SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 20-F(Mark One)

|o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934           | 
|- | ---------------------------------------------------------------------------------------------------------- | 
|  | OR                                                                                                         | 
|  |                                                                                                            | 
|ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934                       | 
|  | For the fiscal year ended December 31, 2004                                                                | 
|  | OR                                                                                                         | 
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) | 
|  | For the Transaction period from  to                                                                        | 
|  | Commission File No. 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:

American Depositary Shares
Shares, nominal value SEK 3.20

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 issuer'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 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 statement item the registrant has elected to follow.
Item 17 ý        Item 18 o



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TeliaSonera is the leading telecommunications company in the Nordic and Baltic region. We also hold strong positions within mobile communications in Russia, Eurasia and Turkey.

TeliaSonera
offers reliable, innovative and easy-to-use services for transferring and packaging voice, images, data, information, transactions and entertainment.
We also offer wholesale international carrier services in Europe and across the Atlantic.

At
year-end 2004, TeliaSonera had 26 million customers and an additional 37 million customers in associated companies. Net sales totaled SEK
81,937 million and operating income totaled SEK 18,793 million in 2004.

We
see simplicity and service as the most important tools for creating long-term growth and value for our customers and our shareholders.

TeliaSonera
shares are listed on the Stockholm and Helsinki stock exchanges.

Contents

|Cross Reference to Form 20-F                                      |  | 2  
|----------------------------------------------------------------- |  | ---
|Presentation and Reconciliation of Non-GAAP Financial Information |  | 7  
|Forward-looking Statements                                        |  | 9  
|Information on the Company                                        |  | 10 
|Shareholder Information                                           |  | 22 
|Corporate Governance                                              |  | 26 
|Report of the Directors                                           |  | 35 
|Consolidated Financial StatementsIFRS                            |  | 60 
|Ten-Year Summary                                                  |  | 187
|Risk Factors                                                      |  | 192
|Supplemental Information                                          |  | 198

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. In this annual report, references to "Group," "Company," "we," "our," "TeliaSonera" and "us" refer to TeliaSonera AB or TeliaSonera AB together with its subsidiaries, depending
upon the context.

1

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Cross Reference to Form 20-F

TeliaSonera's Annual Report 2004 on Form 20-F consists of the Swedish Annual Report for 2004, with certain adjustments to the financial
statements to comply with U.S. restrictions on the use of non-GAAP financial measures, together with certain other information required by Form 20-F which is set forth
under the heading Supplemental Information. The following cross reference table indicates where information required by Form 20-F may be found in this document.

|Form 20-F Item Heading |  | Location in this document                             |  | Page
No.                                      
|---------------------- |  | ----------------------------------------------------- |  | ----------------------------------------------
|PART I                 |  |                                                       |  |                                               
|1                      |  | Identity of Directors, Senior Management and Advisors |  | Not applicable                                
|                      
|2                      |  | Offer Statistics and Expected Timetable               |  | Not applicable                                
|                      
|3                      |  | Key Information                                       |  |                                               
|                       |  | A                                                     |  | Selected Financial Data                       
|                       |  |                                                       |  |                                               
|                       |  | B                                                     |  | Capitalization and Indebtedness               
|                       |  | C                                                     |  | Reason for the Offer and Use of Proceeds      
|                       |  | D                                                     |  | Risk Factors                                  
|                      
|4                      |  | Information on the Company                            |  |                                               
|                       |  | A                                                     |  | History and Development of the Company        
|                       |  |                                                       |  |                                               
|                       |  |                                                       |  |                                               
|                       |  | B                                                     |  | Business Overview                             
|                       |  | C                                                     |  | Organizational Structure                      
|                       |  | D                                                     |  | Property, Plants and Equipment                
|                       |  |                                                       |  |                                               
|                      
|5                      |  | Operating and Financial Review and Prospects          |  |                                               
|                       |  | A                                                     |  | Operating Results                             
|                       |  |                                                       |  |                                               
|                       |  | B                                                     |  | Liquidity and Capital Resources               
|                       |  |                                                       |  |                                               
|                       |  | C                                                     |  | Research and Development, Patents and Licenses
|                       |  |                                                       |  |                                               
|                       |  | D                                                     |  | Trend Information                             
|                       |  |                                                       |  |                                               

2

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|  |  | E                                                 |  | Off-Balance Sheet Arrangements                          |  | Report of the Directors
    Liquidity and Capital Resources
    Off-Balance Sheet Arrangements                                                                |  | 50      
|- |  | ------------------------------------------------- |  | ------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|  |  |                                                   |  |                                                         |  | Notes to Consolidated Financial Statements
    IFRS Note 29 Dependency on Third
    Parties                                                                   |  | 117     
|  |  | F                                                 |  | Tabular Disclosure of Contractual Obligations           |  | Report of the Directors
    Liquidity and Capital ResourcesContractual
    Obligations                                                                        |  | 48      
| 
|6 |  | Directors, Senior Management and Employees        |  |                                                        
|  |  | A                                                 |  | Directors and Senior Management                         |  | Corporate Governance                                                                                                                                           |  | 26      
|  |  | B                                                 |  | Compensation                                            |  | Corporate Governance
    Salary structure within TeliaSonera                                                                                                   |  | 32      
|  |  |                                                   |  |                                                         |  | Notes to Consolidated Financial Statements
    IFRS Note 34 Human Resources,
    sections Remuneration to corporate
    officers and Stock-based compensation |  | 145, 148
|  |  |                                                   |  |                                                         |  | Note 22 Provisions for Pensions and
    Employment Contracts, section General                                                                                  |  | 105     
|  |  | C                                                 |  | Board Practices                                         |  | Corporate Governance
    Responsibilities and duties of the Board
    of Directors                                                                             |  | 28      
|  |  |                                                   |  |                                                         |  | Work of the Board of Directors during 2004                                                                                                                     |  | 29      
|  |  | D                                                 |  | Employees                                               |  | Information on the Company
    Overview                                                                                                                        |  | 10      
|  |  |                                                   |  |                                                         |  | Notes to Consolidated Financial StatementsIFRS
    Note 34 Human Resources                                                                                    |  | 142     
|  |  | E                                                 |  | Share Ownership                                         |  | Corporate Governance
    Composition of the Board of Directors                                                                                                 |  | 26      
|  |  |                                                   |  |                                                         |  | Executive Management and Group Vice
    Presidents                                                                                                             |  | 30      
|  |  |                                                   |  |                                                         |  | Notes to Consolidated Financial Statements
    Note 34 Human Resources, section
    Remuneration to corporate officers                                         |  | 145     
| 
|7 |  | Major Shareholders and Related Party Transactions |  |                                                        
|  |  | A                                                 |  | Major Shareholders                                      |  | Shareholder Information                                                                                                                                        |  | 22      
|  |  | B                                                 |  | Related Party Transactions                              |  | Supplemental Information
    Item 7.BRelated Party Transactions                                                                                               |  | 199     
|  |  |                                                   |  |                                                         |  | Notes to Consolidated Financial StatementsIFRS
    Note 9 Related Party Transactions                                                                          |  | 76      
|  |  | C                                                 |  | Interests of Experts and Counsel                        |  | Not applicable                                                                                                                                                 |  |         
| 
|8 |  | Financial Information                             |  |                                                        
|  |  | A                                                 |  | Consolidated Statements and Other Financial Information |  | Consolidated Financial StatementsIFRS
    See also Item 17                                                                                                    |  | 60      
|  |  |                                                   |  |                                                         |  | Report of the Directors
    Legal and Regulatory Proceedings                                                                                                   |  | 55      
|  |  |                                                   |  |                                                         |  | Shareholder Information                                                                                                                                        |  | 22      
|  |  | B                                                 |  | Significant Changes                                     |  | Supplemental Information
    Item 8.BSignificant Changes                                                                                                      |  | 200     
| 

3

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|9       |   | The Offer and Listing                                                        |  |                                                                                            
|------- | - | ---------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------
|        |   | A                                                                            |  | Offer and Listing Details                                                                  
|        |   | B                                                                            |  | Plan of Distribution                                                                       
|        |   | C                                                                            |  | Markets                                                                                    
|        |   | D                                                                            |  | Selling Shareholders                                                                       
|        |   | E                                                                            |  | Dilution                                                                                   
|        |   | F                                                                            |  | Expenses of the Issue                                                                      
|       
|10      |   | Additional Information                                                       |  |                                                                                            
|        |   | A                                                                            |  | Share Capital                                                                              
|        |   | B                                                                            |  | Memorandum and Articles of Association                                                     
|        |   | C                                                                            |  | Material Contracts                                                                         
|        |   | D                                                                            |  | Exchange Controls                                                                          
|        |   | E                                                                            |  | Taxation                                                                                   
|        |   | F                                                                            |  | Dividends and Paying Agents                                                                
|        |   | G                                                                            |  | Statement by Experts                                                                       
|        |   | H                                                                            |  | Documents on Display                                                                       
|        |   | I                                                                            |  | Subsidiary Information                                                                     
|       
|11      |   | Quantitative and Qualitative Disclosures About Market Risks                  |  | Report of the Directors
    Financial Risk Management                                      
|        |   |                                                                              |  |                                                                                            
|       
|PART II |   |                                                                              |  |                                                                                            
|       
|12      |   | Description of Securities Other than Equity Securities                       |  | Not applicable                                                                             
|       
|13      |   | Defaults, Dividend Arrearages and Delinquencies                              |  | None                                                                                       
|       
|14      |   | Material Modifications to the Rights of Security Holders and Use of Proceeds |  | None                                                                                       
|       
|15      |   | Controls and Procedures                                                      |  | Supplemental Information
    Item 15Controls and Procedures                               
|       
|16      | A | Audit Committee Financial Expert                                             |  | Corporate Governance
    Responsibilities and duties of the Board
    of Directors         
|16      | B | Code of Ethics                                                               |  | Corporate Governance
    Code of ethics                                                    
|16      | C | Principal Accountants Fees and Services                                      |  | Notes to Consolidated Financial StatementsIFRS
    Note 36 Auditors' Fees and
    Services
|16      | D | Exemptions from the Listing Standards for Audit Committees                   |  | Not applicable                                                                             
|16      | E | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |  | Not applicable                                                                             
|       

4

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|PART III |  |                      |  |                                    
|-------- |  | -------------------- |  | -----------------------------------
|17       |  | Financial Statements |  | Consolidated Income StatementsIFRS
|         |  |                      |  |                                    
|         |  |                      |  |                                    
|         |  |                      |  |                                    
|         |  |                      |  |                                    
|         |  |                      |  |                                    
|        
|18       |  | Financial Statements |  | Not applicable                     
|        

5

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|19   |  | Exhibits |  |                                                                                                                                                                                                                                                                                                  |  |                                          
|---- |  | -------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------
|     |  | 1        |  |                                                                                                                                                                                                                                                                                                  |  | Articles of Association of TeliaSonera AB
|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, 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 20 to Consolidated Financial StatementsIFRS, section Earnings per share.                                                                                                                                                                                                               |  | 104                                      
|7    |  |          |  | For definitions of certain ratios used in this report, see Ten-Year Summary.                                                                                                                                                                                                                     |  | 187                                      
|8    |  |          |  | For significant subsidiaries as of the end of the year covered by this annual report, see Supplemental Information, Item 4.COrganizational Structure.                                                                                                                                           |  | 199                                      
|12.1 |  |          |  | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act 2002.                                                                                                                                                                                             |  |                                          
|12.2 |  |          |  | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                          |  |                                          
|13.1 |  |          |  | Certification by the Chief Executive Officer 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 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                                                                                                           |  |                                          

6

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Presentation and Reconciliation of Non-GAAP Financial Information

Pro forma presentation of 2003 and 2002

Our consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). Our historical audited financial
statements for the years ended December 31, 2004, 2003 and 2002 represent the results of operations of the merged group beginning December 2, 2002. In this report, in order to provide
additional insight into our operating results, prior period trends and current position, we have included pro forma combined company results, discussing our combined operating results as if Telia and
Sonera had been a combined company throughout 2002. Pro forma results also exclude the results from our Swedish cable TV operations and Telia Mobile Finland, which we divested in June 2003 due
to a requirement by the EU Commission to obtain clearance for the merger. Set out below is a reconciliation of this pro forma information and other non-GAAP financial measures to our
consolidated financial results in accordance with IFRS.

In
the segment analysis based on the pro forma results, which we present for 2004 and 2003, only one of our reporting segments, TeliaSonera Holding, is affected.

Group

|                                                                       |  | Historical audited results |  | Adjustments |  | Pro forma
|---------------------------------------------------------------------- |  | -------------------------- |  | ----------- |  | ---------
|
|
|Net sales                                                              |  | 81,937                     |  | 82,425      |  | 59,483   
|Operating expenses (except depreciation, amortization and write-downs) |  | -51,096                    |  | -50,390     |  | -50,062  
|Depreciation, amortization and write-downs                             |  | -15,596                    |  | -17,707     |  | -20,844  
|Income/loss from associated companies                                  |  | 3,548                      |  | 382         |  | 528      
|                                                                       |  |                            |  |             |  |          
|Operating income/loss                                                  |  | 18,793                     |  | 14,710      |  | -10,895  
|Financial revenues and expenses                                        |  | -1,345                     |  | -811        |  | -721     
|                                                                       |  |                            |  |             |  |          
|Income/loss after financial items                                      |  | 17,448                     |  | 13,899      |  | -11,616  
|Income taxes                                                           |  | -3,184                     |  | -3,850      |  | 3,619    
|Minority interests                                                     |  | -1,300                     |  | -969        |  | -70      
|                                                                       |  |                            |  |             |  |          
|Net income/loss                                                        |  | 12,964                     |  | 9,080       |  | -8,067   
|                                                                       |  |                            |  |             |  |          
|Earnings/loss per share                                                |  | 2.77                       |  | 1.95        |  | -2.58    

TeliaSonera Holding

Our pro forma segment results for Holding have been adjusted to exclude the results from our Swedish cable TV operations and Telia Mobile Finland, which we
divested in June 2003 due to a

7

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requirement
by the EU Commission to obtain clearance for the merger. A reconciliation of the pro forma results and our audited results is set out below.

|                                 |                   | Historical audited
results |       |        |       |   |   |        |      |      
|-------------------------------- | ----------------- | -------------------------- | ----- | ------ | ----- | - | - | ------ | ---- | -----
|
|
|
|Net sales                        |                   | 1,470                      |       | 2,586  |       |  |   | -958   |      | 1,470
|                                 | of which external |                            | 1,285 |        | 2,220 |   |  |        | -831 |      
|EBITDA excl. non-recurring items |                   | -5                         |       | 118    |       |  |   | -8     |      | -5   
|Income from associated companies |                   | 1,413                      |       | -1,176 |       |  |   |       |      | 1,413
|Operating income/loss            |                   | 1,878                      |       | 122    |       |  |   | -1,569 |      | 1,878
|CAPEX                            |                   | 43                         |       | 261    |       |  |   | -50    |      | 43   

Non-GAAP financial measures

In this document, we also use a non-GAAP financial measure called "EBITDA excluding non-recurring items" in addition to the presentation
of operating income. We believe that "EBITDA excluding non-recurring items" is a measure commonly reported and widely used by analysts, investors and other interested parties in the
telecommunications industry. Accordingly, we have presented "EBITDA excluding non-recurring items" to enhance understanding of our operating performance in 2004 as compared to 2003.

For
illustrative purposes, the following table presents the relationship between operating income, as reported under IFRS, and "EBITDA excluding non-recurring items" for 2004
and 2003 (pro forma):

|SEK in millions                                           |  | 2004    |  | 2003   
|--------------------------------------------------------- |  | ------- |  | -------
|EBITDA excluding non-recurring items (pro forma for 2003) |  | 30,196  |  | 30,690 
|Non-recurring items                                       |  | 645     |  | -368   
|Depreciation, amortization and write-downs                |  | -15,596 |  | -17,564
|Income from associated companies(1)                       |  | 3,548   |  | 382    
|                                                          |  |         |  |        
|Operating income under IFRS (pro forma for 2003)          |  | 18,793  |  | 13,140 

The
following table presents "non-recurring items" within EBITDA for 2004 and 2003 (pro forma):

|SEK in millions                                                                                    |  | 2004 |  | 2003
|-------------------------------------------------------------------------------------------------- |  | ---- |  | ----
|Restructuring charges and implementation costs to gain synergies and integrate Telia and Sonera(2) |  | -617 |  | -368
|Certain pension-related items                                                                      |  | 741  |  |    
|Capital gains(3)                                                                                   |  | 521  |  |    
|                                                                                                   |  |      |  |     
|Total                                                                                              |  | 645  |  | -368

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We
also use "EBITDA excluding non-recurring items" as a measure for measuring profitability of our reporting segments.

"EBITDA
excluding non-recurring items" 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.

8

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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 context, including 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. Forward-looking statements involve inherent risks and uncertainties. A number of factors, including
factors beyond the control or knowledge of TeliaSonera, 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
undertake no obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

9

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Information on the Company

Contents

|                                       |  | Page
|-------------------------------------- |  | ----
|Overview                               |  | 10  
|History and Development of the Company |  | 10  
|Strategic Focus                        |  | 11  
|Business Structure                     |  | 11  
|Markets and Operations                 |  | 13  
|Marketing and Distribution             |  | 16  
|Licenses and Networks                  |  | 17  
|Regulation                             |  | 18  

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, 2004, our net sales amounted to SEK 81,937 million and we had on average
approximately 25,400 employees. For detailed information on our employees, see Note 34 to our consolidated financial statements.

Since
the merger of Telia and Sonera in December 2002, we have 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 announcement of the completion of the merger. See "Report of the DirectorsMerger of Telia and SoneraSynergies from the Merger."

History and Development of the Company

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. Origins of Telia date back to a public service corporation, Televerket, established by the Swedish State in the beginning of the 1850s. Origins of Sonera
date back to a state organization, the Telegraph Office of Finland, established in 1917.

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
current business 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 and Helsinki stock exchanges. On August 6, 2004, we completed the delisting of our ADSs from the Nasdaq National Market.

10

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Our
principal executive office is located at Sturegatan 1, SE-106 63 Stockholm, Sweden, and our telephone number in Sweden 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. Our website iswww.teliasonera.com. Information on our website does not form part of this document.

Strategic Focus

Our overall focus is on best serving our customers in our core business and creating value for our shareholders through strong profits and cash flows. We strive
to provide our customers reliable, innovative and easy-to-use telecommunication services.

We
aim to strengthen and improve our market position within our home market, comprising the Nordic and Baltic markets. In our home market, we also aim to take the lead in supporting the
customer driven migration from the current broad range of services to a more focused range of services, emphasizing opportunities within Internet and mobility. The more focused service portfolio
intends to serve as a platform for future growth and also to reduce complexity and costs. We will continue to exploit scale advantages throughout the group by increased concentration of management,
development and production within various operational areas.

We
intend to seek growth and create value in our joint venture mobile operations in Turkey, Russia and certain Eurasian countries. We have a general interest in increasing our ownership
stake in Turkcell (Turkey). Once the ongoing ownership dispute between certain shareholders in MegaFon (Russia) is resolved, our ambition is to pursue a public listing of the company. We also aim to
increase our operational involvement in those operations. Any potential transaction is however subject to our achievement of suitable terms and conditions as well as suitable local market conditions.

We
aim to develop our operations and create value within our geographical footprint in order to have financial strength allowing us to participate in the potential consolidation of the
European telecom industry.

Business Structure

We operate as an integrated company with autonomous country based profit centers and strong corporate Head Office control over group matters. The autonomy of the
profit centers is limited by corporate control mainly to exploit synergies and scale advantages. A customer perspective analysis is the basis for decision making in profit centers and on group level.

The
geographic profit centers have full profit responsibility for their business and are responsible for all operations, including marketing, sales, product and service development as
well as production and network operations, unless decisions are made to exploit group synergies and scale advantages. In the latter case, certain operations are shared between profit centers and costs
are allocated accordingly. The profit centers make autonomous operational decisions within the framework of centrally established corporate policies and road maps.

11

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GRAPHIC

The
profit centers TeliaSonera Sweden and TeliaSonera Finland have similar organizations. In these markets, we have established three separate end-customer segments:
Consumer, Business and Large Corporate Customers. 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
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.

Corporate
Head Office acts on behalf of the CEO by making policies, by coordinating TeliaSonera group matters and by exercising a strong central control to exploit scale advantages and
synergies.

As
part of the Corporate Head Office, we have also established two group-wide units: (1) Marketing, Products and Services (MPS) and (2) Networks and Technology
(NT). These are operational units with significant decision-making authorities and have the group responsibility for
exploiting scale advantages and synergies. Corporate policies and road maps are used to set the framework for decisions in the profit centers.

Our
MPS unit is responsible for common products and services, use of brands, pricing policies, common marketing and market segment initiatives, global account management, common research
and development, and common lobbying initiatives. Our NT unit is responsible for network strategy and overall architecture, common network systems, IT strategy and overall architecture, common IT
systems, corporate sourcing, and key vendor contracts.

Norway,
Denmark and the Baltic countries (NDB) is an operational unit with the same responsibilities as profit centers but operating within the Corporate Head Office on a delegated
authority from the CEO to assist in managing the large number of country based profit centers.

Additionally,
we have created several competence centers that focus on high-priority areas for our business and take care of our common resources. These competence centers
are located and hosted within the geographical profit centers, and consist of specialists with expertise within a particular technology or product or service area. MPS and NT manage the competence
centers required to carry out their responsibilities. Other competence centers and common resources are managed by each profit center on behalf of others.

12

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Markets and Operations

The following tables present a summary of our operations, our market position and our main competitors in each of the markets we operate, as of
December 31, 2004.

Mobile customers and competition by market

|Country              |  | Population |  | Pene-
tration
(1) |  | Our main
brand             |  | Owner-
ship(2) |  | Market
share(3) |  | Sub-
scriptions(4) |     | Of which
pre-paid |  | Growth
(5) |  | Main
competitors
(6)    
|-------------------- |  | ---------- |  | ----------------- |  | -------------------------- |  | -------------- |  | --------------- |  | ------------------ | --- | ----------------- |  | ---------- |  | ------------------------
|
|Consolidated         |  |            |  |                   |  |                            |  |                |  |                 |  |                    |     |                   |  |           
|Sweden               |  | 9.0        |  | 105               |  | Telia                      |  | 100.0          |  | 51              |  | 4,243              |     | 54                |  | 10.6       |  | Tele2, Vodafone         
|Finland              |  | 5.2        |  | 95                |  | Sonera                     |  | 100.0          |  | 46              |  | 2,297              |     | 2                 |  | -5.4       |  | Elisa, DNA, Saunalahti  
|Norway               |  | 4.6        |  | 96                |  | NetCom                     |  | 100.0          |  | 29              |  | 1,308              |     | 45                |  | 9.5        |  | Telenor, Chess          
|Denmark              |  | 5.4        |  | 96                |  | Telia                      |  | 100.0          |  | 22              |  | 1,115              |     | 32                |  | 136.2      |  | TDC, Sonofon            
|Lithuania            |  | 3.5        |  | 83                |  | Omnitel                    |  | 100.0          |  | 47              |  | 1,338              |     | 47                |  | 27.2       |  | Bite, Tele2             
|Latvia               |  | 2.4        |  | 61                |  | Latvijas
Mobilais
Telefons |  | 60.3           |  | 47              |  | 649                |     | 30                |  | 21.5       |  | Tele2, Zetcom           
|Estonia              |  | 1.4        |  | 90                |  | EMT                        |  | 50.3           |  | 47              |  | 595                |     | 39                |  | 20.9       |  | Tele2, Elisa            
|Kazakhstan           |  | 15.0       |  | 17                |  | KCell                      |  | 51.0           |  | 69              |  | 1,795              |     | 76                |  | 81.3       |  | K-mobile, Altel, Dalacom
|Azerbaijan           |  | 8.0        |  | 19                |  | Azercell                   |  | 51.3           |  | 85              |  | 1,291              |     | 95                |  | 41.6       |  | Bakcell                 
|Georgia              |  | 4.5        |  | 21                |  | Geocell                    |  | 83.2           |  | 46              |  | 481                |     | 87                |  | 56.7       |  | Magticom                
|Moldova              |  | 3.4        |  | 17                |  | Moldcell                   |  | 100.0          |  | 46              |  | 299                |     | 88                |  | 69.9       |  | Voxtel                  
|                     |  |            |  |                   |  |                            |  |                |  |                 |  |                    |     |                   |  |            |  |                         
|Total                |  | 62.4       |  |                   |  |                            |  |                |  |                 |  | 15,411             |     | 47                |  | 24.3       |  |                         
|                     |  |            |  |                   |  |                            |  |                |  |                 |  |                    |     |                   |  |            |  |                         
|Associated companies |  |            |  |                   |  |                            |  |                |  |                 |  |                    |     |                   |  |           
|Russia               |  | 143.8      |  | 51                |  | MegaFon                    |  | 43.8           |  | 18              |  | 13,648             |     | 40                |  | 121.0      |  | MTS, Vimpelcom          
|Turkey               |  | 72.0       |  | 49                |  | Turkcell                   |  | 37.3           |  | 66              |  | 22,300             | (7) | 78                |  | 22.5       |  | Telsim, Avea            
|                     |  |            |  |                   |  |                            |  |                |  |                 |  |                    |     |                   |  |            |  |                         
|Total                |  | 215.8      |  |                   |  |                            |  |                |  |                 |  | 35,948             |     | 64                |  | 47.5       |  |                         
|                     |  |            |  |                   |  |                            |  |                |  |                 |  |                    |     |                   |  |            |  |                         

---

13

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Fixed voice customers and competition by market

|Country              |  | Population |  | Pene-
tration
(1) |  | Our main
brand     |  | Owner-
ship |  | Market
share(2) |  | Sub-
scriptions |  | Growth
(3) |  | Main
competitors
(4)
|-------------------- |  | ---------- |  | ----------------- |  | ------------------ |  | ----------- |  | --------------- |  | --------------- |  | ---------- |  | --------------------
|
|Consolidated         |  |            |  |                   |  |                    |  |             |  |                 |  |                 |  |            |  |                     
|Sweden               |  | 9.0        |  | 72                |  | Telia              |  | 100.0       |  | 71              |  | 6,115           |  | -2.7       |  | Tele2               
|Finland              |  | 5.2        |  | 49                |  | Sonera             |  | 100.0       |  | 32              |  | 740             |  | -8.0       |  | Elisa, Finnet       
|Denmark              |  | 5.4        |  | 64                |  | Telia              |  | 100.0       |  | 5               |  | 212             |  | 23.3       |  | TDC, Tele2          
|Lithuania            |  | 3.5        |  | 23                |  | Lietuvos
Telekomas |  | 60.0        |  | 99              |  | 819             |  | -1.1       |  |                    
|Estonia              |  | 1.4        |  | 32                |  | Elion              |  | 50.3        |  | 86              |  | 426             |  | -4.3       |  | Tele2, Uninet       
|                     |  |            |  |                   |  |                    |  |             |  |                 |  |                 |  |            |  |                     
|Total                |  | 24.5       |  |                   |  |                    |  |             |  |                 |  | 8,312           |  | -2.6       |  |                     
|                     |  |            |  |                   |  |                    |  |             |  |                 |  |                 |  |            |  |                     
|Associated companies |  |            |  |                   |  |                    |  |             |  |                 |  |                 |  |            |  |                     
|Latvia               |  | 2.4        |  | 28                |  | Lattelekom         |  | 49.0        |  | 99              |  | 631             |  | -3.5       |  |                    
|                     |  |            |  |                   |  |                    |  |             |  |                 |  |                 |  |            |  |                     

---

Internet and broadband customers and competition by market

|Country              |  | Population |  | Pene-
tration
(1) |  | Our main
brand     |  | Owner-
ship |  | Market
share(2) |  | Sub-
scriptions(3) |  | Of which
pre-paid |  | Growth
(4) |  | Main
competitors
(5)                    
|-------------------- |  | ---------- |  | ----------------- |  | ------------------ |  | ----------- |  | --------------- |  | ------------------ |  | ----------------- |  | ---------- |  | ----------------------------------------
|
|Consolidated         |  |            |  |                   |  |                    |  |             |  |                 |  |                    |  |                   |  |           
|Sweden               |  | 9.0        |  | 14                |  | Telia              |  | 100.0       |  | 44              |  | 1,350              |  | 39                |  | 10.5       |  | Bredbandsbolaget, Tele2,Com Hem, Telenor
|Finland              |  | 5.2        |  | 14                |  | Sonera             |  | 100.0       |  | 31              |  | 356                |  | 68                |  | 19.1       |  | Elisa, Finnet, Saunalahti, HTV, MTV3    
|Denmark              |  | 5.4        |  | 17                |  | Telia              |  | 100.0       |  | 14              |  | 126                |  | 100               |  | 21.2       |  | TDC, Tele2, Cybercity                   
|Lithuania            |  | 3.5        |  | 4                 |  | Lietuvos
Telekomas |  | 60.0        |  | 47              |  | 86                 |  | 58                |  | 41.0       |  | Omnitel, Bite GSM                       
|Estonia              |  | 1.4        |  | 8                 |  | Elion              |  | 50.3        |  | 58              |  | 99                 |  | 78                |  | 13.8       |  | Tele2, Uninet                           
|                     |  |            |  |                   |  |                    |  |             |  |                 |  |                    |  |                   |  |            |  |                                         
|Total                |  | 24.5       |  |                   |  |                    |  |             |  |                 |  | 2,017              |  |                   |  | 13.8       |  |                                         
|                     |  |            |  |                   |  |                    |  |             |  |                 |  |                    |  |                   |  |            |  |                                         
|Associated companies |  |            |  |                   |  |                    |  |             |  |                 |  |                    |  |                   |  |           
|Latvia               |  | 2.4        |  | 2                 |  | Lattelekom         |  | 49.0        |  | 50              |  | 39                 |  | 100               |  | 105.3      |  | Vita, Microlink                         
|                     |  |            |  |                   |  |                    |  |             |  |                 |  |                    |  |                   |  |            |  |                                         

---

14

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We are subject to substantial and historically increasing competition. Virtually all of our markets are characterized by direct and indirect
competition. The scope and the potential financial impact of increasing competition are further discussed in "Risk Factors."

