 725 million, of which
TeliaSonera guarantees 50 percent.

As
of December 31, 2003, TeliaSonera has recorded all of its commitments on behalf of Ipse 2000 S.p.A. in the balance sheet as provisions for guarantee commitments. Ipse's 3G
license payments to the Italian government and the rental payments for base station sites have been secured by bank guarantees. According to an agreement with the bank, Ipse and its shareholders,
including TeliaSonera, have given cash collateral for the remaining license payments in 2004 and onwards. TeliaSonera's part of the cash collateral amounts to EUR 128.7 million, equivalent to
SEK 1,168 million.

As
of December 31, 2003, under the shareholders' agreement between the shareholders of Xfera, TeliaSonera has an existing capital commitment to Xfera of EUR 332 million,
equivalent to SEK 3,013 million, through 2004 (see section "Other contractual obligations" in note "Leasing Agreements and Contractual Obligations"). Should TeliaSonera breach its
obligations under the shareholders' agreement, the non-breaching shareholders have the right to purchase all of TeliaSonera's shares at fair value. Management believes that TeliaSonera's
investments pursuant to its contractual capital commitment will enable Xfera to meet the performance requirements in relation to its UMTS license. Therefore, management does not expect that
TeliaSonera will have to make any additional significant payments with respect to its performance guarantees on behalf of Xfera commitments. The Spanish government reduced its requirements on bank
guarantees for Xfera during 2003. The counter guarantees issued by TeliaSonera to the Spanish state were thereby reduced from EUR 383 million to EUR 98 million.

TeliaSonera
anticipates that the arbitration proceedings related to Xfera shares held by Vodafone will result in a ruling whereby TeliaSonera will purchase an additional
2.2 percent stake in Xfera, paying approximately EUR 9.5 million in purchase price, interest and arbitration expenses. Accordingly, the counter guarantees are anticipated to increase by
EUR 11 million to approximately EUR 110 million and the capital commitment under the shareholder's agreement by EUR 36 million to EUR 368 million. TeliaSonera
anticipates its commitment to invest in Xfera to be reduced as a result of the ongoing negotiations between the owners.

In
December 1998, TeliaSonera's subsidiary TeliaSonera Finland Oyj (formerly Sonera Oyj) entered into a cross-border finance lease-leaseback agreement under which TeliaSonera
Finland leased some of its mobile telecommunications network equipment ("Head Lease") to a group of U.S. equity trusts which simultaneously leased the equipment back to TeliaSonera Finland ("Back
Lease"). The ownership of the equipment, total book value of which was EUR 19 million, EUR 40 million and EUR 64 million as of December 31, 2003, 2002 and 2001,
respectively, is retained with TeliaSonera Finland. Both the Head Lease receivables and the Back Lease obligations were settled at the inception of the lease agreements, and TeliaSonera Finland
received a net cash consideration of USD 11 million

F-75

---

(EUR 9 million)
which is presented in the balance sheet as an advance payment received and recognized in income as other financial income over the lease term. No other cash payments are
currently expected to be made by TeliaSonera Finland under the lease agreements. The agreement is valid for 15 years, but TeliaSonera Finland has an option to terminate the agreement after
11 years after the inception of the agreement. Separate financial institutions are taking care of the annual repayments received by the equity investors and debt financiers that are
participating in the agreement. The funds securing the repayments to equity investors have been invested in U.S. Treasury and other similar bonds, and a bank deposit has been made to secure the
repayments of debt financing. At the inception of the agreement, the total amount of funds invested was USD 224 million.

32.   Legal Disputes and Regulatory Proceedings

In its normal course of business, TeliaSonera is involved in a number of legal disputes and regulatory proceedings, mainly involving claims arising out of
commercial and competition law issues and regulatory matters. In particular, TeliaSonera is presently involved in various disputes regarding termination fees in mobile and fixed networks as well as in
investigations from competition authorities regarding pricing of broadband services. Pending legal, arbitration or regulatory proceedings that are most relevant to TeliaSonera are described briefly in
this section.

In
May 2002, the parties to Lattelekom SIA arbitration stated their claims. Tilts Communications A/S, TeliaSonera's wholly-owned Danish subsidiary, claims approximately EUR
152 million from the Republic of Latvia as compensation for losses sustained as a consequence of the shortening by the Republic of Latvia of the twenty-year exclusivity period
granted to Lattelekom in 1994, and failure by the Republic of Latvia to ensure that telecommunications tariffs were fixed at contractually agreed
levels. The Republic of Latvia has quantified counterclaims of approximately EUR 1,040 million, principally arising from the alleged failure by Tilts to digitalize the fixed network in Latvia
and certain other alleged breaches by Tilts of its obligations. The parties to the dispute have on March 3, 2004 settled the dispute and withdrawn all previous claims. TeliaSonera's current
holding in Lattelekom is 49 percent.

In
November 2002, TeliaSonera's subsidiary TeliaSonera Finland Oyj (formerly Sonera Oyj) was served a writ by Broadband Mobile ASA bankruptcy estate, claiming a total of NOK
332 million plus interest from the shareholders of Broadband Mobile (TeliaSonera 50 percent). In December 2002, TeliaSonera filed a response to the writ with a district court in
Norway. The hearing of the case is not expected to take place until the end of 2004.

Post-
och Telestyrelsen (PTS, the Swedish National Post and Telecom Agency) has upheld a claim brought by Tele2 that TeliaSonera must reimburse Tele2 for all mobile traffic
transferred by TeliaSonera to Tele2's mobile network. PTS also ruled that TeliaSonera is in its turn entitled to be reimbursed from Tele2 and the other Swedish operators who have transferred mobile
traffic onto TeliaSonera's network. After prevailing in the lower administrative court in this matter, Tele2 has brought an action in the Swedish civil courts seeking reimbursement. TeliaSonera
subsequently paid to Tele2 certain amounts for the mobile traffic transfers at issue in this matter. TeliaSonera has appealed the decision of PTS to the Swedish Administrative Court of Appeal, which
has finally decided that TeliaSonera must reimburse Tele2 for all mobile traffic transferred by TeliaSonera to Tele2's mobile network. The court, however, remanded to PTS the issue of the level of the
interconnection fee and the issue regarding from which date the reimbursement should be done. TeliaSonera will be required to reimburse Tele2 as well as other mobile operators in Sweden for such
traffic transferred by TeliaSonera onto their networks. TeliaSonera would in turn be entitled to claim corresponding amounts from other operators. TeliaSonera will, however, assume a credit risk.

F-76

---

33.   Cash Flow Information

Financial items

Interest received and interest paid for each year was as follows.

January-DecemberSEK in millions2003

2002

2001Interest received

1,060

1,054

1,558Interest paid

-1,622

-1,772

-2,060Net position

-562

-718

-502


Income taxes

Income taxes paid for the years 2003, 2002 and 2001, totaled SEK 1,308 million, SEK 122 million and SEK 631 million, respectively.

Acquisitions and divestitures

The TeliaSonera Group is continually restructured through the acquisition and divestiture of subsidiaries and lines of business as well as associated companies
and companies outside the Group. The market value of assets and liabilities assumed in subsidiaries and the total cash flow from acquisitions were broken down as follows.

|                                                              |  | January-December
|------------------------------------------------------------- |  | ----------------
|
|
|Intangible fixed assets                                       |  | 1,735           
|Tangible fixed assets                                         |  | 577             
|Financial fixed assets, accounts receivable, inventories etc. |  | 1,316           
|Cash and cash equivalents                                     |  | 223             
|Minority interests                                            |  | 1,400           
|Provisions                                                    |  | -237            
|Long-term liabilities                                         |  | -856            
|Current liabilities                                           |  | 232             
|                                                              |  |                 
|Total purchase price                                          |  | 4,390           
|Less purchase price consideration in terms of new share issue |  | -2,051          
|Less cash and cash equivalents in acquired group companies    |  | -223            
|                                                              |  |                 
|Net cash flow from acquired group companies                   |  | 2,116           
|Purchase price for other acquisitions                         |  | 72              
|                                                              |  |                 
|Total cash flow from acquisitions                             |  | 2,188           

F-77

---

The
market value of assets and liabilities transferred in subsidiaries and the total cash flow from divestitures were broken down as follows.

|                                                              |  | January-December
|------------------------------------------------------------- |  | ----------------
|
|
|Intangible fixed assets                                       |  | 2,067           
|Tangible fixed assets                                         |  | 1,154           
|Financial fixed assets, accounts receivable, inventories etc. |  | 509             
|Cash and cash equivalents                                     |  | 82              
|Provisions                                                    |  | -108            
|Long-term liabilities                                         |  | -229            
|Current liabilities                                           |  | -806            
|                                                              |  |                 
|Total sales price                                             |  | 2,669           
|Less cash and cash equivalents in divested group companies    |  | -82             
|Repayment of loans in group companies divested                |  | 375             
|                                                              |  |                 
|Net cash flow from divested group companies                   |  | 2,962           
|Sale price for other divestitures                             |  | 940             
|                                                              |  |                 
|Total cash flow from divestitures                             |  | 3,902           

Non-cash transactions

Sonera

The completion of the merger with Sonera Oyj was mainly effected through an exchange of shares (see note "Merger with Sonera Oyj").

Vehicles

TeliaSonera leases vehicles through financial leasing, primarily from GE Capital. New acquisitions during the year entailed non-cash investments of
SEK 47 million.

Infrastructure/capacity swaps

Within the international carrier operations, swap contracts for infrastructure and capacity are signed with other carriers. Until both parties have fulfilled all
deliveries as agreed, the value provided may differ from the value received. As of December 31, 2003, no such unbalance was recognized.

AUCS

Claims of SEK 157 million on the Dutch associated company AUCS Communications Services v.o.f. were converted to equity in the company during the year.

F-78

---

Cash and cash equivalents

Investments with maturities up to and including three months are combined with Cash and bank to produce the item Cash and cash equivalents, as follows.

December 31,SEK in millions2003

2002

2001Investments

8,380

2,634

7,405Cash and bank

3,689

2,831

1,518Cash and cash equivalents

12,069

5,465

8,923


Other cash flow information

Cash flow before financing activities, non-cash transactions and cash/non-cash effects of restructuring programs are broken down by
business segment as follows.

|                                              |  | January-December 2003
|--------------------------------------------- |  | ---------------------
|
|TeliaSonera Sweden                            |  | 12,950               
|TeliaSonera Finland                           |  | 3,844                
|TeliaSonera Norway,
Denmark, Baltic Countries |  | 1,158                
|TeliaSonera International                     |  | -1,588               
|Holding and Corporate                         |  | 6,636                
|                                              |  |                      
|Total                                         |  | 23,000               

F-79

---

Investments
by class of asset, changes in net interest-bearing liabilities and changes in capital employed and operating capital over the last eight-year period are recorded
below.

|                     |                                     | January-December             
|-------------------- | ----------------------------------- | -----------------------------
|
|
|CAPEX                |                                     | 9,373                        
|                     | Other intangible assets             |                              
|                     | Real estate properties              |                              
|                     | Machinery and equipment             |                              
|                     |                                     | Fixed networks               
|                     |                                     | Mobile networks              
|                     |                                     | Other machinery and equipment
|Acquisitions         |                                     | 2,745                        
|                     | Goodwill and fair value adjustments |                              
|                     | Shares and participations           |                              
|                     |                                     |                              
|Total (Notes 34, 35) |                                     | 12,118                       

Investments
are broken down by business segments in the notes "Profit Center Breakdown" and "Product Area Breakdown."

|                                                          |  | December 31,
|--------------------------------------------------------- |  | ------------
|
|
|Opening balance                                           |  | 25,034      
|Increase (+)/Decrease (-) in long-term loans              |  | -6,257      
|Increase (+)/Decrease (-) in short-term loans             |  | -7,921      
|Increase (-)/Decrease (+) in short-term investments       |  | -4,832      
|Increase (-)/Decrease (+) in cash and bank                |  | -858        
|Change in net debt                                        |  | -19,868     
|Increase (-)/Decrease (+) in interest-bearing receivables |  | 3,383       
|Change in net borrowings                                  |  | -16,485     
|Increase (+)/Decrease (-) in pension provisions           |  | 298         
|Change in net interest-bearing liability                  |  | -16,187     
|Closing balance                                           |  | 8,847       
|                                                          |  |             

F-80

---

|                                                  |                                        | December 31,
|------------------------------------------------- | -------------------------------------- | ------------
|
|
|Fixed assets                                      |                                        | 153,042     
|Current assets                                    |                                        | 37,018      
|                                                  | Non-interest-bearing liabilities       |             
|                                                  | Non-interest-bearing provisions        |             
|Non-interest-bearing financing                    |                                        | -43,150     
|Dividend (for 2003 as proposed by the Board)      |                                        | -4,675      
|Total capital employed                            |                                        | 142,235     
|Shareholders' equity                              |                                        | 112,393     
|Less dividend (for 2003 as proposed by the Board) |                                        | -4,675      
|Minority capital                                  |                                        | 3,441       
|                                                  | Long-term interest-bearing liabilities |             
|                                                  | Current interest-bearing liabilities   |             
|                                                  | Provisions for pensions                |             
|External financing                                |                                        | 31,076      
|Total financing                                   |                                        | 142,235     
|Interest-bearing financial fixed assets           |                                        | -6,112      
|Interest-bearing current assets                   |                                        | -16,117     
|Operating capital (Notes 34, 35)                  |                                        | 120,006     
|                                                  |                                        |             

34.   Profit Center Breakdown

Effective January 1, 2003, the Group's operations are managed and reported primarily by geographical Profit Center (PC). PC consolidation is based on the
same principles as that for the Group as a whole. Intersegment transactions are based on commercial terms. Minor organizational adjustments were carried out in 2003, with operations shifted between
the existing PCs. Comparative years have been restated in order to reflect current Group management and reporting. PC Sweden, PC Finland, PC Norway, Denmark, Baltic countries (NDB; reported by
country/region) and PC International are responsible for the customer contacts, operations and the financial results within their respective geographical area. The PCs employ all operational resources
in TeliaSonera and all operational plans are managed within the PCs. PC International's geographical area covers Eurasia, Russia, Turkey and this PC is also responsible for TeliaSonera's international
carrier operations.

In
2002, the carrying value of assets related to the Danish operations within PC NDB was written down and discarded by SEK 3,033 million (see also note "Restructuring costs"). In
2002 and 2001, the carrying value of the former business area Telia International Carrier within PC International was written down by SEK 6,131 million and SEK 3,027 million,
respectively (see also note "Restructuring Costs").

TeliaSonera
Holding is responsible for the Group's non-core/non-strategic operations. The operations in TeliaSonera Holding are being gradually divested through
sales or partial divestiture.

F-81

---

Corporate
includes corporate staffs and Group-wide initiatives (programs) as well as eliminations of intersegment transfers and similar items.

Besides
net sales and operating income, principal segment control and reporting concepts are EBITDA excluding items not reflecting underlying business operations and operating capital,
respectively (see note "Definitions" and note "Reconciliation of EBITDA Excluding Items Not Reflecting Underlying Buisness Operations to Operating Income"). No income statement items below operating
income have been allocated to reportable segments.

F-82

---

TELIASONERA AB AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

January-December 2003 or December 31, 2003

|SEK in millions                                                      |                              | Sweden |         | Finland |        | Norway |        | Denmark |        | Baltic
countries |        | Eurasia |       | Russia |       | Turkey |        | International
Carrier |        | Holding |        | Corporate |         | Group  
|-------------------------------------------------------------------- | ---------------------------- | ------ | ------- | ------- | ------ | ------ | ------ | ------- | ------ | ---------------- | ------ | ------- | ----- | ------ | ----- | ------ | ------ | --------------------- | ------ | ------- | ------ | --------- | ------- | -------
|Net sales                                                            |                              | 42,364 |         | 17,697  |        | 6,081  |        | 3,278   |        | 5,881            |        | 2,742   |       |       |       | 5      |        | 4,892                 |        | 2,940   |        | -3,455    |         | 82,425 
|External net sales                                                   |                              | 41,385 |         | 17,324  |        | 6,011  |        | 3,188   |        | 5,823            |        | 2,740   |       |       |       |       |        | 3,589                 |        | 2,443   |        | -78       |         | 82,425 
|EBITDA excluding items not reflecting underlying business operations |                              | 17,637 |         | 6,738   |        | 2,499  |        | 70      |        | 2,846            |        | 1,490   |       |       |       | 1      |        | 144                   |        | 205     |        | -930      |         | 30,700 
|Items not reflecting underlying business operations                  |                              | -341   |         | -71     |        | 0      |        | 0       |        | -50              |        | 0       |       |       |       |       |        | 93                    |        | 1,703   |        | 1         |         | 1,335  
|EBITDA                                                               |                              | 17,296 |         | 6,667   |        | 2,499  |        | 70      |        | 2,796            |        | 1,490   |       | 0      |       | 1      |        | 237                   |        | 1,908   |        | -929      |         | 32,035 
|Depreciation, amortization and write-downs                           |                              | -6,481 |         | -4,757  |        | -2,076 |        | -619    |        | -2,181           |        | -601    |       |       |       |       |        | -496                  |        | -526    |        | 30        |         | -17,707
|Income from associated companies                                     |                              | -6     |         | 70      |        | 0      |        | -12     |        | 379              |        | 0       |       | 509    |       | 618    |        | 0                     |        | -1,176  |        |          |         | 382    
|Operating income                                                     |                              | 10,809 |         | 1,980   |        | 423    |        | -561    |        | 994              |        | 889     |       | 509    |       | 619    |        | -259                  |        | 206     |        | -899      |         | 14,710 
|Operating capital                                                    |                              | 20,638 |         | 44,023  |        | 22,852 |        | 2,368   |        | 12,789           |        | 3,924   |       | 2,890  |       | 12,208 |        | 714                   |        | -655    |        | -1,745    |         | 120,006
|                                                                     | of which Segment assets      |        | 34,211  |         | 47,875 |        | 24,131 |         | 4,178  |                  | 13,366 |         | 4,441 |        | 2,899 |        | 12,208 |                       | 7,040  |         | 3,258  |           | 14,223  |        
|                                                                     | of which Segment liabilities |        | -13,573 |         | -3,852 |        | -1,279 |         | -1,810 |                  | -577   |         | -517  |        | -9    |        | 0      |                       | -6,326 |         | -3,913 |           | -15,968 |        
|Equity participation in associated companies                         |                              | 492    |         | 45      |        | 0      |        | 2       |        | 2,999            |        | 0       |       | 3,028  |       | 12,208 |        | 0                     |        | 1,626   |        | 1         |         | 20,401 
|Investments                                                          |                              | 3,103  |         | 4,506   |        | 861    |        | 391     |        | 1,401            |        | 1,077   |       | 0      |       | 0      |        | 239                   |        | 481     |        | 59        |         | 12,118 
|                                                                     | of which CAPEX               |        | 3,103   |         | 2,635  |        | 861    |         | 391    |                  | 797    |         | 1,027 |        | 0     |        | 0      |                       | 239    |         | 263    |           | 57      |        
|Number of employees                                                  |                              | 10,712 |         | 6,661   |        | 722    |        | 1,030   |        | 4,741            |        | 1,024   |       | 1      |       | 3      |        | 555                   |        | 947     |        | 298       |         | 26,694 
|Average number of full-time employees                                |                              | 10,254 |         | 5,984   |        | 718    |        | 1,014   |        | 5,011            |        | 962     |       | 1      |       | 3      |        | 658                   |        | 1,320   |        | 263       |         | 26,188 
|                                                                     |                              |        |         |         |        |        |        |         |        |                  |        |         |       |        |       |        |        |                       |        |         |        |           |         |        