Sweden

In Sweden, we offer a wide range of mobile, fixed voice, Internet and broadband services for businesses, consumers and organizations 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 brands Skanova and Telia. We are the leader
in Sweden within all our product areas. The Swedish market represented approximately 48 percent of our consolidated net sales in 2004.

Finland

In Finland, we offer a wide range of mobile, fixed voice, Internet and broadband services for businesses, consumers and organizations and also provide wholesale
services to operators and service providers. We do business on the Finnish market under the brands Sonera, Auria and Tele Finland. 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. The Finnish market represented approximately 22 percent of our consolidated net sales in 2004.

Norway

We are the second largest mobile operator on the Norwegian market, where we offer mobile services under the NetCom brand. The Norwegian market represented
approximately seven percent of our consolidated net sales in 2004.

Denmark

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. In 2004, we acquired the operations of Orange Denmark and are in the process of integrating them into our existing mobile
operations in Denmark. We are the third largest mobile operator, the third largest provider of fixed voice to end users, and the second largest cable TV operator in Denmark. The Danish market
represented approximately five percent of our consolidated net sales in 2004.

The Baltic Countries

We offer mobile, fixed voice, Internet and broadband services in each of the three Baltic countries. In Lithuania, we offer mobile services under the Omnitel
brand and fixed network services through Lietuvos Telekomas, our 60 percent owned subsidiary, which is also listed on the Vilnius and London stock exchanges. In Latvia, we offer mobile services
through our 60.3 percent owned subsidiary Latvijas Mobilais Telefons and fixed network services through Lattelekom, a 49 percent owned associated company. In Estonia, we offer mobile
services through EMT and fixed line services through Elion, both of which are 50.3 percent owned subsidiaries. Eesti Telekom, the holding company for EMT and Elion, is listed on the Tallinn and
London stock exchanges. The Baltic markets represented approximately seven percent of our consolidated net sales in 2004.

Eurasia

We offer mobile services in four Eurasian countries through Fintur, in which we have a direct and indirect 74 percent interest. Fintur's other shareholder
is Turkcell, our associated company in Turkey. In

15

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Kazakhstan,
Fintur owns 51 percent of the country's leading mobile operator, KCell. In Azerbaijan, Fintur owns 51.3 percent of the country's leading mobile operator, Azercell. In
Georgia, Fintur owns 83.2 percent of Geocell, the country's second largest mobile operator. In Moldova, Fintur holds 100 percent of Moldcell, the country's second largest mobile
operator. The Eurasian markets represented approximately five percent of our consolidated net sales in 2004.

Russia

We have a combined direct and indirect 43.8 percent interest in MegaFon, the third largest mobile operator in Russia. MegaFon is a pan-Russian
operator offering mobile services in 71 of the 89 federal regions. The other major shareholders in MegaFon are OJSC Telecominvest, LLC CT-Mobile, and IPOC International Growth Fund
Limited.

Turkey

We have a combined direct and indirect 37.3 percent interest in Turkcell, the largest mobile operator in Turkey. The other major shareholder is Cukurova
Group, an industry conglomerate in Turkey, which has a 40.5 percent interest. In March 2005, we agreed with Cukurova to increase our ownership in Turkcell to 64.3 percent, subject
to final documentation, due diligence, and necessary regulatory approvals and third-party consents. Turkcell is listed on the Istanbul and New York stock exchanges. Turkcell has also established a
subsidiary in Ukraine with a local partner, which has launched mobile operations with a nationwide GSM 1800 license. In 2004, a Turkcell-led consortium won a nationwide GSM 900/1800
license tender in Iran. However, the license agreement and Turkcell's majority ownership in the consortium is pending the approval by the Iranian parliament.

International Carrier

We provide wholesale services on the European market, offering international IP, capacity and voice services on a wholesale basis to larger operators, service
providers and system integrators. We are the largest provider of wholesale services in the Nordic and Baltic regions and in the western part of Russia. We also have a strong position in the wholesale
telecommunications market in Central and Western Europe and with respect to trans-Atlantic traffic. International Carrier represented approximately three percent of our consolidated net sales in 2004.

TeliaSonera Holding

TeliaSonera Holding is responsible for the management of our non-core/non-strategic operations. Currently, TeliaSonera Holding manages
approximately 125 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. TeliaSonera Holding represented less than two percent of our consolidated net sales in 2004.

Marketing and Distribution

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. In
each of the Nordic and Baltic countries, we operate using local brands.

16

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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.

Licenses and Networks

The following table presents the significant mobile network licenses held by our subsidiaries and associated companies and information on the related network
infrastructure:

|Country                 |  | License
type |     | License
expiration date |  | Network type |  | Network coverage |     | Date when commercial
services started
|----------------------- |  | ------------ | --- | ----------------------- |  | ------------ |  | ---------------- | --- | -------------------------------------
|
|Consolidated operations |  |              |     |                         |  |              |  |                  |     |                                      
|Sweden                  |  | 2G           |     | December 2010           |  | GSM 900/1800 |  | 99               |     | November 1992                        
|                        |  | 3G           | (1) | December 2015           |  | UMTS         |  | 90               |     | March 2004                           
|Finland                 |  | 2G           |     | November 2017           |  | GSM 900/1800 |  | 99               |     | March 1992                           
|                        |  | 3G           |     | March 2019              |  | UMTS         |  | 20               |     | October 2004                         
|Norway                  |  | 2G           |     | October 2005            |  | GSM 900      |  | 99               | (2) | September 1993                       
|                        |  | 2G           |     | March 2010              |  | GSM 1800     |  | 99               | (2) |                                     
|                        |  | 3G           |     | December 2012           |  | UMTS         |  | 76               |     | March 2005                           
|Denmark                 |  | 2G           |     | February 2011           |  | GSM 900      |  | 99               | (2) |                                     
|                        |  | 2G           |     | June 2007               |  | GSM 1800     |  | 99               | (2) | February 1998                        
|                        |  | 3G           |     | October 2021            |  | UMTS         |  | 32               |     | No date set yet                      
|Lithuania               |  | 2G           |     | October 2007            |  | GSM 900      |  | 99               | (2) | March 1995                           
|                        |  | 2G           |     | September 2008          |  | GSM 1800     |  | 99               | (2) |                                     
|Latvia                  |  | 2G           |     | January 2016            |  | GSM 900/1800 |  | 98               | (2) | January 1995                         
|                        |  | 3G           |     | December 2017           |  | UMTS         |  | 1                |     | December 2004                        
|Estonia                 |  | 2G           |     | December 2010           |  | GSM 900/1800 |  | 99               |     | January 1995                         
|                        |  | 3G           |     | July 2013               |  | UMTS         |  |                 |     | No date set yet                      
|Kazakhstan              |  | 2G           |     | June 2013               |  | GSM 900      |  | 57               |     | February 1999                        
|Azerbaijan              |  | 2G           |     | December 2016           |  | GSM 900      |  | 98               |     | December 1996                        
|Georgia                 |  | 2G           |     | August 2006             |  | GSM 900      |  | 93               | (2) | March 1997                           
|                        |  | 2G           |     | August 2007             |  | GSM 1800     |  | 93               | (2) |                                     
|Moldova                 |  | 2G           |     | November 2014           |  | GSM 900      |  | 87               |     | May 2000                             
|                        |  |              |     |                         |  |              |  |                  |     |                                      
|Associated companies    |  |              |     |                         |  |              |  |                  |     |                                      
|Russia                  |  | 2G           |     | 2008-2011(3)            |  | GSM 900/1800 |  | n/a              | (4) | December 1994                        
|Turkey                  |  | 2G           |     | April 2023              |  | GSM 900      |  | 99               | (5) | February 1994                        
|                        |  |              |     |                         |  |              |  |                  |     |                                      

---

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 Estonia. No UMTS licenses have yet been issued in Lithuania, Kazakhstan, Azerbaijan, Georgia, Moldova, Russia and Turkey.

In
Norway, in November 2004, the Ministry of Transport presented the terms for the continuation of NetCom's GSM 900 license. The license will be extended for 12 years upon
payment of an upfront

17

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fee
of NOK 100 million and an annual fee of NOK 9.6 million, and to the condition that no other party indicate an interest in the frequencies. If a party does indicate an interest, the
license will be auctioned for bids exceeding NOK 100 million. NetCom has accepted the license terms offered.

Also,
in November 2004, the Ministry of Transport set fines for NetCom due to the delayed UMTS build out. In January 2005, the Norwegian Government confirmed the obligation
to pay these fines. The total amount of fines is not yet finally determined by the authorities. We launched our third generation services in Norway on March 1, 2005.

In
Denmark, following our acquisition of Orange Denmark, we returned one of our two UMTS licenses to the Danish regulator in January 2005. We have not yet determined the timing of
the launch for our third generation services in Denmark.

In
Latvia we have a test UMTS network in place and opened the network for commercial use in December 2004, in accordance with the license terms. The public commercial launch is
expected to be in late 2005.

Fixed-line Infrastructure

Our Swedish and Finnish fixed line networks feature all-digital transmission; all-digital local, trunk and international switching with
wide access to ISDN; IP/Ethernet network; wide broadband access; and ATM and Frame Relay Network.

Our
Danish fixed line networks feature all-digital transmission; all-digital local, trunk and international switching with wide access to ISDN; IP/Ethernet
network; wide broadband access; and ATM.

Our
Baltic companies' fixed line networks feature all-digital transmission; mainly digital local switching, all-digital trunk and international switching with
wide access to ISDN; IP/Ethernet network; wide broadband access; and ATM and Frame Relay Network.

International 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.

Regulation

European Union

As member states of the European Union (EU), Sweden, Finland, Denmark, Lithuania, Latvia and Estonia are required to follow EU regulations and enact domestic
legislation to give effect to EU directives. Norway is under similar obligations as a party to the European Economic Area Agreement.

In
2002, the European Parliament and the Council adopted a new regulatory framework for electronic communications networks and services (the "EU Communications Framework"), which applies
to the types of telecommunications services that we offer. It aims to bring the sector-specific rules for electronic communications more into line with the general competition rules. Under the related
Framework Directive, the definition of significant market power is based on the concept of a dominant position used in EU competition law. It embraces single company dominance and joint dominance, and
ex ante regulatory measures are intended to redress identified competition concerns.

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National
regulatory authorities (NRAs), including those in the countries in which we operate, are expected to take the markets listed in so-called Relevant Market
Recommendations established by the European Commission as the starting point for their own market analyses. NRAs then determine and designate companies having significant market power (SMP). They can
also impose or maintain ex ante sector-specific obligations when ex post remedies of competition law are not adequate to meet the market problems identified. Possible obligations could include inter
alia transparency, accounting separation, network access and price control. If a market is found to be effectively competitive, existing obligations should, according to regulatory framework, be
withdrawn.

Other
applicable EU directives included in the EU Communications Framework cover areas such as authorization of networks and services, access and interconnection (including local loop
access), universal service, and privacy and security issues. There are also special directives on electronic commerce and on a number of other areas of relevance to our operations. The regulatory
regimes in each of the aforesaid countries in which we operate are generally based on the requirements of the EU Communications Framework and other directives.

Implementation of EU Communications Framework

Sweden

In Sweden, the Act on Electronic Communication implements the legislation relating to the EU Communications Framework, replacing the prior Telecommunications Act
framework. Certain provisions of the Telecommunications Act are in force during a transitional period. Pursuant to the new Act, in 2004, the Swedish NRA published final decisions on six markets at
wholesale level: the three markets for interconnection at a fixed location (origination, termination and transit) and the markets for termination in individual mobile networks, wholesale unbundled
access (LLUB) and broadband access (bit stream access). In all these markets the NRA imposed obligations on TeliaSonera and in some of the markets also on other operators. The decision on the bit
stream access market has been stayed after appeal by TeliaSonera. On some other markets, assessments including preliminary obligations were published for consultation. TeliaSonera was found to have
SMP status in several but not all of these markets and final decisions are expected in 2005.

The
Act increased the Swedish NRA's power to regulate the markets where a telecommunications operator has a significant market power on the relevant wholesale or end-user
market. This includes the power to regulate prices on a retail market applied by an operator in e.g. cases where other measures on a wholesale market, such as interconnection obligations, are
insufficient to ensure effective competition and satisfy the public interest on the end-user market.

On
December 15, 2004, the Swedish NRA issued an injunction on TeliaSonera, Tele2 and Vodafone to reduce their mobile interconnection rate for termination to the regulated price
level of SEK 0.80 per minute. The decision was appealed and on February 9, 2005, the Administrative Court of Appeal granted a stay of execution in relation to Tele2 and Vodafone.

Finland

In Finland, we are subject to the Finnish Communications Market Act 393/2003, as amended (the "Communications Market Act"), and related regulations, decrees and
administrative decisions, which implements the EU Communications Framework.

During
2004, the Finnish NRA published final decisions on most of the relevant markets, which imposed obligations on TeliaSonera and other operators. In the final decision on the market
of access and origination in mobile networks, the NRA found that no operator had SMP status. In its other decision in 2004, the NRA found that TeliaSonera Finland or its subsidiaries have significant
power on market for interconnection at a fixed location (origination and termination), wholesale unbundled

19

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access
and on individual mobile networks (termination). TeliaSonera Finland and its subsidiaries are subject to several obligations such as those related to interconnection, publishing of delivery
terms and tariff information, pricing, accounting procedures, carrier pre-selection and separation of accounts.

The
SMP process in Finland will continue during 2005. An alternative fixed-to-mobile call interconnection procedure was introduced in Finland on the market of
voice call termination on individual mobile networks, following comments by the European Commission. In December 2004 the Finnish Parliament approved an amendment to the Communications Market
Act to this effect and the Act entered into force on March 1, 2005.

Other

In Denmark, the Danish NRA made several draft market analyses and SMP decisions during 2004. Telia was designated as an SMP operator in the markets of fixed and
mobile termination.

In
Norway, the SMP process continued with the Norwegian NRA in May 2004 presenting a draft market analysis and SMP designation regarding the market of mobile termination by which
NetCom was designated as an SMP operator.

In
Latvia and Lithuania, legislation which implements the EU Communications Framework entered into force during 2004, whereas in Estonia the implementation was delayed until
January 1, 2005.

Implementation
of pricing restrictions such as fixed or cost-based pricing or other obligations by the NRAs on us in any of the jurisdictions we operate might have an adverse
effect on our business, financial condition and results of operations.

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 entered 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.

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 13.73 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

20

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Commission
may launch a formal investigation of such a transaction on its own initiative. 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

The Competition Act is harmonized with Regulation 1/2003 and the amendments entered into force in July 2004. 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 Swedish NRA
cooperate to facilitate investigations of anti-competitive behavior in the telecommunications services sector.

Finland

The Act on Competition Restrictions is harmonized with Regulation 1/2003 and the amendments entered into force in May 2004. The Finnish Competition
Authority is empowered to issue injunctions, and to enjoin a party to discontinue immediately practices that are not permitted under the Act on Competition Restrictions.

International Obligations

Over 70 member countries of the World Trade Organization (WTO) have entered into a Basic Telecommunications Agreement (BTA), to provide market access to some or
all of their basic telecommunications services. The BTA took effect in February 1998. Signatories under the BTA have made commitments to provide "market access", requiring 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. Pursuant to
European Union legislation, we may be responsible for the recycling costs of used telephone poles and cleaning up of impregnation sites in several of the jurisdictions in which we operate.

21

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Shareholder Information

TeliaSonera's mission is to serve customers in the best way and create value for shareholders. We have worked hard to fulfill this goal in recent years. And our
efforts have yielded results. Customer satisfaction is increasing and we have strengthened our profitability.

Earnings
per share climbed for the third consecutive year, and we have increased the dividend 73 percent on average the last two years*. For 2004, the Board of Directors is
proposing a dividend of SEK 1.20 per share, representing a 20 percent increase over 2003. The proposed dividend totals SEK 5,610 million, which is in line with our dividend policy to
distribute 30-50 percent of net income each year.

Our
efforts have also given us a strong financial position. The Board of Directors is therefore proposing that an additional SEK 10 billion be distributed to shareholders through
a repurchase program during 2005. For the period 2005-2007, the intention is that a total of SEK 30 billion will be distributed to shareholders in addition to the dividend. The
amount may, however, be adjusted in case there are attractive investment opportunities available in addition to the current plan.

The
number of shareholders decreased during the year from 869,967 to 822,306. The Finnish state reduced its holding from 19.1 percent to 13.7 percent, while the Swedish
state's holding remained unchanged at 45.3 percent. Foreign ownership from outside Sweden and Finland increased from 5.9 to 12 percent.

At
year-end, Swedish private investors owned 3.5 percent compared with 3.6 percent the preceding year. Finnish private investors owned 2.4 percent, which
was the same as the preceding year. Swedish institutions owned 19 percent of the share capital and Finnish institutions owned 3.9 percent.

*
If the Annual General Meeting approves the Board of Directors' proposed dividend for 2004.



TeliaSonera has over the last two years increased the dividend to shareholders by 73 percent on average.

GRAPHIC

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Listing: Stockholm Stock Exchange and Helsinki Stock Exchange

Stockholm Stock Exchange:Ticker symbol

TLSNHighest price 2004

SEK 42.20Lowest price 2004

SEK 29.50At close 2004

SEK 39.80Shares traded 2004, volume

3,929 millionShares traded 2004, value

SEK 141 billionMarket capitalization Dec 31, 2004

SEK 186 billionHelsinki Stock Exchange:Ticker symbol

TLS1VShares traded 2004, volume

444 millionShares traded 2004, value

EUR 1.7 billionNasdaq:TeliaSonera decided during the year, in light of the low trading level and high costs, to terminate the listing of the company's ADS's (American Depository Shares) on Nasdaq, effective as of August 6, 2004.




TeliaSonera's share price increased during 2004 from SEK 38.70 to SEK 39.80. On average 15.5 million shares were traded per trading day, corresponding to a
value of SEK 559 million.

GRAPHIC

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The Largest Shareholders

|As of December 31, 2004
Shareholder        |  | Number of shares(1) |  | % of outstanding
shares/votes
|------------------------------------------ |  | ------------------- |  | -----------------------------
|Swedish State(2)                           |  | 2,118,278,261       |  | 45.31                        
|Finnish State(2)                           |  | 641,800,230         |  | 13.73                        
|Robur funds                                |  | 107,730,788         |  | 2.30                         
|SEB funds                                  |  | 81,534,280          |  | 1.74                         
|Nordea funds                               |  | 73,015,711          |  | 1.56                         
|SHB/SPP funds                              |  | 71,222,486          |  | 1.52                         
|Alecta                                     |  | 51,239,887          |  | 1.10                         
|Skandia Liv                                |  | 48,820,433          |  | 1.04                         
|SEBTrygg Försäkring                       |  | 47,260,000          |  | 1.01                         
|AMF Pension                                |  | 37,420,000          |  | 0.80                         
|Shareholders outside Sweden and Finland(3) |  | 536,253,388         |  | 12.05                        
|Total other shareholders                   |  | 833,656,605         |  | 17.84                        
|Total                                      |  | 4,675,232,069       |  | 100                          

Source:
SIS Ägarservice AB

The Largest Countries by Capital/Votes

|As of December 31, 2004
Country |  | % of capital/votes |  | Number of shares
|------------------------------- |  | ------------------ |  | ----------------
|Sweden                          |  | 67.87              |  | 3,173,175,060   
|Finland                         |  | 20.08              |  | 938,803,621     
|United States                   |  | 3.76               |  | 175,636,162     
|United Kingdom                  |  | 3.32               |  | 155,211,687     
|Luxembourg                      |  | 1.12               |  | 52,504,985      
|Switzerland                     |  | 1.04               |  | 48,711,999      
|Germany                         |  | 0.62               |  | 28,773,091      
|Netherlands                     |  | 0.50               |  | 23,343,431      
|Norway                          |  | 0.27               |  | 12,526,167      
|France                          |  | 0.22               |  | 10,343,768      
|Total others                    |  | 1.20               |  | 56,202,098      
|Total                           |  | 100                |  | 4,675,232,069   

Source:
Swedish Central Security Depository (VPC)

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Changes in Share Capital

|                                |  | Number of shares |  | Par value,
SEK/share |  | Share capital, SEK
thousand
|------------------------------- |  | ---------------- |  | -------------------- |  | ---------------------------
|Share capital, Dec 31, 1999     |  | 8,800,000        |  | 1,000.00             |  | 8,800,000                  
|-Bonus issue, May 20, 2000      |  |                 |  | 1,036.80             |  | 323,840                    
|-Split 324:1, May 20, 2000      |  | 2,842,400,000    |  | 3.20                 |  |                           
|-New share issue, June 16, 2000 |  | 150,000,000      |  | 3.20                 |  | 480,000                    
|Share capital, Dec 31, 2000     |  | 3,001,200,000    |  | 3.20                 |  | 9,603,840                  
|Share capital, Dec 31, 2001     |  | 3,001,200,000    |  | 3.20                 |  | 9,603,840                  
|-New share issue, Dec 3, 2002   |  | 1,604,556,725    |  | 3.20                 |  | 5,134,582                  
|Share capital, Dec 31, 2002     |  | 4,605,756,725    |  | 3.20                 |  | 14,738,422                 
|-New share issue, Feb 10, 2003  |  | 69,475,344       |  | 3.20                 |  | 222,321                    
|Share capital, Dec 31, 2003     |  | 4,675,232,069    |  | 3.20                 |  | 14,960,743                 
|Share capital, Dec 31, 2004     |  | 4,675,232,069    |  | 3.20                 |  | 14,960,743                 

25

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Corporate Governance

TeliaSonera is a Swedish public limited liability company with its Annual General Meeting (AGM) as its highest decision-making body.

Composition of the Board of Directors

TeliaSonera's Board of Directors consists of nine members elected by the AGM, serving one-year terms. The members elected by the AGM are considered to
be independent in relation to the company and to the shareholders. The Board of Directors also includes three employee representatives, with an additional employee representative being entitled to be
present at board meetings but not having the right to vote. The employee representatives are not considered to be independent members.

The
composition of the Board of Directors and the shareholdings and biographies of the members of the Board of Directors is set forth below:

Name

Year
born

Number of shares
owned as of
February 28, 2005

PositionOrdinary Members:Tom von Weymarn

1944

4,316

ChairmanCarl Bennet

1951

11,000
(1)
Vice ChairmanEva Liljeblom

1958

999

DirectorLennart Låftman

1945

0

DirectorSven-Christer Nilsson

1944

0

DirectorTimo Peltola

1946

3,000

DirectorPaul Smits

1946

0

DirectorCaroline Sundewall

1958

2,000
(1)
DirectorRoger Talermo

1955

0

DirectorYvonne Karlsson

1959

175

Director(2)Berith Westman

1945

1,000

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. 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 Color Group Oy, Hydrios Biotechnology Oy and Summa Capital, 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 Director of Oy
Karl Fazer Ab between 1983 and 1991the last two 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,

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Lifco
AB, Sorb Industri AB 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 SSAB 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.

Eva Liljeblomwas elected to the board of directors of TeliaSonera in 2002. 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-indexes for the HEX Integrated Markets Oy and Chairman of the Investment Committee of the Finnish Government Pension Fund.

Lennart Låftmanwas elected to the board of directors of TeliaSonera in 2004. In addition to being a member of the board of
directors of TeliaSonera, Mr. Låftman is the chairman of the Pension Fund of Vattenfall, Stiftelsen Framtidens Kultur, Hasseludden Konferens & Yasuragi AB, Stadshagen
Fastighets AB, Intervalor AB and Plena AB. He is also a deputy chairman of the board of directors of the Swedish Foundation for Strategic Research, a director of Centrum för
Molekulär Medicin, and a non-executive director of several non-listed companies.

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 and the Swedish Institute for Quality
Development (SIQ).

Timo Peltolawas elected to the board of directors of TeliaSonera in 2004. In addition to being a member of the board of directors of
TeliaSonera, Mr. Peltola has been the President and CEO of the packaging company Huhtamäki Oyj until 2004 where he still is a member of the board. He is also the chairman of the
board of directors of AW-Energy Oy, deputy chairman of the board of directors of Nordea Bank AB, chairman of the management council for Keskinäinen
Vakuutusyhtiö Ilmarinen, as well as a member of the management council for Suomen Messut. Mr. Peltola is also a member of the Advisory Board of CVC Capital Partners.

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 chairman of the supervisory board of Telfort N.V. (Amsterdam),
a member of the supervisory boards of Enertel BV Rotterdam, Unit 4 Agresso, Byelex B.V. Rotterdam and Feyenoord Rotterdam N.V., 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 Aktiemarknadsbolagens Förening. 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. 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.

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

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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.

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.

Responsibilities and duties of the Board of Directors

The Board of Directors is responsible for the company's organization and the management of the company's business, which means that the Board of Directors
determines the Group's general strategy and makes strategic decisions.

The
Board of Directors appoints the Chief Executive Officer, CEO, and issues guidelines for his management of the Group. The Board appoints the Chairman and Deputy Chairman from among
the Board members or, alternatively, the Chairman and the Deputy Chairman are elected by the AGM.

The
guidelines for the work of the Board of Directors are set down in standing orders. The standing orders contain 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 duties of the Chairman of the Board, responsibilities of
the members of the Board and the CEO, and how work is carried out in committees.

To
distribute the work the Board has appointed two committees with special tasks. These committees handle business within their respective areas and present recommendations and reports
on which the Board may base its actions. However, all members of the Board of Directors have the same responsibility for decisions made irrespective of whether the issue in question has been reviewed
in a committee or not. The following committees have been appointed:

Remuneration Committee.Handles issues regarding salary and other remuneration to the CEO, executive
management and group vice presidents and incentive programs that target a broader group of employees. The Committee consists of Tom von Weymarn (chairman), Carl Bennet, Lennart Låftman
and Roger Talermo.