F-83

---

TELIASONERA AB AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

January-December 2002 or December 31, 2002 (restated)

|SEK in millions                                                      |                              | Sweden |         | Finland |        | Norway |        | Denmark |        | Baltic
countries |        | Eurasia |       | Russia |       | Turkey |        | International
Carrier |        | Holding |        | Corporate |         | Group  
|-------------------------------------------------------------------- | ---------------------------- | ------ | ------- | ------- | ------ | ------ | ------ | ------- | ------ | ---------------- | ------ | ------- | ----- | ------ | ----- | ------ | ------ | --------------------- | ------ | ------- | ------ | --------- | ------- | -------
|Net sales                                                            |                              | 43,562 |         | 1,461   |        | 5,537  |        | 2,783   |        | 578              |        | 211     |       | 2      |       |       |        | 5,306                 |        | 3,382   |        | -3,339    |         | 59,483 
|External net sales                                                   |                              | 41,683 |         | 1,443   |        | 5,482  |        | 2,593   |        | 576              |        | 211     |       | 0      |       |       |        | 4,331                 |        | 3,156   |        | 8         |         | 59,483 
|EBITDA excluding items not reflecting underlying business operations |                              | 15,896 |         | 502     |        | 2,129  |        | -1,309  |        | 207              |        | 118     |       | 0      |       |       |        | -1,285                |        | -100    |        | -466      |         | 15,692 
|Items not reflecting underlying business operations                  |                              | -919   |         | -136    |        | 4      |        | -540    |        |                 |        | 3       |       | 0      |       |       |        | -4,818                |        | 123     |        | 12        |         | -6,271 
|EBITDA                                                               |                              | 14,977 |         | 366     |        | 2,133  |        | -1,849  |        | 207              |        | 121     |       | 0      |       | 0      |        | -6,103                |        | 23      |        | -454      |         | 9,421  
|Depreciation, amortization and write-downs                           |                              | -6,938 |         | -405    |        | -2,170 |        | -3,911  |        | -196             |        | -33     |       | 0      |       |       |        | -5,957                |        | -1,232  |        | -2        |         | -20,844
|Income from associated companies                                     |                              | -4     |         | -31     |        |       |        | -4      |        | 218              |        |        |       | 51     |       | 115    |        |                      |        | 183     |        |          |         | 528    
|Operating income                                                     |                              | 8,035  |         | -70     |        | -37    |        | -5,764  |        | 229              |        | 88      |       | 51     |       | 115    |        | -12,060               |        | -1,026  |        | -456      |         | -10,895
|Operating capital                                                    |                              | 24,938 |         | 44,559  |        | 27,799 |        | 2,315   |        | 14,844           |        | 4,070   |       | 3,143  |       | 12,174 |        | -459                  |        | 2,660   |        | 1,070     |         | 137,113
|                                                                     | of which Segment assets      |        | 35,756  |         | 49,826 |        | 29,197 |         | 4,774  |                  | 15,373 |         | 4,659 |        | 3,155 |        | 12,174 |                       | 8,346  |         | 8,101  |           | 15,378  |        
|                                                                     | of which Segment liabilities |        | -10,818 |         | -5,267 |        | -1,398 |         | -2,459 |                  | -529   |         | -589  |        | -12   |        | 0      |                       | -8,805 |         | -5,441 |           | -14,308 |        
|Equity participation in associated companies                         |                              | 498    |         | 106     |        |       |        | 3       |        | 3,456            |        |        |       | 3,152  |       | 12,174 |        |                      |        | 3,638   |        |          |         | 23,027 
|Investments                                                          |                              | 4,919  |         | 30,741  |        | 1,100  |        | 957     |        | 4,224            |        | 75      |       | 1,531  |       | 8,891  |        | 1,032                 |        | 950     |        | 18        |         | 54,438 
|                                                                     | of which CAPEX               |        | 4,655   |         | 5,265  |        | 1,094  |         | 953    |                  | 693    |         | 74    |        |      |        | 0      |                       | 1,032  |         | 561    |           | 18      |        
|Number of employees                                                  |                              | 11,261 |         | 6,235   |        | 734    |        | 1,105   |        | 5,691            |        | 879     |       | 1      |       | 3      |        | 914                   |        | 2,123   |        | 227       |         | 29,173 
|Average number of full-time employees                                |                              | 11,268 |         | 601     |        | 724    |        | 1,202   |        | 519              |        | 30      |       | 2      |       | 0      |        | 769                   |        | 1,935   |        | 227       |         | 17,277 
|                                                                     |                              |        |         |         |        |        |        |         |        |                  |        |         |       |        |       |        |        |                       |        |         |        |           |         |        

F-84

---

TELIASONERA AB AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

January-December 2001 or December 31, 2001 (restated)

|SEK in millions                                                      |                              | Sweden |         | Finland |   | Norway |        | Denmark |        | Baltic
countries |       | Eurasia |   | Russia |       | Turkey |   | International
Carrier |        | Holding |        | Corporate |        | Group  
|-------------------------------------------------------------------- | ---------------------------- | ------ | ------- | ------- | - | ------ | ------ | ------- | ------ | ---------------- | ----- | ------- | - | ------ | ----- | ------ | - | --------------------- | ------ | ------- | ------ | --------- | ------ | -------
|Net sales                                                            |                              | 44,691 |         |        |   | 4,316  |        | 2,567   |        | 40               |       |        |   | 4      |       |       |   | 4,742                 |        | 11,265  |        | -10,429   |        | 57,196 
|External net sales                                                   |                              | 41,835 |         |        |   | 4,287  |        | 2,240   |        | 35               |       |        |   | 0      |       |       |   | 3,630                 |        | 5,170   |        | -1        |        | 57,196 
|EBITDA excluding items not reflecting underlying business operations |                              | 15,478 |         |        |   | 1,381  |        | -677    |        | 5                |       |        |   | 2      |       |       |   | -1,573                |        | -1,046  |        | -655      |        | 12,915 
|Items not reflecting underlying business operations                  |                              | 287    |         |        |   |       |        | 1       |        |                 |       |        |   |       |       |       |   |                      |        | 12      |        | 84        |        | 384    
|EBITDA                                                               |                              | 15,765 |         |        |   | 1,381  |        | -676    |        | 5                |       |        |   | 2      |       | 0      |   | -1,573                |        | -1,034  |        | -571      |        | 13,299 
|Depreciation, amortization and write-downs                           |                              | -6,579 |         |        |   | -1,769 |        | -658    |        | -7               |       |        |   | 0      |       |       |   | -3,582                |        | -1,378  |        | -2        |        | -13,975
|Income from associated companies                                     |                              | -5     |         |        |   |       |        | 1       |        | 195              |       |        |   | 153    |       |       |   | 0                     |        | 5,785   |        | 7         |        | 6,136  
|Operating income                                                     |                              | 9,181  |         |        |   | -388   |        | -1,333  |        | 193              |       |        |   | 155    |       |       |   | -5,155                |        | 3,373   |        | -566      |        | 5,460  
|Operating capital                                                    |                              | 29,180 |         |        |   | 26,950 |        | 6,052   |        | 3,784            |       |        |   | 1,463  |       |       |   | 8,614                 |        | 1,197   |        | -7,090    |        | 70,150 
|                                                                     | of which Segment assets      |        | 40,349  |         |  |        | 28,076 |         | 8,739  |                  | 3,793 |         |  |        | 1,463 |        |  |                       | 14,728 |         | 9,971  |           | 251    |        
|                                                                     | of which Segment liabilities |        | -11,169 |         |  |        | -1,126 |         | -2,687 |                  | -9    |         |  |        | 0     |        |  |                       | -6,114 |         | -8,774 |           | -7,341 |        
|Equity participation in associated companies                         |                              | 249    |         |        |   |       |        | 2       |        | 3,746            |       |        |   | 1,459  |       |       |   | 0                     |        | 4,471   |        | 0         |        | 9,927  
|Investments                                                          |                              | 8,762  |         |        |   | 1,057  |        | 3,063   |        | 19               |       |        |   | 353    |       |       |   | 5,018                 |        | 2,462   |        | 1         |        | 20,735 
|                                                                     | of which CAPEX               |        | 7,606   |         |  |        | 1,044  |         | 2,698  |                  | 19    |         |  |        |      |        |  |                       | 5,018  |         | 1,328  |           | 0      |        
|Number of employees                                                  |                              | 11,915 |         |        |   | 712    |        | 1,259   |        | 35               |       |        |   | 2      |       |       |   | 742                   |        | 2,267   |        | 217       |        | 17,149 
|Average number of full-time employees                                |                              | 11,802 |         |        |   | 658    |        | 1,113   |        | 35               |       |        |   | 2      |       |       |   | 636                   |        | 10,460  |        | 273       |        | 24,979 
|                                                                     |                              |        |         |         |   |        |        |         |        |                  |       |         |   |        |       |        |   |                       |        |         |        |           |        |        

F-85

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TELIASONERA AB AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

35.   Product Area Breakdown

The Group's operations are reported secondarily by product area. Consolidation by product area is based on the same principles as for the Group as a whole.

Fixed
Communications include Internet and data services and equipment sales. Other includes non-core/non-strategic operations, corporate staffs and
Group-wide initiatives (programs) as well as eliminations of intersegment transfers and similar items.

|                                             |                              | January-December or December 31,
|-------------------------------------------- | ---------------------------- | --------------------------------
|
|
|External net sales                           |                              | 35,889                          
|Depreciation, amortization and write-downs   |                              | -7,385                          
|Income from associated companies             |                              | 1,265                           
|Operating income                             |                              | 10,287                          
|Operating capital                            |                              | 85,723                          
|                                             | of which Segment assets      |                                 
|                                             | of which Segment liabilities |                                 
|Equity participation in associated companies |                              | 16,989                          
|Investments                                  |                              | 4,202                           
|                                             | of which CAPEX               |                                 
|Number of employees                          |                              | 4,987                           
|Average number of full-time employees        |                              | 4,854                           
|                                             |                              |                                 

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36.   Human Resources

Employees, salaries, and social security expenses

Divestitures and streamlining efforts in 2003 resulted in a decrease of the number of employees by 1,173 and 2,029, respectively, totaling 3,202. At the same
time, the acquisition of Auria Group added 723 employees. Hence, the net change during 2003 was a decrease by 2,479 employees to 26,694 (29,173) at year-end.

The
breakdown by business segment is presented in note "Profit Center Breakdown." In Profit Center Sweden the number of employees decreased by 549, while increasing by 426 in Profit
Center Finland. In the other reportable segments, the total number of employees decreased by 2,356, of which 950 in the Baltic countries and 1,176 in TeliaSonera Holding.

Adjusted
for operations acquired and divested, the number of employees decreased by 2,029.

The
average number of full-time employees was as follows.

|               |  | January-December
|-------------- |  | ----------------
|
|
|Sweden         |  | 11,321          
|Finland        |  | 6,408           
|Norway         |  | 738             
|Denmark        |  | 1,048           
|Lithuania      |  | 4,386           
|Latvia         |  | 632             
|Estonia        |  | 48              
|Kazakhstan     |  | 300             
|Azerbaijan     |  | 351             
|Georgia        |  | 154             
|Moldova        |  | 149             
|Russia         |  | 89              
|United Kingdom |  | 96              
|Germany        |  | 66              
|United States  |  | 53              
|Sri Lanka      |  | 198             
|Rest of world  |  | 151             
|               |  |                 
|Total          |  | 26,188          

The
Swedish operations were conducted virtually throughout the country, and operations outside Sweden in 28, 30 and 28 countries during the years 2003, 2002 and 2001, respectively.

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The number of female and male Group senior executives is as follows. Senior executives include ordinary members of boards of directors, presidents and those on
executive management teams at the corporate level, profit center level and company level.

|      |  | December 31,
|----- |  | ------------
|
|
|Women |  | 50          
|Men   |  | 224         
|      |  |             

The
data for 2002 and 2001 refer to those companies included in the Group on December 31, 2003.

Absence
due to illness, as a percentage of ordinary work hours excluding leave time and vacation, is distributed as follows in the Group's Swedish units.

|                             |                                                                                | 2003
|---------------------------- | ------------------------------------------------------------------------------ | ----
|
|
|Total absence due to illness |                                                                                | 6.6 
|                             | Absence due to illness that concerns a period of 60 consecutive days or longer |     
|                             | Total absence due to illness, men                                              |     
|                             | Total absence due to illness, women                                            |     
|                             | Total absence due to illness, employees 29 years of age and younger            |     
|                             | Total absence due to illness, employees 30-49 years of age                     |     
|                             | Total absence due to illness, employees 50 years of age and older              |     
|                             |                                                                                |     

Salaries
and other remuneration, along with social security expenses, were as follows.

|                                          |  | January-December
|----------------------------------------- |  | ----------------
|
|
|Salaries and other remuneration           |  | 8,460           
|Social security expenses                  |  |                 
|Employer's social security contributions  |  | 1,950           
|Pension expenses                          |  | 1,220           
|Contractual pensions for early retirement |  | 186             
|                                          |  |                 
|Total                                     |  | 3,356           
|                                          |  |                 
|Total                                     |  | 11,816          

Pension
expenses for all boards of directors and presidents in the TeliaSonera Group totaled SEK 23 million, SEK 39 million and SEK 43 million for the years
2003, 2002 and 2001, respectively. No pension expenses were recorded for external board members of the parent company TeliaSonera AB.

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Salaries
and other remuneration were divided between boards of directors and presidents and other employees as follows. Variable salaries were based on last year's performance.

|               |  | January-December
|-------------- |  | ----------------
|
|
|
|Sweden         |  | 40 (10          
|Finland        |  | 31 (11          
|Norway         |  | 3 (1            
|Denmark        |  | 4 (1            
|Lithuania      |  | 11 (2           
|Latvia         |  | 2 (0            
|Estonia        |  | 0 (0            
|Kazakhstan     |  | 1 (0            
|Azerbaijan     |  | 1 (0            
|Georgia        |  | 0 (0            
|Moldova        |  | 1 (0            
|Russia         |  | 0 (0            
|United Kingdom |  | 3 (0            
|Germany        |  | 2 (0            
|United States  |  | 2 (0            
|Sri Lanka      |  | 1 (0            
|Rest of world  |  | 6 (0            
|               |  |                 
|Total          |  | 108 (25         

Remuneration to corporate officers

Policies

As resolved by the Annual General Meeting, remuneration is paid to the chairman of the Board and directors in the amount of SEK 750,000 per year to the chairman,
SEK 550,000 per year to the vice chairman and SEK 400,000 per year to each elected director. No separate remuneration is paid to directors for committee work. Directors appointed as employee
representatives are not remunerated.

Remuneration
to the Chief Executive Officer (CEO) and other corporate officers consists of a base salary, certain taxable benefits, variable salary, and pension benefits. Employee stock
options have been allotted to other corporate officers on terms equal to those applicable to other employees. "Other corporate officers" refers to the seven individuals who, along with the CEO and the
deputy CEO, constituted TeliaSonera group executive management on December 31, 2003.

Variable
salary to the CEO and the deputy CEO is capped at an amount equal to 50 percent of the base salary. For other corporate officers, the variable salary is capped at
35 percent of the base salary. Variable salary is based on the financial performance of the group, financial performance in each officer's area of responsibility and individual performance
objectives.

Remuneration
to the CEO, the deputy CEO and other corporate officers as described above is paid as part of each individual's total remuneration package.