28

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Audit Committee.Reviews the Group's financial information, financial reporting processes and systems
for internal financial controls. The Committee consists of Caroline Sundewall (chairman), Eva Liljeblom, Sven-Christer Nilsson, Timo Peltola and Tom von Weymarn. All Committee members are
considered to be independent and qualify as financial experts.

Work of the Board of Directors during 2004

The Board of Directors held eight ordinary meetings during the year as well as a number of extra meetings. On average, over eleven of the twelve ordinary members
participated in the meetings.

In
addition to following up the day-to-day business of the Group, the Board of Directors focused on the following areas during 2004:



TeliaSonera's
General Counsel Jan Henrik Ahrnell served as secretary at the meetings.

Evaluation of the Board of Directors' work

The Board of Directors has engaged external consultants to evaluate the Board's work. The Board has discussed the results of the evaluation.

External auditors

TeliaSonera's external auditors are appointed by the AGM and it is their task to audit the Group's financial reporting as well as the Board's and CEO's management
of the Group. The auditors report to the shareholders at the AGM.

At
the AGM 2004, PricewaterhouseCoopers AB was appointed as auditors for TeliaSonera. At the same time, it was decided that the auditors' remuneration would be paid based on invoice.
Fees to auditors are reported in Note 36 "Auditors' Fees and Services" to our consolidated financial statements. The appointment is for a period of four years.

Nomination of Board members

At the AGM 2001, a decision was made to establish a nomination committee that acts on behalf of the shareholders and whose task is to nominate Board members and
propose remuneration to the Board of Directors.

At
the extraordinary meeting of shareholders in the autumn of 2002, it was decided that the Nomination Committee should be comprised of the Chairman of the Board and the Deputy Chairman.

The
nomination of members of the Board in preparation for the 2005 AGM has been preceded by consultations with the five largest shareholders.

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Remuneration to the Board of Directors

At the 2004 AGM, annual remuneration for the Chairman of the Board of Directors was set at SEK 750,000 and for the Deputy Chairman SEK 550,000, while other Board
members elected by the AGM shall receive annual remuneration of SEK 400,000.

The
AGM also determined that annual remuneration shall be paid to the chairman of the Board's Audit Committee in the amount of SEK 75,000 and to other members of the Audit Committee in
the amount of SEK 50,000.

Remuneration
is paid monthly. No remuneration is paid to members who are employees of the TeliaSonera Group.

Executive Management and Group Vice Presidents

The composition of our Executive Management and Group Vice Presidents and their shareholdings and biographies are set forth below:

Name

Year
born

Number of shares
owned as of
February 28, 2005

Principal occupationAnders Igel

1951

35,100

President and Chief Executive OfficerKim Ignatius

1956

3,028

Executive Vice President, Chief Financial OfficerMarie Ehrling

1955

2,000

President of TeliaSonera SwedenAnni Vepsäläinen

1963

1,500

President of TeliaSonera FinlandKenneth Karlberg

1954

1,600
(1)
President of TeliaSonera Norway, Denmark and the Baltic CountriesTerje Christoffersen

1952

0

Group Vice President responsible for Corporate Marketing, Products and ServicesLars-Gunnar Johansson

1944

2,550
(1)
Group Vice President responsible for Corporate Networks and TechnologyRune Nyberg

1949

1,000

Group Vice President responsible for Corporate Human ResourcesMichael Kongstad

1960

2,000

Group Vice President responsible for Corporate CommunicationsJan Henrik Ahrnell

1959

2,500

Group Vice President and General Counsel responsible for Corporate Legal Affairs


---

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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 CEO 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 CEO of Esselte in 1999.

Kim Ignatiusis Executive Vice President and CFO of TeliaSonera. Mr. Ignatius was appointed Executive Vice President and CFO 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.

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. 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. 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. Previously, Mr. Karlberg has held several executive positions in Telia, including Executive Vice President of Telia and head of the Telia Mobile business area.

Terje Christoffersenis a Group Vice President and head of the unit Corporate Marketing, Products and Services. Mr. Christoffersen
has been employed by TeliaSonera since 2001. Previously, Mr. Christoffersen has served as President of Telia Danmark, country manager for Hewlett-Packard in Norway and Sweden, and CEO of NetCom
in Norway.

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. Mr. Johansson will retire in June 2005 and Mr. Håkan Dahlström has been
appointed as new Group Vice President and head of the unit Corporate Networks and Technology.

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 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

31

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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.

The
business address of each of the members of the TeliaSonera board of directors, the CEO 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.

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.

Salary structure within TeliaSonera

According to the remuneration policy established by the Board of Directors, TeliaSonera shall offer a competitive package of rewards and remuneration to
executives, managers and employees without being market leader in this area. Employees' remuneration consists of a fixed part and a variable part based on performance.

The
fixed pay follows the pay structure in each country in which the Group operates, while the variable pay is established in a plan for each calendar year and consists of a
Group-related part and a country-related part. Variable pay is linked to the employee's position and varies depending on the level of the position in the company. The variable pay model has been
approved by the Board of Directors.

The
CEO's variable pay may be a maximum of 50 percent of the fixed annual salary, while others within executive management and group vice presidents may receive variable pay of a
maximum of 25-35 percent of the fixed annual salary. For other managers and key employees who are included in the variable pay model for managers, variable pay can, with certain
exceptions, total a maximum of 15-25 percent of the fixed annual pay.

Country-specific
plans apply to remaining employees where the variable pay can total a maximum of 6.25-16.6 percent of the fixed annual pay.

For
employees who work with direct sales, a commission-based pay system applies.

For
more detail regarding compensation, see Note 34 to our consolidated financial statements.

Pensions

The CEO is guaranteed early retirement at the age of 60, pursuant to which his total annual pension benefits will equal 70 percent of his base salary. From
the age of 65 onwards, the CEO's pension benefits will be paid according to the ITP plan with supplemental benefits for that portion of his salary exceeding 20 "income base amounts" (as defined under
Swedish law), so that the total pension equals 50 percent of the base salary.

The
early retirement age for members of the executive management other than the CEO varies between 60 and 62.

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. The part of Swedish obligation that is recorded as a provision is also secured through an external credit guarantee.

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.

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For
additional details regarding our pensions, see Note 22 to our consolidated financial statements.

Severance pay

TeliaSonera's employment contract with 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.

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. 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.

Employee stock option plans

Our shareholders at the 2001 AGM approved 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 employees of Telia. 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 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 exercise of all options outstanding under the stock option plan would amount to SEK
38 million or 0.2 percent of the total number of TeliaSonera shares. The current subscription price is set at SEK 69 per TeliaSonera share.

In
exchange for Sonera warrants of series 1999A, the extraordinary meeting of our shareholders held on November 4, 2002 approved the issuance of up to 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 70.62 per TeliaSonera
share for series A warrants. The exercise period for options will end on June 30, 2005. The increase in share capital following a full exercise of all outstanding series A
warrants would be SEK 29 million, or 0.2 percent of the total number of our shares.

Organization and management principles

See "Information on the CompanyBusiness Structure."

Planning and follow-up

Planning and follow-up are done in rolling 7-quarter plans. The CEO sets goals for the operations based on the guidelines of the Board of
Directors. To ensure performance, managers usually have balanced scorecards with goals for their particular operations.

Internal control and financial reporting procedures

Corporate internal audit reviews various operations of the company and proposes measures to improve internal control, to streamline control processes and to
increase internal efficiency.

33

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In
response to changes in Swedish, U.S. and other regulations, we are conducting a major review of our internal control processes. We expect that as a result of this review we may
identify areas where we believe changes or improvements are appropriate or required.

Code of ethics

We have adopted a code of ethics that applies to the 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 the code can be obtained free of charge by sending a request via e-mail to: investor-relations@teliasonera.com.

Personnel and competence development

The telecoms industry is knowledge-intensive and highly competitive. Providing an effective supply of competent employees with good opportunities for development
is therefore of crucial importance for TeliaSonera.

In
order to share resources, make development opportunities evident to employees and strengthen the "we" feeling of solidarity within the Group, a common internal job marketplace has
been created for the wholly owned operations. New jobs and large project assignments are normally posted on a website to which all employees have access. In the longer term, the ambition is also to
involve the partially owned businesses.

To
increase knowledge of TeliaSonera's business operationsand how they can be developeda Group-wide business education program, TeliaSonera Business
School has been established. This Group-wide program also enables participants to exchange experiences and build networks.

Corporate social responsibility

TeliaSonera wishes to support sustainable development and be a "good corporate citizen." The Board of Directors has therefore adopted a Corporate Social
Responsibility (CSR) policy. TeliaSonera has also undertaken to comply with the ETNO (European Telecommunications Network Operators' Association) Sustainability Charter and has joined CSR Sweden, a
corporate-run network that focuses on corporate social responsibility and social commitment.

The
Group pursues an environmental policy and was hailed as "Climate Improver of the Year" in the Climate Index compiled by the Swedish insurance group Folksam for having cut
CO2 emissions by over 20 percent in 2003.

34

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Report of the Directors

Contents

|                                                        |  | Page
|------------------------------------------------------- |  | ----
|Introduction                                            |  | 35  
|Merger of Telia and Sonera                              |  | 35  
|Restructuring Costs and Write-downs                     |  | 36  
|Financial Results                                       |  | 36  
|Liquidity and Capital Resources                         |  | 46  
|Financial Risk Management                               |  | 50  
|Critical Accounting Policies, Estimates and Assumptions |  | 53  
|Legal and Regulatory Proceedings                        |  | 55  
|Research and Development                                |  | 57  
|Environment                                             |  | 57  
|Parent Company                                          |  | 57  
|Trend Information                                       |  | 58  
|Outlook                                                 |  | 59  
|Dividend 2004                                           |  | 59  
|Capital Distribution to Shareholders                    |  | 59  

Introduction

The following information summarizes the results of operations of TeliaSonera in 2004, including that TeliaSonera achieved its merger synergy target and increased
operating income to SEK 18,793 million from SEK 13,140 million and net income to SEK 12,964 million from SEK 7,671 million. For information regarding
the composition and work of the Board of Directors during 2004, see "Corporate Governance."

Our
consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). See Note 39 to our consolidated financial statements for
a description of the principal differences between IFRS and Swedish GAAP. As in previous years, we have also prepared consolidated financial statements in accordance with the current stipulations of
the Swedish Annual Accounts Act (ÅRL), which are included in the annual report filed in Sweden. Our non-restricted equity is determined based on the consolidated financial
statements in accordance with ÅRL.

See
Note 41 to our consolidated financial statements for a description of the principal differences between IFRS and U.S. GAAP and for a description of the anticipated impact of
the adoption of recently issued U.S. GAAP accounting standards.

Effective
January 1, 2004, TeliaSonera applies IFRS 3, which means that goodwill amortization has been discontinued.

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. We have accounted for the merger as an acquisition by TeliaSonera of Sonera using the
purchase method of accounting.

35

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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 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.

In
connection with the merger, we set a goal of reaching an annual rate of SEK 2.7 billion of pre-tax cash flow savings at the end of 2005. Our actions in 2003 and
2004 resulted in a rate of annual cost savings of SEK 1.8 billion and annual capital expenditure savings of SEK 0.9 billion, totaling SEK 2.7 billion, measured at the end
of 2004. This means that the goal we set in connection with the merger was reached a year early.

Restructuring Costs and Write-downs

Since the beginning of 2002, we have taken several actions to streamline our operations and improve our efficiency, mainly relating to the refocusing of our
international carrier and Danish network operations and streamlining our core business. This has led to significant restructuring costs and provisions, which has had a negative impact on our results
of operations, especially in 2002. In 2002, we recorded restructuring costs and provisions for future cash outflows in relation to these actions, totaling SEK 5.9 billion. Restructuring costs
and provisions recorded in 2003 and 2004 were not significant in comparison with 2002. For a detailed discussion of each of these restructuring efforts, see Note 35 to our consolidated
financial statements.

Since
the beginning of 2002, we have also recorded significant non-cash write-downs, mainly related to our international carrier and Danish fixed network operations, and our
minority investment in Infonet Services Corporation. The aggregate amount of these write-downs in our historical consolidated financial statements was SEK 9.2 billion in 2002, SEK
1.0 billion in 2003 and SEK 3.3 billion in 2004. For a detailed discussion of each of these write-downs, see Notes 10 and 11 to our consolidated financial statements.

Financial Results

Our historical audited financial statements for the years ended December 31, 2004, 2003 and 2002 represent the results of operations of the merged group
beginning December 3, 2002. Consequently, our historical audited financial statements for the year ended December 31, 2002 are not representative of the total business scope of the
merged company. Therefore, to provide additional insight into our operating results, prior period trends and current position, we also present pro forma results, discussing our combined operating
results as if the merger had occurred on January 1, 2002.

|                                                                       |  | Historical audited results |  | Adjustments |  | Pro forma
|---------------------------------------------------------------------- |  | -------------------------- |  | ----------- |  | ---------
|
|
|Net sales                                                              |  | 81,937                     |  | 82,425      |  | 59,483   
|Operating expenses (except depreciation, amortization and write-downs) |  | -51,096                    |  | -50,390     |  | -50,062  
|Depreciation, amortization and write-downs                             |  | -15,596                    |  | -17,707     |  | -20,844  
|Income/loss from associated companies                                  |  | 3,548                      |  | 382         |  | 528      
|                                                                       |  |                            |  |             |  |          
|Operating income/loss                                                  |  | 18,793                     |  | 14,710      |  | -10,895  
|Financial revenues and expenses                                        |  | -1,345                     |  | -811        |  | -721     
|                                                                       |  |                            |  |             |  |          
|Income/loss after financial items                                      |  | 17,448                     |  | 13,899      |  | -11,616  
|Income taxes                                                           |  | -3,184                     |  | -3,850      |  | 3,619    
|Minority interests                                                     |  | -1,300                     |  | -969        |  | -70      
|                                                                       |  |                            |  |             |  |          
|Net income/loss                                                        |  | 12,964                     |  | 9,080       |  | -8,067   
|                                                                       |  |                            |  |             |  |          
|Earnings/loss per share                                                |  | 2.77                       |  | 1.95        |  | -2.58    

36

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

For
the 2002 pro forma results, 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.

Historical Audited Results 2004, 2003 and 2002

Our net sales decreased by 0.6 percent in 2004, mainly due to the divestments of our Swedish cable TV operations and Telia Mobile Finland in
June 2003 that were required by the EU Commission as part of the merger of Telia and Sonera. In 2003, our net sales increased by 39 percent, 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 in TeliaSonera Holding beginning December 3, 2002.

The
following table presents net sales for each of our reporting segments:

|SEK in millions, except percentages |  | 2004   |  | 2003   |  | Change
(%) |  | 2002   |  | Change
(%)
|----------------------------------- |  | ------ |  | ------ |  | ---------- |  | ------ |  | ----------
|Sweden                              |  | 40,448 |  | 42,601 |  | -5.1       |  | 43,822 |  | -2.8      
|Finland                             |  | 18,267 |  | 17,697 |  | 3.2        |  | 1,461  |  | n/a       
|Norway                              |  | 6,299  |  | 6,081  |  | 3.6        |  | 5,537  |  | 9.8       
|Denmark                             |  | 4,495  |  | 3,278  |  | 37.1       |  | 2,783  |  | 17.8      
|Baltic countries                    |  | 5,868  |  | 5,881  |  | -0.2       |  | 578    |  | n/a       
|Eurasia                             |  | 4,084  |  | 2,742  |  | 48.9       |  | 211    |  | n/a       
|International Carrier               |  | 3,952  |  | 4,892  |  | -19.2      |  | 5,306  |  | -7.8      
|Holding                             |  | 1,470  |  | 2,586  |  | -43.2      |  | 2,989  |  | -13.5     
|Corporate and other                 |  | -2,946 |  | -3,333 |  | -11.6      |  | -3,204 |  | 4.0       
|                                    |  |        |  |        |  |            |  |        |  |           
|The Group                           |  | 81,937 |  | 82,425 |  | -0.6       |  | 59,483 |  | 38.6      

Net
sales in Sweden decreased throughout the period mainly due to lower net sales in fixed voice, partly offset by growth in mobile and Internet services. Net sales in Finland increased
in 2004 due to the acquisition of Auria, and in 2003 due to the merger. Net sales in Norway increased throughout the period due to growth in customer base and increased usage of services. Net sales in
Denmark increased throughout the period mainly due to growth in our mobile operations, and in 2004 also due to the acquisition of Orange Denmark. Net sales in the Baltic countries remained stable in
2004, with the decline in fixed voice offsetting the growth in mobile and Internet services, and increased in 2003 due
to the merger. Net sales in Eurasia increased in 2004 due to growth in customer base and in 2003 due to the merger. Net sales in International Carrier decreased throughout the period due to
discontinuation of unprofitable operations and substantial price erosion, partly offset by the effects of the merger in 2003. Net sales in Holding decreased throughout the period due to the continued
divestment of our non-core operations.

Our
operating expenses, excluding depreciation, amortization and write-downs, increased slightly in 2004, mainly due to lower capital gains than in 2003. Operating expenses, excluding
depreciation, amortization and write-downs, increased in 2003 due to the merger with Sonera, however almost

37

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entirely
offset by significantly lower restructuring charges than in 2002. See Notes 7 and 8 to our consolidated financial statements.

Our
depreciation, amortization and write-downs decreased in 2004 due to discontinued goodwill amortization and lower depreciation level in Sweden fixed network, partly offset by an
impairment charge recorded on our international carrier operations. In 2003, depreciation, amortization and write-downs decreased mainly due to significantly lower write-downs than in 2002. See
Note 10 to our consolidated financial statements.

Income
from associated companies increased in 2004 as compared to 2003, mainly due to capital gains in 2004. In 2003, income from associated companies decreased slightly in comparison
with 2002, mainly due to write-downs and capital losses in 2003. See Note 11 to our consolidated financial statements.

Our
operating income increased in 2004 mainly due to lower depreciation, amortization and write-downs and higher income from associated companies. In 2003, our operating income increased
mainly due to lower write-downs and restructuring charges compared to 2002.

The
following table presents operating income/loss for each of our reporting segments:

|SEK in millions       |  | 2004   |  | 2003   |  | Change |  | 2002    |  | Change 
|--------------------- |  | ------ |  | ------ |  | ------ |  | ------- |  | -------
|Sweden                |  | 12,696 |  | 10,892 |  | +1,804 |  | 8,045   |  | +2,847 
|Finland               |  | 3,278  |  | 1,980  |  | +1,298 |  | -70     |  | +2,050 
|Norway                |  | 1,183  |  | 423    |  | +760   |  | -37     |  | +460   
|Denmark               |  | -909   |  | -561   |  | -348   |  | -5,764  |  | +5,203 
|Baltic countries      |  | 1,799  |  | 994    |  | +805   |  | 229     |  | +765   
|Eurasia               |  | 1,803  |  | 889    |  | +914   |  | 88      |  | +801   
|Russia                |  | 653    |  | 509    |  | +144   |  | 51      |  | +458   
|Turkey                |  | 973    |  | 619    |  | +354   |  | 115     |  | +504   
|International Carrier |  | -3,642 |  | -259   |  | -3,383 |  | -12,060 |  | +11,801
|Holding               |  | 1,878  |  | 122    |  | +1,756 |  | -1,036  |  | +1,158 
|Corporate and other   |  | -919   |  | -898   |  | -21    |  | -456    |  | -442   
|                      |  |        |  |        |  |        |  |         |  |        
|The Group             |  | 18,793 |  | 14,710 |  | +4,083 |  | -10,895 |  | +25,605

Operating
income in Sweden increased in 2004 mainly due to extended depreciation schedules and a changed accounting practice for certain pension-related items, and in 2003 mainly due to
reduced operating expenses as a result of the streamlining efforts. Operating income in Finland increased in 2004 due to discontinued goodwill amortization, and in 2003 due to the merger. Operating
income in Norway increased in 2004 due to discontinued goodwill amortization, and in 2003 due to growth in net sales. Operating loss in Denmark increased in 2004 due to costs of integrating Orange
Denmark, and narrowed significantly in 2003 mainly due to significant write-downs and restructuring expenses recorded in 2002. Operating income in the Baltic countries improved in 2004 mainly due to
discontinued goodwill amortization, and in 2003 due to the merger. Operating income in Eurasia increased in 2004 due to growth in net sales and discontinued goodwill amortization, and in 2003 due to
the merger. Operating income from Russia and Turkey improved throughout the period mainly due to continued customer growth in our associated companies in these countries. Operating loss increased in
International Carrier in 2004 when we wrote down the net fixed assets to zero, and narrowed significantly in 2003 mainly due to significant write-downs and restructuring expenses recorded in 2002.
Operating income in Holding improved throughout the period due to gains from divestments, and in 2003 also due to write-downs recorded in 2002.

Our
net financial expenses increased in 2004, mainly due to write-downs and provisions recorded on minority investments, as compared to capital gains from such investments in 2003. Net
financial

38

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expenses
increased slightly in 2003, mainly due to higher debt levels after the merger with Sonera. See Note 12 to our consolidated financial statements.

Our
income tax expense decreased in 2004, despite higher income before taxes than in 2003, mainly due to the recording of previously unrecognized deferred tax assets. We recorded an
income tax expense in 2003, compared to a tax benefit in 2002 that was due to a loss before taxes, caused by significant restructuring charges and write-downs recorded in 2002. See Note 13 to
our consolidated financial statements.

Our
net income and earnings per share increased in 2004, mainly due to improved operating income. Net income and earnings per share turned positive in 2003, from a net loss and a loss
per share in 2002, due to significantly improved operating income, partly offset by higher income taxes.

Pro Forma Consolidated and Segment Results 2004 and 2003

The following discussion includes the information published in Sweden, based on a pro forma presentation of 2003, excluding the results from our Swedish cable TV
operations and Telia Mobile Finland, which were divested in June 2003 due to the requirement by the EU Commission to obtain clearance for the merger. See "Historical Audited Results 2004, 2003
and 2002" for an analysis based on our audited historical financial statements. In the segment analysis, the pro forma presentation of 2003 only affects the results of our Holding unit.

Consolidated Results

|SEK in millions, except percentages and earnings per share |  | 2004   |  | 2003  
|---------------------------------------------------------- |  | ------ |  | ------
|Net sales                                                  |  | 81,937 |  | 81,772
|EBITDA excluding non-recurring items                       |  | 30,196 |  | 30,690
|Margin (%)                                                 |  | 36.9   |  | 37.5  
|Income from associated companies                           |  | 3,548  |  | 382   
|Operating income                                           |  | 18,793 |  | 13,140
|Income after financial items                               |  | 17,448 |  | 12,346
|Net income                                                 |  | 12,964 |  | 7,671 
|                                                           |  |        |  |       
|Earnings per share                                         |  | 2.77   |  | 1.64  
|                                                           |  |        |  |       
|Capital expenditure                                        |  | 10,356 |  | 8,960 
|Free cash flow                                             |  | 14,118 |  | 17,499
|                                                           |  |        |  |       

Net salesincreased 0.2 percent to SEK 81,937 million year-on-year due to strong growth in mobile
markets outside Sweden and Finland and increases in broadband across all markets, offset partially by lower price levels, exchange rate fluctuations and decreased sales in fixed as a result of
continued migration to mobile and IP-based services.

Operating incomeincreased to SEK 18,793 million (13,140) due to operational improvements as well as the discontinuation of
goodwill amortization, offset by the impact of non-recurring items amounting to SEK -2,066 million (-1,691).

Financial itemstotaled SEK -1,345 million (-794), of which non-recurring items were
SEK -609 million (-22).

Tax expensesdecreased to SEK 3,184 million (3,706) mainly due to new valuation of certain deferred tax assets.

Capital expenditureincreased to SEK 10,356 million (8,960) due to higher investments in the growth areas broadband,
IP-based services and mobile communications.

39

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Non-recurring Items

In our pro forma results, we have reported the following non-recurring items within EBITDA:

|SEK in millions                                                                                                   |  | 2004 |  | 2003 |  | 2002   
|----------------------------------------------------------------------------------------------------------------- |  | ---- |  | ---- |  | -------
|Write-downs, restructuring charges, and implementation costs to gain synergies and integrate Telia and Sonera (1) |  | -617 |  | -368 |  | -11,468
|Certain pension-related items                                                                                     |  | 741  |  |     |  | -248   
|Net capital gains (2)                                                                                             |  | 521  |  |     |  | 1,658  
|                                                                                                                  |  |      |  |      |  |        
|Total                                                                                                             |  | 645  |  | -368 |  | -10,058
|                                                                                                                  |  |      |  |      |  |        

---

Segment Results

For each of the segments discussed below, operating income was also affected by the discontinuation of goodwill amortization as of January 2004.

Sweden

|SEK in millions, except percentages |                   | 2004   |        | 2003  
|----------------------------------- | ----------------- | ------ | ------ | ------
|Net sales                           |                   | 40,448 |        | 42,601
|                                    | of which external |        | 39,667 |       
|EBITDA excl. non-recurring items    |                   | 16,730 |        | 17,723
|                                    | Margin (%)        |        | 41.4   |       
|Operating income                    |                   | 12,696 |        | 10,893
|CAPEX                               |                   | 3,974  |        | 3,105 
|Mobile communications               |                   |        |        |       
|Net sales                           |                   | 12,059 |        | 12,312
|EBITDA excl. non-recurring items    |                   | 5,129  |        | 5,529 
|                                    | Margin (%)        |        | 42.5   |       
|CAPEX                               |                   | 640    |        | 407   
|Fixed communications                |                   |        |        |       
|Net sales                           |                   | 28,389 |        | 30,289
|EBITDA excl. non-recurring items    |                   | 11,601 |        | 12,194
|                                    | Margin (%)        |        | 40.9   |       
|CAPEX                               |                   | 3,334  |        | 2,698 

In
Sweden, net sales decreased by 5.1 percent due to lower price levels, decreased volume in fixed voice services, and a change in reporting third-party content services on a net
basis instead of gross basis, partially offset by volume growth in mobile and broadband services. These factors also caused a reduction in EBITDA, although our EBITDA margin remained relatively
constant. The change in reporting third-party content services decreased net sales in 2004 by approximately SEK 1.1 billion, with no impact on EBITDA or operating income. Increases in operating
income resulted principally from extension of depreciation schedules and the impact of non-recurring items including changes in accounting for certain pension-related expenses. The
extended depreciation schedules increased operating income in 2004 by approximately SEK 0.7 billion.

40

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A
winter storm in Sweden in January 2005 is estimated to cause additional operating expenses and capital expenditure for 2005 in the range of SEK
0.4 - 0.5 billion.

Finland

|SEK in millions, except percentages |                   | 2004   |        | 2003  
|----------------------------------- | ----------------- | ------ | ------ | ------
|Net sales                           |                   | 18,267 |        | 17,697
|                                    | of which external |        | 17,898 |       
|EBITDA excl. non-recurring items    |                   | 6,663  |        | 6,738 
|                                    | Margin (%)        |        | 36.5   |       
|Operating income                    |                   | 3,278  |        | 1,981 
|CAPEX                               |                   | 2,375  |        | 2,348 
|Mobile communications               |                   |        |        |       
|Net sales                           |                   | 11,177 |        | 10,898
|EBITDA excl. non-recurring items    |                   | 5,076  |        | 5,200 
|                                    | Margin (%)        |        | 45.4   |       
|CAPEX                               |                   | 1,056  |        | 1,132 
|Fixed communications                |                   |        |        |       
|Net sales                           |                   | 7,090  |        | 6,799 
|EBITDA excl. non-recurring items    |                   | 1,587  |        | 1,538 
|                                    | Margin (%)        |        | 22.4   |       
|CAPEX                               |                   | 1,319  |        | 1,216 

In
Finland, net sales increased, but on a comparable basis (adjusting for the acquisition of Auria) net sales remained level. Increases in mobile and broadband services were offset by
price erosion and decreases in fixed voice. Price pressure also negatively impacted our EBITDA margin along with increased sales and marketing costs and the increasing proportion of our customers
served through service providers.

Norway

|SEK in millions, except percentages |                   | 2004  |       | 2003 
|----------------------------------- | ----------------- | ----- | ----- | -----
|Net sales                           |                   | 6,299 |       | 6,081
|                                    | of which external |       | 6,142 |      
|EBITDA excl. non-recurring items    |                   | 2,059 |       | 2,499
|                                    | Margin (%)        |       | 32.7  |      
|Operating income                    |                   | 1,183 |       | 423  
|CAPEX                               |                   | 866   |       | 861  

In
Norway, net sales increased by 3.6 percent despite continued strong price pressure. This was mainly due to a 9.5 percent increase in the number of
end-customers and an increase in the number of customers through service providers. Our lower EBITDA margin was due to price pressure and higher customer acquisition costs.

41

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Denmark

|SEK in millions, except percentages |                   | 2004* |       | 2003 
|----------------------------------- | ----------------- | ----- | ----- | -----
|Net sales                           |                   | 4,495 |       | 3,278
|                                    | of which external |       | 4,389 |      
|EBITDA excl. non-recurring items    |                   | 414   |       | 70   
|                                    | Margin (%)        |       | 9.2   |      
|Operating loss                      |                   | -909  |       | -561 
|CAPEX                               |                   | 485   |       | 391  
|Mobile communications               |                   |       |       |      
|Net sales                           |                   | 2,406 |       | 1,552
|EBITDA excl. non-recurring items    |                   | 50    |       | -91  
|CAPEX                               |                   | 312   |       | 173  
|Fixed communications excl. Stofa    |                   |       |       |      
|Net sales                           |                   | 1,319 |       | 1,080
|EBITDA excl. non-recurring items    |                   | 141   |       | -1   
|CAPEX                               |                   | 117   |       | 135  
|Stofa (cable TV, broadband)         |                   |       |       |      
|Net sales                           |                   | 770   |       | 646  
|EBITDA excl. non-recurring items    |                   | 223   |       | 162  
|CAPEX                               |                   | 56    |       | 83   

---

*
Effect of the acquisition of Orange: External net sales: SEK 607 million; EBITDA excluding non-recurring items: SEK -35 million. Orange was consolidated as of
October 11, 2004.

In
Denmark, net sales increased 37 percent principally due to the acquisition of Orange and also as a result of increased sales across all operations. Operating loss was increased
by costs of implementing the Orange acquisition and integration. Integration efforts will include reduction in personnel and the
total costs associated with the integration are estimated to be SEK 755 million. Approximately SEK 639 million of these costs were recorded in 2004 and the remaining are expected to be
recorded in 2005.

Lithuania

|SEK in millions, except percentages |                   | 2004  |       | 2003 
|----------------------------------- | ----------------- | ----- | ----- | -----
|Mobile communications               |                   |       |       |      
|Net sales                           |                   | 2,134 |       | 2,032
|                                    | of which external |       | 2,002 |      
|EBITDA excl. non-recurring items    |                   | 914   |       | 900  
|                                    | Margin (%)        |       | 42.8  |      
|Operating income                    |                   | 568   |       | 352  
|CAPEX                               |                   | 271   |       | 346  
|Fixed communications                |                   |       |       |      
|Net sales                           |                   | 1,906 |       | 2,136
|                                    | of which external |       | 1,796 |      
|EBITDA excl. non-recurring items    |                   | 887   |       | 1,059
|                                    | Margin (%)        |       | 46.5  |      
|Operating income/loss               |                   | 73    |       | -294 
|CAPEX                               |                   | 198   |       | 136  

42

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In
Lithuania, we acquired the remaining shares in the mobile operator Omnitel, and now hold 100 percent of the company. Omnitel's net sales increased by 5 percent due
principally to a 27 percent increase in the number of customers, which was partially offset by strong price pressure. In fixed communications, Lietuvos Telekomas' sales decreased
11 percent due to significantly lower price levels and lower fixed voice customer base. However, Internet and data services sales increased 9 percent and the number of broadband
customers doubled to 50,000 during the year.

Latvia

|SEK in millions, except percentages |                                                 | 2004  |       | 2003 
|----------------------------------- | ----------------------------------------------- | ----- | ----- | -----
|Mobile communications               |                                                 |       |       |      
|Net sales                           |                                                 | 2,049 |       | 1,855
|                                    | of which external                               |       | 2,010 |      
|EBITDA excl. non-recurring items    |                                                 | 1,059 |       | 944  
|                                    | Margin (%)                                      |       | 51.7  |      
|Operating income                    |                                                 | 833   |       | 632  
|CAPEX                               |                                                 | 249   |       | 269  
|Fixed communications                |                                                 |       |       |      
|Income from associated companies    |                                                 | 219   |       | 205  
|                                    | of which share of net income                    |       | 141   |      
|                                    | of which amortization of goodwill               |       |      |      
|                                    | of which amortization of fair value adjustments |       | 78    |      

In
Latvia, net sales of Latvijas Mobilais Telefons increased 10 percent due to customer growth. For fixed communications, Lattelekom (in which we hold a 49% interest) reported
decreased sales. Operating income increased, however, mainly due to lower depreciations.

Estonia

|SEK in millions                  |                                                 | 2004 |     | 2003
|-------------------------------- | ----------------------------------------------- | ---- | --- | ----
|Mobile communications            |                                                 |      |     |     
|Income from associated companies |                                                 | 181  |     | 136 
|                                 | of which share of net income                    |      | 196 |     
|                                 | of which amortization of goodwill               |      |    |     
|                                 | of which amortization of fair value adjustments |      | -15 |     
|Fixed communications             |                                                 |      |     |     
|Income from associated companies |                                                 | 93   |     | 41  
|                                 | of which share of net income                    |      | 98  |     
|                                 | of which amortization of goodwill               |      |    |     
|                                 | of which amortization of fair value adjustments |      | -5  |     

In
December 2004, we increased our ownership in Eesti Telekom (which owns the mobile operator EMT and the fixed operator Elion) to over 50 percent and as of
December 28, Eesti Telekom became a consolidated subsidiary.

Additionally,
in connection with the acquisition, we wrote down the value of brand names by SEK 104 million, which is not included in the above table but decreased our
total operating income for Estonia in 2004.

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Eurasia

|SEK in millions, except percentages |                   | 2004  |       | 2003 
|----------------------------------- | ----------------- | ----- | ----- | -----
|Net sales                           |                   | 4,084 |       | 2,742
|                                    | of which external |       | 4,082 |      
|EBITDA excl. non-recurring items    |                   | 2,321 |       | 1,490
|                                    | Margin (%)        |       | 56.8  |      
|Operating income                    |                   | 1,803 |       | 889  
|CAPEX                               |                   | 1,710 |       | 990  

In
Eurasia, net sales increased by 49 percent and EBITDA by 56 percent, due to continued growth in customer base and demand for services and effective cost controls.

Russia

|SEK in millions                  |  | 2004 |  | 2003
|-------------------------------- |  | ---- |  | ----
|Share of net income              |  | 653  |  | 709 
|Amortization of goodwill         |  |     |  | -200
|                                 |  |      |  |     
|Income from associated companies |  | 653  |  | 509 

In
Russia, MegaFon (in which we hold 43.8 percent) more than doubled its customer base, leading to an increase in sales of approximately 80 percent, while EBITDA margin
remained steady at 44 percent. Net income was negatively affected by a revaluation of loans.

Turkey

|SEK in millions                        |  | 2004 |  | 2003
|-------------------------------------- |  | ---- |  | ----
|Share of net income (US GAAP)          |  | 895  |  | 600 
|IFRS adjustments                       |  | 174  |  | 706 
|Amortization of goodwill               |  |     |  | -541
|Amortization of fair value adjustments |  | -97  |  | -147
|                                       |  |      |  |     
|Income from associated companies       |  | 972  |  | 618 

In
Turkey, Turkcell (an associated company in which we hold 37.3% and which reports with a one-quarter lag), our share of U.S. GAAP based net income increased by
49 percent, due to an increased customer base and increased customer usage, which offset the adverse effects of new provisions and the lower IFRS adjustments. For 2004 and 2003, IFRS
adjustments mainly consist of the inflation adjustment in accordance with IFRS. At the end of 2004, Turkcell also settled its legal disputes with Türk Telekom and the Turkish Treasury.

International Carrier

|SEK in millions, except percentages |                   | 2004   |       | 2003 
|----------------------------------- | ----------------- | ------ | ----- | -----
|Net sales                           |                   | 3,952  |       | 4,892
|                                    | of which external |        | 2,702 |      
|EBITDA excl. non-recurring items    |                   | 167    |       | 144  
|                                    | Margin (%)        |        | 4.2   |      
|Operating loss                      |                   | -3,642 |       | -259 
|CAPEX                               |                   | 169    |       | 239  

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In
our International Carrier operations, net sales fell 19 percent due to discontinuation of unprofitable operations and substantial price erosion, which was not sufficiently
offset by increases in market position. We wrote down the value of International Carrier net fixed assets to zero, which resulted in a non-recurring expense of SEK 3,263 million.

Holding

|SEK in millions, except percentages   |                   | 2004  |       | 2003  
|------------------------------------- | ----------------- | ----- | ----- | ------
|Net sales                             |                   | 1,470 |       | 1,628 
|                                      | of which external |       | 1,285 |       
|EBITDA excl. non-recurring items      |                   | -5    |       | 110   
|                                      | Margin (%)        |       | -0.3  |       
|Income/loss from associated companies |                   | 1,413 |       | -1,176
|Operating income/loss                 |                   | 1,878 |       | -1,447
|CAPEX                                 |                   | 43    |       | 211   

Operating
income increased by SEK 3.3 billion due to divestments and improvements in the remaining operations. Non-recurring items included capital gains from
divestitures of SEK 1,504 million, of which SEK 983 million was attributable to final recognition of gains related to Telefos.

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Liquidity and Capital Resources

Cash Flows

The following table and discussion is based on our historical results. Therefore, the fluctuations in the historical cash flows in 2003 as compared to 2002 are
due principally to the merger of Telia and Sonera.

|SEK in millions                                       |                | 2004    |        | 2003    |        | 2002   
|----------------------------------------------------- | -------------- | ------- | ------ | ------- | ------ | -------
|Cash from operating activities                        |                | 24,403  |        | 26,443  |        | 12,449 
|Cash used in capital expenditure                      |                | -10,285 |        | -9,092  |        | -8,572 
|                                                      | Free cash flow |         | 14,118 |         | 17,351 |        
|Cash from other investing activities                  |                | 2,294   |        | 5,649   |        | 3,019  
|Cash flow before financing activities                 |                | 16,412  |        | 23,000  |        | 6,896  
|Cash used in financing activities                     |                | -11,102 |        | -16,412 |        | -10,344
|                                                      |                |         |        |         |        |        
|Cash and cash equivalents, opening balance            |                | 12,069  |        | 5,465   |        | 8,923  
|Net cash flow for the period                          |                | 5,310   |        | 6,588   |        | -3,448 
|Exchange rate difference in cash and cash equivalents |                | -134    |        | 16      |        | -10    
|                                                      |                |         |        |         |        |        
|Cash and cash equivalents, closing balance            |                | 17,245  |        | 12,069  |        | 5,465  

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. 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 pay dividends and other returns to shareholders. We believe that we are capable of meeting payables,
when they become due, from our cash flow from operating activities. Additionally, we maintain credit facilities with available funds which can be used, if necessary, to meet current liabilities when
they fall due.

Cash
flow from operating activities decreased in 2004 mainly due to higher tax payments than in 2003. Cash flow from operating activities increased in 2003 primarily due to the merger
and due to improved profitability of our operations.

Cash
used in capital expenditure increased in 2004 due to higher investments in the growth areas broadband, IP-based services and mobile communications. Cash used in capital
expenditure increased in 2003 due to the merger.

Free
cash flow (cash flow from operating activities less capital expenditure) decreased in 2004 due to both decreased cash flow from operating activities and increased capital
expenditures. In 2003, free cash flow increased mainly due to increased cash flow from operating activities.

Net
cash received from other investing activities decreased in 2004 mainly due to higher amount of acquisitions than in 2003. Net cash received from other investing activities increased
in 2003 mainly due to higher proceeds from divestments than in 2002.

Despite
higher dividends paid, net cash used in financing activities decreased in 2004 compared to 2003 due to lower net repayments of loans. Net cash used in financing activities
increased in 2003 compared to 2002, primarily due to higher net repayments of loans and higher dividends paid than during 2002.

Acquisitions, Investments and Divestitures

We have made a number of significant acquisitions and equity investments as well as divestitures since the beginning of 2002. Our most significant transaction
during the three-year period ended December 31, 2004 was the merger of Telia and Sonera in December 2002.

46

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Following
the merger, we have made the following significant acquisitions and divestitures:



Additionally,
in March 2005, we agreed with the Cukurova Group to increase our ownership in Turkcell to 64.3 percent for a cash consideration of USD 3.1 billion,
subject to final documentation, due diligence, and necessary regulatory approvals and third-party consents.

Credit Facilities

We believe that our bank credit facilities and open-market financing programs are sufficient for our present liquidity requirements. Our cash and
short-term investments totaled SEK 17.6 billion as of December 31, 2004. In addition, the aggregate principal unutilized amount we had available under our committed credit
facilities amounted to approximately SEK 10 billion as of December 31, 2004.

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. Our
credit rating from Moody's Investor Services is A2 for long-term borrowing and Prime-1 for short-term borrowing. On March 25, 2005, following our
announcement of the agreement with the Cukurova Group to purchase additional shares in Turkcell, Standard & Poor's placed its credit ratings on Credit Watch, with negative implications. On
March 30, 2005, Moody's affirmed its current credit ratings on TeliaSonera.

We
generally seek to arrange our financing through our parent company TeliaSonera AB. Our primary means of external borrowing are described in Note 30 "Financial Instruments and
Financial Risk Management" under subsections "Liquidity and bank credit facilities" & "Open-market financing programs". See also "Contractual Obligations" below.

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Contractual Obligations

The table below sets forth certain information on our other contractual obligations as of December 31, 2004, including scheduled payment dates:

|SEK in millions                    |  | 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
|---------------------------------- |  | ------------------------ |  | ------------- |  | ----------------------------------- |  | ------------------------------------ |  | -------------
|Long-term loans                    |  | 12,942                   |  |              |  | 7,043                               |  | 2,757                                |  | 3,142        
|Short-term loans (1)               |  | 11,733                   |  | 11,733        |  |                                    |  |                                     |  |             
|Operating leases                   |  | 9,025                    |  | 1,780         |  | 2,597                               |  | 1,937                                |  | 2,711        
|Financial leases                   |  | 538                      |  | 225           |  | 258                                 |  | 46                                   |  | 9            
|License fees                       |  | 793                      |  | 355           |  | 194                                 |  | 194                                  |  | 50           
|Unconditional purchase obligations |  | 2,310                    |  | 626           |  | 766                                 |  | 612                                  |  | 306          
|Other contractual obligations      |  | 6,064                    |  | 2,854         |  | 2,164                               |  | 646                                  |  | 400          
|                                   |  |                          |  |               |  |                                     |  |                                      |  |              
|Total contractual cash obligations |  | 43,405                   |  | 17,573        |  | 13,022                              |  | 6,192                                |  | 6,618        
|                                   |  |                          |  |               |  |                                     |  |                                      |  |              

---

Interest-bearing liabilities

We had long-term loans amounting to SEK 12,942 million as of December 31, 2004. Of such amount, SEK 390 million was in the form
of loans incurred through long-term financial leasing, foreign currency interest rate swaps and interest rate swaps. Further, SEK 7,417 million was in the form of other foreign
currency loans and EMTN program loans and SEK 968 million was in the form of other loans. Finally, SEK 4,167 million was in the form of FTNs. Our short-term loans include
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 24,675 million as of
December 31, 2004, compared to SEK 31,076 million as of December 31, 2003, and SEK 44,956 million as of December 31, 2002. Our interest-bearing liabilities decreased
in 2004 as compared to 2003 due to scheduled repayments and early redemptions of debt, financed by our free cash flow and asset sales.

In
2005, our scheduled debt repayments are higher than they were in 2004. In addition to scheduled amortizations, we have in the past and may in the future decide to redeem or repurchase
outstanding debt prior to its maturity.

In
general, our policy is to place debt at the parent company level. However, as of December 31, 2004, our wholly owned subsidiary TeliaSonera Finland Oyj had interest-bearing
liabilities to external parties of approximately SEK 9.9 billion outstanding. These liabilities were assumed as a result of the merger of Telia and Sonera in December 2002.

Leasing activities

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

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

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Finland.
See Note 31 to our consolidated financial statements "Contingent Assets, Collateral Pledged and Contingent Liabilities" for more details regarding this transaction.

License fees

License fees in the above table relate to our remaining annual payments for the UMTS licenses in Denmark as of December 31, 2004. We have subsequently
returned one of our two UMTS licenses in Denmark to the Danish NRA.

Unconditional purchase obligations

Unconditional 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, 2004, we had a capital commitment to invest EUR 275 million (SEK 2,482 million) in Xfera Móviles S.A.. Our ownership in
Xfera is 16.45 percent and our share of the shareholder capital commitments is 23.13 percent. The existing capital commitment was originally scheduled to be paid by the end of 2004, but
due to ongoing negotiations among Xfera owners this payment has been postponed.

As
of December 31, 2004, we had contractual obligations to acquire tangible fixed assets totaling SEK 2,126 million, mainly related to supplier contracts for the
construction of fixed networks in Sweden and Denmark and mobile networks in Norway, Denmark and 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, 2004, the amount of provision for our future payments totaled SEK 967 million.

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, 2004:

|SEK in millions                      |  | 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
|------------------------------------ |  | ---------------------- |  | ------------- |  | ----------------------------------- |  | ------------------------------------ |  | -------------
|Credit and performance guarantees(1) |  | 2,289                  |  | 452           |  | 247                                 |  | 1,408                                |  | 182          

---

For
all guarantees, except the credit guarantee on behalf of Svenska UMTS-nät AB, stated amounts, included in the table above, equal the estimated maximum
amount of future payments that we could be required to make under the respective guarantee. As security for certain amounts

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borrowed
by Svenska UMTS-nät under a third-party credit facility totaling SEK 7,000 million, we have issued to the lenders a guarantee, which totaled maximum of SEK
3,500 million as of December 31, 2004 and SEK 2,650 million in February 2005, after a reduction of the credit facility to SEK 5,300 million. We have also
granted pledges of our shares in Svenska UMTS-nät to the lenders. As of December 31, 2004, Svenska UMTS-nät had, under the credit facility,
borrowed SEK 2,014 million, of which we guarantee 50 percent, or SEK 1,007 million.

We
have issued the following guarantees on behalf of Xfera, which totaled SEK 769 million as of December 31, 2004:



As
of December 31, 2004, we had a provision of EUR 51 million, equivalent to SEK 460 million, for our commitments and obligations on behalf of Xfera, and we believe
that there is currently no need for additional provisions.

As
of December 31, 2004, other guarantees included approximately SEK 400 million related to divested businesses, and certain other guarantees in the normal course of
business.

Off-Balance Sheet Arrangements

Except for credit and performance guarantees discussed above in "Contractual Obligations," there are no off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material
to investors.

Financial Risk Management

Our financial policy contains guidelines for interest rates and the average maturity of borrowings. Our current 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 swapped into or denominated in Swedish krona, unless directly linked to international operations. 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.

See
Note 30 to our consolidated financial statements "Financial Instruments and Financial Risk Management" under subsection "Foreign exposure / Foreign-exchange derivatives" for
further reference

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regarding
our portfolio of foreign currency interest rate swaps and our portfolio of foreign exchange derivatives hedging loans, investments and operational transaction exposure, as of
December 31, 2004.

As
of December 31, 2004, TeliaSonera AB and TeliaSonera Finland Oyj had interest-bearing liabilities of SEK 23,245 million with a duration of interest of approximately
1.1 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
17,500 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 250 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 2004. See Note 30 to our consolidated financial statements "Financial Instruments and Financial Risk Management" under
subsection "Borrowings, maturity structure, interest rates and currencies" for further reference regarding the borrowings and the average cost, including relevant hedges, of outstanding
long-term and short-term borrowings as of December 31 for the past three years of TeliaSonera AB and TeliaSonera Finland Oyj.

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

|                                             |  | As of December 31, 2004
|-------------------------------------------- |  | -----------------------
|
|Long-term loans                              |  | 12,975                 
|Short-term loans                             |  | 11,736                 
|Interest rate swaps, gains                   |  | -214                   
|Foreign currency interest rate swaps, gains  |  | -312                   
|Interest rate swaps, losses                  |  | 158                    
|Foreign currency interest rate swaps, losses |  | 131                    
|Other foreign currency derivatives, gains    |  | -42                    
|                                             |  |                        
|Total borrowings (including derivatives)     |  | 24,432                 
|                                             |  |                        

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 2004 and SEK 12 million for the year 2003 on a
full-year basis if the Swedish krona weakened by one percentage point against all the transaction currencies of our Swedish operations.

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, 2004, the risk mandate was utilized by less than SEK 150 million.

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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, 2004 to approximately SEK 123.5 billion (and as of
December 31, 2003 to approximately SEK 116.4 billion). As of December 31, 2004, 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, 2004, and approximately SEK 1.2 billion as of December 31, 2003, if the Swedish krona weakened by one
percentage point against all the currencies related to net foreign assets. This impact 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, 2004, TeliaSonera group's aggregate exposure to counterparties in derivatives was SEK 229 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 behavior and, if necessary, credit and business information
derived from external sources. Bad debt expense in relation to consolidated revenues was 0.3 percent, 0.7 percent and 1.4 percent in 2004, 2003 and 2002, 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 "Provisions for Pensions and Employment Contracts" for further reference regarding actuarial calculation assumptions.

As
of December 31, 2004, we had pension obligations with a net present value of SEK 18,047 million. To secure these obligations we maintain pension funds, with plan
assets equivalent to SEK 15,838 million based on market values as of December 31, 2004. The pension funds assets are used as the primary funding source for the pension
obligations, and at the end of 2004, these assets consisted of approximately 56 percent of fixed income instruments and approximately 44 percent of

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shares
and other investments. The expected return on plan assets is approximately 5.7 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 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 2,900 million higher, if the weighted average discount rate had been one percentage point lower than the five percent that we have used
as of December 31, 2004. 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 pension funds' fixed income portfolios (including index-linked bonds) as of December 31, 2004, 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 900 million.

Critical Accounting Policies, Estimates and Assumptions

The preparation of financial statements requires management and the Board of Directors to make estimates and judgments that affect reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets and 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.

Management
believes that the following critical accounting policies reflect its more significant estimates and assumptions used in the preparation of the consolidated financial
statements.

Revenue recognition

For a telecom operator, management judgment is required in a number of cases to determine if and how revenue should be recognized, such as when signing agreements
with third-party providers for content services (are we principal or agent under the agreement?), in complex bundling of products, services and rights to use assets into one customer offering (do we
recognize the separate components up-front or defer?), the sales of Indefeasible Rights of Use, when signing swap contracts for infrastructure, capacity and services, and in assessing the
degree of completion in service and construction contracts. Our recording of net sales is described in Note 6 to our consolidated financial statements under IFRS.

Our
allowance for doubtful receivables reflects estimated losses that result from the inability of our customers to make required payments. We base our allowance on the likelihood of
recoverability of accounts receivable based on past experience and taking into account current collection trends. Should economic or specific industry conditions worsen compared to our estimates, we
may have to increase our allowance, negatively impacting earnings. See also section "Credit risk" in Note 30 to our consolidated financial statements under IFRS for a description of how we
mitigate credit risks related to trade receivables.

Valuation of Long-lived Assets

Long-lived assets represent approximately 80 percent of our total assets, the recording of which is described in Notes 14, 15 and 16 to our
consolidated financial statements under IFRS.

53

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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 changes in the estimated useful 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 under IFRS.

Long-lived
assets are reviewed 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.

A
number of significant assumptions and estimates are involved in the application of a DCF model to forecast operating cash flows, for example with respect to factors such as market
growth rates, revenue volumes, market prices for telecommunications services, costs to maintain and develop communications networks and working capital requirements. 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. 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 our long-lived assets change as a result of changes in business model or strategy, competitive pressures, or regulatory
environment, impairment charges may have to be recognized.

Restructuring

We have engaged, and may in the future need to engage, in restructuring activities, which require management to make significant estimates related to realizable
values of assets made redundant or obsolete (see "Valuation of 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.
See also Note 35 to our consolidated financial statements under IFRS.

Provisions for Pensions

The most significant assumptions that management has to make in connection with the actuarial calculation of pension obligations and pension expenses affect 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. For a discussion of this process and how plan assets are invested, see sections "Actuarial calculation assumptions" and "Strategic
plan-asset allocation" in Note 22 to our consolidated financial statements under IFRS. A change in any of these key assumptions may have a significant impact on projected benefit
obligations, funding requirements and periodic pension cost. See section "Pension obligation risk" in Note 30 to out consolidated financial statements under IFRS for a sensitivity analysis
related to a change in the weighted average discount rate in calculating pension provisions.

54

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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 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 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 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 13 to our consolidated
financial statements under IFRS.

Litigation and Contingent Liabilities

Determination of the treatment of contingent liabilities in the 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 less than probable but reasonably possible, or an estimate
is not determinable, the matter is disclosed provided that the contingency is material. See also Note 31 to the consolidated financial statements under IFRS.

Legal 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.

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



55

---





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



56

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Research and Development

Rapid advances in telecommunications make it critical for us to renew and refine our businesses and services. 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 customers, suppliers, universities and research institutions. In 2004,
we incurred research and development expenses of SEK 2,783 million as compared to SEK 2,543 million for 2003 and SEK 1,167 million for 2002. The increase in 2003 compared
to 2002 was mainly due to the merger and consolidation of Sonera.

One
of the main goals 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. This goal was illustrated during 2004 by our launch of Telia Connect Pro with a
SIM-based multi-access roaming that ensures the fastest available connection being automatically selected.

Other
development initiatives in 2004 included, for instance, preparing a readiness for IP multimedia services; and introducing streaming media applications and business models,
including real time television on 3G terminals, the launch of a digital IP-TV service, and a commercial pilot for mobile TV network.

As
of December 31, 2004, we had approximately 650 patent "families" and over 2,400 patents and patent applications, none of which, individually, is material to our business.

Environment

TeliaSonera topped the ranking in 2004 in the Climate Index of the Swedish insurance company Folksam. The index analyses and presents the amount of carbon dioxide
emitted by publicly traded companies, and looks at how the companies work towards reducing emissions and how the companies present their emissions and the reduction measures. One of the reasons for
TeliaSonera's emission reduction was a reduction of travel by using telemeetings.

Parent Company

Financial statements for the parent company are prepared and presented in accordance with the Swedish Annual Accounts Act and standards and statements issued by
the Swedish Financial Accounting Standards Council and its Emerging Issues Task Force.

Net
sales were SEK 21,601 million (21,858), of which SEK 16,892 million (17,108) was billed to subsidiaries. Earnings before appropriations and taxes decreased to SEK
3,970 million (5,450), as improved operating income did not balance write-downs of shares in subsidiaries. Due to released untaxed reserves, earnings after appropriations and taxes improved to
SEK 10,467 million (3,328).

The
balance sheet total increased to SEK 138,967 million (137,275). Shareholders' equity increased to SEK 97,644 million (96,198). Retained earnings amounted to SEK
25,153 million (23,138).

Cash
flow from operating activities improved to SEK 10,900 million (7,561) and cash flow before financing activities to SEK 11,555 million (5,606). Net borrowings increased
to SEK 5,413 million (3,294). Cash and cash equivalents totaled SEK 13,125 million (8,809).

The
equity/assets ratio (including the equity component of untaxed reserves) was 67.9 percent (74.1).