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Remuneration and other benefits during the year

|SEK                                          |  | Base salary/board
remuneration |  | Variable
salary |  | Other
benefits |  | Pension
expense |  | Financial
instruments |  | Other remuneration |  | Total     
|-------------------------------------------- |  | ------------------------------ |  | --------------- |  | -------------- |  | --------------- |  | --------------------- |  | ------------------ |  | ----------
|Chairman of the Board                        |  | 629,879                        |  |                |  |               |  |                |  |                      |  |                   |  | 629,879   
|Chief Executive Officer                      |  | 6,067,200                      |  | 3,000,000       |  | 656,083        |  | 3,585,701       |  |                      |  |                   |  | 13,308,984
|Deputy Chief Executive Officer               |  | 5,226,356                      |  | 1,294,659       |  |               |  | 2,390,501       |  |                      |  |                   |  | 8,911,516 
|Other corporate officers (seven individuals) |  | 19,012,085                     |  | 4,918,672       |  | 4,039,823      |  | 8,662,552       |  |                      |  |                   |  | 36,633,132
|                                             |  |                                |  |                 |  |                |  |                 |  |                       |  |                    |  |           
|Total                                        |  | 30,935,520                     |  | 9,213,331       |  | 4,695,906      |  | 14,638,754      |  |                      |  |                   |  | 59,483,511

Comments
on the table:



F-90

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Stock options

In exchange for their Sonera warrants, the deputy CEO and two Finnish other corporate officers were granted TeliaSonera warrants in connection with the merger
and, as of December 31, 2003, held the following number of warrants.

|            |  | Number of TeliaSonera warrants |  |         |  |       
|----------- |  | ------------------------------ |  | ------- |  | ------
|
|2002/2005:A |  | 255,000                        |  | 117,500 |  | 71.62 
|2002/2008:A |  |                               |  | 75,000  |  | 347.38
|2002/2008:B |  |                               |  | 75,000  |  | 347.38
|2002/2008:C |  |                               |  | 150,000 |  | 347.38
|2002/2010:A |  | 100,000                        |  | 41,667  |  | 49.09 
|2002/2010:B |  | 100,000                        |  | 41,667  |  | 49.09 
|2002/2010:C |  | 200,000                        |  | 83,334  |  | 49.09 
|2002/2010:D |  | 40,000                         |  | 40,000  |  | 33.64 
|2002/2010:E |  | 40,000                         |  | 40,000  |  | 33.64 
|2002/2010:F |  | 80,000                         |  | 80,000  |  | 33.64 
|            |  |                                |  |         |  |       

On
February 10, 2004, the Board of Directors of TeliaSonera decided to cancel all warrants of series 2002/2008:A, 2002/2008:B, 2002/2010:A, 2002/2010:B, 2002/2010:D and
2002/2010:E, due to non-fulfillment of certain exercise criteria.

Two
of the Swedish other corporate officers employed in 2001 were each allotted 1,000 employee stock options in the 2001 option program on terms equal to those applicable to other
employees of the Group. The options are exercisable during the period between May 31, 2003 and May 31, 2005. The exercise price is set to SEK 69 per share.

There
was no additional option program during 2003.

Pensions

The age of retirement for the CEO is 60. Pension benefits between age 60 and 65 shall equal 70 percent of pensionable salary. Pension benefits after age 65
shall be paid in accordance with the ITP plan with supplementation of benefits for that part of salary exceeding 20 income base amounts, so that the total pension equals 50 percent of the
pensionable salary. Pensionable salary corresponds to the base salary. All pension benefits are unassailable, i.e., are not subject to conditions concerning future employment.

The
age of retirement for other corporate officers employed in Sweden varies between 60 and 62. Pension benefits between age 60 (62) and 65 shall equal 70 percent of
pensionable salary, except in one case were pension benefits equal 43 percent of pensionable salary. Pension benefits after age 65 shall be paid in accordance with the ITP plan with
supplementation of benefits, amounting to 32.5 percent of the pensionable salary, for that part of salary exceeding 20 income base amounts. Pensionable salary includes base salary and variable
salary for those employed prior to July 1, 2002. For those employed after that date the pensionable salary corresponds to the base salary. All pension benefits are unassailable, i.e. are not
subject to conditions concerning future employment.

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The
age of retirement for the deputy CEO and one other corporate officer employed in Finland is 60. Pension benefits between age 60 and 65 equal 60 percent of the pensionable
salary, which includes variable salary. Pension benefits after age 65 is paid according to statutory TEL pension.

Severance pay

The contract between the company and the CEO requires both parties to provide six months' notice of resignation or termination of employment. Upon termination by
the company, the CEO shall be
entitled to severance pay equal to his fixed monthly salary for a period of 24 months. Other income shall be deducted from the severance amount. If the CEO resigns his position, he shall not be
entitled to severance pay. The contract between the company and the deputy CEO requires both parties to provide six months' notice of resignation or termination of employment. Upon termination by the
company, the deputy CEO shall be entitled to severance pay corresponding to 18 months' salary. If the deputy CEO resigns his position, he shall not be entitled to severance pay.

The
contract between the company and other corporate officers requires a period of notice of six months from the employee and 12 months from the company with respect to
resignation or termination of employment. Upon termination by the company, other corporate officers shall be entitled to severance pay equal to the fixed monthly salary for a period of
12 months. Other income shall be deducted against the salary during the notice period and against the severance amount. If an other corporate officer resigns his or her position, he or she
shall not be entitled to severance pay.

Planning and decision process

Remuneration to the CEO is decided by the Board of Directors based on the recommendation of the compensation committee.

Remuneration
to other corporate officers is decided by the CEO in consultation with the compensation committee.

Stock-based compensation

General

At General Meetings of shareholders of TeliaSonera AB, a number of stock option schemes have been adopted. Under current IFRS/IAS, TeliaSonera does not record an
expense with respect to these option schemes. The option schemes are described below, together with pro forma information regarding net income and earnings per share, determined as if TeliaSonera had
accounted for its stock options at fair value.

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Summarized
information about warrants outstanding as of December 31, 2003 by exercise price is as follows. On the last trading day of the year, December 30, 2003, the
closing price for the TeliaSonera share on Stockholmsbörsen was SEK 37.60.

|       |  | Outstanding |  | Of which exercisable
|------ |  | ----------- |  | --------------------
|
|33.64  |  | 2,246,000   |  | 6.42                
|49.09  |  | 3,429,236   |  | 6.42                
|69.00  |  | 12,550,000  |  | 1.42                
|71.62  |  | 5,956,650   |  | 1.50                
|108.17 |  | 101,800     |  | 4.42                
|347.38 |  | 9,444,600   |  | 4.42                
|       |  |             |  |                     

The
fair value for these options has been estimated at the date of grant using a Black-Scholes option-pricing model. The estimated fair value of the options is amortized to expense over
the options' vesting period. TeliaSonera's aggregate pro forma information is as follows.

|SEK in millions                                           |  | 2003  |  | 2002   |  | 2001 
|--------------------------------------------------------- |  | ----- |  | ------ |  | -----
|Reported net income                                       |  | 9,080 |  | -8,067 |  | 1,869
|Less: Compensation expense                                |  | -18   |  | -121   |  | -91  
|Pro forma net income                                      |  | 9,062 |  | -8,188 |  | 1,778
|Pro forma basic and diluted earnings/loss per share (SEK) |  | 1.94  |  | -2.62  |  | 0.59 
|                                                          |  |       |  |        |  |      

The
Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because most of TeliaSonera's stock options have characteristics significantly
different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employee stock options.

2001 Employee stock option program (ESOP)

The 2001 Annual General Meeting voted in favor of establishing an employee stock option program involving issue of debt instruments with option rights to
subscribe to shares in TeliaSonera AB. The employee stock options were allotted free of charge and all employees affected were given 1,000 options.

The
program covers a total of no more than 21,000,000 options that entitle the holder to acquire an equal number of shares in TeliaSonera AB. Furthermore; a maximum of 6,500,000 options
may be transferred to the market in order to counteract the effect of payroll overhead incurred by the option program. Payroll overhead will then be charged to expense, while consideration for options
issued will be booked directly to shareholders' equity.

The
2001 stock options are exercisable as from May 31, 2003. However, option holders may exercise their options no later than May 31, 2005. The exercise price has been set
at SEK 69. The terms of the ESOP may be recalculated as a consequence of share issues, etc.

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If
fully exercised, options outstanding as of December 31, 2003 in the 2001 ESOP will entail an increase in share capital of approximately SEK 40 million, equal to a
0.3 percent increase in the number of shares.

The
fair value of these options, estimated at the date of grant, was SEK 273 million. The fair value was estimated using a Black-Scholes option-pricing model with the following
weighted-average assumptions. No new options were granted in 2003.

2002

2001Fair market value of underlying share (SEK)

45.60

62.00Expected volatility of underlying share (%)

50.0

47.3Expected dividend yield (%)

0.4

0.3Risk-free interest rate for expected term (%)

4.59

4.24Expected life of options (years)

2.4

3.0


For
the years ended December 31, 2003, 2002 and 2001, compensation costs amortized over the vesting period amounted to SEK 18 million, SEK 121 million and SEK
91 million, respectively, totaling SEK 230 million. Due to forfeitures and all options being fully vested, no more compensation cost will be incurred.

A
summary of the 2001 stock option activity, and related information for the years ended December 31, 2003, 2002 and 2001 is presented below.

|                                                            |  | Number of options |  | Weighted average
exercise price (SEK) |  | Weighted average
fair value (SEK)
|----------------------------------------------------------- |  | ----------------- |  | ------------------------------------- |  | ---------------------------------
|Options outstanding at December 31, 2000                    |  |                  |  |                                      |  |                                  
|Granted (exercise price higher than the share market price) |  | 16,200,000        |  | 69                                    |  | 20,08                            
|Exercised                                                   |  |                  |  |                                      |  |                                  
|Forfeited                                                   |  | -900,000          |  | 69                                    |  |                                  
|Options outstanding at December 31, 2001                    |  | 15,300,000        |  | 69                                    |  |                                  
|Granted (exercise price higher than the share market price) |  | 592,000           |  | 69                                    |  | 9,02                             
|Exercised                                                   |  |                  |  |                                      |  |                                  
|Forfeited                                                   |  | -1,590,000        |  | 69                                    |  |                                  
|Options outstanding at December 31, 2002                    |  | 14,302,000        |  | 69                                    |  |                                  
|Granted (exercise price higher than the share market price) |  |                  |  | 69                                    |  |                                  
|Exercised                                                   |  |                  |  |                                      |  |                                  
|Forfeited                                                   |  | -1,752,000        |  | 69                                    |  |                                  
|Options outstanding at December 31, 2003                    |  | 12,550,000        |  | 69                                    |  |                                  
|Options exercisable at December 31,                         |  |                   |  |                                       |  |                                  
|2001 and 2002                                               |  |                  |  |                                      |  |                                  
|2003                                                        |  | 12,550,000        |  | 69                                    |  |                                  
|                                                            |  |                   |  |                                       |  |                                  

The
exercise price for options outstanding as of December 31, 2003 was SEK 69. The weighted-average remaining contractual life of those options is 1.42 years.

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2002 stock option schemeseries 2002/2005:A-B

On November 4, 2002, the extraordinary General Meeting of Telia AB (now TeliaSonera AB) adopted a resolution to issue a maximum of 7,500,000 warrants of
series 2002/2005:A and a maximum of 5,846,847 of series 2002/2005:B warrants in exchange for Sonera Oyj warrants of series 1999A and 1999B, respectively. Information on the number
of warrants etc. under the 2002/2005 option scheme is as follows.

|            |  | Number of warrants |  |         |  |       
|----------- |  | ------------------ |  | ------- |  | ------
|
|2002/2005:A |  | 5,798,880          |  | 157,870 |  | 71.62 
|2002/2005:B |  | 5,145,708          |  | 132,082 |  | 132.82
|            |  |                    |  |         |  |       
|Total       |  | 10,944,588         |  | 289,952 |  |       

Each
warrant entitles the warrant holder to subscribe for one and a half (1.5) new share in TeliaSonera AB. The exercise price as well as the number of new shares that each warrant
entitles to subscribe for may be recalculated as a consequence of share issues, cash dividends, etc.

Series A
warrants are exercisable. On December 9, 2002, series A warrants were listed on the Helsinki Exchanges, and an employee can sell series A warrants on
the stock exchange, at a price determined by public quotes. However, option holders may exercise their options no later than June 30, 2005. In 2003, according to the said terms, the exercise
price of the series A warrants was adjusted by the 2002 dividend per share.

The
subscription rights could be exercised with series B warrants provided that Sonera's cumulative earnings per share (under Finnish GAAP) during January 1, 1999 through
December 31, 2002 was at least EUR 1.66 and that Sonera's operating profit in relation to net sales (under Finnish GAAP) was at least 15 percent, on the average, during the same period;
and finally that the employee did not leave Sonera before June 1, 2003 (for other than retirement or death). For Sonera's top management, exercise of the series B warrants was also
contingent upon Sonera's share price development exceeding the reference index for a peer group of companies. In May 2003, the Board of Directors of TeliaSonera concluded that the said
parameters were not reached and all series B warrants were cancelled.

If
fully exercised, warrants outstanding as of December 31, 2003 in the 2002/2005 option scheme will entail an increase in share capital of approximately SEK 29 million,
equal to a 0.2 percent increase in the number of shares.

The
fair value, in total SEK 49.4 million, of all 10,944,588 warrants issued in the exchange offer was recognized in 2002 as part of the purchase price for the merger. The fair
value, in total SEK 0.7 million, of all 289,952 warrants issued in the mandatory redemption offer, was recognized as part of the adjusted purchase price calculation (see note "Merger
with Sonera Oyj"). The assumptions used in calculating the fair value of the 2002/2005 option schemes, at the date of grant, relating to the

F-95

---



exercise
price of warrants is presented in the table above. The other weighted average assumptions used in calculating the fair value were as follows.

2003

2002Fair market value of underlying share (SEK)

29.50

34.70Expected volatility of underlying share (%)

50.0

50.0Expected dividend yield (SEK)

0.74

0.73Risk-free interest rate for expected term (%)

5.5

5.5Expected life of warrants (years)

2.39

2.58


A
summary of the series 2002/2005 option schemes as of and changes in the years ended December 31, 2003 and 2002 is presented below:

|                                                            |  | Number of
warrants |  | Weighted average
exercise price (SEK) |  | Weighted average
fair value (SEK)
|----------------------------------------------------------- |  | ------------------ |  | ------------------------------------- |  | ---------------------------------
|Series 2002/2005:A                                          |  |                    |  |                                       |  |                                  
|Warrants outstanding on December 31, 2001                   |  |                   |  |                                      |  |                                  
|Granted (exercise price higher than the share market price) |  | 5,798,880          |  | 72.02                                 |  | 6.78                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  |                   |  |                                      |  |                                  
|Warrants outstanding on December 31, 2002                   |  | 5,798,880          |  | 72.02                                 |  |                                  
|Granted (exercise price higher than the share market price) |  | 157,870            |  | 72.02                                 |  | 3.77                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  | -100               |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 5,956,650          |  | 71.62                                 |  |                                  
|Warrants exercisable on December 31,                        |  |                    |  |                                       |  |                                  
|2002                                                        |  | 5,798,880          |  | 72.02                                 |  |                                  
|2003                                                        |  | 5,956,650          |  | 71.62                                 |  |                                  
|Series 2002/2005:B                                          |  |                    |  |                                       |  |                                  
|Warrants outstanding on December 31, 2001                   |  |                   |  |                                      |  |                                  
|Granted (exercise price higher than the share market price) |  | 5,145,708          |  | 132.82                                |  | 1.96                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  |                   |  |                                      |  |                                  
|Warrants outstanding on December 31, 2002                   |  | 5,145,708          |  | 132.82                                |  |                                  
|Granted (exercise price higher than the share market price) |  | 132,082            |  | 132.82                                |  | 0.87                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Cancelled                                                   |  | -5,277,790         |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  |                   |  |                                      |  |                                  
|Warrants exercisable on December 31, 2002 and 2003          |  |                   |  |                                      |  |                                  
|                                                            |  |                    |  |                                       |  |                                  

F-96

---



2002 stock option schemeseries 2002/2008:A-F and 2002/2010:A-F

On November 4, 2002, the extraordinary General Meeting of Telia AB (now TeliaSonera AB) adopted a resolution to issue a maximum of 11,456,200 warrants of
series 2002/2008:A-F and a maximum of 6,417,272 warrants of series 2002/2010:A-F in exchange for Sonera warrants of series 2000/A1-C2 and
2000/A3-C4. Detailed information on the warrants outstanding under the 2002/2008 and the 2002/2010 option schemes is as follows.

|            |  | Number of warrants |  |         |  |       
|----------- |  | ------------------ |  | ------- |  | ------
|
|2002/2008:A |  | 2,433,350          |  | 73,800  |  | 347.38
|2002/2008:B |  | 2,433,350          |  | 73,800  |  | 347.38
|2002/2008:C |  | 4,866,700          |  | 147,600 |  | 347.38
|2002/2008:D |  | 30,600             |  | 3,600   |  | 108.17
|2002/2008:E |  | 30,600             |  | 3,600   |  | 108.17
|2002/2008:F |  | 61,200             |  | 7,200   |  | 108.17
|2002/2010:A |  | 915,146            |  | 2,501   |  | 49.09 
|2002/2010:B |  | 915,146            |  | 2,501   |  | 49.09 
|2002/2010:C |  | 1,830,292          |  | 5,002   |  | 49.09 
|2002/2010:D |  | 571,500            |  | 3,000   |  | 33.64 
|2002/2010:E |  | 571,500            |  | 3,000   |  | 33.64 
|2002/2010:F |  | 1,143,000          |  | 6,000   |  | 33.64 
|            |  |                    |  |         |  |       
|Total       |  | 15,802,384         |  | 331,604 |  |       

Each
warrant entitles the warrant holder to subscribe for one and a half (1.5) new share in TeliaSonera AB. The exercise price as well as the number of new shares that each warrant
entitles to subscribe for may be recalculated as a consequence of share issues, cash dividends, etc.

Holders
of warrants of series 2002/2008:A, 2002/2008:B, 2002/2008:D, 2002/2008:E, 2002/2010:A, 2002/2010:B, 2002/2010:D and 2002/2010:E are not entitled to subscribe for shares in
TeliaSonera unless the development of the value of the Sonera share during the period April 1, 1999 - December 31, 2002 exceeds the development of the value of the reference index
for a peer group of companies during the same period or unless the development of the value of the Sonera share during the period April 1, 1999 - December 31, 2003 exceeds the
development of the value of the reference index during the same period. On February 10, 2004, the Board of Directors of TeliaSonera concluded that the said parameters were not reached and
consequently decided that holders of warrants of series 2002/2008:A, 2002/2008:B, 2002/2008:D, 2002/2008:E, 2002/2010:A, 2002/2010:B, 2002/2010:D and 2002/2010:E are not entitled to subscribe
for shares in TeliaSonera.

Holders
of warrants of series 2002/2008:C, 2002/2008:F, 2002/2010:C and 2002/2010:F are not entitled to subscribe for shares in TeliaSonera unless the development of the value of
the Sonera share during the period April 1, 1999 - December 31, 2003 exceeds the development of the value of the reference index for a peer group of companies during the same
period.

If
fully exercised, warrants outstanding as of December 31, 2003 in the 2002/2008 and 2002/2010 option schemes will entail an increase in share capital of approximately SEK
73 million, equal to a 0.5 percent increase in the number of shares.

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The
fair value, in total SEK 177.5 million, of all 15,802,384 warrants issued in the exchange offer was recognized in 2002 as part of the purchase price. The fair value, in total
SEK 0.9 million, of all 331,604 warrants issued in the mandatory redemption offer, was recognized as part of the adjusted purchase price calculation for the merger (see note "Merger with Sonera
Oyj"). The assumptions used in calculating the fair value of the 2002/2008 and the 2002/2010 option schemes, at the date of grant, relating to the exercise price of warrants is presented in the table
above. The other weighted average assumptions used were as follows.

2003

2002Series 2002/2008:A-FFair market value of underlying share (SEK)

29.50

34.70Expected volatility of underlying share (%)

50.0

50.0Expected dividend yield (SEK)

1.67

1.74Risk-free interest rate for expected term (%)

5.5

5.5Expected life of warrants (years)

5.31

5.49Series 2002/2010:A-FFair market value of underlying share (SEK)

29.50

34.70Expected volatility of underlying share (%)

50.0

50.0Expected dividend yield (SEK)

2.20

2.48Risk-free interest rate for expected term (%)

5.5

5.5Expected life of warrants (years)

7.31

7.49


A
summary of the 2002/2008 and 2002/2010 stock option schemes as of and changes in the years ended December 31, 2003 and 2002 is presented below:

|                                                            |  | Number of
warrants |  | Weighted average
exercise price (SEK) |  | Weighted average
fair value (SEK)
|----------------------------------------------------------- |  | ------------------ |  | ------------------------------------- |  | ---------------------------------
|Series 2002/2008:A-C                                        |  |                    |  |                                       |  |                                  
|Warrants outstanding on December 31, 2001                   |  |                   |  |                                      |  |                                  
|Granted (exercise price higher than the share market price) |  | 9,733,400          |  | 347.38                                |  | 2.26                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  |                   |  |                                      |  |                                  
|Warrants outstanding on December 31, 2002                   |  | 9,733,400          |  | 347.38                                |  |                                  
|Granted (exercise price higher than the share market price) |  | 295,200            |  | 347.38                                |  | 1.27                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  | -584,000           |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 9,444,600          |  | 347.38                                |  |                                  
|Warrants exercisable on December 31, 2002 and 2003          |  |                   |  |                                      |  |                                  
|                                                            |  |                    |  |                                       |  |                                  

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|                                                            |  | Number of
warrants |  | Weighted average
exercise price (SEK) |  | Weighted average
fair value (SEK)
|----------------------------------------------------------- |  | ------------------ |  | ------------------------------------- |  | ---------------------------------
|Series 2002/2008:D-F                                        |  |                    |  |                                       |  |                                  
|Warrants outstanding on December 31, 2001                   |  |                   |  |                                      |  |                                  
|Granted (exercise price higher than the share market price) |  | 122,400            |  | 108.17                                |  | 10.53                            
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  |                   |  |                                      |  |                                  
|Warrants outstanding on December 31, 2002                   |  | 122,400            |  | 108.17                                |  |                                  
|Granted (exercise price higher than the share market price) |  | 14,400             |  | 108.17                                |  | 7.04                             
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  | -35,000            |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 101,800            |  | 108.17                                |  |                                  
|Warrants exercisable on December 31, 2002 and 2003          |  |                   |  |                                      |  |                                  
|Series 2002/2010:A-C                                        |  |                    |  |                                       |  |                                  
|Warrants outstanding on December 31, 2001                   |  |                   |  |                                      |  |                                  
|Granted (exercise price higher than the share market price) |  | 3,660,584          |  | 49.09                                 |  | 24.23                            
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  |                   |  |                                      |  |                                  
|Warrants outstanding on December 31, 2002                   |  | 3,660,584          |  | 49.09                                 |  |                                  
|Granted (exercise price higher than the share market price) |  | 10,004             |  | 49.09                                 |  | 18.50                            
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  | -241,352           |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 3,429,236          |  | 49.09                                 |  |                                  
|Warrants exercisable on December 31, 2002 and 2003          |  |                   |  |                                      |  |                                  
|Series 2002/2010:D-F                                        |  |                    |  |                                       |  |                                  
|Warrants outstanding on December 31, 2001                   |  |                   |  |                                      |  |                                  
|Granted (exercise price lower than the share market price)  |  | 2,286,000          |  | 33.64                                 |  | 28.65                            
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  |                   |  |                                      |  |                                  
|Warrants outstanding on December 31, 2002                   |  | 2,286,000          |  | 33.64                                 |  |                                  
|Granted (exercise price lower than the share market price)  |  | 12,000             |  | 33.64                                 |  | 22.35                            
|Exercised                                                   |  |                   |  |                                      |  |                                  
|Forfeited                                                   |  | -52,000            |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 2,246,000          |  | 33.64                                 |  |                                  
|Warrants exercisable on December 31, 2002 and 2003          |  |                   |  |                                      |  |                                  
|                                                            |  |                    |  |                                       |  |                                  

Profit-sharing system

The subsidiary Telia Finans AB made provisions totaling SEK 3 million, SEK 1 million and SEK 1 million for costs of employee
profit-sharing for the years 2003, 2002 and 2001, respectively.

37.   Restructuring Costs

TeliaSonera has engaged, and may continue to engage, in restructuring activities, which require management to utilize significant estimates related to realizable
values of assets made redundant or obsolete (see note "Depreciation, Amortization and Write-Downs") and expenses for severance and

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other
employee separation costs, lease cancellation and other exit costs. Should the actual amounts differ from these estimates, usage of restructuring provisions could be materially impacted.

Implementation of post-merger integration synergies in the international carrier operations

To realize post-merger synergy gains, management in 2003 decided to integrate the international carrier operations previously run separately by Telia
and Sonera. Overlapping operations will be phased out and the traffic moved over from leased capacity to the wholly owned network. Parts of Sonera's operations in the United Kingdom, the United
States, Sweden and Germany have been closed down. Under this program TeliaSonera recorded integration provisions, but to some extent costs were also expensed as incurred. The integration efforts also
incurred impairment charges related to network capacity and equipment. The program is expected to be completed by the end of 2005.

Each
of the elements of the international carrier integration costs would result in future cash outflows except for write-downs, which are non-cash in nature. The material
elements of the integration costs and related cash outflows were as follows.

|SEK in millions                                |  | Integration
charges
2003 |  | Cash outflow
2003 |  | Change in
integration
provision
2003
|---------------------------------------------- |  | ------------------------ |  | ----------------- |  | ------------------------------------
|Integration provision, beginning of period     |  |                         |  |                  |  |                                    
|Workforce reduction                            |  | 27                       |  | -10               |  | 17                                  
|Leasing and service contracts, technical sites |  | 211                      |  | -3                |  | 208                                 
|Leasing contracts, offices                     |  | 66                       |  | -4                |  | 62                                  
|Dismantling of technical sites and offices     |  | 19                       |  |                   |  | 19                                  
|Other costs                                    |  | 16                       |  | -1                |  | 15                                  
|Exchange rate differences, timing effects      |  |                         |  |                  |  | 6                                   
|                                               |  |                          |  |                   |  |                                     
|Integration provision, end of period           |  |                         |  |                  |  | 327                                 
|                                               |  |                          |  |                   |  |                                     
|Workforce reduction                            |  | 8                        |  | -8                |  |                                     
|Leasing and service contracts, technical sites |  | 3                        |  | -3                |  |                                     
|Leasing contracts, offices                     |  | 4                        |  | -4                |  |                                     
|Dismantling of technical sites and offices     |  | 9                        |  | -9                |  |                                     
|Write-downs of tangible fixed assets           |  | 54                       |  |                  |  |                                     
|                                               |  |                          |  |                   |  |                                     
|Total charges/total cash outflow               |  | 417                      |  | -42               |  |                                     
|                                               |  |                          |  |                   |  |                                     

Redundancies in the Swedish, Finnish and Lithuanian operations

The organization and control models introduced in 2003 have significantly increased efficiency and created potential to eliminate duplicate functions within
several areas, like product and service development. Efficiency was also enhanced within administration and certain support functions.

The
management of TeliaSonera Sweden under this program established a redundancy of approximately 1,200 employees, including 500 hired personnel. TeliaSonera has negotiated with the
trade unions to determine which of the permanent employees are affected by the redundancy. Of these employees, approximately 300 have left TeliaSonera Sweden or been redeployed within the Group. The
remaining redundancies are handled through natural attrition, tailored pension plans and within the framework of Telia Resources and Redeployment, which manages redundancies in wholly-owned Swedish
operations. At year-end 2003, 376 employees were part of the redundancy program. In

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Finland,
a redundancy of 400 employees was determined after negotiations with the employee organizations. 176 permanent employees were given notice and the remainder of the reduction is handled
through pension plans, non-renewal of temporary contracts and redeployment within the Group.

In
the Lithuanian fixed-line operations an efficiency enhancement program was started in 2003 to further reduce personnel, operating costs and CAPEX. In the second half of
the year, the number of employees was reduced by 478 to 3,586 at year-end. The Lithuanian program also incurred impairment charges related to real estate, network capacity and equipment.

Each
of the elements of the Swedish, Finnish and Lithuanian restructuring costs would result in future cash outflows except for write-downs, which are non-cash in nature. The
material elements of the restructuring costs and related cash outflows were as follows.

|SEK in millions                                   |  | Restructuring
charges
2003 |  | Cash outflow
2003 |  | Change in
restructuring
provision
2003
|------------------------------------------------- |  | -------------------------- |  | ----------------- |  | --------------------------------------
|Restructuring provision, beginning of period      |  |                           |  |                  |  |                                      
|Workforce reduction                               |  | 435                        |  | -44               |  | 391                                   
|Other costs                                       |  | 4                          |  | -4                |  | 0                                     
|Reversal, not utilized                            |  |                           |  |                  |  | -28                                   
|Reclassification to pension provision             |  |                           |  |                  |  | -173                                  
|                                                  |  |                            |  |                   |  |                                       
|Restructuring provision, end of period            |  |                           |  |                  |  | 190                                   
|                                                  |  |                            |  |                   |  |                                       
|Write-downs and discards of tangible fixed assets |  | 120                        |  |                  |  |                                       
|                                                  |  |                            |  |                   |  |                                       
|Total charges/total cash outflow                  |  | 559                        |  | -48               |  |                                       
|                                                  |  |                            |  |                   |  |                                       

New focus for the Danish fixed network operations

The Danish fixed network operations were reviewed during 2002 in order to value their assets and determine a new focus. Looking forward, the operations will be
focused on telephony sales to businesses and consumers and wholesale network capacity to operators and service providers. Unprofitable products have been discontinued or frozen. Frozen operations will
continue to serve current customers. Most of the workforce reduction was effectuated in the last few months of 2002, when the number of employees was reduced by approximately 100 people and
consultants and temporary staff were reduced by more than 100 people. In terms of product offerings and workforce the restructuring program gained full effect at the end of 2003. Settlement of leasing
and other contracts will take place during the next three-year period.

F-101

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Each
of the elements of the Danish fixed network refocusing costs would result in future cash outflows except for write-downs, which are non-cash in nature. The material
elements of the refocusing costs and related cash outflows were as follows.

|SEK in millions                                                  |  | Restructuring
charges
2002 |  | Cash
outflow
2002 |  | Change in
restructuring
provision
2002 |  | Cash
outflow
2003 |  | Change in
restructuring
provision
2003
|---------------------------------------------------------------- |  | -------------------------- |  | ----------------- |  | -------------------------------------- |  | ----------------- |  | --------------------------------------
|Restructuring provision, beginning of period                     |  |                           |  |                  |  |                                       |  |                  |  | 486                                   
|Workforce reduction                                              |  | 45                         |  |                  |  | 45                                     |  | -54               |  | -54                                   
|Leasing and service contracts, technical sites                   |  | 113                        |  | -39               |  | 74                                     |  | -29               |  | -29                                   
|Leasing contracts, offices                                       |  | 11                         |  |                  |  | 11                                     |  | -22               |  | -22                                   
|Dismantling of technical sites and offices                       |  | 157                        |  |                  |  | 157                                    |  | -19               |  | -19                                   
|Other costs                                                      |  | 193                        |  |                  |  | 193                                    |  | -105              |  | -105                                  
|Exchange rate differences                                        |  |                           |  |                  |  | 6                                      |  |                  |  | -7                                    
|                                                                 |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Restructuring provision, end of period                           |  |                           |  |                  |  | 486                                    |  |                  |  | 250                                   
|                                                                 |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Write-downs and discards of intangible and tangible fixed assets |  | 3,033                      |  |                  |  |                                       |  |                   |  |                                       
|                                                                 |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Total charges/total cash outflow                                 |  | 3,552                      |  | -39               |  |                                        |  | -229              |  |                                       
|                                                                 |  |                            |  |                   |  |                                        |  |                   |  |                                       

Strategic refocusing of the international carrier operations

In 2002, TeliaSonera completed a comprehensive review of its international carrier operations. Management decided to change the strategic focus of Telia
International Carrier and significantly restructure its operations. As part of the restructuring program, Management decided to close down Telia International Carrier's Asian operations as well as its
domestic voice reseller business in the United Kingdom and Germany, discontinue offering domestic network services in the United States and terminate its co-location business. TeliaSonera
has also centralized Telia International Carrier's sales, administration and customer care resources to Sweden. The strategic refocusing and restructuring will also enable Telia International Carrier
to substantially scale down the number of offices and technical facilities, as well as lead to reduced operation and maintenance costs and leased lines. Management also estimates that, as part of the
restructuring, Telia International Carrier will reduce its original workforce of approximately 800 persons by more than 50 percent. As of December 31, 2002 and 2003, the number of
employees was 736 and 475, respectively. Most of the restructuring provision is expected to be used in 2004 and the remaining part will be used later during the phase-out of
long-term contracts.

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Each of the elements of the carrier restructuring costs would result in future cash outflows except for write-downs, which are non-cash in nature. The
material elements of the carrier restructuring costs and related cash outflows were as follows.

|SEK in millions                                         |  | Restructuring
charges
2002 |  | Cash
outflow
2002 |  | Change in
restructuring
provision
2002 |  | Cash
outflow
2003 |  | Change in
restructuring
provision
2003
|------------------------------------------------------- |  | -------------------------- |  | ----------------- |  | -------------------------------------- |  | ----------------- |  | --------------------------------------
|Restructuring provision, beginning of period            |  |                           |  |                  |  |                                       |  |                  |  | 3,854                                 
|Workforce reduction                                     |  | 303                        |  | -40               |  | 263                                    |  | -165              |  | -165                                  
|Leasing and service contracts, technical sites and land |  | 2,860                      |  | -66               |  | 2,794                                  |  | -827              |  | -827                                  
|Leasing contracts, offices                              |  | 186                        |  | -2                |  | 184                                    |  | -31               |  | -31                                   
|Dismantling of technical sites and offices              |  | 230                        |  |                  |  | 230                                    |  | -55               |  | -55                                   
|Customer compensation                                   |  | 233                        |  |                  |  | 233                                    |  | -66               |  | -66                                   
|Legal and similar fees                                  |  | 151                        |  | -1                |  | 150                                    |  | -15               |  | -15                                   
|Timing effects                                          |  |                           |  |                  |  |                                       |  |                  |  | 99                                    
|Reversal, not utilized                                  |  |                           |  |                  |  |                                       |  |                  |  | -427                                  
|Exchange rate differences                               |  |                           |  |                  |  |                                       |  |                  |  | -100                                  
|                                                        |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Restructuring provision, end of period                  |  |                           |  |                  |  | 3,854                                  |  |                  |  | 2,267                                 
|                                                        |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Write-downs of intangible and tangible fixed assets     |  | 5,307                      |  |                  |  |                                        |  |                  |  |                                       
|Write-downs of financial fixed assets                   |  | 824                        |  |                  |  |                                        |  |                  |  |                                       
|                                                        |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Total charges/total cash outflow                        |  | 10,094                     |  | -109              |  |                                        |  | -1,159            |  |                                       
|                                                        |  |                            |  |                   |  |                                        |  |                   |  |                                       

Lower
than expected restructuring costs, mainly due to the French operations but also to redundancies in Sweden and certain customer contracts, enabled a reversal of the restructuring
reserve.

Streamlining the core business

At the beginning of 2002, Management started a program to streamline the core business. Under this program TeliaSonera recorded restructuring provisions, but to a
large extent costs were also expensed as incurred. In Sweden, substantial efficiency measures and restructuring efforts mainly focused on sales and distribution channels, concentrating customer
services in fewer locations, streamlining the delivery process and increasing sales of standardized products and services through web and interactive voice response. Products with unsatisfactory
profitability were removed as offerings.