Total
investments amounted to SEK 14,472 million (12,805), including SEK 2,941 million (2,506) in tangible fixed assets, primarily fixed-line installations.
Other investments totaling SEK 11,531 million (10,299, of which SEK 2,581 million reflected the purchase price consideration for Sonera) were primarily attributable to capital infusions
in subsidiaries and associated companies. Of the capital infusions to subsidiaries, SEK 14 million (2,013) was provided through debt conversion.

57

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Due
to operations acquired, the number of employees as of December 31, 2004 was 3,867 compared to 2,982 at year-end 2003.

Effective
January 1, 2004, the Swedish Annual Accounts Act was changed, allowing certain financial instruments to be recorded on an ongoing basis at fair value. Comparable figures
have been restated to reflect the change in accounting principles.

Trend Information

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 and Baltic markets, but
has continued to be rapid in the Russian, Turkish and Eurasian mobile services markets.

In
the Swedish and Finnish mobile communications market, growth has slowed as penetration levels have risen. However, price erosion has had a negative effect on our revenue growth.

Retail
revenues from our fixed telephony operations in Sweden have declined in the last several 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. In Finland, our fixed telephony business has steadily decreased over the last several years, mainly due to fixed-to-mobile migration and people moving out from
our traditional service areas in Eastern and Northern Finland.

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.

In
our Danish mobile operations, fast customer growth has contributed to an increase in revenues and the operation has been reducing its operating losses. Our acquisition of Orange
Denmark in 2004 reinforced our position in the Danish mobile market. Restructuring of the Danish fixed network business has significantly improved its results during 2003 and 2004.

Our
Baltic mobile operations have continued to show growth. As a consequence, however, our Baltic fixed network operations have suffered from fixed-to-mobile
migration and declining revenues.

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 still low.

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.
Turkey, where our associated company Turkcell is the largest mobile operator, has exhibited strong recent economic growth after experiencing economic difficulties in 2000-2002.

Our
TeliaSonera International Carrier operations have continued to face difficult market conditions. However, our restructuring efforts regarding our international carrier activities
have been successful and we have reduced losses significantly. The closing down of unprofitable businesses within TeliaSonera International Carrier together with continued price erosion has, however,
resulted in declining revenues. Additionally, after an annual impairment test, we recorded the net book value of International Carrier fixed assets to zero in 2004.

58

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Outlook

We expect 2005 to be the first year in a three-year transition period with strong migration from fixed to mobile and Internet-based services impacting
in the first phase our home markets, particularly Sweden and Finland, where price pressure is expected to continue.

The
restructuring programs launched will have a negative effect on 2005 operating income but simultaneously they will represent substantial cost reductions during the latter part of the
three-year transition period.

In
the mobile operations in Norway, Denmark, the Baltics, Eurasia and in the non-consolidated operations in Russia and Turkey we expect continued growth both in terms of
revenue and profitability.

Due
to the migration and price pressure, group revenue growth will be limited. Longer term we however expect market growth to return to higher levels. Group EBITDA margin excluding
non-recurring items is expected to decline somewhat in 2005.

Total
CAPEX for 2005 is expected to be in line with last year.

TeliaSonera's
strong market positions and financial strength is a solid base for meeting the challenges of continued price pressure, migration from fixed to mobile and Internet based
services, and potential acquisition opportunities within the current footprint.

TeliaSonera's
ambition remains to enhance value by strengthening and improving its operations and positions.

Dividend 2004

For 2004, the Board of Directors and the CEO propose an ordinary dividend of SEK 1.20 per share. This results in a total distribution of SEK 5,610 million.
See "Proposed Appropriation of Earnings."

Capital Distribution to Shareholders

TeliaSonera has communicated that it is planning to distribute SEK 30 billion to its shareholders during the period 2005-2007 in addition to
ordinary dividends. In case there are attractive investment opportunities available in addition to the current plan, this figure can be adjusted.

The
Board of Directors will, as a first step, propose that the AGM on April 26, 2005 decide on a distribution of approximately SEK 10 billion. The method proposed for
distribution will be a repurchase of shares through a public offer with sales rights that will be traded on Stockholm Exchange and Helsinki Stock Exchange. More detailed information about the proposal
will be communicated in connection with the notice of the AGM.

59

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Consolidated Income StatementsIFRS

|                                                           |         |        |  | January-December
|---------------------------------------------------------- | ------- | ------ |  | ----------------
|
|
|Net sales                                                  |         | 6, 33  |  | 81,937          
|Costs of production                                        |         | 7, 10  |  | -43,104         
|                                                           |         |        |  |                 
|Gross income                                               |         |        |  | 38,833          
|Sales, administrative, and research & development expenses |         | 7, 10  |  | -21,367         
|Other operating revenues and expenses                      |         | 8, 10  |  | -2,221          
|Income from associated companies                           |         | 11, 33 |  | 3,548           
|                                                           |         |        |  |                 
|Operating income/loss                                      |         | 33     |  | 18,793          
|Financial revenues and expenses                            |         | 12     |  | -1,345          
|                                                           |         |        |  |                 
|Income/Loss after financial items                          |         |        |  | 17,448          
|Income taxes                                               |         | 13     |  | -3,184          
|Minority interests                                         |         |        |  | -1,300          
|                                                           |         |        |  |                 
|Net income/loss                                            |         |        |  | 12,964          
|                                                           |         |        |  |                 
|Earnings/loss per share (SEK)                              |         | 20     |  |                 
|                                                           | Basic   |        |  |                 
|                                                           | Diluted |        |  |                 

60

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Consolidated Balance SheetsIFRS

|                                                 |  |            |  | December 31,
|------------------------------------------------ |  | ---------- |  | ------------
|
|
|Assets                                           |  |            |  |             
|Intangible fixed assets                          |  | 14         |  | 70,493      
|Tangible fixed assets                            |  | 15, 28     |  | 47,542      
|Equity participations in associated companies    |  | 16, 30     |  | 19,613      
|Other financial fixed assets                     |  | 16, 28, 30 |  | 15,497      
|                                                 |  |            |  |             
|Total fixed assets                               |  |            |  | 153,145     
|                                                 |  |            |  |             
|Inventories, etc.                                |  | 17         |  | 655         
|Receivables                                      |  | 18, 28, 30 |  | 21,605      
|Short-term investments                           |  | 19         |  | 12,070      
|Cash and bank                                    |  | 32         |  | 5,543       
|                                                 |  |            |  |             
|Total current assets                             |  |            |  | 39,873      
|                                                 |  |            |  |             
|Total assets                                     |  |            |  | 193,018     
|                                                 |  |            |  |             
|Shareholders' equity and liabilities             |  |            |  |             
|Restricted equity                                |  |            |  |             
|Share capital                                    |  |            |  | 14,961      
|Restricted reserves                              |  |            |  | 64,439      
|Non-restricted equity                            |  |            |  |             
|Non-restricted reserves                          |  |            |  | 29,292      
|Net income/loss                                  |  |            |  | 12,964      
|                                                 |  |            |  |             
|Total shareholders' equity                       |  |            |  | 121,656     
|                                                 |  |            |  |             
|Minority interests in equity                     |  | 21         |  | 7,457       
|                                                 |  |            |  |             
|Provisions for pensions and employment contracts |  | 22         |  |            
|Deferred tax liability                           |  | 13, 23     |  | 7,906       
|Other provisions                                 |  | 23         |  | 5,496       
|                                                 |  |            |  |             
|Total provisions                                 |  |            |  | 13,402      
|                                                 |  |            |  |             
|Interest-bearing liabilities                     |  |            |  |             
|Long-term loans                                  |  | 24, 28, 30 |  | 12,942      
|Short-term loans                                 |  | 25, 28, 30 |  | 11,733      
|Non-interest-bearing liabilities                 |  |            |  |             
|Long-term liabilities                            |  | 26, 28     |  | 2,450       
|Current liabilities                              |  | 27, 30     |  | 23,378      
|                                                 |  |            |  |             
|Total liabilities                                |  |            |  | 50,503      
|                                                 |  |            |  |             
|Total shareholders' equity and liabilities       |  |            |  | 193,018     
|                                                 |  |            |  |             
|Contingent assets                                |  | 31         |  |            
|Collateral pledged                               |  | 31         |  | 1,675       
|Contingent liabilities                           |  | 31         |  | 2,289       
|                                                 |  |            |  |             

61

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Consolidated Cash Flow StatementsIFRS

|                                                                         |                                                        |    |    | January-December
|------------------------------------------------------------------------ | ------------------------------------------------------ | -- | -- | ----------------
|
|
|Net income/loss                                                          |                                                        |    |    | 12,964          
|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                                        |    | 32 |                 
|                                                                         | Income taxes                                           |    | 32 |                 
|                                                                         | Minority interest, miscellaneous non-cash items        |    |    |                 
|Cash flow before change in working capital                               |                                                        |    |    | 24,686          
|                                                                         |                                                        |    |    |                 
|Increase (-)/Decrease (+) in operating receivables                       |                                                        |    |    | 728             
|Increase (-)/Decrease (+) in inventories etc.                            |                                                        |    |    | -37             
|Increase (+)/Decrease (-) in operating liabilities                       |                                                        |    |    | -974            
|Change in working capital                                                |                                                        |    |    | -283            
|                                                                         |                                                        |    |    |                 
|Cash flow from operating activities                                      |                                                        |    |    | 24,403          
|Intangible and tangible fixed assets acquired                            |                                                        |    |    | -10,285         
|Intangible and tangible fixed assets divested                            |                                                        |    |    | 130             
|Compensation received for divested IRU                                   |                                                        |    |    | 8               
|Compensation paid for acquired IRU                                       |                                                        |    |    | -1              
|Shares, participations and operations acquired                           |                                                        | 32 |    | -6,169          
|Shares, participations and operations divested                           |                                                        | 32 |    | 6,795           
|Loans made and other investments                                         |                                                        |    |    | -10             
|Repayment of loans made and other investments                            |                                                        |    |    | 1,128           
|Investment in financial leasing receivables                              |                                                        |    |    | -458            
|Amortization of financial leasing receivables                            |                                                        |    |    | 823             
|Compensation from/Payment to pension fund                                |                                                        |    |    |                
|Net change in advances and short-term loans to associated companies etc. |                                                        |    |    | 48              
|Cash flow from investing activities                                      |                                                        |    |    | -7,991          
|                                                                         |                                                        |    |    |                 
|Cash flow before financing activities                                    |                                                        |    |    | 16,412          
|Dividend                                                                 |                                                        |    |    | -4,675          
|Transactions with minority shareholders                                  |                                                        |    |    | -441            
|Loans raised                                                             |                                                        |    |    | 260             
|Loans amortized                                                          |                                                        |    |    | -8,544          
|Net change in interest-bearing liabilities with short maturities         |                                                        |    |    | 2,298           
|Cash flow from financing activities                                      |                                                        |    |    | -11,102         
|Cash flow for the year                                                   |                                                        |    |    | 5,310           
|                                                                         |                                                        |    |    |                 
|Cash and cash equivalents, opening balance                               |                                                        |    |    | 12,069          
|Cash flow for the year                                                   |                                                        |    |    | 5,310           
|Exchange rate differences in cash and cash equivalents                   |                                                        |    |    | -134            
|Cash and cash equivalents, closing balance                               |                                                        | 32 |    | 17,245          

62

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Consolidated Statements of Changes in Shareholders' EquityIFRS

|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, 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 differences (Note 20)                                                            |  |              |  |                      |  |                      |  |                          |  | 1,692                                         |  |                       |  | 35                                                 |  | 1,727       
|Reporting financial instruments at fair value (Note 20)                                        |  |              |  |                      |  |                      |  | 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 loss                                                                                       |  |              |  |                      |  |                      |  |                          |  |                                              |  | -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 differences (Note 20)                                                            |  |              |  |                      |  |                      |  |                          |  | -8,266                                        |  |                       |  | 165                                                |  | -8,101      
|Inflation adjustments (Note 20)                                                                |  |              |  |                      |  | 2,427                 |  |                          |  |                                              |  |                       |  |                                                   |  | 2,427       
|Reporting financial instruments at fair value (Note 20)                                        |  |              |  |                      |  |                      |  | -10                       |  |                                              |  |                       |  |                                                   |  | -10         
|Net income recognized directly in equity                                                       |  |              |  |                      |  | 2,414                 |  | -10                       |  | -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                |  | 4,223                 |  | 14,373                    |  | -1,848                                        |  | 24,897                 |  | 1,251                                              |  | 112,393     
|                                                                                               |  |               |  |                       |  |                       |  |                           |  |                                               |  |                        |  |                                                    |  |             
|Transactions with non-related parties                                                          |  |              |  |                      |  | -12                   |  |                          |  |                                              |  |                       |  |                                                   |  | -12         
|Exchange rate differences (Note 20)                                                            |  |              |  |                      |  |                      |  |                          |  | -1,768                                        |  |                       |  | -485                                               |  | -2,253      
|Inflation adjustments (Note 20)                                                                |  |              |  |                      |  | 1,452                 |  |                          |  |                                              |  |                       |  |                                                   |  | 1,452       
|Revaluing fair values of net assets in associates becoming consolidated subsidiaries (Note 20) |  |              |  |                      |  |                      |  | 1,641                     |  |                                              |  |                       |  |                                                   |  | 1,641       
|Reporting financial instruments at fair value (Note 20)                                        |  |              |  |                      |  |                      |  |                          |  |                                              |  | 146                    |  |                                                   |  | 146         
|Net income recognized directly in equity                                                       |  |              |  |                      |  | 1,440                 |  | 1,641                     |  | -1,768                                        |  | 146                    |  | -485                                               |  | 974         
|Dividend                                                                                       |  |              |  |                      |  |                      |  |                          |  |                                              |  | -4,675                 |  |                                                   |  | -4,675      
|Transfer between restricted and non-restricted equity                                          |  |              |  |                      |  | 1,479                 |  | -9,637                    |  |                                              |  | 8,158                  |  |                                                   |  |            
|Net income                                                                                     |  |              |  |                      |  |                      |  |                          |  |                                              |  | 12,964                 |  |                                                   |  | 12,964      
|                                                                                               |  |               |  |                       |  |                       |  |                           |  |                                               |  |                        |  |                                                    |  |             
|Closing balance, December 31, 2004                                                             |  | 14,961        |  | 54,536                |  | 7,142                 |  | 6,377                     |  | -3,616                                        |  | 41,490                 |  | 766                                                |  | 121,656     
|                                                                                               |  |               |  |                       |  |                       |  |                           |  |                                               |  |                        |  |                                                    |  |             

63

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TeliaSonera        Notes to Consolidated Financial StatementsIFRS

|Contents
Note |  |                                                                  |  | Page
|------------- |  | ---------------------------------------------------------------- |  | ----
|1.            |  | Basis for Preparation                                            |  | 65  
|2.            |  | Use of Estimates                                                 |  | 68  
|3.            |  | Consolidated Financial Statements                                |  | 68  
|4.            |  | Transactions in Foreign Currencies                               |  | 69  
|5.            |  | Changes in Group Composition                                     |  | 70  
|6.            |  | Net Sales                                                        |  | 72  
|7.            |  | Operating Costs                                                  |  | 74  
|8.            |  | Other Operating Revenues and Expenses                            |  | 76  
|9.            |  | Related Party Transactions                                       |  | 76  
|10.           |  | Depreciation, Amortization and Write-Downs                       |  | 79  
|11.           |  | Income from Associated Companies                                 |  | 82  
|12.           |  | Financial Revenues and Expenses                                  |  | 84  
|13.           |  | Income Taxes                                                     |  | 84  
|14.           |  | Intangible Fixed Assets                                          |  | 89  
|15.           |  | Tangible Fixed Assets                                            |  | 91  
|16.           |  | Financial Fixed Assets                                           |  | 95  
|17.           |  | Inventories, etc.                                                |  | 99  
|18.           |  | Receivables                                                      |  | 99  
|19.           |  | Short-term Investments                                           |  | 101 
|20.           |  | Shareholders' Equity, Earnings per Share                         |  | 101 
|21.           |  | Minority Interests in Equity                                     |  | 104 
|22.           |  | Provisions for Pensions and Employment Contracts                 |  | 105 
|23.           |  | Deferred Tax Liability, Other Provisions                         |  | 111 
|24.           |  | Long-term Loans                                                  |  | 112 
|25.           |  | Short-term Loans                                                 |  | 112 
|26.           |  | Long-term Liabilities                                            |  | 113 
|27.           |  | Current Liabilities                                              |  | 113 
|28.           |  | Leasing Agreements and Contractual Obligations                   |  | 114 
|29.           |  | Dependency on Third Parties                                      |  | 117 
|30.           |  | Financial Instruments and Financial Risk Management              |  | 117 
|31.           |  | Contingent Assets, Collateral Pledged and Contingent Liabilities |  | 130 
|32.           |  | Cash Flow Information                                            |  | 133 
|33.           |  | Business Segments                                                |  | 138 
|34.           |  | Human Resources                                                  |  | 142 
|35.           |  | Restructuring Costs                                              |  | 155 
|36.           |  | Auditors' Fees and Services                                      |  | 161 
|37.           |  | Acquisition of Orange Denmark and Eesti Telekom                  |  | 164 
|38.           |  | Specification of Shareholdings and Participations                |  | 167 
|39.           |  | Swedish GAAP                                                     |  | 170 
|40.           |  | Finnish GAAP                                                     |  | 170 
|41.           |  | U.S. GAAP                                                        |  | 172 

64

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1.    Basis for Preparation

General

TeliaSonera's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

Accounting principles

The applied accounting principles are described in the respective notes.

Discrepancies
between Swedish, Finnish and U.S. GAAP and TeliaSonera accounting principles 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.

New accounting standards and other changes

New accounting standards

On December 17, 2003, revisions to IAS 32 "Financial Instruments: Disclosure and Presentation" and IAS 39 "Financial Instruments: Recognition and
Measurement" were issued. A further amendment to IAS 39, incorporating new provisions that permit, in certain cases, fair value hedge accounting for a portfolio hedge of interest rate risk (macro
hedging), was issued on March 31, 2004. The revised IAS 39 must be applied for annual periods beginning on or after January 1, 2005. Earlier application is permitted only if the revised
IAS 32 is also early applied. On December 17, 2004, limited amendments to IAS 39 were issued. The amendments give entities a choice of applying the "day 1' gain or loss recognition requirements
in IAS 39: retrospectively (as previously required by IAS 39); prospectively to transactions entered into after October 25, 2002 (the effective date of similar requirements in U.S. GAAP); or
prospectively to transactions entered into after January 1, 2004.

On
December 18, 2003, IAS 15 "Information Reflecting the Effects of Changing Prices" was withdrawn and revisions were issued 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.

The
revised standards also superseded SIC 1 "ConsistencyDifferent Cost Formulas for Inventories," SIC 2 "ConsistencyCapitalization of Borrowing Costs," SIC 3
"Elimination of Unrealised Profits and Losses on Transactions with Associates," SIC 5 "Classification of Financial InstrumentsContingent Settlement Provisions," SIC 6 "Costs of Modifying
Existing Software," SIC 11 "Foreign ExchangeCapitalisation of Losses Resulting from Severe Currency Devaluations," SIC 14 "Property, Plant and EquipmentCompensation for the
Impairment or Loss of Items," SIC 16 "Share CapitalReacquired Own Equity Instruments (Treasury Shares)," SIC 17 "EquityCosts of an Equity

65

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Transaction,"
SIC 18 "ConsistencyAlternative Methods," SIC 19 "Reporting CurrencyMeasurement and Presentation of Financial Statements under IAS 21 and IAS 29," SIC 20 "Equity
Accounting MethodRecognition of Losses," SIC 23 "Property, Plant and EquipmentMajor Inspection or Overhaul Costs," SIC 24 "Earnings Per ShareFinancial
Instruments that May Be Settled in Shares," SIC 30 "Reporting CurrencyTranslation from Measurement Currency to Presentation Currency," and SIC 33 "Consolidation and Equity
MethodPotential Voting Rights and Allocation of Ownership Interest."

IFRS
2 "Share-based Payment" (also replacing certain disclosure requirements in IAS 19 "Employee Benefits") was issued on February 19, 2004. IFRS 2 is effective for annual periods
beginning on or after January 1, 2005. Earlier application is encouraged.

On
March 31, 2004, IFRS 3 "Business Combinations" (superseding IAS 22 "Business Combinations"), IFRS 4 "Insurance Contracts" and IFRS 5 "Non-current Assets Held for
Sale and Discontinued Operations" (superseding IAS 35 "Discontinuing Operations") were issued. Revisions to IAS 36 "Impairment of Assets" and IAS 38 "Intangible Assets," in both cases related to IFRS
3, were also issued on March 31, 2004. Generally, IFRS 3 became effective for business combinations agreed to on or after March 31, 2004. Special transitional provisions applied to
previously recognized goodwill, negative goodwill, intangible assets, and equity accounted investments. Entities could choose to apply IFRS 3 from any date prior to March 31, 2004 to all
business combinations occurring on or after the chosen application date providing that sufficient information was available at the date of initially accounting for those business combinations. IFRS 4
is effective for annual periods beginning on or after January 1, 2005. Earlier application is encouraged. IFRS 5 must be applied prospectively for annual periods beginning on or after
January 1, 2005. Earlier application is permitted if sufficient information is available. The effective date of the revisions to IAS 36 and IAS 38 was April 1, 2004 (or date of adoption
of IFRS 3 for intangible assets acquired in a business combination).

On
December 9, 2004, IFRS 6 "Exploration for and Evaluation of Mineral Resources" was issued. IFRS 6 is effective for annual periods beginning on or after January 1, 2006.
Earlier application is encouraged, and if an entity adopts IFRS 6 before January 1, 2006, transitional relief is available for some comparative disclosures.

On
December 16, 2004, an amendment to IAS 19 "Employee Benefits" was issued. Previously, IAS 19 required actuarial gains and losses to be recognized in profit or loss, either in
the period in which they occur or spread over the service lives of the employees. Under the amendment, entities that at present spread the gains and losses are not required to change their approach,
but are now free to choose to do so and recognize actuarial gains and losses in full in the period in which they occur, outside profit or loss. The amendment also (a) specifies how group
entities should account for defined benefit group plans in their separate or individual financial statements and (b) requires additional disclosures.

On
May 27, 2004, IFRIC 1 "Changes in Existing Decommissioning, Restoration and Similar Liabilities" was published. IFRIC 1 contains guidance on accounting for changes in
decommissioning, restoration and similar liabilities that have previously been recognized both as part of the cost of an item of property, plant and equipment under IAS 16 and as a provision under IAS
37. The interpretation addresses subsequent changes to the amount of the provision that may arise from (a) a revision in the timing or amount of the estimated decommissioning or restoration
costs or from (b) a

66

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change
in the current market-based discount rate. IFRIC 1 is effective for annual periods beginning on or after September 1, 2004, with earlier application encouraged.

On
November 11, 2004, an amendment to SIC-12 "ConsolidationSpecial Purpose Entities" was published. The amendment removes the scope exclusion in
SIC-12 for equity compensation plans. The amendment also amends the scope exclusion in SIC-12 for post-employment benefit plans to include other
long-term employee benefit plans, to ensure consistency with the requirements of IAS 19. The amendment is effective for annual periods beginning on or after January 1, 2005. If an
entity applies IFRS 2 for an earlier period, this amendment shall be applied for that earlier period.

On
November 25, 2004, IFRIC 2 "Members' Shares in Co-operative Entities and Similar Instruments" was released, giving guidance on the classification of members' shares
in co-operative entities either as financial liabilities or as equity. On December 2, 2004, IFRIC 3 "Emission Rights" and IFRIC 4 "Determining whether an Arrangement contains a
Lease" were released. IFRIC 3 specifies the accounting for companies participating in government schemes aimed at reducing greenhouse gas emissions. IFRIC 4 gives guidance on determining whether
arrangements that do not take the legal form of a lease should, nonetheless, be accounted for in accordance with IAS 17 "Leases." On December 16, 2004, IFRIC 5 "Rights to Interests arising from
Decommissioning, Restoration and Environmental Rehabilitation Funds" was issued. IFRIC 5 explains how to treat expected reimbursements from funds set up to meet the costs of decommissioning plant or
equipment or in undertaking environmental restoration or rehabilitation. IFRIC 2, IFRIC 3 and IFRICs 4 and 5 are effective for annual periods beginning on or after January 1, 2005,
March 1, 2005 and January 1, 2006, respectively, with earlier adoption encouraged.

TeliaSonera's
future adoption of IFRS 2 (including the amended SIC-12), IFRS 4, IFRS 5 and IFRIC 2, and of the revisions to 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 such a change in accounting principles that require restatement of comparative figures. TeliaSonera already complied with IFRIC 1. IFRS 6, IAS 40,
IFRIC 3 and IFRIC 5 are not applicable to TeliaSonera. 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 of 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 is investigating possible benefits of recognizing actuarial gains and
losses according to the new option allowed under the amended IAS 19 and the impact, if any, of adopting IFRIC 4.

TeliaSonera
decided to adopt IFRS 3 as of January 1, 2004. Adoption of IFRS 3 and of the revisions to IAS 36 and IAS 38 involved, among other things, that goodwill and other
intangible assets with indefinite useful lives are no longer amortized but tested for impairment at least annually and that the minority interest includes minority shareholders' part of the fair value
of assets acquired and liabilities assumed.

Change in estimates

Effective January 1, 2004, the depreciation rate for copper cables in the Swedish fixed local access network was changed from 8 years to
20 years and for switching equipment for ADSL customers from 3 years to 10 years.

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Restated segment reporting

Some adjustments of TeliaSonera's business organization were implemented in 2004. Hence, segment information in this annual report has been restated.

Other

The Swedish Financial Accounting Standards Council's standard RR 30 "Supplementary Rules for Consolidated Financial Statements" will be effective
January 1, 2005 and is applicable to Swedish legal
entities whose equities are listed on a Swedish stock exchange or authorized equity market place. RR 30 specifies supplementary rules and disclosures in addition to IFRS requirements, caused by
provisions in the Swedish Annual Accounts Act. TeliaSonera adopted the provisions of RR 30 in prior years.

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 long-lived 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 owns more than
50 percent of the voting rights or otherwise has control. TeliaSonera's consolidated financial statements are based on accounts prepared by all controlled 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 controlled. Goodwill and fair value
adjustments arising from the acquisition of foreign entities are considered to be denominated in the respective 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 inter-company transactions and profits within the Group have been eliminated in the consolidated financial statements.

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Foreign currency translation and inflation adjustments

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity
operates, normally the local currency.

The
consolidated financial statements are presented in Swedish kronor (SEK), which is the functional currency of the parent company. Income statements and balance sheets of foreign
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 item 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 instruments used to hedge net foreign investments, do not affect income but are
charged directly to equity.

When
the functional 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 (until 2003) and
write-downs 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 between segments, comparative period figures are restated.

4.    Transactions in Foreign Currencies

Transactions denominated in foreign currencies are translated 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

69

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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 2004 and after the balance sheet date

Metro One

On January 14, 2004, TeliaSonera sold its remaining shareholding in Metro One Telecommunications, Inc.

INGROUP

On February 20, 2004, the shareholders of INGROUP Holding AB, including TeliaSonera holding a 37 percent stake, sold all of their shares to
Manpower.

Zed

On January 13, 2004, Yahoo!, sold back its 16 percent holding in Sonera Zed Oy to TeliaSonera, whereby Zed became a wholly owned subsidiary of
TeliaSonera. On September 10, 2004, TeliaSonera sold Zed to the Spanish interactive media group Wisdom Entertainment.

Satellite companies

TeliaSonera's minority holdings in the satellite companies Eutelsat S.A. and Intelsat, Ltd. were sold in February 2004 and on January 28,
2005, respectively.

Telia Finans

On March 1, 2004, TeliaSonera sold its wholly owned subsidiary, the Swedish leasing company Telia Finans AB, to De Lage Landen International B.V.