Telia
Resources and Redeployment handles redundancies in wholly-owned Swedish operations and will support redundant employees in finding new employment either within or outside the Group
for the statutory period of notice as well as a further six months, although for a period of no less than ten months in all. Costs incurred chiefly include re-training, but also severance
pays and early-retirement costs. In 2002 the number of employees in Sweden decreased by 774, as a result of the streamlining efforts. An additional 323 employees within Telia Resources and
Redeployment were identified as redundant at year-end 2002, of which 240 left the unit in 2003. During the streamlining efforts, a freeze was imposed on the employment of permanent staff
and also on the employment of temporary staff and consultants. At year-end 2002, the number of consultants used as employee substitutes had been brought down by almost 50 percent to
400.

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Some
of the measures taken involved closing down of operations, like Vimera (customer training) and Time (accounting services) within TeliaSonera Holding and part of the portal business
and payment and security services within the former business area Telia Internet Services, the latter including equipment being written-off due to economic obsolescence. Furthermore some
30 retail outlets in Telia Mobile Finland were transferred to a new owner.

Except
write-off items, which are non-cash in nature, each element of the streamlining effort costs would result in immediate or future cash outflows. The
material elements of these streamlining effort costs and related cash outflows were as follows.

|SEK in millions                                    |  | Restructuring
charges
2002 |  | Cash
outflow
2002 |  | Change in
restructuring
provision
2002 |  | Cash
outflow
2003 |  | Change in
restructuring
provision
2003
|-------------------------------------------------- |  | -------------------------- |  | ----------------- |  | -------------------------------------- |  | ----------------- |  | --------------------------------------
|Restructuring provision, beginning of period       |  |                           |  |                  |  |                                       |  |                  |  | 287                                   
|Workforce reduction                                |  | 389                        |  | -75               |  | 314                                    |  | -194              |  | -194                                  
|Other                                              |  | 53                         |  | -2                |  | 51                                     |  | -14               |  | -14                                   
|Reversal, non-utilized                             |  |                           |  |                  |  | -78                                    |  |                  |  | -20                                   
|                                                   |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Restructuring provision, end of period             |  |                           |  |                  |  | 287                                    |  |                  |  | 59                                    
|                                                   |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Workforce reduction                                |  | 302                        |  | -302              |  |                                        |  |                  |  |                                       
|Administrative support systems write-off           |  | 57                         |  |                  |  |                                        |  |                  |  |                                       
|Customer and Internet services equipment write-off |  | 114                        |  |                  |  |                                        |  |                  |  |                                       
|                                                   |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Total charges/total cash outflow                   |  | 915                        |  | -379              |  |                                        |  | -208              |  |                                       
|                                                   |  |                            |  |                   |  |                                        |  |                   |  |                                       

Close-down of satellite-related activities

At the end of 2001, Management decided on a plan to cease TeliaSonera's Swedish-based satellite-related activities. This plan involved the termination of
employees, evaluating the usefulness of satellite station equipment, terminating contractual commitments and incurring legal, accounting and similar fees. The close-down was completed in
2003.

The
satellite division employees included operating and product development personnel and corporate staff. The restructuring plan affected a total of 48 employees who gradually ceased
their services.

Upon
evaluation of the satellite station equipment, Management's decision to no longer pursue the satellite activities resulted in the equipment having no further economic use and was
written off. Termination of various satellite capacity contracts triggered penalty payments.

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Each
of the elements of satellite restructuring costs would result in future cash outflows except for equipment write-off, which is non-cash in nature. The
material elements of satellite restructuring costs and related cash outflows were as follows.

|SEK in millions                                      |  | Restructuring
charges
2001 |  | Cash
outflow
2002 |  | Change in
restructuring
provision
2002 |  | Cash
outflow
2003 |  | Change in
restructuring
provision
2003
|---------------------------------------------------- |  | -------------------------- |  | ----------------- |  | -------------------------------------- |  | ----------------- |  | --------------------------------------
|Restructuring provision, beginning of period         |  |                           |  |                  |  | 455                                    |  |                  |  | 85                                    
|Workforce reduction                                  |  | 39                         |  | -19               |  | -19                                    |  | -6                |  | -6                                    
|Leasing contracts, satellite capacity                |  | 357                        |  | -192              |  | -192                                   |  | -79               |  | -79                                   
|Site restoration, customer compensation, other costs |  | 59                         |  | -21               |  | -21                                    |  |                  |  |                                      
|Reversal, non-utilized                               |  |                           |  |                  |  | -138                                   |  |                  |  |                                      
|                                                     |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Restructuring provision, end of period               |  |                            |  |                  |  | 85                                     |  |                  |  |                                      
|                                                     |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Satellite station equipment write-off                |  | 45                         |  |                  |  |                                        |  |                  |  |                                       
|                                                     |  |                            |  |                   |  |                                        |  |                   |  |                                       
|Total charges/total cash outflow                     |  | 500                        |  | -232              |  |                                        |  | -85               |  |                                       
|                                                     |  |                            |  |                   |  |                                        |  |                   |  |                                       

Due
to partial transfer of satellite capacity for international telephony to be used in the international carrier operations, the costs for terminating leasing contracts have been
reduced.

38.   Auditors' Fees

The following remuneration was paid to auditors and accounting firms for audits and other reviews based on applicable legislation and for advice and other
assistance resulting from observations in the reviews. Remuneration was also paid for independent advice, using Group auditors or other audit

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firms,
in the fields of Tax/Law and Corporate Finance as well as other consulting services. Audit fees to other accounting firms refer to consolidated companies not audited by the Group auditors.

January-DecemberSEK in millions2003

2002

2001Ernst & Young ABAudits

28

28

25Independent advice

18

37

30Total

46

65

55KPMG Bohlins ABAudits

25



Independent advice

15



Total

40



Swedish National Audit OfficeAudits

0

0

0Total

0

0

0Other accounting firmsAudits

10

4

0Independent advice

6

2

8Total

16

6

8Total

102

71

63


The
information concerns significant Group units inside and outside Sweden. Audit services were performed by auditors and accounting firms appointed by the Group units.

39.   Value Added

Value added is a measure of the TeliaSonera Group's productive efforts, in other words the increase in value achieved by business activities. Value added consists
of the Group's net sales less the cost of purchased goods and services. Value added is divided among the Group's stakeholders: the employees, creditors, Governments, and the shareholders. The
remainder is retained in the Group to cover the cost of wear and tear on machinery, equipment, and installations (depreciation) and to enable further expansion of the business.

F-106

---



The
Group also serves as a collector of value-added tax, the indirect tax levied on the value added by the Group. To provide a comprehensive view of the Group's contribution to the
state, a measure of value added adjusted for such tax effects is also presented.

|                                     |  | January-December
|------------------------------------ |  | ----------------
|
|
|Net sales                            |  | 82,425          
|Cost of purchased goods and services |  | -41,786         
|Other revenues and expenses, net     |  | 1,804           
|                                     |  |                 
|Total goods and services             |  | -39,982         
|                                     |  |                 
|Value added                          |  | 42,443          
|Value-added tax collected            |  | 21,608          
|Value-added tax paid                 |  | -11,297         
|                                     |  |                 
|Adjusted value added                 |  | 52,754          

Value
added was distributed among the Group's stakeholders as follows.

|                                                                        |  | January-December
|----------------------------------------------------------------------- |  | ----------------
|
|
|To employees                                                            |  |                 
|Total salaries and wages                                                |  | 8,460           
|Employer's social security contributions                                |  | 1,950           
|Less: capitalized salaries and employer's social security contributions |  | -2              
|                                                                        |  |                 
|Total                                                                   |  | 10,408          
|To creditors                                                            |  |                 
|Interest etc.                                                           |  | 1,415           
|To Governments                                                          |  |                 
|Income taxes                                                            |  | 3,850           
|To shareholders                                                         |  |                 
|Dividend (for 2003 as proposed by the Board)                            |  | 4,675           
|Retained by the Group                                                   |  |                 
|Depreciation and amortization                                           |  | 17,707          
|Other                                                                   |  | 4,388           
|                                                                        |  |                 
|Total                                                                   |  | 22,095          
|                                                                        |  |                 
|Value added                                                             |  | 42,443          
|Value-added tax recorded                                                |  | 10,311          
|                                                                        |  |                 
|Adjusted value added                                                    |  | 52,754          
|                                                                        |  |                 

F-107

---



Dividends
to shareholders equaled 11.0 percent of value added in 2003, 10.5 percent in 2002 and 2.4 percent in 2001. Dividends to shareholders also equaled
44.9 percent of the Group's total salaries and employer's social security contributions in 2003, 22.1 percent in 2002 and 5.3 percent in 2001.

40.   Merger with Sonera Oyj

As discussed in note "Changes in Group Composition" above, TeliaSonera obtained sole record and beneficial ownership of all Sonera shares during 2003. The
preliminary purchase price calculation and the preliminary purchase price allocation presented in TeliaSonera's Annual Report for 2002 have been adjusted accordingly. Further, some additional
adjustments have been made, as described below.

Purchase price calculation

The aggregate purchase price was calculated as follows.

|SEK in millions                                                           |  | December 31,
2003 |  | Adjustments
in 2003 |  | December 31,
2002
|------------------------------------------------------------------------- |  | ----------------- |  | ------------------- |  | -----------------
|Fair value of TeliaSonera shares issued in exchange for Sonera shares     |  | 57,728            |  | 2,050               |  | 55,678           
|Fair value of TeliaSonera warrants issued in exchange for Sonera warrants |  | 228               |  | 1                   |  | 227              
|Value of Sonera shares and warrants acquired for cash                     |  | 495               |  | 495                 |  |                 
|Transaction related expenses                                              |  | 637               |  | 15                  |  | 622              
|                                                                          |  |                   |  |                     |  |                  
|Total purchase price consideration                                        |  | 59,088            |  | 2,561               |  | 56,527           

TeliaSonera
shares issued to Sonera shareholders in the mandatory redemption offer have been valued based on the quoted closing market price at Stockholmsbörsen (Stockholm
Stock Exchange) on February 10, 2003, the date when TeliaSonera's Board of Directors decided to issue the new shares, in accordance with the authorization by the General Meeting of
shareholders.

The
fair value of TeliaSonera warrants issued to Sonera warrant holders have been calculated based on a Black-Scholes valuation. The calculation is based on the number of Sonera warrants
outstanding and the closing market price of the Telia share, calculated as a weighted average price, and assuming an exchange ratio of one TeliaSonera warrant for each Sonera warrant. Assumptions were
also made based on the current information for the exercise prices and other terms and conditions of the TeliaSonera warrants, expected volatility of the TeliaSonera share, expected dividend rate of
TeliaSonera, expected average life of options, and the discount rate.

Sonera
shares and warrants acquired for cash in the mandatory redemption offer have been valued based on the share price and the warrant prices set out in the mandatory redemption offer
prospectus. Sonera shares acquired for cash in the compulsory acquisition proceeding have been valued based on the redemption price determined by the arbitral panel plus accrued interest.

Final
transaction related expenses capitalized by TeliaSonera as a result of the merger represent bankers' fees as well as transaction related legal and accounting fees, prospectus
printing expenses and other fees and expenses.

F-108

---



Purchase price allocation

The excess of purchase price consideration over the value of Sonera's net assets, fair value adjustments and goodwill are as follows.

|SEK in millions                                                                                          |  | December 31,
2003 |  | Adjustments
in 2003 |  | December 31,
2002
|-------------------------------------------------------------------------------------------------------- |  | ----------------- |  | ------------------- |  | -----------------
|Total purchase price consideration                                                                       |  | 59,088            |  | 2,561               |  | 56,527           
|Less: value of Sonera's net assets under IAS                                                             |  | -17,235           |  | -857                |  | -16,378          
|                                                                                                         |  |                   |  |                     |  |                  
|Excess of purchase price consideration over value of Sonera's net assets                                 |  | 41,853            |  | 1,704               |  | 40,149           
|Less:  Identified intangibles at fair value:                                                             |  |                   |  |                     |  |                  
|Trade names                                                                                              |  | -1,690            |  | -144                |  | -1,546           
|Licenses and patents                                                                                     |  | -2,349            |  | -118                |  | -2,231           
|Subscriber contracts                                                                                     |  | -723              |  | -36                 |  | -687             
|Less:  Fair value adjustment of computer software                                                        |  | -271              |  | -18                 |  | -253             
|Less:  Fair value adjustment of real estate and plant and
           machinery                           |  | -803              |  | -12                 |  | -791             
|Less:  Fair value adjustment of investments in associated
           companies and other equity holdings |  | -7,888            |  | 2,234               |  | -10,122          
|Add-back: Fair value adjustment of pension obligations                                                   |  | 398               |  | 19                  |  | 379              
|Deferred tax                                                                                             |  | 715               |  | -2,911              |  | 3,626            
|                                                                                                         |  |                   |  |                     |  |                  
|Goodwill                                                                                                 |  | 29,242            |  | 718                 |  | 28,524           

In
connection with finalizing the preliminary purchase price allocation TeliaSonera also recognized that certain deferred taxes included in the preliminary purchase price allocation
would never crystallize and, therefore, deferred tax liabilities of SEK 3,919 million and deferred tax assets of SEK 545 million were reversed. TeliaSonera also finalized the allocation
of goodwill to the various businesses directly and indirectly acquired in the merger with Sonera resulting, among others, in a reduction of goodwill allocated to the shares in Turkcell Iletisim
Hizmetleri A.S. by SEK 2,618 million with a commensurate increase in residual group goodwill. Other adjustments mainly reflect the remaining five percent share of Sonera assets acquired and
obligations assumed in 2003.

There
were no purchased in-process research and development assets acquired.

F-109

---





41.   Specification of Shareholdings and Participations

Associated companies

|                                                                                  |  |    |  |            |  |         |  | Equity participation for
consolidation in the Group |  | Book value in each
parent company
|--------------------------------------------------------------------------------- |  | -- |  | ---------- |  | ------- |  | --------------------------------------------------- |  | ---------------------------------
|
|
|
|Parent company holdings                                                           |  |    |  |            |  |         |  |                                                     |  |                                  
|Swedish companies                                                                 |  |    |  |            |  |         |  |                                                     |  |                                  
|Overseas Telecom AB, 556528-9138, Stockholm                                       |  | 65 |  | 1,180,575  |  | SEK 118 |  | 426                                                 |  | 151                              
|isMobile AB, 556575-0014, Luleå                                                   |  | 50 |  | 996,008    |  | SEK 0   |  | 0                                                   |  | 17                               
|Slottsbacken Venture Capital KB, 969626-1313, Stockholm                           |  | 50 |  |           |  | SEK    |  | 8                                                   |  | 85                               
|Telefos AB, 556523-6865, Stockholm                                                |  | 49 |  | 4,900,000  |  | SEK 0   |  | 0                                                   |  | 0                                
|Lokomo Systems AB, 556580-3326, Stockholm                                         |  | 40 |  | 676,504    |  | SEK 0   |  | 1                                                   |  | 3                                
|INGROUP Holding AB (publ), 556595-2941, Stockholm                                 |  | 37 |  | 228,262    |  | SEK 16  |  | 0                                                   |  | 37                               
|TiFiC AB, 556578-3973, Gothenburg                                                 |  | 30 |  | 1,422,965  |  | SEK 0   |  | 0                                                   |  | 4                                
|eWork Scandinavia AB, 556587-8708, Stockholm                                      |  | 29 |  | 220,677    |  | SEK 0   |  | 4                                                   |  | 6                                
|Service Factory SF AB, 556575-5682, Stockholm                                     |  | 27 |  | 388,000    |  | SEK 0   |  | 0                                                   |  | 9                                
|Geyser Interactive Learning AB (publ), 556556-9752, Stockholm                     |  | 27 |  | 62,375     |  | SEK 1   |  | 0                                                   |  | 0                                
|Intermezzon AB, 556541-8885, Gothenburg                                           |  | 25 |  | 7,338,707  |  | SEK 0   |  | 0                                                   |  | 2                                
|COOP Bank AB (publ), 516406-0005, Stockholm                                       |  | 20 |  | 200,000    |  | SEK 20  |  | 0                                                   |  | 0                                
|SNPAC Swedish Number Portability Administrative Centre AB, 556595-2925, Stockholm |  | 20 |  | 400        |  | SEK 0   |  | 3                                                   |  | 1                                
|Other operating, dormant and divested companies                                   |  |    |  |            |  |         |  | 0                                                   |  | 8                                
|Companies outside Sweden                                                          |  |    |  |            |  |         |  |                                                     |  |                                  
|OAO Telecominvest, St. Petersburg                                                 |  | 26 |  | 4,262,165  |  | RUR 43  |  | 814                                                 |  | 807                              
|Drutt Corp., Wilmington, DE                                                       |  | 25 |  | 1,000,000  |  | USD 0   |  | 7                                                   |  | 15                               
|Infonet Services Corp., 954148675, El Segundo, CA                                 |  | 20 |  | 94,367,361 |  | USD 1   |  | 1,038                                               |  | 2,732                            
|Other operating, dormant and divested companies                                   |  |    |  |            |  |         |  | 0                                                   |  | 93                               
|                                                                                  |  |    |  |            |  |         |  |                                                     |  |                                  
|Total                                                                             |  |    |  |            |  |         |  |                                                     |  |                                  

F-110

---

|                                                   |  |    |  |                 |  |                 |  | Equity participation for
consolidation in the Group |  | Book value in each
parent company
|-------------------------------------------------- |  | -- |  | --------------- |  | --------------- |  | --------------------------------------------------- |  | ---------------------------------
|
|
|
|Subsidiaries' holdings                             |  |    |  |                 |  |                 |  |                                                     |  |                                  
|Swedish companies                                  |  |    |  |                 |  |                 |  |                                                     |  |                                  
|Svenska UMTS-nät AB, 556606-7996, Stockholm        |  | 50 |  | 501,000         |  | SEK 50          |  | 489                                                 |  | 498                              
|SmartTrust AB, 556179-5161, Stockholm              |  | 46 |  | 111,000,000     |  | SEK 1           |  | 78                                                  |  | 142                              
|Other operating, dormant and divested companies    |  |    |  |                 |  |                 |  | 0                                                   |  | 0                                
|Companies outside Sweden                           |  |    |  |                 |  |                 |  |                                                     |  |                                  
|Lattelekom SIA, 000305278, Riga                    |  | 49 |  | 71,581,000      |  | LVL 72          |  | 612                                                 |  | 1,006                            
|AS Eesti Telekom, 10234957, Tallinn                |  | 49 |  | 67,317,756      |  | EEK 673         |  | 2,385                                               |  | 2,379                            
|Punwire Paging Services Ltd, Chandigarh            |  | 49 |  | 14,699,780      |  | INR 147         |  | 0                                                   |  | 0                                
|Turkcell Holding A.S., Istanbul                    |  | 47 |  | 214,871,670,000 |  | TRL 214,871,670 |  | 7,856                                               |  | 7,897                            
|Turkcell Iletisim Hizmetleri A.S., Istanbul        |  | 13 |  | 65,370,950,001  |  | TRL 65,370,950  |  | 4,353                                               |  | 4,277                            
|Telekolmio Oy, 0785319-6, Hämeenlinna              |  | 40 |  | 3,200           |  | EUR 1           |  | 26                                                  |  |                                 
|OAO MegaFon, 7812014560, Moscow                    |  | 36 |  | 2,207,204       |  | RUR 20          |  | 2,213                                               |  | 2,320                            
|Helsingin GSM-Palvelut Oy, 1546079-8, Helsinki     |  | 35 |  | 700             |  | EUR 0           |  | 11                                                  |  | 9                                
|AUCS Communications Services v.o.f., Hoofddorp     |  | 33 |  |                |  | EUR 159         |  | 64                                                  |  | 0                                
|Suomen Numerot NUMPAC Oy, 1829232-0, Helsinki      |  | 33 |  | 4,000           |  | EUR 0           |  | 1                                                   |  |                                 
|UAB TietoEnator Consulting, 2594163, Vilnius       |  | 26 |  | 4,160           |  | LTL 0           |  | 3                                                   |  |                                 
|Operators Clearing House A/S, 18936909, Copenhagen |  | 25 |  | 250             |  | DKK 0           |  | 2                                                   |  | 3                                
|Eltel Networks Länsi Oy, 0731522-4, Paimio         |  | 21 |  | 11,430          |  | EUR 0           |  | 7                                                   |  |                                 
|Other operating, dormant and divested companies    |  |    |  |                 |  |                 |  | 0                                                   |  | 526                              
|                                                   |  |    |  |                 |  |                 |  |                                                     |  |                                  
|Total                                              |  |    |  |                 |  |                 |  | 20,401                                              |  | 23,027                           

In 2003, the share of voting power in Overseas Telecom AB was reduced to 42 percent and the company is no longer a subsidiary. The
comparative year value of equity participation in Overseas Telecom refers to Overseas' participations in its associated companies MTN Uganda Ltd and Mobile Telecommunications Ltd (MTC)
in Namibia.

The
share of voting power in Infonet Services Corp. 21 percent. OAO Telecominvest owns an additional 31 percent of the shares in OAO MegaFon. Turkcell Holding A.S. owns
51 percent of the shares in Turkcell Iletisim Hizmetleri A.S.

The
parent company's and subsidiaries' respective holdings of associated companies for the comparative year chiefly related to restructuring and companies divested. In 2003, the parent
company's and a subsidiary's shares in AS Eesti Telekom were transferred to the subsidiary Baltic Tele AB, which now owns the Group's total holding of 49 percent of the shares in Eesti Telekom.
The parent

F-111

---

company's
shares in OAO MegaFon were transferred to a subsidiary. The former associated company Loimaan Seudun Puhelin Oy became a subsidiary in 2003. Divestitures in 2003 included Marakanda
Marknadsplats AB, Maila Nordic AB and Suomen Erillisverkot Oy. Letemell AB was liquidated. The holdings in Netia S.A. and Metro One Telecommunications, Inc. decreased to the extent that these
entities were no longer associated companies. Later on the remaining shares in Netia S.A. were sold. Altogether, the Group's equity participation in the named companies amounted to SEK
627 million and the book value in each parent company to SEK 1,217 million.

Other holdings of securities

|                                                                |  |    |  |             |  |         |  | Book/fair value for
consolidation in the Group |  | Book value in each
parent company
|--------------------------------------------------------------- |  | -- |  | ----------- |  | ------- |  | ---------------------------------------------- |  | ---------------------------------
|
|
|
|Parent company holdings                                         |  |    |  |             |  |         |  |                                                |  |                                  
|Swedish companies                                               |  |    |  |             |  |         |  |                                                |  |                                  
|Wireless MainGate AB, 556551-9690, Karlskrona                   |  | 16 |  | 11,288,788  |  | SEK 0   |  | 0                                              |  | 0                                
|Taste Now AB, 556584-8602, Stockholm                            |  | 16 |  | 400         |  | SEK 0   |  | 0                                              |  | 0                                
|NGF NetGame Factory AB, 556588-3344, Stockholm                  |  | 10 |  | 147,000     |  | SEK 0   |  | 0                                              |  | 6                                
|Slottsbacken Fund Two KB, 969660-9875, Stockholm                |  | 18 |  |            |  | SEK    |  | 5                                              |  | 7                                
|Hyglo AB, 556601-6761, Stockholm                                |  | 8  |  | 16,800      |  | SEK 0   |  | 0                                              |  |                                 
|Other operating, dormant and divested companies                 |  |    |  |             |  |         |  | 0                                              |  | 0                                
|Companies outside Sweden                                        |  |    |  |             |  |         |  |                                                |  |                                  
|Digital Telecommunications Philippines Inc., Manila-Quezon City |  | 9  |  | 600,000,000 |  | PHP 600 |  | 40                                             |  | 40                               
|Vision Capital L.P., LP64, Saint Helier                         |  | 6  |  |            |  | USD 2   |  | 3                                              |  | 18                               
|Reach-U Holding Oyj, 1700628-1, Helsinki                        |  | 3  |  | 673,872     |  | EUR 0   |  | 0                                              |  | 0                                
|Eutelsat S.A., B422551176, Paris                                |  | 1  |  | 7,461,620   |  | EUR 7   |  | 67                                             |  | 67                               
|Atrica, Inc., 770532447, Santa Clara, CA                        |  | 1  |  | 249,377     |  | USD 0   |  | 0                                              |  | 10                               
|Intelsat, Ltd., Bermuda                                         |  | 0  |  | 1,566,190   |  | USD 2   |  | 7                                              |  | 7                                
|Other operating, dormant and divested companies                 |  |    |  |             |  |         |  | 0                                              |  | 76                               
|                                                                |  |    |  |             |  |         |  |                                                |  |                                  
|Total                                                           |  |    |  |             |  |         |  |                                                |  |                                  

F-112

---

|                                                             |  |    |  |           |  |       |  | Book/fair value for
consolidation in the Group |  | Book value in each
parent company
|------------------------------------------------------------ |  | -- |  | --------- |  | ----- |  | ---------------------------------------------- |  | ---------------------------------
|
|
|
|Subsidiaries' holdings                                       |  |    |  |           |  |       |  |                                                |  |                                  
|Swedish companies                                            |  |    |  |           |  |       |  |                                                |  |                                  
|Nerileran AB, 556293-1799, Karlstad                          |  | 18 |  | 22,397    |  | SEK 0 |  | 0                                              |  | 10                               
|Incirco AB, 556575-8546, Stockholm                           |  | 16 |  | 327,807   |  | SEK 0 |  | 0                                              |  | 0                                
|Internetprint Nordic AB, 556549-3342, Malmö                  |  | 14 |  | 216,667   |  | SEK 0 |  | 0                                              |  | 0                                
|Other operating, dormant and divested companies              |  |    |  |           |  |       |  | 0                                              |  | 11                               
|Subsidiaries' holdings                                       |  |    |  |           |  |       |  |                                                |  |                                  
|Companies outside Sweden                                     |  |    |  |           |  |       |  |                                                |  |                                  
|Digia Oy, 1073758-3, Helsinki                                |  | 15 |  | 51,833    |  | EUR 0 |  | 49                                             |  | 60                               
|Eveo Inc., C2175136, San Francisco, CA                       |  | 10 |  | 2,000,000 |  | USD 0 |  | 0                                              |  | 21                               
|Juniper Financial Corp., Wilmington, DE                      |  | 8  |  | 7,464,280 |  | USD 0 |  | 7                                              |  | 16                               
|Oy Finnet International Ab, 0946082-0, Helsinki              |  | 7  |  | 236       |  | EUR 0 |  | 8                                              |  |                                 
|Metro One Telecommunications, Inc., 930995165, Beaverton, OR |  | 7  |  | 1,635,000 |  | USD  |  | 26                                             |  |                                 
|CellGlide Ltd., 04573898, London                             |  | 6  |  | 136,081   |  | GBP 0 |  | 11                                             |  | 15                               
|Dejima, Inc., C2335702, Palo Alto, CA                        |  | 5  |  |          |  | USD 0 |  | 0                                              |  | 16                               
|Fonecta Group Oy, 1747839-3, Helsinki                        |  | 4  |  | 427,000   |  | EUR 0 |  | 3                                              |  |                                 
|Codetoys Oy, 1082133-9, Espoo                                |  | 3  |  | 636,851   |  | EUR 0 |  | 0                                              |  | 17                               
|Santapark Oy, 1095079-8, Rovaniemi                           |  | 3  |  | 10,000    |  | EUR 0 |  | 2                                              |  | 2                                
|InPhonic, Inc., Sacramento, CA                               |  | 4  |  | 744,198   |  | USD 0 |  | 5                                              |  | 21                               
|Bytemobile, Inc., C2266090, Mountain View, CA                |  | 2  |  | 735,476   |  | USD 0 |  | 4                                              |  | 10                               
|Radiolinja Eesti AS, 10261411, Tallinn                       |  | 2  |  | 8         |  | EEK 0 |  | 1                                              |  |                                 
|PacketVideo Corp., C2119477, San Diego, CA                   |  | 1  |  | 262,467   |  | USD 0 |  | 1                                              |  | 29                               
|Helsinki Halli Oy, 1016235-3, Helsinki                       |  | 1  |  | 36        |  | EUR 0 |  | 4                                              |  | 4                                
|Digital Media & Communications II L.P., Boston, MA           |  | 0  |  |          |  | USD  |  | 16                                             |  | 84                               
|Allegis Capital, LLC, 199817710056, San Francisco, CA        |  | 0  |  |          |  | USD  |  | 0                                              |  | 66                               
|Intellect Capital Ventures, Palo Alto, CA                    |  | 0  |  |          |  | USD  |  | 24                                             |  | 56                               
|TelAdvent LP, Boston, MA                                     |  | 0  |  |          |  | USD  |  | 15                                             |  | 37                               
|Magnum Communications L.P., Cayman Islands                   |  | 0  |  |          |  | USD  |  | 11                                             |  | 29                               
|Diamondhead Ventures, L.P., 200000500011, Menlo Park, CA     |  | 0  |  |          |  | USD  |  | 4                                              |  | 18                               
|Wideray Corp., C2261105, San Francisco, CA                   |  | 0  |  |          |  | USD 0 |  | 0                                              |  | 10                               
|Siennax International B.V., Amstelveen                       |  | 0  |  | 1,841,211 |  | EUR 0 |  | 9                                              |  | 9                                
|Phonetic Systems Ltd., Petach Tikva                          |  | 0  |  | 339,506   |  | ILS 0 |  | 0                                              |  | 59                               
|Kiinteistö Oy Mechelininkatu, Helsinki                       |  | 0  |  | 280       |  | EUR 0 |  | 1                                              |  | 1                                
|Kiinteistö Oy Turun Monitoimihalli, 0816425-3, Turku         |  | 0  |  | 1         |  | EUR 0 |  | 1                                              |  |                                 
|Technopolis Oyj, 0487422-3, Oulu                             |  | 0  |  | 27,433    |  | EUR 0 |  | 1                                              |  | 1                                
|Participations in real estate and housing companies, Finland |  |   |  |          |  | EUR  |  | 25                                             |  | 29                               
|Participations in local phone companies, Finland             |  |   |  |          |  | EUR  |  | 7                                              |  | 7                                
|Other operating, dormant and divested companies              |  |    |  |           |  |       |  | 0                                              |  | 181                              
|                                                             |  |    |  |           |  |       |  |                                                |  |                                  
|Total                                                        |  |    |  |           |  |       |  | 357                                            |  | 1,050                            

F-113

---



The parent company's and subsidiaries' respective holdings of other securities for the comparative year chiefly related to restructuring and companies divested.
In 2003, shares in Hyglo AB and Eutelsat S.A. that were previously owned by subsidiaries were transferred to the parent company. Divestitures in 2003 included Netia 1 Sp. z o.o., Done Solutions Oyj,
Entrust, Inc., New Skies Satellites N.V., Inmarsat Ventures plc, Ledstiernan AB, Handwise Oy, 724 Solutions, Inc., Zapper Technologies, Inc., Vitaminic S.p.A. and eBay Inc.
Peoples Telephone Company Ltd. is owned by Overseas Telecom AB, which became an associated company in 2003. Altogether, the Group's equity participation in the named companies amounted to SEK
271 million and the book value in each parent company to SEK 294 million.

42.   Quarterly Data (unaudited)

2003

|SEK in millions, except per share data          |                       | Q1     |       | Q2     |       | Q3     |       | Q4     |       | Total  
|----------------------------------------------- | --------------------- | ------ | ----- | ------ | ----- | ------ | ----- | ------ | ----- | -------
|Net sales                                       |                       | 20,674 |       | 20,603 |       | 20,094 |       | 21,054 |       | 82,425 
|EBITDA                                          |                       | 7,625  |       | 9,397  |       | 7,571  |       | 7,442  |       | 32,035 
|Depreciation, amortization and write-downs      |                       | -4,437 |       | -4,374 |       | -4,337 |       | -4,559 |       | -17,707
|Income from associated companies                |                       | 84     |       | -620   |       | 419    |       | 499    |       | 382    
|Operating income                                |                       | 3,272  |       | 4,403  |       | 3,653  |       | 3,382  |       | 14,710 
|Income after financial items                    |                       | 2,742  |       | 4,704  |       | 3,353  |       | 3,100  |       | 13,899 
|Net income                                      |                       | 1,609  |       | 2,983  |       | 1,792  |       | 2,696  |       | 9,080  
|Basic and diluted earnings/loss per share (SEK) |                       | 0.35   |       | 0.64   |       | 0.38   |       | 0.58   |       | 1.95   
|Free cash flow                                  |                       | 3,891  |       | 5,013  |       | 5,138  |       | 3,309  |       | 17,351 
|Investments                                     |                       | 3,375  |       | 2,231  |       | 1,899  |       | 4,613  |       | 12,118 
|                                                | of which CAPEX        |        | 2,153 |        | 1,995 |        | 1,889 |        | 3,336 |        
|                                                | of which acquisitions |        | 1,222 |        | 236   |        | 10    |        | 1,277 |        
|                                                |                       |        |       |        |       |        |       |        |       |        

2002

|SEK in millions, except per share data          |                       | Q1     |       | Q2     |       | Q3      |       | Q4     |        | Total  
|----------------------------------------------- | --------------------- | ------ | ----- | ------ | ----- | ------- | ----- | ------ | ------ | -------
|Net sales                                       |                       | 13,885 |       | 14,346 |       | 14,496  |       | 16,756 |        | 59,843 
|EBITDA                                          |                       | 3,404  |       | 2,760  |       | 284     |       | 2,973  |        | 9,421  
|Depreciation, amortization and writedowns       |                       | -2,707 |       | -3,004 |       | -11,057 |       | -4,076 |        | -20,844
|Income from associated companies                |                       | 12     |       | 363    |       | -42     |       | 195    |        | 528    
|Operating income                                |                       | 709    |       | 119    |       | -10,815 |       | -908   |        | -10,895
|Income after financial items                    |                       | 535    |       | -78    |       | -10,964 |       | -1,109 |        | -11,616
|Net income                                      |                       | 127    |       | 30     |       | -10,118 |       | 1,894  |        | -8,067 
|Basic and diluted earnings/loss per share (SEK) |                       | 0.04   |       | 0.01   |       | -3.37   |       | 0.54   |        | -2.58  
|Free cash flow                                  |                       | -1,107 |       | 1,722  |       | 2,059   |       | 1,203  |        | 3,877  
|Investments                                     |                       | 2,053  |       | 2,637  |       | 1,956   |       | 47,792 |        | 54,438 
|                                                | of which CAPEX        |        | 2,022 |        | 2,091 |         | 1,783 |        | 8,449  |        
|                                                | of which acquisitions |        | 31    |        | 546   |         | 173   |        | 39,343 |        
|                                                |                       |        |       |        |       |         |       |        |        |        

F-114

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2001

|SEK in millions, except per share data          |                       | Q1     |       | Q2     |       | Q3     |       | Q4     |       | Total  
|----------------------------------------------- | --------------------- | ------ | ----- | ------ | ----- | ------ | ----- | ------ | ----- | -------
|Net sales                                       |                       | 13,592 |       | 14,203 |       | 14,431 |       | 14,970 |       | 57,196 
|EBITDA                                          |                       | 3,378  |       | 3,285  |       | 3,181  |       | 3,455  |       | 13,299 
|Depreciation, amortization and write-downs      |                       | -2,410 |       | -2,505 |       | -2,775 |       | -6,285 |       | -13,975
|Income from associated companies                |                       | -157   |       | 208    |       | 2,339  |       | 3,746  |       | 6,136  
|Operating income                                |                       | 811    |       | 988    |       | 2,745  |       | 916    |       | 5,460  
|Income after financial items                    |                       | 502    |       | 909    |       | 2,491  |       | 906    |       | 4,808  
|Net income                                      |                       | 291    |       | 250    |       | 1,900  |       | -572   |       | 1,869  
|Basic and diluted earnings/loss per share (SEK) |                       | 0.10   |       | 0.08   |       | 0.63   |       | -0.19  |       | 0.62   
|Free cash flow                                  |                       | -3,082 |       | -1,304 |       | -1,527 |       | -593   |       | -6,506 
|Investments                                     |                       | 3,659  |       | 5,954  |       | 5,965  |       | 5,157  |       | 20,735 
|                                                | of which CAPEX        |        | 3,568 |        | 3,666 |        | 5,630 |        | 4,849 |        
|                                                | of which acquisitions |        | 91    |        | 2,288 |        | 335   |        | 308   |        
|                                                |                       |        |       |        |       |        |       |        |       |        

43.   Swedish GAAP

Differences in principles

TeliaSonera's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS/IAS). IFRS/IAS differ in certain
respects from Swedish law and accounting practices, primarily with respect to the reporting of financial instruments and write-ups of tangible fixed assets.