Sturenportti

On February 27, 2004, TeliaSonera purchased all shares in the real estate company Kiinteistö Oy Sturenportti from Sonera Pension Fund.

Omnitel

On August 17, 2004, TeliaSonera acquired 10 percent of the shares in UAB Omnitel of Lithuania from the Kazickas family, making Omnitel fully owned
by TeliaSonera.

Orange Denmark

On October 11, 2004, TeliaSonera acquired France Telecom's Danish subsidiary, the mobile operator Orange A/S.

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Eesti Telekom

On December 28, 2004, TeliaSonera became the owner of slightly more than 50 percent of the shares in Eesti Telekom, making Eesti Telekom a
consolidated subsidiary. Exceeding the 50 percent threshold required TeliaSonera to make a mandatory public offer for the remaining shares in Eesti Telekom. The offer period expired on
February 23, 2005, resulting in a minor increase in TeliaSonera's shareholding, which currently is 50.3 percent.

Infonet

On February 25, 2005, the major shareholders of Infonet Services Corporation, including TeliaSonera with a 20 percent holding, sold their stakes in
Infonet to British Telecommunications plc.

Teleadress and Multicom Security

On February 2 and 28, 2005, respectively, the shareholders of TA Teleadress Information AB and Multicom Security AB, including TeliaSonera with an indirect
holding of 46 and 47 percent, respectively, sold all shares in Teleadress to Aftonbladet Hierta AB and in Multicom Security to the British investment company GMT Communications Partners.

Turkcell

On March 25, 2005, TeliaSonera agreed with the Cukurova Group in Turkey to acquire all the remaining shares in Turkcell Holding. Thereby TeliaSonera will acquire
a further effective 27.0 percent stake in Turkcell Iletisim Hizmetleri A.S. and increase its effective ownership stake to 64.3 percent. The transaction is subject to agreement on
definitive documentation, further due diligence on Turkcell and the receipt of all necessary regulatory approvals and third party consents. In particular, the transaction will be conditioned on the
confirmation of an exemption from the mandatory tender offer requirement from the Turkish Capital Markets Board. The transaction is expected to complete in the second quarter of 2005.

Major acquisitions and divestitures during 2002-2004

In 2004, 2003 and 2002, 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, 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 net sales, net income
and earnings/loss per share, had the merger with Sonera taken place at January 1, 2002, including the effects of the fact that due to the merger,

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three
entities in Latvia and Lithuania that were previously associated companies to Telia and Sonera, became controlled subsidiaries to TeliaSonera.

|                                                |  | January-December
|----------------------------------------------- |  | ----------------
|
|Net sales                                       |  | 81,937          
|Net income/loss                                 |  | 12,964          
|Basic and diluted earnings/loss per share (SEK) |  | 2.77            

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 and installation fees, service charges and sales of customer premises equipment.

Revenue
is recognized for the period in which the service is performed, based on actual traffic or over the contract term, as applicable, or when 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
hookup fees in the Swedish cable TV operations disposed of in the first half of 2003 were recorded as cost reductions over the depreciation period for the facility in question.
Other connection fees are separately recognized at completion of connection, if the fees do not include any amount for subsequent servicing but only cover the connection costs.

When
invoicing end-customers for third-party content services, revenue is reported on a net basis if TeliaSonera under the agreement acts as an agent or broker without
assuming the risks and rewards of ownership of the services.

TeliaSonera
may bundle services and products into one customer offering. Offerings may involve the delivery or performance of multiple products, services, or rights to use assets
(multiple deliverables). In some cases, the arrangements include initial installation, initiation, or activation services and involve consideration in the form of a fixed fee or a fixed fee coupled
with a continuing payment stream. Telecom equipment is accounted for separately from service where a market for each deliverable exist and if title to the equipment passes to the
end-customer. Costs associated with the equipment are recognized at the time of revenue recognized. The revenue is allocated to equipment and services in proportion to the fair value of
the individual elements. Customized equipment that can be used only in connection with services or products provided by TeliaSonera is not accounted for separately and revenue is deferred over the
total service arrangement period.

To
corporate customers, TeliaSonera offers long-term functional service agreements for total telecom services, which may include switchboard services, fixed telephony, mobile
telephony, data communication and other customized services. There are generally no options for the customer to acquire the equipment at the end of the service contract period. Revenue for such
functionality agreements is recognized over the service period but part of the periodic fixed fee is deferred to meet the costs at the end of the contract period (maintenance and
up-grades).

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In
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 note "Business Segments," section "Profit Center breakdown." Sales (including exports) were distributed among economic regions
as follows.

|                                            |  | January-December
|------------------------------------------- |  | ----------------
|
|
|European Union (EU)                         |  | 70,379          
|European Economic Area (EEA)                |  | 6,259           
|Rest of Europe                              |  | 675             
|North-American Free Trade Agreement (NAFTA) |  | 442             
|Rest of world                               |  | 4,182           
|                                            |  |                 
|Total                                       |  | 81,937          
|of which outside Sweden                     |  | 42,279          
|of which Nordic markets outside Sweden      |  | 28,301          

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Net
sales were broken down by product category as follows.

|                                             |  | January-December
|-------------------------------------------- |  | ----------------
|
|
|Mobile communications                        |  | 38,382          
|Fixed telephony                              |  | 25,023          
|Internet                                     |  | 5,586           
|Data communications and network capacity     |  | 7,972           
|Service, installation and customer equipment |  | 2,473           
|Cable TV                                     |  | 606             
|Financial services                           |  | 174             
|Other                                        |  | 1,721           
|                                             |  |                 
|Total                                        |  | 81,937          
|                                             |  |                 

Invoiced
advertising tax totaled SEKmillion, SEKmillion and SEK 0 million for the years 2004, 2003 and 2002, respectively.

The
distribution of sales change between volume effects, structural effects, exchange rate effects, and price effects was as follows.

|                       |                       | January-December
|---------------------- | --------------------- | ----------------
|
|
|Sales change           |                       | -0.6            
|of which volume growth |                       | 7.0             
|                       | structural changes    |                 
|                       | exchange rate effects |                 
|                       | price reductions      |                 

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.

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Operating
costs were distributed by function as follows.

|                         |  | January-December
|------------------------ |  | ----------------
|
|
|Production               |  | 43,104          
|Other functions          |  |                 
|Sales                    |  | 12,739          
|Administration           |  | 5,845           
|Research and development |  | 2,783           
|                         |  |                 
|Total other functions    |  | 21,367          
|                         |  |                 
|Total                    |  | 64,471          
|                         |  |                 

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                            |  | 12,273          
|Network expenses, interconnect traffic     |  | 12,915          
|Change in inventories                      |  | 91              
|                                           |  |                 
|Total                                      |  | 25,279          
|Salaries and remuneration                  |  | 8,674           
|Employer's social security contributions   |  | 1,902           
|Capitalized work by employees              |  | -127            
|Pension expenses                           |  | 441             
|Other personnel expenses                   |  | 656             
|                                           |  |                 
|Total                                      |  | 11,546          
|Rent and leasing fees                      |  | 2,491           
|Energy expenses                            |  | 445             
|Travel expenses                            |  | 649             
|Consultants' services                      |  | 1,695           
|Marketing expenses                         |  | 5,404           
|Bad debt expense                           |  | 249             
|Information technology                     |  | 1,679           
|Other expenses                             |  | 2,346           
|                                           |  |                 
|Total                                      |  | 14,958          
|Depreciation, amortization and write-downs |  | 12,688          
|                                           |  |                 
|Total                                      |  | 64,471          
|                                           |  |                 

Advertising
expenses totaled SEK 1,312 million, SEK 1,022 million and SEK 524 million for the years 2004, 2003 and 2002, respectively.

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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.

Other
operating revenues and expenses were distributed as follows.

|                                    |  | January-December
|----------------------------------- |  | ----------------
|
|
|Other operating revenues            |  |                 
|Capital gains, shares               |  | 679             
|Capital gains, divested operations  |  | 43              
|Capital gains, other                |  | 43              
|Exchange rate gains                 |  | 335             
|Commissions etc.                    |  | 316             
|Grants, etc.                        |  | 15              
|Recovered accounts receivable       |  | 40              
|Damages received                    |  | 3               
|                                    |  |                 
|Total other operating revenues      |  | 1,474           
|Other operating expenses            |  |                 
|Capital losses, shares              |  | -50             
|Capital losses, divested operations |  | -4              
|Capital losses, other               |  | -136            
|Provisions for onerous contracts    |  |                
|Exchange rate losses                |  | -270            
|Sonera merger expenses              |  |                
|Restructuring costs                 |  | -314            
|Impairment charge                   |  | -2,906          
|Damages paid                        |  | -15             
|                                    |  |                 
|Total other operating expenses      |  | -3,695          
|                                    |  |                 
|Net effect on income                |  | -2,221          
|                                    |  |                 

9.    Related Party Transactions

Group units

Commercial terms and market prices apply for the supply of goods and services between Group units. Inter-company sales totaled SEK 44,963 million, SEK
50,914 million and SEK 53,852 million for the years 2004, 2003 and 2002, respectively. On Profit Center level internal sales totaled SEK 2,948 million in 2004, SEK
3,336 million in 2003 and SEK 3,214 million in 2002.

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The Swedish State and the Finnish State

The Swedish State currently owns 45.3 percent and the Finnish State 13.7 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. Until
2003, TeliaSonera was the only operator obliged to pay this fee. Under the act, the fee from 2004 is apportioned to more operators. The required fee from TeliaSonera was SEK 30 million
in 2004, SEK 50 million in 2003 and SEK 50 million in 2002. In addition, TeliaSonera, like other operators, pays annual fees to the Swedish National Post and Telecom Agency (PTS) to fund
the Agency's activities under the Electronic Communications Act and the Radio and Telecommunications Terminal Equipment Act. TeliaSonera paid fees of SEK 65 million in 2004, SEK
64 million in 2003 and SEK 64 million in 2002.

The
Finnish telecommunications market is governed mainly by the Communications Market Act and the Act on the Protection of Privacy and Data Security in Electronic Communications as well
as by regulations, decisions and technical directions in accordance with these acts. In 2004, 2003 and 2002, TeliaSonera paid EUR 2.4 million, EUR 2.8 million and EUR 2.5 million,
respectively, for the use of radio frequencies and EUR 0.9 million, EUR 1.6 million and EUR 1.3 million, respectively, for the use of numbers. In 2004, TeliaSonera paid EUR
0.2 million for data privacy supervision and EUR 1 million as communications market fee, i.e. a general fee paid for the regulatory activities of the Finnish Communications Regulatory
Authority (FICORA).

Svenska UMTS-nät

TeliaSonera owns 50 percent of Svenska UMTS-nät AB. In 2004 and 2003, TeliaSonera sold services and products to Svenska
UMTS-nät worth SEK 180 million and SEK 131 million, respectively, and, in 2004, bought services and products worth SEK 43 million. As security for
certain amounts borrowed by Svenska UMTS-nät under a third-party credit facility, TeliaSonera had, as of December 31, 2004, issued a guarantee of a maximum of SEK
3,500 million to the lenders and granted pledges of its shares in Svenska UMTS-nät. In February 2005, the guarantee was reduced to a maximum of SEK
2,650 million.

Telekolmio

In 2004, TeliaSonera sold services to the associated company Telekolmio Oy worth SEK 34 million and bought services worth SEK 95 million.

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Kasteam

In 2004, TeliaSonera bought services from the indirectly owned associated company Kasteam Oy worth SEK 50 million.

Lattelekom

In 2004 and 2003, TeliaSonera sold services to the Latvian associated company Lattelekom SIA worth SEK 112 million and SEK 114 million,
respectively, and purchased services worth SEK 70 million and SEK 73 million, respectively. Further, in 2003, the Annual General Meeting of shareholders in Lattelekom decided to annul
the company's class C shares, resulting in a repayment of SEK 350 million to TeliaSonera.

Eesti Telekom

In 2004 and 2003, TeliaSonera sold services to the Estonian associated company AS Eesti Telekom worth SEK 24 million and SEK 13 million,
respectively, and purchased services worth SEK 42 million and SEK 13 million, respectively. On December 28, 2004, Eesti Telekom became a consolidated subsidiary.

MegaFon

TeliaSonera holds a participating interest in the Russian company OAO MegaFon. As of December 31, 2004, TeliaSonera had interest-bearing and
non-interest-bearing claims on MegaFon of SEK 326 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 were also liable for any losses in AUCS and had to pay
Infonet a bonus if the losses were lower than an amount specified in the contract. In total, this meant that TeliaSonera's share of Unisource's expenses as per the agreement was 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 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 undertook (SEK 1,348 million, as

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explained
above), was recorded as share of earnings in AUCS over the term of the management agreement and other agreements.

In
2004, 2003 and 2002 TeliaSonera sold services to AUCS worth SEKmillion, SEK 0 million and SEK 27 million, respectively.

Infonet

In 2004, 2003 and 2002, TeliaSonera sold services and products to the American associated company Infonet Services Corp. worth SEK 35 million, SEK
48 million and SEK 41 million, respectively, and purchased services and products worth SEK 116 million, SEK 225 million and SEK 260 million, respectively.

Telefos

TeliaSonera owns a participating interest in Telefos AB. As of December 31, 2004, TeliaSonera had interest-bearing claims on the Telefos Group of SEK
97 million. In 2004, 2003 and 2002, TeliaSonera sold services and products to the Telefos Group worth SEK 94 million, SEK 139 million and SEK 324 million,
respectively, and bought services and products worth SEK 1,908 million, SEK 2,675 million and SEK 3,534 million. Some of the services purchased by TeliaSonera relate to
construction of fixed assets.

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 2004, 2003 and 2002, TeliaSonera bought services from the associated company Service Factory SF AB worth SEK 23 million, SEK 35 million and SEK
32 million, respectively.

Other transactions

In addition, TeliaSonera sold and bought 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, were 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 useful life of various classes of assets. Effective January 1, 2004, TeliaSonera adopted IFRS 3, involving, among other things,
that goodwill and other intangible assets with indefinite useful lives are not amortized but tested for impairment at least annually. Also effective January 1, 2004, the depreciation rate for
copper cables in the fixed local access network in Sweden was changed from 12.5 percent to 5 percent annually and for switching equipment for ADSL customers from

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33.3 percent
to 10 percent annually. No general changes in depreciation schedules were applied in 2003 or 2002. 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 (until 2003)                                                          |  | Individual evaluation, minimum 5%                                            
|------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------
|Sonera and NetCom goodwill (until 2003)                                       |  | 5%                                                                           
|Trade names                                                                    |  | Individual evaluation, minimum 10%                                           
|Licenses for mobile and fixed communications                                   |  | License period, minimum 5%                                                   
|Other intangible assets                                                        |  | 7-33%                                                                        
|Buildings                                                                      |  | 2-10%                                                                        
|Land improvements                                                              |  | 5-20%                                                                        
|Expenditure on improvements to property not owned by the Group Mobile networks |  | Remaining term of corresponding lease                                        
|Base stations                                                                 |  | 9.5-14.5%                                                                    
|Other installations                                                           |  | 10-33%                                                                       
|Fixed networks                                                                 |  |                                                                              
|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%                                                                        
|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 using DCF models to forecast operating cash flows, for example with respect to factors such as market growth rates,
revenue volumes, market prices for 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

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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 acquisition of Orange Denmark in 2004, 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) and the Danish mobile operations were
tested for impairment as of December 31, 2004. The recoverable values were 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 11.0 percent in 2004, 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, 2004, 2003 and 2002 and therefore the
related goodwill was not impaired.

In
2002, TeliaSonera completed a comprehensive review of the Telia International Carrier operations, which constituted a cash-generating unit. Management decided to change
the strategic focus and significantly restructure the 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 carrying value, which was written down. SEK 824 million referred to financial assets. In 2003, the operations of Telia International Carrier and Sonera International
Carrier were integrated. The combined International
carrier operation constitutes a cash-generating unit. In 2004, continued weak market conditions, due to overcapacity and falling prices, triggered testing International Carrier for
impairment. As a result of the test, the net fixed asset value of SEK 3,263 million was written down to zero. SEK 357 million referred to financial assets. WACC used in calculating
recoverable values was 13.1 percent in 2004 and 16.2 percent in 2002. Excluding financial assets, the write-downs were recognized as Other operating expenses, most of which in the Fixed
networks class of assets.

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 carrying 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.

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Depreciation,
amortization and write-downs on intangible and tangible fixed assets were distributed by function as follows.

|                            |  | January-December
|--------------------------- |  | ----------------
|
|
|Production                  |  | 10,968          
|Sales                       |  | 678             
|Administration              |  | 888             
|Research and development    |  | 154             
|Other operating expenses    |  | 2,908           
|                            |  |                 
|Total                       |  | 15,596          
|Proportion of net sales (%) |  | 19.0            
|                            |  |                 

Depreciation,
amortization and write-downs are broken down by business segments in note "Business Segments."

Depreciation,
amortization and write-downs were distributed by asset class as follows.

|                              |  | January-December
|----------------------------- |  | ----------------
|
|
|Goodwill                      |  |                
|Other intangible assets       |  | 2,422           
|Buildings                     |  | 8               
|Land improvements             |  | 321             
|Mobile networks               |  | 3,905           
|Fixed networks                |  | 8,033           
|Other machinery and equipment |  | 907             
|                              |  |                 
|Total                         |  | 15,596          
|                              |  |                 

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. Turkcell's financials are included
in TeliaSonera's reporting with a one-quarter lag.

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This
item also includes amortization of goodwill (until 2003) 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                                 |  | 2,820           
|Amortization of goodwill (until 2003) and fair value adjustments |  | -64             
|Write-down of goodwill, fair value adjustments, etc.             |  | -67             
|Net capital gains                                                |  | 859             
|                                                                 |  |                 
|Net effect on income                                             |  | 3,548           
|                                                                 |  |                 

Income
from associated companies is broken down by business segments in note "Business Segments."

Large
individual stakes (including intermediate holding companies, when applicable) impacted earnings as follows.

|                                          |  | January-December
|----------------------------------------- |  | ----------------
|
|
|UAB Omnitel, Lithuania                    |  |                
|AB Lietuvos Telekomas, Lithuania          |  |                
|Latvijas Mobilais Telefons SIA, Latvia    |  |                
|Lattelekom SIA, Latvia                    |  | 219             
|AS Eesti Telekom, Estonia                 |  | 274             
|OAO MegaFon, Russia                       |  | 653             
|Turkcell Iletisim Hizmetleri A.S., Turkey |  | 972             
|Overseas Telecom AB, Sweden               |  | 285             
|Telefos AB, Sweden                        |  | 1,071           
|INGROUP Holding AB, Sweden                |  |                
|COOP Bank AB, Sweden                      |  | 17              
|Unisource N.V./AUCS, the Netherlands      |  | 43              
|Comsource UnLtd/Eircom plc, Ireland       |  |                
|Infonet Services Corp., USA               |  | -67             
|Metro One Telecommunications, Inc., USA   |  |                
|Bharti Mobile Ltd., India                 |  |                
|Other holdings                            |  | 81              
|                                          |  |                 
|Net effect on income                      |  | 3,548           
|                                          |  |                 

As
Eesti Telekom became a consolidated subsidiary on December 28, 2004. Due to the merger with Sonera Oyj (now TeliaSonera Finland Oyj); Latvijas Mobilais Telefons SIA, UAB
Omnitel AB and Lietuvos Telekomas became consolidated subsidiaries on December 3, 2002. The 2002 figure for the then subsidiary Overseas Telecom AB refer to Overseas' holdings in certain
associated companies. See also note "Financial Fixed Assets" and note "Specification of Shareholdings and Participations."

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In
the second quarter of 2003, management concluded that TeliaSonera's ownership interest in Infonet Services Corp. was not strategic and it was 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. TeliaSonera's holding in Infonet was divested in February 2005.

12.    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 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                           |  | 1               
|Capital gains/losses                |  | -460            
|Write-downs                         |  | -131            
|                                    |  |                 
|Total                               |  | -590            
|Other financial revenues            |  |                 
|Interest on financial leases        |  | 153             
|Other interest income               |  | 554             
|Exchange rate gains                 |  | 453             
|                                    |  |                 
|Total                               |  | 1,160           
|Other financial expenses            |  |                 
|Interest expenses                   |  | -1,572          
|Capitalized interest                |  | 20              
|Exchange rate losses                |  | -363            
|                                    |  |                 
|Total                               |  | -1,915          
|                                    |  |                 
|Net effect on income                |  | -1,345          
|                                    |  |                 

13.    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

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current
legislation in the countries where they are domiciled. The corporate income tax rate in Sweden was 28 percent in 2004, 2003 and 2002, and is applied to the nominal income recorded, plus
non-deductible items such as share write-downs and capital losses and less non-taxable revenues such as share dividends and capital gains.

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 utilizing the 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 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 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, distributed by taxation domicile, was as follows.

|                                      |  | January-December
|------------------------------------- |  | ----------------
|
|
|Sweden, subsidiaries                  |  | 7,911           
|Sweden, associated companies          |  | 599             
|                                      |  |                 
|Total Sweden                          |  | 8,510           
|Finland, subsidiaries                 |  | 2,437           
|Finland, associated companies         |  | 1               
|Other countries, subsidiaries         |  | 4,411           
|Other countries, associated companies |  | 2,089           
|                                      |  |                 
|Total outside Sweden                  |  | 8,938           
|                                      |  |                 
|Total                                 |  | 17,448          
|                                      |  |                 

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Recorded
tax expense was distributed as follows.

|                   |  | January-December
|------------------ |  | ----------------
|
|
|Current tax        |  |                 
|Sweden             |  | 67              
|Finland            |  | -43             
|Other countries    |  | 946             
|                   |  |                 
|Total current tax  |  | 970             
|Deferred tax       |  |                 
|Sweden             |  | 1,029           
|Finland            |  | 1,631           
|Other countries    |  | -446            
|                   |  |                 
|Total deferred tax |  | 2,214           
|                   |  |                 
|Total              |  | 3,184           
|                   |  |                 

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 |  | -180            
|Tax booked directly to equity     |  | 15              

The
difference between the nominal tax rate in Sweden and the effective tax rate comprises the following components.

|                                                         |  | January-December
|-------------------------------------------------------- |  | ----------------
|
|
|Swedish income tax rate                                  |  | 28.0            
|Differences in tax rates on foreign operations           |  | -4.6            
|Adjustment of current taxes for previous periods         |  | -1.0            
|Adjustment of deferred taxes for previous periods        |  | -6.1            
|Substantively enacted future changes in tax rates        |  | 5.4             
|Income from associated companies                         |  | -4.1            
|Losses for which deferred tax assets were not recognized |  | 1.2             
|Non-deductible expenses                                  |  | 2.7             
|Non-taxable revenues                                     |  | -3.3            
|                                                         |  |                 
|Tax rate as per the income statement                     |  | 18.2            
|Tax booked directly to equity                            |  | 0.1             
|                                                         |  |                 
|Effective tax rate                                       |  | 18.3            
|Tax rate, current tax                                    |  | 5.6             
|                                                         |  |                 

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On
June 30, 2004, the Finnish parliament passed new tax laws, including, among other things, a reduction of the Finnish corporate income tax rate from 29 percent to
26 percent effective January 1, 2005. This triggered a recalculation of deferred tax assets and liabilities in TeliaSonera's Finnish operations, resulting in a deferred tax expense of
SEK 949 million.

The
accumulated tax loss carry-forwards were distributed as follows.

|                |  | December 31,
|--------------- |  | ------------
|
|
|Sweden          |  | 546         
|Finland         |  | 28,769      
|Other countries |  | 6,720       
|                |  |             
|Total           |  | 36,035      
|                |  |             

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, 2004
expire in the following years.

|Expiry
SEK in millions  |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | 2010-2024 |  | Unlimited |  | Total 
|----------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | --------- |  | --------- |  | ------
|Tax loss carry-forwards |  | 71   |  | 270  |  | 91   |  | 468  |  | 13   |  | 28,914    |  | 6,208     |  | 36,035

87

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Deferred
tax liabilities and assets were distributed as follows.

|                                                     |                                      | December 31,
|---------------------------------------------------- | ------------------------------------ | ------------
|
|
|Deferred tax liability                               |                                      |             
|Shares and participations                            |                                      | 187         
|Other long-lived assets                              |                                      |            
|                                                     | Gross deferred tax liability         |             
|                                                     | Off-set deferred tax asset/liability |             
|Provisions                                           |                                      |            
|                                                     | Gross deferred tax liability         |             
|                                                     | Off-set deferred tax asset/liability |             
|Current receivables and liabilities                  |                                      | 30          
|Off-balance-sheet items                              |                                      | 1,042       
|                                                     |                                      |             
|Total deferred tax liability                         |                                      | 7,906       
|Gross deferred tax asset                             |                                      |             
|Shares and participations                            |                                      |            
|Other long-lived assets                              |                                      |            
|                                                     | Gross deferred tax asset             |             
|                                                     | Off-set deferred tax liability/asset |             
|Provisions and other long-term liabilities           |                                      |            
|                                                     | Gross deferred tax asset             |             
|                                                     | Off-set deferred tax liability/asset |             
|Current receivables and liabilities                  |                                      | 113         
|Tax loss carry-forwards                              |                                      | 9,759       
|                                                     |                                      |             
|Subtotal                                             |                                      | 14,406      
|Valuation allowance                                  |                                      |             
|Other long-lived assets                              |                                      | -303        
|Provisions and other long-term liabilities           |                                      | -24         
|Current receivables and liabilities                  |                                      | -104        
|Tax loss carry-forwards                              |                                      | -1,837      
|                                                     |                                      |             
|Subtotal                                             |                                      | -2,268      
|                                                     |                                      |             
|Total deferred tax asset                             |                                      | 12,138      
|                                                     |                                      |             
|Net deferred tax asset (-)/liability (+)             |                                      | -4,232      
|Net increase (+)/decrease (-) in valuation allowance |                                      | -36         
|                                                     |                                      |             

In
2004, the deferred tax liability with respect to other long-lived assets chiefly referred to temporary differences between tax and book value on assets in the parent
company, while amounts in 2003 and 2002 mostly referred to untaxed reserves (see below). Unrecorded deferred tax liabilities for undistributed earnings in subsidiaries totaled SEK 415 million
in 2004, SEK 436 million in 2003 and SEK 350 million in 2002.

The
deferred tax asset originating from tax loss carry-forwards mainly refers to extensive write-downs of investments in foreign associated companies and other minority holdings in 2002.
By means of

88

---



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.

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     |  | 3,239       
|Accumulated excess depreciation |  | 3,845       
|Contingency reserve             |  | 166         
|                                |  |             
|Total                           |  | 7,250       
|                                |  |             

In
2004, the parent company reversed all of its accumulated excess depreciation and consequently recorded a corresponding deferred tax liability.

Excess
depreciation was as follows.

|                             |  | December 31,
|---------------------------- |  | ------------
|
|
|Opening balance              |  | 769         
|Operations acquired/divested |  | -7          
|Provisions                   |  | 199         
|Reversals                    |  | -2          
|                             |  |             
|Closing balance              |  | 959         
|                             |  |             

14.    Intangible Fixed Assets

Intangible assets are recorded in the balance sheet at acquisition value, including directly attributable borrowing costs, less accumulated scheduled amortization
(for goodwill only until 2003), 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."

89

---





Direct external and internal charges for the development of software for in-house administrative use are capitalized, provided that future economic
benefits are probable and will exceed expenses incurred. 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             |  | 61,235      
|Accumulated amortization as of January 1, 2004 |  | -7,956      
|Purchases                                      |  | 4,413       
|Operations acquired                            |  |            
|Sales/discards                                 |  | -1          
|Operations divested                            |  | -47         
|Reclassifications                              |  | 410         
|Exchange rate differences                      |  | -14         
|                                               |  |             
|Accumulated acquisition value, closing balance |  | 58,040      
|Amortization, opening balance                  |  | -7,956      
|Accumulated amortization as of January 1, 2004 |  | 7,956       
|Operations acquired                            |  |            
|Sales/discards                                 |  |            
|Operations divested                            |  |            
|Reclassifications                              |  |            
|Amortization for the year                      |  |            
|Exchange rate differences                      |  |            
|                                               |  |             
|Accumulated amortization, closing balance      |  |            
|Write-downs, opening balance                   |  | -357        
|Operations acquired                            |  |            
|Reclassifications                              |  | 7           
|Write-downs for the year                       |  | -16         
|Exchange rate differences                      |  | 2           
|                                               |  |             
|Accumulated write-downs, closing balance       |  | -364        
|Advances                                       |  |            
|                                               |  |             
|Total book value, closing balance              |  | 57,676      
|                                               |  |             

The
acquisition value includes accumulated interest of SEK 22 million for 2004, SEK 22 million for 2003 and SEK 22 million for 2002.

Capitalized
software for in-house administrative use amounted to SEK 80 million in 2004, SEK 110 million in 2003 and SEK 192 million in 2002. In the
three years, amortization was SEK 122 million, SEK 140 million and SEK 101 million, respectively.

90

---



The
total book value was distributed as follows.

|                                                             |  | December 31,
|------------------------------------------------------------ |  | ------------
|
|
|Goodwill, TeliaSonera Finland                                |  | 28,063      
|Goodwill, NetCom                                             |  | 20,085      
|Goodwill, Orange Denmark                                     |  | 3,848       
|Goodwill, other                                              |  | 5,680       
|Administrative software systems                              |  | 670         
|Trade names, licenses, contractual agreements, patents, etc. |  | 10,693      
|Leases, etc.                                                 |  | 835         
|Work in progress, advances                                   |  | 619         
|                                                             |  |             
|Total                                                        |  | 70,493      
|                                                             |  |             

See
note "Acquisition of Orange Denmark and Eesti Telekom" for more information on significant acquisitions in 2004. In connection with the completion of the merger with Sonera Oyj (now
TeliaSonera Finland Oyj) in 2003, goodwill was finally allocated to units concerned.

Given
the current ownership structure and the same exchange rates as in 2004, 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                                               |  | 2005  |  | 2006  |  | 2007  |  | 2008  |  | 2009 
|------------------------------------------------------------- |  | ----- |  | ----- |  | ----- |  | ----- |  | -----
|Expected future amortization of other intangible fixed assets |  | 1,978 |  | 1,978 |  | 1,978 |  | 1,653 |  | 1,548

15.    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 installations in
the Swedish cable TV operations divested in early 2003, a deduction was 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 (5.25 percent for 2004, 5.0 percent for 2003 and 5.75 percent
for 2002).

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

91

---



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.

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             |  | 6,043       
|Purchases                                      |  | 358         
|Operations acquired                            |  | 1,358       
|Sales/discards                                 |  | -140        
|Operations divested                            |  |            
|Reclassifications                              |  | 19          
|Exchange rate differences                      |  | -60         
|                                               |  |             
|Accumulated acquisition value, closing balance |  | 7,578       
|Depreciation, opening balance                  |  | -2,024      
|Operations acquired                            |  | -580        
|Sales/discards                                 |  | 82          
|Reclassifications                              |  | -4          
|Depreciation for the year                      |  | -328        
|Exchange rate differences                      |  | 15          
|                                               |  |             
|Accumulated depreciation, closing balance      |  | -2,839      
|Write-downs, opening balance                   |  | -354        
|Sales/discards                                 |  | 15          
|Reclassifications                              |  | 13          
|Write-downs for the year                       |  |            
|Exchange rate differences                      |  | 2           
|                                               |  |             
|Accumulated write-downs, closing balance       |  | -324        
|Advances                                       |  | 36          
|                                               |  |             
|Total book value, closing balance              |  | 4,451       
|                                               |  |             

No
interest is included in the acquisition value for the years 2004, 2003 and 2002.

92

---



The
Group's Swedish real estate holdings have been assessed for tax purposes at the following values.

|                           |  | December 31,
|-------------------------- |  | ------------
|
|
|Buildings                  |  | 178         
|Land and land improvements |  | 74          
|                           |  |             
|Tax-assessed value         |  | 252         
|                           |  |             

At
the 2004 property assessment for tax purposes, a number of properties were assessed for the first time, while others had their assessments adjusted. The number of real estate
properties valued for tax purposes is limited as many of them are classified as non-taxable communication buildings.

Plant and machinery

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|Acquisition value, opening balance                     |  | 135,184     
|Purchases                                              |  | 9,403       
|Operations acquired                                    |  | 5,211       
|Dismantling/restoration                                |  | 25          
|Sales/discards                                         |  | -3,327      
|Operations divested                                    |  | -537        
|Reclassifications                                      |  | 777         
|Exchange rate differences                              |  | -475        
|                                                       |  |             
|Accumulated acquisition value, closing balance         |  | 146,261     
|Depreciation, opening balance                          |  | -81,495     
|Operations acquired                                    |  | -4,002      
|Sales/discards                                         |  | 3,067       
|Operations divested                                    |  | 482         
|Reclassifications                                      |  | -798        
|Depreciation for the year                              |  | -8,909      
|Exchange rate differences                              |  | 231         
|                                                       |  |             
|Accumulated depreciation, closing balance              |  | -91,424     
|Write-downs, opening balance                           |  | -10,447     
|Operations acquired                                    |  | -15         
|Sales/discards                                         |  | 172         
|Reclassifications                                      |  | -120        
|Write-downs for the year                               |  | -2,948      
|Exchange rate differences                              |  | 33          
|                                                       |  |             
|Accumulated write-downs, closing balance               |  | -13,325     
|Fixed-asset contributions from cable TV customers, net |  |            
|Advances                                               |  | 40          
|                                                       |  |             
|Total book value, closing balance                      |  | 41,552      
|                                                       |  |             

93

---



The
acquisition value includes accumulated interest of SEK 594 million, SEK 617 million and SEK 574 million for the years 2004, 2003 and 2002, respectively.

In
2004 and 2002, the carrying value of the international carrier operations was written down and, in 2002, assets in the Danish fixed-line operations were impaired (see also
note "Restructuring Costs").

Equipment, tools and installations

|                                               |  | December 31,
|---------------------------------------------- |  | ------------
|
|
|Acquisition value, opening balance             |  | 6,730       
|Purchases                                      |  | 639         
|Operations acquired                            |  | 1,276       
|Sales/discards                                 |  | -573        
|Operations divested                            |  | -317        
|Reclassifications                              |  | -1,227      
|Exchange rate differences                      |  | -13         
|                                               |  |             
|Accumulated acquisition value, closing balance |  | 6,515       
|Depreciation, opening balance                  |  | -4,249      
|Operations acquired                            |  | -1,011      
|Sales/discards                                 |  | 538         
|Operations divested                            |  | 188         
|Reclassifications                              |  | 830         
|Depreciation for the year                      |  | -978        
|Exchange rate differences                      |  | 6           
|                                               |  |             
|Accumulated depreciation, closing balance      |  | -4,676      
|Write-downs, opening balance                   |  | -277        
|Operations acquired                            |  | -22         
|Sales/discards                                 |  | 7           
|Operations divested                            |  | 1           
|Reclassifications                              |  |            
|Write-downs for the year                       |  | -10         
|Exchange rate differences                      |  | 1           
|                                               |  |             
|Accumulated write-downs, closing balance       |  | -300        
|Total book value, closing balance              |  | 1,539       
|                                               |  |             

No
interest is included in the acquisition value for the years 2004, 2003 or 2002.

94

---



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 |  | 108         
|Buildings                                                      |  | 3,945       
|Land and land improvements                                     |  | 398         
|                                                               |  |             
|Total buildings and land                                       |  | 4,451       
|Plant and machinery                                            |  |             
|Mobile networks                                                |  | 7,961       
|Fixed networksswitching systems and peripheral equipment      |  | 9,269       
|Fixed networkstransmission systems                            |  | 11,771      
|Fixed networkstransmission media and other types of media     |  | 9,286       
|Cable TV networks                                              |  | 416         
|Alarm systems                                                  |  | 9           
|New installations under construction, advances                 |  | 2,840       
|                                                               |  |             
|Total plant and machinery                                      |  | 41,552      
|Equipment, tools and installations                             |  |             
|Financial leasing, vehicles                                    |  | 271         
|Other equipment, tools and installations                       |  | 1,268       
|                                                               |  |             
|Total equipment, tools and installations                       |  | 1,539       
|                                                               |  |             
|Total                                                          |  | 47,542      
|                                                               |  |             

New
installations under construction under Plant and machinery are chiefly installations for mobile and fixed 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.

16.    Financial Fixed Assets

General

The principles for the consolidation of subsidiaries and associated companies are described in note "Consolidated Financial Statements. " Effective
January 1, 2004, goodwill and other indefinite lived intangible assets are not amortized. 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 market value if listed, 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"). For further discussion of the
valuation of financial fixed assets, see note "Financial Instruments and Financial Risk Management."

95

---



Equity participations in associated companies

|                                                                                   |  | December 31,
|---------------------------------------------------------------------------------- |  | ------------
|
|
|Book value, opening balance                                                        |  | 20,401      
|Acquisitions                                                                       |  | 379         
|Operations acquired                                                                |  | 28          
|Transactions with non-related parties                                              |  |            
|New share issues and shareholder contributions                                     |  | 66          
|Share in earnings                                                                  |  | 2,820       
|Amortization and write-down of goodwill (until 2003), fair value adjustments, etc. |  | -131        
|Divestitures                                                                       |  | -169        
|Dividends received                                                                 |  | -899        
|Reclassifications                                                                  |  | -2,394      
|Inflation adjustments                                                              |  | 1,423       
|Exchange rate differences                                                          |  | -1,911      
|                                                                                   |  |             
|Book value, closing balance                                                        |  | 19,613      
|                                                                                   |  |             

The
book value was distributed as follows.

|                                             |  | December 31,
|-------------------------------------------- |  | ------------
|
|
|Goodwill and similar assets on consolidation |  | 8,079       
|Participation in equity                      |  | 11,534      
|                                             |  |             
|Total                                        |  | 19,613      
|                                             |  |             

Book
value is broken down by business segments in note "Business Segments."

Summarized
information (unaudited) on the associated companies' aggregate balance sheets and income statements were as follows.

|                                     |  | December 31 or January-December
|------------------------------------ |  | -------------------------------
|
|
|Fixed assets                         |  | 65,072                         
|Current assets                       |  | 25,999                         
|Provisions and long-term liabilities |  | 13,967                         
|Current liabilities                  |  | 25,097                         
|Net sales                            |  | 46,209                         
|Gross income                         |  | 11,802                         
|Net income                           |  | 6,034                          

96

---



Other holdings of securities

|                                  |  | December 31,
|--------------------------------- |  | ------------
|
|
|Book value, opening balance       |  | 558         
|Acquisitions                      |  | 142         
|Operations acquired               |  |            
|Divestitures                      |  | -120        
|Write-downs                       |  | -129        
|Reclassifications                 |  |            
|Changes in fair value             |  | 83          
|Share of earnings in partnerships |  |            
|Exchange rate differences         |  | -3          
|                                  |  |             
|Book value, closing balance       |  | 531         
|                                  |  |             

Other long-term financial assets

|                            |  | December 31,
|--------------------------- |  | ------------
|
|
|Book value, opening balance |  | 21,102      
|Purchases                   |  | 148         
|Operations acquired         |  |            
|Sales/discards              |  | -3,706      
|Operations divested         |  | -3,162      
|Write-downs                 |  | -619        
|Reclassifications           |  | 1,214       
|Exchange rate differences   |  | -11         
|                            |  |             
|Book value, closing balance |  | 14,966      
|                            |  |             

97

---



Distribution by class of asset

The total book value was distributed as follows.

|                                                          |  | December 31,
|--------------------------------------------------------- |  | ------------
|
|
|Associated companies                                      |  |             
|Equity participations in associated companies             |  | 19,613      
|Interest-bearing receivables                              |  | 232         
|Non-interest-bearing receivables                          |  | 0           
|                                                          |  |             
|Total associated companies                                |  | 19,845      
|Other holdings of securities                              |  |             
|Shares and participations                                 |  | 326         
|Other securities                                          |  | 205         
|                                                          |  |             
|Total other holdings of securities                        |  | 531         
|Deferred tax asset                                        |  | 12,138      
|Other long-term receivables                               |  |             
|Interest-bearing                                          |  |             
|Receivables for pension obligations                       |  | 573         
|Financial leasing agreements                              |  | 333         
|Service-financing agreements                              |  | 254         
|Loans to employees                                        |  | 7           
|Interest rate swaps                                       |  | 104         
|Foreign currency interest rate swaps                      |  | 113         
|Other                                                     |  | 301         
|Non-interest-bearing                                      |  |             
|Deferral of paid pension-related social charges and taxes |  | 621         
|Operating lease agreements                                |  | 44          
|Other                                                     |  | 246         
|                                                          |  |             
|Total other long-term receivables                         |  | 2,596       
|                                                          |  |             
|Total                                                     |  | 35,110      
|                                                          |  |             

The
deferred tax asset is discussed in note "Income taxes" and leasing agreements in note "Leasing Agreements and Contractual Obligations." Shareholdings and participations in associated
companies as well as other holdings of securities are specified in note "Specification of Shareholdings and Participations."

98

---





17.    Inventories, etc.

Inventory and stock in trade are valued at acquisition value, based on FIFO (first in/first out), or net selling price, which-ever 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.

After
deductions for obsolescence amounting to SEK 15 million, SEK 7 million and SEK 10 million for the years 2004, 2003 and 2002, respectively, the total book value
was distributed as follows.

|                                         |  | December 31,
|---------------------------------------- |  | ------------
|
|
|Raw materials and essential inputs       |  | 109         
|Products at work                         |  | 20          
|Finished goods and goods for resale      |  | 473         
|Expense incurred, construction contracts |  | 51          
|Advances to suppliers                    |  | 2           
|                                         |  |             
|Total                                    |  | 655         
|                                         |  |             

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
173 million, SEK 6 million and SEK 26 million for the years 2004, 2003 and 2002, respectively, were stored at a central location. The remainder was held at local warehouses and
worksites.

18.    Receivables

Allowances for doubtful receivables are calculated based on individual assessment or in connection with mass invoicing 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.

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.

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The
total book value is distributed as follows.

|                                            |  | December 31,
|------------------------------------------- |  | ------------
|
|
|Accounts receivable                         |  |             
|Invoiced receivables                        |  | 12,621      
|Allowance for doubtful receivables          |  | -704        
|                                            |  |             
|Total accounts receivable                   |  | 11,917      
|Other current receivables                   |  |             
|Interest-bearing                            |  |             
|Receivable from associated companies        |  | 5           
|Financial leasing agreements                |  | 269         
|Foreign currency interest rate swaps        |  | 209         
|Receivable from others                      |  | 390         
|Non-interest-bearing                        |  |             
|Receivable from associated companies        |  | 423         
|Value-added tax                             |  | 364         
|Other tax assets                            |  | 725         
|International settlements                   |  | 565         
|Currency swaps, forward exchange contracts  |  | 54          
|Receivable from others                      |  | 1,447       
|                                            |  |             
|Total other current receivables             |  | 4,451       
|Accrued revenues and prepaid expenses       |  |             
|Metered call charges                        |  | 2,383       
|Interconnect and roaming charges            |  | 1,001       
|Other traffic charges                       |  | 176         
|Construction and service contracts          |  | 25          
|Prepaid rent and leasing fees               |  | 290         
|Other accrued or prepaid items              |  | 1,362       
|                                            |  |             
|Total accrued revenues and prepaid expenses |  | 5,237       
|                                            |  |             
|Total                                       |  | 21,605      
|                                            |  |             

Written-down
accounts receivable (bad debt expense) and recovered accounts receivable for the years 2004, 2003 and 2002 are recorded in note "Operating Costs" and note "Other
Operating Revenues and Expenses." For information on leases, see note "Leasing Agreements and Contractual Obligations."

100

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19.    Short-term Investments

Short-term investments consist primarily of surplus liquidity invested in the overnight market and are valued at the acquisition value plus accrued
interest income, which approximates fair value. Investments with maturities over three months are valued at fair value.

|                                                             |  | December 31,
|------------------------------------------------------------ |  | ------------
|
|
|Investments with maturities over three months                |  | 368         
|Investments with maturities up to and including three months |  | 11,702      
|                                                             |  |             
|Total                                                        |  | 12,070      
|                                                             |  |             

See
also note "Financial Instruments and Financial Risk Management" and note "Cash Flow Information."

20.    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, the share premium reserve, the statutory reserve and other restricted reserves. 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.

Earnings
in associated companies that have not been distributed are recorded in the Group's equity as an equity method reserve in restricted reserves. Likewise, the revaluation reserve,
arising from revaluing the fair values of net assets in a previous associate accounted for under the equity method to the fair values of net assets at the date that entity became a consolidated
subsidiary, constitutes a restricted reserve. Further, the equity component of untaxed reserves is recognized in restricted equity. Until 2003, the equity effect of recording financial instruments at
fair value was attributed to a fair value reserve in restricted reserves. Following a change in the Swedish Annual Accounts Act, effective January 1, 2004, the fair value reserve was
transferred to non-restricted equity.

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.

101

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During
the last five 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     
|Share capital, December 31, 2004 |                                    | 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 2004 totals SEK 5,610 million (SEK 1.20 per share). This amount has not been recorded as a liability.

Exchange rate differences

|                                       |  | December 31,
|-------------------------------------- |  | ------------
|
|
|Translation of foreign operations      |  | -2,243      
|Forward contracts used as equity hedge |  |            
|Operations divested                    |  | -10         
|Tax effect                             |  |            
|                                       |  |             
|Total                                  |  | -2,253      
|                                       |  |             

There
was no tax effect arising from the translation of foreign associated companies.

The
cumulative exchange rate differences in restricted equity were distributed as follows.

|                          |  | December 31,
|------------------------- |  | ------------
|
|
|Equity method reserve     |  | -3,407      
|Other restricted reserves |  | -209        
|                          |  |             
|Total                     |  | -3,616      
|                          |  |             

102

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Inflation adjustments

|                                                         |  | December 31,
|-------------------------------------------------------- |  | ------------
|
|
|Book value, opening balance                              |  | 2,427       
|Translation of operations in hyperinflationary economies |  | 1,452       
|                                                         |  |             
|Book value, closing balance                              |  | 3,879       
|                                                         |  |             

There
was no tax effect arising from the translation of associated companies in hyperinflationary economies.

Revaluation reserve

|                            |  | December 31,
|--------------------------- |  | ------------
|
|
|Book value, opening balance |  |            
|Operations acquired         |  | 1,641       
|                            |  |             
|Book value, closing balance |  | 1,641       
|                            |  |             

Fair value reserve

|                            |  | December 31,
|--------------------------- |  | ------------
|
|
|
|Book value, opening balance |  | -11         
|Provisions                  |  | 129         
|Reversals                   |  | 11          
|Tax effect                  |  |            
|                            |  |             
|Book value, closing balance |  | 129         
|                            |  |             

No
part of the reversed amount referred to reversals that necessitate adjusting the acquisition value. See also section "General" in note "Financial Instruments and Financial Risk
Management."

103

---



Earnings per share

|                                                  |  | January-December
|------------------------------------------------- |  | ----------------
|
|Net income/loss (SEK million)                     |  | 12,964          
|Average number of shares (thousands)              |  | 4,675,232       
|-after dilution (thousands)                       |  | 4,675,232       
|Earnings/Loss per share (SEK)                     |  |                 
|-Basic                                            |  | 2.77            
|-Diluted                                          |  | 2.77            
|Cash dividend (for 2004 as proposed by the Board) |  |                 
|-Per share (SEK)                                  |  | 1.20            
|-Total (SEK million)                              |  | 5,610           

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 no dilution effect upon computation of earnings per share for 2004 and a very limited dilution effect for 2003 and 2002.

21.    Minority Interests in Equity

Changes in minority interests were as follows.

|                                       |  | December 31,
|-------------------------------------- |  | ------------
|
|
|Book value, opening balance            |  | 3,441       
|Acquisitions/Disposals                 |  | 968         
|Fair value adjustments in acquisitions |  | 2,380       
|Share of net income                    |  | 1,300       
|Share of dividends                     |  | -468        
|Share of exchange rate differences     |  | -164        
|                                       |  |             
|Book value, closing balance            |  | 7,457       
|                                       |  |             

104

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The
book value was distributed as follows (including intermediate holding companies, when applicable).

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|TeliaSonera Finland Oyj (formerly Sonera Oyj), Finland |  |            
|UAB Omnitel, Lithuania                                 |  |            
|AB Lietuvos Telekomas, Lithuania                       |  | 1,183       
|Latvijas Mobilais Telefons SIA, Latvia                 |  | 669         
|AS Eesti Telekom, Estonia                              |  | 3,549       
|Fintur Holdings B.V., the Netherlands                  |  | 2,051       
|Other subsidiaries                                     |  | 5           
|                                                       |  |             
|Total book value                                       |  | 7,457       
|                                                       |  |             

22.    Provisions for Pensions and Employment Contracts

General

Almost all of TeliaSonera's employees in Sweden, Finland and Norway are covered by defined benefit pension plans, which mean 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. Employees in TeliaSonera AB and most of
its Swedish subsidiaries are eligible for retirement benefits under a benefit plan called ITP-Tele. TeliaSonera's employees in Finland are entitled to statutory pension benefits pursuant
to the Finnish Employees' Pension Act, a defined benefit pension arrangement with retirement, disability, unemployment and death benefits (TEL pension). In addition, certain employees have additional
pension coverage through a supplemental pension plan.

The
pension obligations are secured mostly by pension funds, but also by provisions in the balance sheet and by insurance premiums. In Sweden, the part of the ITP multiemployer pension
plan that is secured by paying pension premiums is accounted for as a defined contribution plan due to lack of information necessary to account for the plan as a defined benefit plan. 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.

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.

105

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Receivables/provisions
for pension obligations were recorded in the balance sheet as follows.

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|Present value of pension obligations                   |  | 18,047      
|Fair value of plan assets                              |  | -15,838     
|                                                       |  |             
|Pension obligations less plan assets                   |  | 2,209       
|Unrecognized past service cost                         |  | 20          
|Unrecognized transition gains                          |  |            
|Unrecognized actuarial gains (+)/losses (-)            |  | -2,802      
|                                                       |  |             
|Receivables (-)/Provisions (+) for pension obligations |  | -573        
|                                                       |  |             

Total
pension expenses were distributed as follows.

|                                                                                               |  | January-December
|---------------------------------------------------------------------------------------------- |  | ----------------
|
|
|Current service cost                                                                           |  | 430             
|Interest on pension provisions                                                                 |  | 902             
|Expected return on assets                                                                      |  | -940            
|Amortization of past service cost                                                              |  | -34             
|Amortization of transition gains                                                               |  | -158            
|Amortization of actuarial gains (-)/losses (+)                                                 |  | 66              
|                                                                                               |  |                 
|Pension expenses, defined benefit pension plans                                                |  | 266             
|Settlement of pension obligations                                                              |  |                
|Termination benefits (excl. premiums and pension-related social charges)                       |  | 76              
|Pension premiums, defined benefit/defined contribution pension plans and pay-as-you-go systems |  | 661             
|Pension-related social charges and taxes, other pension expenses                               |  | -562            
|                                                                                               |  |                 
|Total pension expenses                                                                         |  | 441             
|of which pension premiums paid to the ITP pension plan                                         |  | 192             

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 plans. A change

106

---



in
any of these key assumptions may have a significant impact on the projected benefit obligations, funding requirements and periodic pension cost.

|                                                          |  | December 31,
|--------------------------------------------------------- |  | ------------
|
|
|Discount rate                                             |  | 5.0         
|Expected rate of compensation increase                    |  | 3.5         
|Employee turnover rate                                    |  | 2.8         
|Average expected remaining working life, years            |  | 15.1        
|Increase in income base amount (only Swedish Group units) |  | 2.8         
|Annual adjustments to pensions                            |  | 2.0         
|Expected return on plan assets                            |  | 5.7         

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 yields derived from domestic government bonds, with an add-on equivalent to the applicable swap spread and also an additional add-on reflecting
the relevant credit spread for a highly-rated corporate bond issuer 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. Yields for terms over 15 years have been estimated by
extrapolating the yield-curve as described above.

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 funds. Plan assets chiefly consist of fixed income instruments and equity instruments. The asset portfolios are balanced to give the expected average return, chiefly based on historical
data, as further described below.

107

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Specifications to pension obligation and pension expense

Changes in projected benefit obligation, plan assets, and the net receivable/liability in the balance sheet and actuarial net gains or losses for the defined
benefit pension plans were as follows.

|                                     |  | December 31,
|------------------------------------ |  | ------------
|
|
|Present value of pension obligations |  |             
|Opening balance                      |  | 16,977      
|Current service cost                 |  | 430         
|Interest expenses                    |  | 902         
|Benefits paid                        |  | -1,360      
|Termination benefits                 |  | 76          
|Operations acquired/divested         |  | 23          
|Settlement of pension obligations    |  |            
|Past service cost                    |  | -20         
|Actuarial gains (-)/losses (+)       |  | 1,027       
|Exchange rate differences            |  | -8          
|                                     |  |             
|Closing balance                      |  | 18,047      
|Plan assets                          |  |             
|Opening balance                      |  | 14,295      
|Expected return on plan assets       |  | 940         
|Contribution to pension fund         |  | 1,122       
|Payment from pension fund            |  | -1,028      
|Operations acquired (+)/divested (-) |  | 13          
|Actuarial gains (+)/losses (-)       |  | 506         
|Exchange rate differences            |  | -10         
|                                     |  |             
|Closing balance                      |  | 15,838      
|Expected return on plan assets       |  |             
|Expected return on plan assets       |  | 940         
|Actuarial gains (+)/losses (-)       |  | 506         
|                                     |  |             
|Actual return                        |  | 1,446       
|                                     |  |             

108

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|                                                                     |  | December 31,
|-------------------------------------------------------------------- |  | ------------
|
|
|Provisions for pension obligations                                   |  |             
|Opening balance                                                      |  | 522         
|Pension expenses, defined benefit pension plans                      |  | 266         
|Benefits paid                                                        |  | -1,360      
|Contribution to pension fund                                         |  | -1,122      
|Payment from pension fund                                            |  | 1,028       
|Termination benefits                                                 |  | 75          
|Operations acquired/divested, net                                    |  | 20          
|Settlement of pension obligations                                    |  |            
|Exchange rate differences                                            |  | -2          
|                                                                     |  |             
|Closing balance                                                      |  | -573        
|Actuarial gains/losses                                               |  |             
|Opening balance, actuarial gains (+)/losses (-)                      |  | -2,346      
|Actuarial gains (-)/losses (+) to be recognized                      |  | 66          
|Actuarial gains (-)/losses (+), settlement of pension obligations    |  |            
|Actuarial gains (-)/losses (+), acquired/divested operations         |  | 10          
|Actuarial gains (+)/losses (-), pension obligations                  |  | -1,027      
|Actuarial gains (+)/losses (-), plan assets                          |  | 506         
|Exchange rate differences                                            |  | -11         
|                                                                     |  |             
|Closing balance, actuarial gains (+)/losses (-)                      |  | -2,802      
|Operations acquired                                                  |  |             
|Increase in pension obligations                                      |  | 43          
|Increase in plan assets                                              |  | -13         
|                                                                     |  |             
|Net position                                                         |  | 30          
|Operations divested                                                  |  |             
|Decrease in pension obligations                                      |  | -20         
|Decrease in plan assets                                              |  |            
|Decrease in unrecognized net transition gain/loss, past service cost |  | -0          
|Decrease in unrecognized net transition gain/loss                    |  | -0          
|Changes in unrecognized actuarial gains (-)/losses (+)               |  | 10          
|                                                                     |  |             
|Net position                                                         |  | -10         
|                                                                     |  |             

Strategic plan-asset allocation

As of December 31, 2004, the decided 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 other investments. Other investments include hedge funds, private equity, emerging market debt and high
yield bonds. Out of the total assets 40 percent are domestic index (inflation) linked government bonds and 20 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.