Besides
Swedish law (Årsredovisningslagen, ÅRLthe Swedish Annual Accounts Act), accounting practices for Swedish publicly quoted companies are
governed by standards issued by Redovisningsrådet (the Swedish Financial Accounting Standards Council). These standards are based on IFRS/IAS but still differ from IFRS/IAS in certain
respects. However, with reference to TeliaSonera's operations and other relevant circumstances, the accounting principles applied by TeliaSonera do not materially differ from
Redovisningsrådet's standards.

Financial instruments

Swedish law differs from IFRS/IAS mainly with regard to accounting for unrealized value changes in derivatives and publicly quoted securities and accounting for
liabilities hedged against changes in fair value (see note "Financial Instruments and Financial Risk Management"). The Swedish Annual Accounts Act (ÅRL) stipulates valuation at the
lower of acquisition cost or fair value.

Write-up of tangible fixed assets

Following an economic life analysis and a subsequent management decision to change the depreciation period for the fixed local access network from 8 years
to 20 years and for switching equipment for ADSL customers from 3 years to 10 years, the parent company under ÅRL made a one-off write-up of
tangible fixed assets. This method is not allowed under IFRS/IAS.

Income taxes

Deferred tax assets and liabilities are calculated for all differences between IFRS/IAS and Swedish GAAP, when applicable.

F-115

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Translation into Swedish GAAP

Application of U.S. GAAP has the following effects on consolidated net income and shareholders' equity.

|                              |  | January-December
|----------------------------- |  | ----------------
|
|
|Net income under IFRS/IAS     |  | 9,080           
|Financial instruments         |  | 0               
|Deferred tax                  |  | -0              
|                              |  |                 
|Net income under Swedish GAAP |  | 9,080           

|                                        |  | December 31,
|--------------------------------------- |  | ------------
|
|
|Shareholders' equity under IFRS/IAS     |  | 112,393     
|Financial instruments                   |  | 100         
|Write-up of tangible fixed assets       |  | 4,949       
|Deferred tax                            |  | -1,414      
|                                        |  |             
|Shareholders' equity under Swedish GAAP |  | 116,028     

The
adjustments would have changed certain items in the consolidated income statements and balance sheets. The following table shows summary income statements and balance sheets after
the application of Swedish GAAP.

|                                                |  | January-December
|----------------------------------------------- |  | ----------------
|
|
|Income statements under Swedish GAAP            |  |                 
|Net sales                                       |  | 82,425          
|Operating income                                |  | 14,710          
|Income after financial items                    |  | 13,899          
|Income taxes                                    |  | -3,850          
|Minority interests                              |  | -969            
|Net income                                      |  | 9,080           
|Basic and diluted earnings/loss per share (SEK) |  | 1.95            
|                                                |  |                 

F-116

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|                                           |  | December 31,
|------------------------------------------ |  | ------------
|
|
|Balance sheets under Swedish GAAP          |  |             
|Fixed assets                               |  | 157,801     
|Current assets                             |  | 37,018      
|Total assets                               |  | 194,819     
|Shareholders' equity                       |  | 116,028     
|Minority interests                         |  | 3,441       
|Provisions                                 |  | 16,682      
|Long-term liabilities                      |  | 28,095      
|Current liabilities                        |  | 30,573      
|Total shareholders' equity and liabilities |  | 194,819     
|                                           |  |             

44.   Finnish GAAP

The following information is provided pursuant to the Finnish Financial Supervision Authority decision no. 28/269/2002.

This
annual report has been prepared in accordance with chapter 2, section 6 of the Finnish Securities Markets Act.

As
defined in note "Basis for Presentation;" section "General," TeliaSonera prepares its consolidated financial statements in accordance with International Financial Reporting Standards
(IFRS/IAS). The main differences between Finnish Accounting Standards (Finnish GAAP) and IFRS/IAS, relevant to TeliaSonera, are as follows.

Business combinations

Under Finnish GAAP an acquisition paid through the issue of own shares does not require that the purchase price is determined based on the market value of the
issued shares. IFRS/IAS require that the purchase price is determined based on the market value of the issued shares, which often results in the recognition of goodwill and other assets at
consolidation and future depreciation and amortization of such amounts. Historically TeliaSonera has not issued own shares at acquisitions but the merger with Sonera involved the issue of own shares.

Impairment of fixed assets and long-term investments

IFRS/IAS require that if future cash flows are used for recoverability tests these cash flows should be discounted. Finnish GAAP do not exactly define how
recoverability tests should be performed.

Financial instruments

Under Finnish GAAP, derivative financial instruments cannot be recorded at fair value, unless used for hedging purposes. Under IFRS/IAS, all derivatives are
recorded in the balance sheet at fair value. The changes in the fair value of derivatives are recorded either in earnings or in a separate component of shareholders' equity, depending on the intended
use and designation of the derivative at its inception.

F-117

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Under
Finnish GAAP, investments in marketable securities should be recorded at the lower of cost or market value and the unrealized changes are recorded in the income statement as
write-downs or reversals of write-downs. Under IFRS/IAS, TeliaSonera reports all marketable securities classified as "available-for-sale" at fair value, and records the
unrealized gains and losses as a separate component of shareholders' equity, unless there is an impairment, in which case a write-down is recorded in the income statement.

Deferred taxes

Finnish GAAP do not require the recognition of deferred tax assets for certain temporary differences even if it is apparent that the temporary differences
reverses in the foreseeable future. IFRS/IAS require the recognition of a deferred tax asset under such circumstances.

45.   U.S. GAAP

Differences in principles

TeliaSonera's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS/IAS), which differ in certain
respects from United States Generally Accepted Accounting Principles (U.S. GAAP). Application of U.S. GAAP would have affected
shareholders' equity as of December 31, 2003, 2002 and 2001 and net income for each of the years in the three-year period ended December 31, 2003. The significant differences
between IFRS/IAS and U.S. GAAP as related to TeliaSonera are discussed below.

Revenue recognition

The SEC Staff Accounting Bulletin No. 104 "Revenue Recognition" (SAB 104) addresses revenue recognition under U.S. GAAP. Under this guidance, revenue
earned from access, connection and similar fees should be recognized over the estimated life of the customer relationship. Also, SAB 104 permits, but does not require, companies to defer costs
directly associated with such revenue and to also recognize these costs over the life of the customer relationship. Under IFRS/IAS, TeliaSonera recognizes this revenue and related costs when the
services are provided and the related costs are incurred.

Under
U.S. GAAP, TeliaSonera has adjusted revenues to reflect the deferral of access, connection and similar revenues and subsequent amortization over the estimated customer life of
seven years. TeliaSonera has elected not to defer any associated costs and accordingly, as permitted under U.S. GAAP, such costs are expensed as incurred.

Impairment charge

At the end of 2001, TeliaSonera recorded an impairment charge relating to the impairment of its former business area, Telia International Carrier. Under IFRS/IAS,
the business area was written down to its realizable value as determined by discounting the expected future cash flows. Under U.S. GAAP, the test for impairment uses the asset's recoverable amount as
determined using expected future undiscounted cash flows. The estimated recoverable (sum of undiscounted cash flows) exceeded the carrying value and therefore no impairment was recognized under U.S.
GAAP and accordingly, the impairment charge and the related valuation allowance for deferred tax recognized under IFRS/IAS was reversed.

F-118

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During
2002, management determined a new strategic focus for Telia International Carrier. Based on this decision management undertook an additional evaluation of International Carrier
assets for impairment test under IFRS/IAS and recognized an impairment charge of SEK 6,131 million. The results of this evaluation also revealed that the sum of expected future undiscounted
cash flows was
below the related assets carrying value and therefore an impairment charge was also recognized under U.S. GAAP.

Sale and leaseback

In 1998 and in 2001, TeliaSonera sold certain real estate properties to external buyers, while TeliaSonera group companies stayed on as tenants. The profit from
the divestitures was recognized as revenue in its entirety, under IFRS/IAS, because the rental contracts are considered operating leases and the real estate was sold at market value.

Under
U.S. GAAP additional conditions must be met in order to immediately recognize gains on sale-leaseback transactions. As the TeliaSonera Group retained use of more than
an insignificant portion, but less than substantially all of the properties sold, gain recognition is being deferred. Under U.S. GAAP, during the periods 1998-2012 and
2001-2013, respectively, that portion of the profit in excess of the discounted present value of the related future gross rental payments at the time of sale is recognized as revenue in
proportion to the gross rental payments.

Other
than related operating lease commitments, which extended for 3-15 years from the respective transaction dates, the TeliaSonera Group is not bound by any other
outstanding commitments or contingent obligations related to these properties.

Stock-based compensation

Under IFRS/IAS, TeliaSonera does not record an expense with respect to its employee stock option programs, implemented in 2001 and 2002. In 2001, TeliaSonera
under U.S. GAAP accounted for employee stock options under the recognition and measurement provisions of APB Opinion No. 25 "Accounting for Stock Issued to Employees" (APB 25) and
related interpretations under this method. In December 2002, FASB Statement No. 148 "Accounting for Stock-Based CompensationTransition and Disclosure" (FAS 148) was
issued. FAS 148 amends FAS 123 "Accounting for Stock-Based Compensation" and provides alternative methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation under FAS 123. In addition, FAS 148 amends the disclosure requirements of FAS 123 to require more prominent and more frequent
disclosures in financial statements about the effects of stock-based compensation. FAS 148 became effective for fiscal years ending after December 15, 2002. Under U.S. GAAP, TeliaSonera
began expensing the cost of employee stock options in the fourth quarter of 2002 and has elected to use the retroactive restatement method of FAS 148. Accordingly, all prior periods presented
have been restated to reflect compensation costs that would have been recognized had the recognition provisions of FAS 123, as amended by FAS 148, been applied to all awards granted to
employees.

Alecta/SPP funds

In 2000, Alecta, a Swedish insurance company formerly called SPP, announced a refund of pension premiums paid. Part of the refund was repaid in cash and the
remaining balance could be applied against future premiums, be paid in cash over several years, or be paid in a lump sum. Under IFRS/IAS, TeliaSonera recognized the present value of the total refund
as other operating revenue. Under U.S. GAAP, cash refunds are recognized as other operating revenue when received.

F-119

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Restructuring costs

Under IFRS/IAS, a provision for restructuring costs is recognized when the general requirements for recording provisions are met. Under U.S. GAAP, a restructuring
charge is recorded when a detailed plan for exit costs has been developed and those costs relating to employee termination benefits have been developed in sufficient detail so that employees who may
be subject to termination would be aware of the benefit they were to receive upon involuntary termination. U.S. GAAP requires that significant changes in the plan are unlikely. Certain provisions of
the restructuring accrual recorded under IFRS/IAS in 2002 related to the workforce reduction and certain other exit costs did not meet the U.S. GAAP requirements and accordingly were reversed. In
2003, the U.S. GAAP requirements related to workforce reduction were met. Under U.S. GAAP, the said other exit costs are recognized as incurred.

Share of earnings in associated companies

TeliaSonera's share of net income of its associated companies is determined using the equity method and is based on financial statements of the investees prepared
in accordance with IAS. This reconciliation item reflects adjustments for the differences between IFRS/IAS and U.S. GAAP relating to the associates.

Financing of associated companies

TeliaSonera, under IFRS/IAS, records interest costs arising from financing of associated companies in its operations as incurred. U.S. GAAP requires that interest
costs be capitalized to the extent that such costs relate to an associated company while the associated company has activities in progress necessary to commence its planned principal activities as
prescribed by FASB Statement No. 34 "Capitalization of Interest Costs."

Associated companies in hyperinflationary economies

Under IFRS/IAS, when the measurement currency for a subsidiary or an associated company is the currency of a hyperinflationary economy, the reported
non-monetary assets and liabilities, and equity are restated in terms of the measuring unit current at the balance sheet date. The restated financial statements are translated into SEK at
the closing rate. The restating effects are recorded as financial revenue or expense and in income from associated companies, respectively.

Under
U.S. GAAP, the temporal method should be used to translate the financial statements of subsidiaries and equity accounted investees where they are denominated in currencies of
highly-inflationary economies. The remeasurement of the financial statements is done as if the reporting currency of the parent had been the functional currency.

Goodwill

Under IFRS/IAS, TeliaSonera amortizes goodwill and other intangible assets. In accordance with FASB Statement No. 142 "Goodwill and Other Intangible
Assets" (FAS 142), goodwill and indefinite lived intangible assets will no longer be amortized but will be reviewed annually for impairment. Intangible assets that are not deemed to have an
indefinite life will continue to be amortized over their useful lives. The amortization provisions of FAS 142 apply to goodwill and intangible assets acquired after June 30, 2001. With
respect to goodwill and intangible assets acquired prior to July 1, 2001, TeliaSonera began applying the new accounting rules starting January 1, 2002.

F-120

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The
adoption of FAS 142 required TeliaSonera to perform an initial impairment assessment by June 30, 2002 on all recorded goodwill as of January 1, 2002. At this
date, TeliaSonera had no other acquired indefinite lived intangible assets. As required by FAS 142 this impairment analysis was updated during the fourth quarter of 2002. Telia did not
recognize any impairment loss as a result of assessing impairment.

As
a result of adoption, TeliaSonera under U.S. GAAP realized a pre-tax benefit of SEK 1,804 million on amortization reductions for goodwill on subsidiaries and
associated companies in the year ended December 31, 2002.

Changes in accounting principles

FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" (FAS 133) was effective January 1, 2001. FAS 133
requires that all derivatives be measured at fair value and recognized as either assets or liabilities on the balance sheet. Changes in the fair value of derivative instruments not used for hedging
purposes or qualifying as accounting hedges will be recognized in earnings immediately. Changes in the fair value of derivative instruments qualifying as effective accounting hedges will be recognized
either in earnings, for hedges of changes in fair value, or in Other Comprehensive Income for hedges of changes in cash flows. The ineffective portion of a derivative instrument's change in fair value
is immediately recognized in earnings. Under FAS 133, foreign exchange risks hedged under firm commitments may either be recorded as a fair value hedge or as a cash flow hedge. TeliaSonera
classifies and records these hedges as cash flow hedges.

The
transitional rules in IAS 39 and FAS 133 differ somewhat in that under IAS 39, TeliaSonera recorded the changes in accounting principles as an adjustment to the opening
balance of shareholders' equity at January 1, 2001. Under U.S. GAAP upon adoption of FAS 133 certain adjusting entries were recorded in earnings in accordance with FAS 133,
paragraph 52.

Merger with Sonera Oyj

Under IFRS/IAS, the TeliaSonera shares issued to Sonera shareholders in the mandatory redemption offer have been valued based on the quoted closing market price
of these shares as of the date of the Board of Directors decision to issue new shares, which was February 10, 2003. Under U.S. GAAP, the average market price for a reasonable period before and
after the date the terms of a transaction are agreed and announced is to be used in determining the fair value of securities issued. Accordingly, under U.S. GAAP, all TeliaSonera shares issued to
Sonera shareholders in consideration for the merger are valued based on a weighted average share price for the five consecutive trading days between March 22 and 28, 2002, which was SEK 36.75
per share. The fair value of TeliaSonera warrants issued to Sonera warrantholders in the mandatory redemption offer has been determined using the same share price and totaled SEK 4 million.

Furthermore,
under IFRS/IAS, the total fair value of TeliaSonera warrants issued has been recorded as part of the purchase price. Under U.S. GAAP, the fair value of fully vested
warrants, amounting to SEK 232 million, has been recognized as part of the purchase price consideration, while the fair value of the unvested warrants, totaling SEK 48 million, will be
amortized to expense over the future remaining vesting period as stock-based employee compensation cost. In 2003, the compensatory cost was SEK 23 million.

F-121

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Adjusted
to reflect the completion of the merger, the excess of purchase price consideration over the fair value of Sonera's net assets, the final fair value adjustments and goodwill
under U.S. GAAP are as follows.

|SEK in millions                                                                                                          |  | December 31,
2003                                          |  | Adjustments in 2003 |  | December 31,
2002
|------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------- |  | ------------------- |  | -----------------
|Fair value of TeliaSonera shares issued                                                                                  |  | 61,520                                                     |  | 2,553               |  | 58,967           
|Fair value of TeliaSonera warrants issued                                                                                |  | 232                                                        |  | 4                   |  | 228              
|Value of Sonera shares and warrants acquired for cash                                                                    |  | 495                                                        |  | 495                 |  |                 
|Transaction related expenses                                                                                             |  | 637                                                        |  | 15                  |  | 622              
|                                                                                                                         |  |                                                            |  |                     |  |                  
|Total purchase price consideration                                                                                       |  | 62,884                                                     |  | 3,067               |  | 59,817           
|Less: Fair value of Sonera's net assets under U.S. GAAP (based on Sonera's U.S. GAAP reconciliation on December 3, 2002) |  | -19,054                                                    |  | -953                |  | -18,101          
|                                                                                                                         |  |                                                            |  |                     |  |                  
|Excess of purchase price consideration over fair value of Sonera's net assets                                            |  | 43,830                                                     |  | 2,114               |  | 41,716           
|Less: Identified intangibles at fair value:                                                                              |  |                                                            |  |                     |  |                  
|                                                                                                                         |  | Trade names                                                |  | -1,690              |  | -144             
|                                                                                                                         |  | Licenses, patents, and roaming and interconnect agreements |  | -5,782              |  | -290             
|                                                                                                                         |  | Subscriber contracts                                       |  | -16,038             |  | -969             
|Less: Fair value adjustment of computer software                                                                         |  | -271                                                       |  | -18                 |  | -253             
|Less: Fair value adjustment of real estate and plant and machinery                                                       |  | -777                                                       |  | -12                 |  | -765             
|Less: Fair value adjustment of investments in associated companies and other equity holdings                             |  | -6,261                                                     |  | 2,479               |  | -8,740           
|Add-back: Fair value adjustment of pension obligations                                                                   |  | 539                                                        |  | 27                  |  | 512              
|Deferred tax                                                                                                             |  | 6,125                                                      |  | -1,665              |  | 7,790            
|                                                                                                                         |  |                                                            |  |                     |  |                  
|Goodwill                                                                                                                 |  | 19,675                                                     |  | 1,522               |  | 18,153           

Under
IFRS/IAS, roaming and interconnect agreements with other operators as well as most of the customer list ("portfolio of customers") do not meet the definition of an intangible
asset. Therefore, TeliaSonera under IFRS/IAS has not assigned any value to Sonera's roaming and interconnect
agreements and only assigned a limited value to Sonera's customer list, reflecting certain long-term contractual agreements with customers. Under U.S. GAAP, the fair values of roaming and
interconnect agreements and the total customer list are recorded as intangible assets and amortized over their economic useful lives.

Besides
different carrying values of Sonera's net assets and of Sonera's investments in associated companies, differences in the methods of calculating the fair value of TeliaSonera
shares and warrants issued and the fair value of other intangible assets affect the amount of goodwill from the transaction under U.S. GAAP. Under IFRS/IAS, the purchase price allocated to
identifiable assets and liabilities is amortized based on the estimated useful life of the identifiable assets and liabilities. The excess purchase price after this allocation is described as goodwill
and recognized as a separate asset. Under IFRS/IAS, TeliaSonera amortizes goodwill arising from the merger over an economic useful life of 20 years. Under U.S. GAAP, goodwill arising in a
business combination shall not be amortized.

F-122

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Income taxes

Deferred tax assets and liabilities are calculated for all differences between IFRS/IAS and U.S. GAAP, when applicable.

Translation into U.S. GAAP

Application of U.S. GAAP has the following effects on consolidated net income and shareholders' equity.

January-DecemberSEK in millions2003

2002

2001Net income under IFRS/IAS

9,080

-8,067

1,869Revenue recognition

-325

-147

-239Impairment charge



-3,027

3,027Sale and leaseback

120

449

-274Stock-based compensation

-18

-125

-91Alecta/SPP funds

6

243

138Restructuring costs

-335

470

Share of earnings in associated companies

8

33

29Financing of associated companies

0

0

-15Associated companies in hyperinflationary economies

-743

-122

Goodwill

4,205

1,804

2Changes in accounting principles





4Merger with Sonera

-2,073

-152

Deferred tax

703

-114

-7Net income under U.S. GAAP

10,628

-8,755

4,443


December 31,SEK in millions2003

2002

2001Shareholders' equity under IFRS/IAS

112,393

108,829

59,885Revenue recognition

-4,428

-4,103

-3,956Impairment charge





3,027Sale and leaseback

-1,076

-1,196

-1,645Alecta/SPP funds



-6

-249Restructuring costs

135

470

Share of earnings in associated companies

41

33

Financing of associated companies

3

3

3Associated companies in hyper inflationary economies

-3,292

-122

Goodwill

6,011

1,806

2Merger with Sonera

1,593

3,138

Deferred tax

2,111

1,408

1,522Exchange rate differences

-1,711

9

Shareholders' equity under U.S. GAAP

111,780

110,269

58,589


F-123

---



The
adjustments would have changed certain items in the consolidated income statements and balance sheets. The following tables show summary income statements and balance sheets after
the application of U.S. GAAP.

January-DecemberSEK in millions, except per share data2003

2002

2001Income statements under U.S. GAAPNet sales

82,099

59,336

56,957Income from associated companies

284

809

6,147Operating income

15,555

-11,472

8,033Income after financial items

14,744

-12,190

7,390Income taxes

-3,147

3,505

-2,925Minority interests

-969

-70

-22Net income

10,628

-8,755

4,443Basic and diluted earnings/loss per share (SEK)

2.28

-2.80

1.48


December 31,SEK in millions2003

2002

2001Balance sheets under U.S. GAAPFixed assets

163,769

183,627

99,236Current assets

37,018

33,837

33,259Total assets

200,787

217,464

132,495Shareholders? equity

111,780

110,269

58,589Minority interests

3,441

5,210

204Provisions

21,072

22,386

13,107Long-term loans

25,867

32,124

25,193Short-term loans

4,687

12,608

3,931Long-term liabilities

4,826

5,773

6,262Current liabilities

29,114

29,094

25,209Total shareholders' equity and liabilities

200,787

217,464

132,495


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Comprehensive income

The accounts should comply with FASB Statement No. 130 "Reporting Comprehensive Income" to take into account the concept of comprehensive income. This
concept includes net income for the year and items charged directly to equity originating from non-owner sources.

|                                                         |                        | January-December
|-------------------------------------------------------- | ---------------------- | ----------------
|
|
|Net income under U.S. GAAP                               |                        | 10,628          
|Derivatives at fair value: Application of FAS 133        |                        |                
|                                                         | Change during the year |                 
|Unrealized gains/losses on securities available for sale |                        |                
|Translation of foreign operations                        |                        | -9,812          
|Other items                                              |                        | -23             
|                                                         |                        |                 
|Other comprehensive income                               |                        | -9,845          
|                                                         |                        |                 
|Total comprehensive income                               |                        | 783             
|Accumulated comprehensive income                         |                        | 13,526          
|                                                         |                        |                 

Expected future amortization of other intangible assets

Given the current ownership structure and the same exchange rates as in 2003, and that no events will occur that would trigger impairment charges, TeliaSonera
expects the following amortization of other intangible assets during the next five-year period.

|SEK in millions                               |  | 2004  |  | 2005  |  | 2006  |  | 2007  |  | 2008 
|--------------------------------------------- |  | ----- |  | ----- |  | ----- |  | ----- |  | -----
|Amortization of other intangible fixed assets |  | 3,558 |  | 3,258 |  | 3,258 |  | 2,996 |  | 2,579

Recently issued accounting pronouncements

FAS 143

FASB Statement No. 143 "Accounting for Obligations Associated with the Retirement of Long-Lived Assets" (FAS 143) was issued in
August 2001. FAS 143 addresses financial accounting and reporting for the retirement obligation of an asset and states that companies should recognize the asset retirement cost, at its
fair value, as part of the cost of the asset and classify the accrued amount as a liability in the consolidated balance sheet. The asset retirement liability is then accreted to the ultimate payout as
interest expense. The initial measurement of the liability would be subsequently updated for revised estimates of the discounted cash outflows. FAS 143 became effective for fiscal years
beginning after June 15, 2002. The application of FAS 143 did not have a material effect on TeliaSonera's earnings and financial position under U.S. GAAP.

FAS 145

FASB Statement No. 145 "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections"
(FAS 145) was issued in April 2002. FAS 145 rescinds FAS 4 "Reporting Gains and Losses from Extinguishment of Debt," and an amendment of that statement, FAS 64 "Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements." FAS 145 also rescinds FAS 44 "Accounting for Intangible Assets of Motor Carriers." FAS 145 amends FAS 13 "Accounting
for Leases," to eliminate an inconsistency between the required accounting for

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sale-leaseback
transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions.
FAS 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. The provisions
of FAS 145 related to the rescission of FAS 4 shall be applied in fiscal years beginning after May 15, 2002. Two provisions related to FAS 13 became effective for transactions
occurring after May 15, 2002. All other provisions of FAS 145 became effective for financial statements issued on or after May 15, 2002. The application of FAS 145 did not
have a material effect on TeliaSonera's earnings and financial position under U.S. GAAP.

FAS 146

In July 2002, FASB Statement No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" (FAS 146) was issued. FAS 146
addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The principal difference between FAS 146 and EITF 94-3 relates to FAS 146's
requirements for recognition of a liability for a cost associated with an exit or disposal activity. FAS 146 requires that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. Under EITF 94-3, a liability for an exit cost as generally defined in EITF 94-3 was recognized at the date of an entity's commitment
to an exit plan. FAS 146 states that an entity's commitment to a plan, by itself, does not create an obligation that meets the definition of a liability. Therefore, FAS 146 eliminates
the definition and requirements for recognition of exit costs in EITF 94-3. It also establishes that fair value is the objective for initial measurement of the liability. FAS 146
became effective prospectively for exit or disposal activities initiated after December 31, 2002. The application of FAS 146 did not have a material effect on TeliaSonera's earnings and
financial position under U.S. GAAP.

FAS 149

In April 2003, FASB Statement No. 149 "Amendment of Statement 133 on Derivative Instruments and Hedging Activities"
(FAS 149) was issued.FAS 149 requires that contracts with comparable characteristics be accounted for similarly. In particular, FAS 149 clarifies under
what circumstances a contract with an initial net investment meets the characteristic of a derivative, clarifies when a derivative contains a financing component, amends the definition of an
underlying to conform it to language used in FIN 45 (see below), and amends certain other existing pronouncements. FAS 149 was effective for contracts entered into or modified after
June 30, 2003, and for hedging relationships designated after June 30, 2003. In addition, provisions of FAS 149 should be applied prospectively. The application of FAS 149
did not have a material effect on TeliaSonera's earnings and financial position under U.S. GAAP.

FAS 150

In May 2003, FASB Statement No. 150 "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity" (FAS 150) was issued.FAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. FAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning
of the first interim period beginning after June 15, 2003. It is to

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be
implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of FAS 150 and still existing at the
beginning of the interim period of adoption. Restatement is not permitted. The application of FAS 150 did not have a material effect on TeliaSonera's earnings and financial position under U.S.
GAAP.

FIN 45

In November 2002, FASB Interpretation No. 45 "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" (FIN 45) was issued. Guarantees meeting the characteristics described in FIN 45, which are not included in a long list of exceptions, are required to be
initially recorded at fair value, which is different from the general current practice of recording a liability only when a loss is probable and reasonably estimable, as those terms are defined in
FASB Statement No. 5 "Accounting for Contingencies." FIN 45 also requires a guarantor to make significant new disclosures for virtually all guarantees even if the likelihood of the
guarantor's having to make payments under the guarantee is remote. FIN 45's disclosure requirements
are effective for financial statements of interim or annual periods ending after December 15, 2002. The initial recognition and initial measurement provisions are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002. The application of FIN 45 did not have a material effect on TeliaSonera's earnings and financial position under U.S. GAAP.

FIN 46

In January 2003, FASB Interpretation No. 46 "Consolidation of Variable Interest Entities" (FIN 46) was issued. On December 24,
2003, it was replaced by FASB Interpretation No. 46 (revised December 2003) "Consolidation of Variable Interest Entitiesan interpretation of ARB No. 51"
(FIN 46R). FIN 46R is an interpretation of Accounting Research Bulletin No. 51 "Consolidated Financial Statements" and changes the criteria currently used by companies in deciding
whether they are required to consolidate another entity. The application of FIN 46R did not have a material effect on TeliaSonera's consolidated financial statements under U.S. GAAP.

EITF 00-21

In November 2002, the Emerging Issues Task Force (EITF) within FASB reached a consensus on Issue 00-21 "Revenue Arrangements with Multiple
Deliverables" (EITF 00-21), providing further guidance on how to account for multiple element contracts. EITF 00-21 is effective for all arrangements entered into on or after
January 1, 2004. TeliaSonera does not expect the application of EITF 00-21 to have a material impact on its accounting treatment of multiple element contracts under US. GAAP.

46.   Definitions

Concepts

EBITDA

An abbreviation of "Earnings Before Interest, Tax, Depreciation and Amortization." Equals operating income before depreciation, amortization and write-downs and
before income from associated companies.

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Items not reflecting underlying business operations

Items not reflecting underlying business operations include capital gains and losses, costs for phasing out operations, personnel redundancy costs, and
non-capitalized expenses in conjunction with the merger with Sonera in 2002. Effective January 1, 2003, only capital gains/losses, write-downs, restructuring programs or similar
that represent more than SEK 100 million on an individual basis, will be reported as not reflecting underlying business operations. Comparable periods have not been restated.

Capital employed

Total assets less non-interest-bearing liabilities and non-interest-bearing provisions recorded, and the (proposed) dividend.

Operating capital

Non-interest-bearing assets less non-interest-bearing liabilities, including the (proposed) dividend, and non-interest-bearing
provisions.

Net interest-bearing liability

Interest-bearing liabilities and provisions less interest-bearing assets but including participations in associated companies.

Net borrowings

Interest-bearing liabilities less interest-bearing assets but including participations in associated companies.

Net debt

Interest-bearing liabilities less short-term investments and cash and bank.

Free cash flow

Cash flow from operating activities less intangible and tangible fixed assets acquired.

CAPEX

An abbreviation of "Capital Expenditure." Investments in intangible and tangible fixed assets but excluding goodwill and fair-value adjustments.

Acquisitions

Investments in goodwill and fair-value adjustments, shares, and participations.

Per share data

Earnings per share are based on the weighted average number of shares before and after dilution with potential ordinary shares, while shareholders' equity per
share are based on the number of shares at the end of the period.

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Notation conventions

In conformance with Swedish and international standards, this report applies the following currency notations:

|SEK |  | Swedish krona    |  | HKD |  | Hong Kong dollar |  | NOK |  | Norwegian krone 
|--- |  | ---------------- |  | --- |  | ---------------- |  | --- |  | ----------------
|AZM |  | Azerbaijan manat |  | HUF |  | Hungarian forint |  | PHP |  | Philippine peso 
|CHF |  | Swiss franc      |  | INR |  | Indian rupee     |  | PLN |  | Polish zloty    
|CZK |  | Czech koruna     |  | JPY |  | Japanese yen     |  | RUR |  | Russian ruble   
|DEM |  | German mark      |  | KZT |  | Kazakhstan tenge |  | SGD |  | Singapore dollar
|DKK |  | Danish krone     |  | LKR |  | Sri Lankan rupee |  | TRL |  | Turkish lira    
|EEK |  | Estonian kroon   |  | LTL |  | Lithuanian lita  |  | UGX |  | Ugandan shilling
|EUR |  | European euro    |  | LVL |  | Latvian lat      |  | USD |  | U.S. dollar     
|GBP |  | Pound sterling   |  |     |  |                  |  |     |  |                 

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.

|April 19, 2004 |  | TELIASONERA AB
|-------------- |  | --------------
|               |  | By:           
|               |  | Name:         
|               |  | Title:        
|               |  | By:           
|               |  | Name:         
|               |  | Title:        

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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
TELIASONERA AB
Exhibits To Form 20-F

|1.   |  | Articles of Association of TeliaSonera AB (incorporated herein by reference to Exhibit 3.2 to Post-Effective Amendment No. 1 to the Registration Statement on Form F-4 filed by TeliaSonera AB with the
Securities and Exchange Commission on December 18, 2002).                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1  |  | Combination Agreement, dated as of March 26, 2002, by and between Telia AB and Sonera Corporation (incorporated herein by reference to Exhibit 2.1 to the Registration Statement on Form F-4 filed by Telia AB with the Securities and
Exchange Commission on October 1, 2002 (the "Form F-4")).
|4.2  |  | Amendment to the Combination Agreement, dated as of September 27, 2002, by and between Telia and Sonera (incorporated herein by reference to Exhibit 2.2 to the Form F-4).                                                                                                                      
|4.3  |  | Framework Agreement, dated as of March 15, 2001, between Telia AB and Telia Mobile AB, and NetCom AB and Tele2 AB (incorporated herein by reference to Exhibit 10.1 to the Form F-4).                                                                                                           
|4.4  |  | Shareholder Agreement, dated as of March 15, 2001, between Telia AB, Telia Mobile AB, NetCom AB and Tele2 AB (incorporated herein by reference to Exhibit 10.2 to the Form F-4).                                                                                                                
|4.5  |  | Registration Rights Agreement, dated as of September 27, 2002 between Telia AB and the Kingdom of Sweden (incorporated herein by reference to Exhibit 10.3 to the Form F-4).                                                                                                                    
|4.6  |  | Registration Rights Agreement, dated as of September 27, 2002 between Telia AB and the Republic of Finland (incorporated herein by reference to Exhibit 10.4 to the Form F-4).                                                                                                                  
|6.   |  | See Note 21 to our consolidated financial statements included in Item 18 of this Form 20-F for information on how earnings per share information was calculated.                                                                                                                                
|8.   |  | For significant subsidiaries as of the end of the year covered by this annual report, see "Item 4.C Organizational Structure" and Note 41 to our consolidated financial statements included in Item 18 of this Form 20-F.                                                                       
|12.1 |  | Certification by the Chief Executive Officer of TeliaSonera AB pursuant to Section 302 of the Sarbanes-Oxley Act 2002.                                                                                                                                                                          
|12.2 |  | Certification by the Chief Financial Officer of TeliaSonera AB pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       
|13.1 |  | Certification by the Chief Executive Officer of TeliaSonera AB pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                        
|13.2 |  | Certification by the Chief Financial Officer of TeliaSonera AB pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                        

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