109

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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 5.5 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 4.5 percent, domestic and global equity
8 percent and other investments 8 percent.

The
assumptions used in the Finnish and Norwegian pension funds are similar.

The
actual allocation may fluctuate from the strategic allocation in a range of +/-10 percent between fixed income and equities. As of the balance sheet date, actual
market values of pension plan assets were as follows.

|                                    |  | December 31,
|----------------------------------- |  | ------------
|
|
|Fixed income instruments, liquidity |  | 8,884       
|Shares and other investments        |  | 6,954       
|                                    |  |             
|Total                               |  | 15,838      
|of which shares in TeliaSonera AB   |  | 84          

Future cash flows

Contributions

For companies in Sweden, part of the pension 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 107 million in 2005.

Estimated benefits paid

Given the current actuarial calculation assumptions, TeliaSonera expects the following benefit payments during the next ten-year period.

|SEK in millions        |  | 2005 |  | 2006 |  | 2007  |  | 2008  |  | 2009  |  | 2010-2014 |  | Total 
|---------------------- |  | ---- |  | ---- |  | ----- |  | ----- |  | ----- |  | --------- |  | ------
|Expected benefits paid |  | 979  |  | 993  |  | 1,017 |  | 1,055 |  | 1,106 |  | 6,454     |  | 11,604

110

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23.    Deferred Tax Liability, Other Provisions

Changes in other provisions, including deferred tax liability, were as follows.

|                                 |  | December 31,
|-------------------------------- |  | ------------
|
|
|Book value, opening balance      |  | 14,775      
|Provisions for the period        |  | 1,250       
|Operations acquired              |  |            
|Utilized provisions              |  | -2,003      
|Operations divested              |  |            
|Reclassifications                |  | 218         
|Reversals of provisions          |  | -836        
|Timing and interest-rate effects |  | 54          
|Exchange rate differences        |  | -56         
|                                 |  |             
|Book value, closing balance      |  | 13,402      
|                                 |  |             

The
book value of the provisions was distributed as follows.

|                                         |  | December 31,
|---------------------------------------- |  | ------------
|
|
|Deferred tax liability                   |  | 7,906       
|Other provisions                         |  |             
|Payroll taxes on future pension payments |  | 241         
|Restructuring                            |  | 2,701       
|Onerous contracts                        |  | 143         
|Guarantee reserves                       |  | 1,995       
|Other                                    |  | 416         
|                                         |  |             
|Total other provisions                   |  | 5,496       
|                                         |  |             
|Total                                    |  | 13,402      
|                                         |  |             

The
deferred tax liability is discussed in note "Income Taxes" and provisions for restructuring in note "Restructuring Costs".

111

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24.    Long-term Loans

Long-term loans were distributed as follows.

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|Financial leasing, vehicles                            |  | 165         
|TeliaSonera FTN/FTO                                    |  | 4,167       
|TeliaSonera EMTN, other foreign currency loans         |  | 5,476       
|TeliaSonera Finland EMTN, other foreign currency loans |  | 1,941       
|Other loans                                            |  | 968         
|Interest rate swaps                                    |  | 47          
|Foreign currency interest rate swaps                   |  | 178         
|                                                       |  |             
|Total                                                  |  | 12,942      
|                                                       |  |             

For
the years 2004, 2003 and 2002, SEK 1,733 million, SEK 4,995 million and SEK 5,359 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,
|------------------------------------------------------ |  | ------------
|
|
|Loans from associated companies                        |  |            
|Financial leasing, vehicles                            |  | 83          
|TeliaSonera FTN                                        |  | 752         
|TeliaSonera EMTN, other foreign currency loans         |  | 2,706       
|TeliaSonera Finland EMTN, other foreign currency loans |  | 7,930       
|Other loans                                            |  | 248         
|Interest rate swaps                                    |  | 4           
|Foreign currency interest rate swaps                   |  | 10          
|                                                       |  |             
|Total                                                  |  | 11,733      
|                                                       |  |             

Bank
overdraft facilities had a total limit of SEK 879 million, SEK 984 million and SEK 6,593 million for the years 2004, 2003 and 2002, respectively. See
also note "Financial Instruments and Financial Risk Management."

112

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26.    Long-term Liabilities

Long-term liabilities were distributed as follows.

|                                    |  | December 31,
|----------------------------------- |  | ------------
|
|
|Liabilities to associated companies |  |            
|Prepaid leasing agreements          |  | 1,194       
|License fees                        |  | 438         
|Other liabilities                   |  | 818         
|                                    |  |             
|Total                               |  | 2,450       
|                                    |  |             

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 2004, 2003 and 2002, SEK 68 million, SEK 136 million and SEK 204 million, respectively, fell due more than five years after the
balance sheet date.

27.    Current Liabilities

Current liabilities were distributed as follows.

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|Accounts payable                                       |  | 7,756       
|Liabilities to associated companies                    |  | 470         
|Tax liabilities                                        |  | 647         
|Other liabilities                                      |  |             
|Telephone card reserve, deductible calling charges     |  | 1,022       
|Advances, deposits, etc.                               |  | 248         
|Value-added tax, excise taxes                          |  | 1,168       
|Employee withholding tax, payable to employees         |  | 463         
|International settlements                              |  | 301         
|Currency swaps, forward exchange contracts             |  | 12          
|Other                                                  |  | 1,110       
|                                                       |  |             
|Total other liabilities                                |  | 4,324       
|Accrued expenses and prepaid revenues                  |  |             
|Accrued payroll expenses                               |  | 1,424       
|Accrued employer's social security contributions, etc. |  | 482         
|Accrued leasing fees                                   |  | 496         
|Accrued interest                                       |  | 642         
|Subscription charges                                   |  | 1,911       
|Interconnect charges                                   |  | 1,084       
|Retailer commissions                                   |  | 160         
|Prepaid leasing agreements                             |  | 291         
|Other accrued or prepaid items                         |  | 3,691       
|                                                       |  |             
|Total accrued expenses and prepaid revenues            |  | 10,181      
|                                                       |  |             
|Total current liabilities                              |  | 23,378      
|                                                       |  |             

113

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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.

The
book value of the leased assets as of the balance sheet date was as follows.

|                                          |  | December 31,
|----------------------------------------- |  | ------------
|
|
|Acquisition value                         |  | 1,516       
|Less accumulated depreciation             |  | -1,035      
|                                          |  |             
|Net value of financial leasing agreements |  | 481         
|                                          |  |             

Depreciation
and write-downs totaled SEK 261 million, SEK 274 million and SEK 56 million for the years 2004, 2003 and 2002, respectively. Leasing fees paid during
these years totaled SEK 274 million, SEK 301 million and SEK 72 million, respectively.

As
of December 31, 2004, 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.

|Maturity
SEK in millions                       |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | Later years |  | Total
|---------------------------------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Future minimum leasing fees                    |  | 225  |  | 148  |  | 110  |  | 39   |  | 7    |  | 9           |  | 538  
|Present value of future minimum lease payments |  | 214  |  | 134  |  | 95   |  | 32   |  | 5    |  | 7           |  | 487  

As
of the balance sheet date, the present value of future minimum leasing fees under non-cancelable financial leasing agreements was as follows.

|                                             |  | December 31,
|-------------------------------------------- |  | ------------
|
|
|Total future minimum leasing fees            |  | 538         
|Less interest charges                        |  | -51         
|                                             |  |             
|Present value of future minimum leasing fees |  | 487         
|                                             |  |             

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.

114

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Future
minimum leasing fees under operating lease agreements in effect as of December 31, 2004 that could not be canceled in advance and were in excess of one year were as
follows.

|Maturity
SEK in millions |  | 2005  |  | 2006  |  | 2007  |  | 2008 |  | 2009 |  | Later years |  | Total
|------------------------ |  | ----- |  | ----- |  | ----- |  | ---- |  | ---- |  | ----------- |  | -----
|Future leasing fees      |  | 1,780 |  | 1,391 |  | 1,206 |  | 995  |  | 942  |  | 2,711       |  | 9,025
|Subleasing               |  | 61    |  | 42    |  | 40    |  | 38   |  | 37   |  | 128         |  | 346  

Total
rent and leasing fees paid were SEK 2,041 million, SEK 1,771 million and SEK 1,540 million for the years 2004, 2003 and 2002, respectively. For these years,
revenue for subleased items totaled SEK 61 million, SEK 56 million and SEK 61 million, respectively.

At
the end of 2004 office space and technical site leases covered approximately 1,615,000 square meters, including approximately 5,000 square meters of office space for TeliaSonera's
principal executive offices, located at Sturegatan 1 in Stockholm, Sweden. Apart from certain short-term leases, leasing terms range mainly between 3 and 21 years with an
average term of approximately 7 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. In 2004, most of the customer financing operations were divested. Some of the divested leasing receivables were securitized. Based on the terms of the securitization
contracts, these leasing receivables were included in the Group balance sheet.

As
of the balance sheet date, the present value of future minimum lease payment receivables under non-cancelable financial leasing agreements was as follows.

|                                                                                       |  | December 31,
|-------------------------------------------------------------------------------------- |  | ------------
|
|
|Gross investment in financial lease contracts                                          |  | 679         
|Less unearned financial revenues                                                       |  | -77         
|                                                                                       |  |             
|Net investment in financial lease contracts                                            |  | 602         
|Less: Un-guaranteed residual values of leased properties for the benefit of the lessor |  | -0          
|                                                                                       |  |             
|Present value of future minimum lease payment receivables                              |  | 602         
|                                                                                       |  |             

As
of December 31, 2004, the gross investment and present value of receivables relating to future minimum lease payments under non-cancelable financial leasing
agreements were distributed as follows.

|Maturity
SEK in millions                                               |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | Later years |  | Total
|---------------------------------------------------------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Gross investment                                                       |  | 283  |  | 198  |  | 122  |  | 49   |  | 21   |  | 6           |  | 679  
|Present value of receivables relating to future minimum lease payments |  | 269  |  | 174  |  | 101  |  | 38   |  | 16   |  | 4           |  | 602  

115

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Reserve
for doubtful receivables regarding minimum lease payments totaled SEK 10 million as of December 31, 2004.

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 2004, the Danish part of
the total portfolio was 16 percent. The term of the contract stock is approximately 15 quarters. The term of new contracts signed in 2004 is 14 quarters. Of all contracts, 72 percent
carry a floating interest rate and 28 percent a fixed rate. Most contracts include renewal options.

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,
|----------------------------------------- |  | ------------
|
|
|Acquisition value                         |  | 3,146       
|Less accumulated depreciation             |  | -1,366      
|Less accumulated write-downs              |  | -300        
|                                          |  |             
|Gross book value                          |  | 1,480       
|Plus prepaid sales costs                  |  | 2           
|Less prepaid lease payments               |  | -1,044      
|                                          |  |             
|Net value of operating leasing agreements |  | 438         
|                                          |  |             

Depreciation
and write-downs totaled SEK 622 million, SEK 548 million and SEK 336 million for the years 2004, 2003 and 2002.

Future
minimum lease payment receivables under operating agreements in effect as of December 31, 2004 that could not be canceled in advance and were in excess of one year were as
follows.

|Maturity
SEK in millions      |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | Later years |  | Total
|----------------------------- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Future minimum lease payments |  | 262  |  | 140  |  | 65   |  | 15   |  | 9    |  | 2           |  | 493  

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.

116

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Other contractual obligations

As of December 31, 2004, the Group had the following contractual obligations regarding future acquisitions (or equivalent) of intangible, tangible and
financial fixed assets.

|Maturity
SEK in millions |  | 2005  |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | Later years |  | Total
|------------------------ |  | ----- |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Intangible fixed assets  |  | 59    |  |     |  |     |  |     |  |     |  |            |  | 59   
|Tangible fixed assets    |  | 1,848 |  | 160  |  | 118  |  |     |  |     |  |            |  | 2,126
|Associated companies     |  | 13    |  |     |  |     |  |     |  |     |  |            |  | 13   
|Xfera capital commitment |  | 310   |  | 621  |  | 621  |  | 319  |  |     |  |            |  | 1,871
|                         |  |       |  |      |  |      |  |      |  |      |  |             |  |      
|Total                    |  | 2,230 |  | 781  |  | 739  |  | 319  |  |     |  |            |  | 4,069
|                         |  |       |  |      |  |      |  |      |  |      |  |             |  |      

Most
of the obligations relating to tangible fixed assets cover the construction under contract of TeliaSonera's mobile networks in Norway, Denmark and Kazakhstan and fixed networks in
Sweden and Denmark. The Xfera capital commitment is recorded net of provisions and certain guarantees. See note "Contingent Assets, Collateral Pledged and Contingent Liabilities" for more information
related to the Xfera capital commitment.

29.    Dependency on Third Parties

Commercial relationships

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.

Off-balance sheet arrangements

Except for credit and performance guarantees, there are no off-balance sheet arrangements that have or are reasonably likely to have a current or
future effect on TeliaSonera's financial position, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. See note "Contingent
Assets, Collateral Pledged and Contingent Liabilities" for information related to credit and performance guarantees issued by TeliaSonera.

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.

117

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Assets
held to maturity, receivables arising from own lending and assets whose fair value cannot be reliably determined, e.g. certain 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 prerequisites stated below.
Non-interest-bearing financial instruments, 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.

118

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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 deal (see notes "Financial Fixed Assets" and "Receivables", and "Long-term Loans" and "Short-term Loans", respectively).

|                                              |  | December 31,
|--------------------------------------------- |  | ------------
|
|
|Equity participations in associated companies |  | 19,613      
|Other holdings of securities                  |  | 531         
|Receivables for pension obligations           |  | 573         
|Leasing receivables                           |  | 602         
|Other long-term and short-term receivables    |  | 1,089       
|Short-term investments                        |  | 368         
|Interest rate swaps received                  |  | 5,757       
|Interest rate swaps paid                      |  | -5,543      
|Foreign currency interest rate swaps received |  | 4,781       
|Foreign currency interest rate swaps paid     |  | -4,469      
|Other currency derivatives                    |  | 54          
|                                              |  |             
|Assets                                        |  | 23,356      
|Provisions for pensions                       |  |            
|Long-term loans                               |  | 12,975      
|Short-term loans                              |  | 11,736      
|Interest rate swaps received                  |  | -1,313      
|Interest rate swaps paid                      |  | 1,471       
|Foreign currency interest rate swaps received |  | -2,340      
|Foreign currency interest rate swaps paid     |  | 2,471       
|Other currency derivatives                    |  | 12          
|                                              |  |             
|Liabilities                                   |  | 25,012      
|Less book value of:                           |  |             
|-pension provisions                           |  |            
|-accrued interest                             |  | -325        
|-other currency derivatives                   |  | -12         
|                                              |  |             
|Book value of interest-bearing liabilities    |  | 24,675      

119

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The
market capitalizations of the Group's holdings of publicly quoted shares as of the balance sheet date were as follows.

|                                                       |  | December 31,
|------------------------------------------------------ |  | ------------
|
|
|Subsidiaries                                           |  |             
|AB Lietuvos Telekomas, Lithuania                       |  | 2,748       
|AS Eesti Telekom, Estonia                              |  | 4,483       
|                                                       |  |             
|Total subsidiaries                                     |  | 7,231       
|Associated companies and other minority holdings       |  |             
|AS Eesti Telekom, Estonia                              |  |            
|Turkcell Iletisim Hizmetleri A.S., Turkey              |  | 25,415      
|Netia S.A., Poland                                     |  |            
|Infonet Services Corp., USA                            |  | 1,264       
|eBay Inc., USA                                         |  |            
|Digital Telecommunications Phils. Inc., Philippines    |  | 123         
|Other holdings                                         |  | 17          
|                                                       |  |             
|Total associated companies and other minority holdings |  | 26,819      
|                                                       |  |             
|Total                                                  |  | 34,050      
|                                                       |  |             

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 and 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 and Treasury (CFT) is responsible for Group-wide financial risk management including netting and pooling of capital requirements and payment
flows. CFT 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
or that derivative transactions are initiated in order to adjust e.g. the overall interest rate duration of the debt portfolio, if deemed appropriate. 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. CFT'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. CFT's deviation mandate in the currency markets is currently capped at the equivalent of a nominal SEK
+/-200 million. As of December 31, 2004, the risk mandate was utilized by less than SEK 150 million.

SEK
is the functional 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

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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,
2004, the surplus liquidity (short-term investments and cash and bank) amounted to the equivalent of SEK 17,613 million. Surplus liquidity is typically deposited in banks or
invested in short-term interest-bearing instruments with good credit ratings. At year-end, TeliaSonera AB had no such investments in interest-bearing securities with maturities
exceeding three months. In addition to available cash, TeliaSonera AB has a revolving credit facility, which is a committed syndicated bank credit facility with final maturity in December 2011,
capped at EUR 1,000 million and used for short-term financing and back-up purposes. This facility was not utilized as of December 31, 2004. In total, as of
the balance sheet date, the available unutilized amount under committed bank credit lines was approximately SEK 10 billion.

Open-market financing programs

As of December 31, 2004, the equivalent of EUR 914 million (EUR 808 million in 2003) 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 (5,000). 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
(1,000). As of December 31, 2004, the ECP program was not utilized (no utilization as of December 31, 2003).

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, 2004, totaled SEK 4,800 million (5,100), with an average remaining maturity of approximately 1.3 years.

In
addition to this TeliaSonera AB has a Finnish Commercial Paper (CP) program for non-domestic issuers, aimed at short-term borrowing, with a limit of EUR
300 million (300). As of December 31, 2004, the CP program was not utilized (no utilization as of December 31, 2003).

TeliaSonera
Finland Oyj has an old EMTN program with a limit of EUR 3,000 million (3,000). As of December 31, 2004, the equivalent of EUR 1,082 million (1,600) was
utilized under the EMTN program, with an average remaining maturity of approximately 1.0 year. 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.

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Borrowings, maturity structure, interest rates and currencies

As of December 31, 2004, the Group's interest-bearing borrowings had the following maturity structure.

|            |  | TeliaSonera AB
(incl. debt derivatives) |  | TeliaSonera Finland |  |       |  |   |  |       
|----------- |  | --------------------------------------- |  | ------------------- |  | ----- |  | - |  | ------
|
|2005        |  | 2,860                                   |  | 602                 |  | 7,933 |  |  |  | 11,395
|2006        |  | 1,389                                   |  | 4,545               |  |      |  |  |  | 5,934 
|2007        |  | 847                                     |  |                    |  |      |  |  |  | 847   
|2008        |  |                                        |  | 777                 |  |      |  |  |  | 777   
|2009        |  |                                        |  |                    |  | 1,941 |  |  |  | 1,941 
|Later years |  | 1,936                                   |  | 1,141               |  |      |  |  |  | 3,077 
|            |  |                                         |  |                     |  |       |  |   |  |       
|Total       |  | 7,032                                   |  | 7,065               |  | 9,874 |  |  |  | 23,971
|            |  |                                         |  |                     |  |       |  |   |  |       

Debt
derivatives relate to interest rate swaps and foreign currency interest rate swaps.

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,
|----------------------------- |  | ------------
|
|
|TeliaSonera AB (SEK)          |  |             
|Long-term borrowings          |  | 4.54        
|Short-term borrowings         |  | 5.22        
|TeliaSonera Finland Oyj (EUR) |  |             
|Long-term borrowings          |  | 4.63        
|Short-term borrowings         |  | 5.63        

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, 2004, 2003 and 2002 had a nominal value of approximately SEK 13,500 million, SEK
10,700 million and SEK 15,700 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              |  | 5.2         
|DEM              |  |            
|JPY              |  | 3.0         
|                 |  |             
|Total SEK        |  | 5.2         
|Swapped into EUR |  |             
|USD              |  | 3.9         
|LTL              |  |            
|LTL              |  |            
|                 |  |             
|Total SEK        |  | 3.9         
|Non-swapped      |  |             
|SEK              |  | 4.2         
|EUR              |  | 4.4         
|NOK              |  |            
|DKK              |  | 2.3         
|LKR              |  |            
|LVL              |  | 4.1         
|                 |  |             
|Total SEK        |  |             
|                 |  |             
|Total SEK        |  |             
|                 |  |             

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 Nordic
operations.

|                  |  | January-December
|----------------- |  | ----------------
|
|
|
|
|EUR               |  | 1,008           
|USD               |  | 546             
|GBP               |  | 55              
|NOK               |  | 65              
|SEK               |  |                
|DKK               |  | -25             
|Other currencies  |  | 71              
|                  |  |                 
|Total net outflow |  | 1,720           
|-gross outflow    |  | 2,863           
|-gross inflow     |  | -1,143          

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 17 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 2004,
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 18 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, TeliaSonera's
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.

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

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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              |  | 54,165      
|NOK              |  | 27,352      
|TRL              |  | 12,972      
|LTL              |  | 6,413       
|DKK              |  | 6,367       
|USD              |  | 5,180       
|EEK              |  | 4,577       
|LVL              |  | 3,764       
|KZT              |  | 915         
|GBP              |  | 835         
|AZM              |  | 423         
|CZK              |  | 182         
|LKR              |  | 145         
|UGX              |  | 131         
|Other currencies |  | 12          
|                 |  |             
|Total            |  | 123,433     
|of which hedged  |  |            

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
1,250 million, based on the exposure as of December 31, 2004 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, 2004, TeliaSonera's portfolio of foreign currency interest rate swaps represented the following currencies and maturities. Amounts
indicated include underlying principal and accrued interest.

|Maturity
SEK in millions                       |  | 2005   |  | 2006   |  | 2007 |  | 2008 |  | 2009 |  | Later
years |  | Total 
|---------------------------------------------- |  | ------ |  | ------ |  | ---- |  | ---- |  | ---- |  | ----------- |  | ------
|Foreign currency interest rate swaps, received |  |        |  |        |  |      |  |      |  |      |  |             |  |       
|Buy EUR                                        |  | 2,831  |  | 2,547  |  |     |  |     |  |     |  | 1,529       |  | 6,907 
|Buy JPY                                        |  |       |  |       |  |     |  |     |  |     |  | 195         |  | 195   
|Buy USD                                        |  | 10     |  | 9      |  |     |  |     |  |     |  |            |  | 19    
|                                               |  |        |  |        |  |      |  |      |  |      |  |             |  |       
|Total, received                                |  | 2,841  |  | 2,556  |  |     |  |     |  |     |  | 1,724       |  | 7,121 
|Foreign currency interest rate swaps, paid     |  |        |  |        |  |      |  |      |  |      |  |             |  |       
|Total, paid                                    |  | -2,636 |  | -2,636 |  |     |  |     |  |     |  | -1,668      |  | -6,940
|                                               |  |        |  |        |  |      |  |      |  |      |  |             |  |       
|Net position                                   |  | 205    |  | -80    |  |     |  |     |  |     |  | 56          |  | 181   

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As
of December 31, 2004, 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.

|Maturity
SEK in millions |  | 2005   |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | Later years |  | Total 
|------------------------ |  | ------ |  | ---- |  | ---- |  | ---- |  | ---- |  | ----------- |  | ------
|Sell DKK                 |  | 1,813  |  |     |  |     |  |     |  |     |  |            |  | 1,813 
|Sell USD                 |  | 1,202  |  |     |  |     |  |     |  |     |  |            |  | 1,202 
|Sell EUR                 |  | 536    |  | 34   |  | 18   |  | 2    |  | 1    |  |            |  | 591   
|Sell CZK                 |  | 114    |  |     |  |     |  |     |  |     |  |            |  | 114   
|Sell LVL                 |  | 113    |  |     |  |     |  |     |  |     |  |            |  | 113   
|Sell PLN                 |  | 54     |  |     |  |     |  |     |  |     |  |            |  | 54    
|Sell CHF                 |  | 17     |  |     |  |     |  |     |  |     |  |            |  | 17    
|Sell GBP                 |  | 11     |  |     |  |     |  |     |  |     |  |            |  | 11    
|Sell LTL                 |  | 9      |  |     |  |     |  |     |  |     |  |            |  | 9     
|Sell HUF                 |  | 5      |  |     |  |     |  |     |  |     |  |            |  | 5     
|Sell SGD                 |  | 4      |  |     |  |     |  |     |  |     |  |            |  | 4     
|Sell HKD                 |  | 3      |  |     |  |     |  |     |  |     |  |            |  | 3     
|                         |  |        |  |      |  |      |  |      |  |      |  |             |  |       
|Sell total               |  | 3,881  |  | 34   |  | 18   |  | 2    |  | 1    |  |            |  | 3,936 
|Buy NOK                  |  | -3,371 |  |     |  |     |  |     |  |     |  |            |  | -3,371
|Buy EUR                  |  | -2,453 |  |     |  |     |  |     |  |     |  |            |  | -2,453
|Buy GBP                  |  | -579   |  |     |  |     |  |     |  |     |  |            |  | -579  
|Buy USD                  |  | -148   |  |     |  |     |  |     |  |     |  |            |  | -148  
|Buy LVL                  |  | -37    |  |     |  |     |  |     |  |     |  |            |  | -37   
|Buy CHF                  |  | -4     |  |     |  |     |  |     |  |     |  |            |  | -4    
|Buy HUF                  |  | -2     |  |     |  |     |  |     |  |     |  |            |  | -2    
|Buy PLN                  |  | -5     |  |     |  |     |  |     |  |     |  |            |  | -5    
|                         |  |        |  |      |  |      |  |      |  |      |  |             |  |       
|Buy total                |  | -6,599 |  |     |  |     |  |     |  |     |  |            |  | -6,599
|                         |  |        |  |      |  |      |  |      |  |      |  |             |  |       
|Net position             |  | -2,718 |  | 34   |  | 18   |  | 2    |  | 1    |  |            |  | -2,663

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.

127

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As
of December 31, 2004, TeliaSonera AB and TeliaSonera Finland Oyj had interest-bearing debt of SEK 23,245 million with duration of interest of approximately
1.1 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
17,500 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 250 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 2004.

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." In 2004, there were no cash flow hedges discontinued due to the original forecasted transactions not
having occurred in the originally specified time period.

As
of December 31, 2004, the TeliaSonera Group's portfolio of interest rate swap contracts was composed as follows. Amounts indicated include underlying principal and accrued
interest.

|Maturity
SEK in millions |  | 2005  |  | 2006  |  | 2007 |  | 2008 |  | 2009 |  | Later years |  | Total
|------------------------ |  | ----- |  | ----- |  | ---- |  | ---- |  | ---- |  | ----------- |  | -----
|Interest received        |  |       |  |       |  |      |  |      |  |      |  |             |  |      
|Fixed interest rate      |  | 2,730 |  | 3,027 |  |     |  |     |  |     |  |            |  | 5,757
|Floating interest rate   |  | 151   |  |      |  | 503  |  |     |  |     |  | 659         |  | 1,313
|                         |  |       |  |       |  |      |  |      |  |      |  |             |  |      
|Total                    |  | 2,881 |  | 3,027 |  | 503  |  |     |  |     |  | 659         |  | 7,070
|Interest paid            |  |       |  |       |  |      |  |      |  |      |  |             |  |      
|Fixed interest rate      |  | 158   |  |      |  | 560  |  |     |  |     |  | 753         |  | 1,471
|Floating interest rate   |  | 2,708 |  | 2,835 |  |     |  |     |  |     |  |            |  | 5,543
|                         |  |       |  |       |  |      |  |      |  |      |  |             |  |      
|Total                    |  | 2,866 |  | 2,835 |  | 560  |  |     |  |     |  | 753         |  | 7,014
|                         |  |       |  |       |  |      |  |      |  |      |  |             |  |      

Pension obligation risk

As of December 31, 2004, TeliaSonera had pension obligations which net present value amounted to SEK 18,047 million (see note "Provisions for
Pensions and Employment Contracts"). The approximate impact on those obligations is SEK 2,900 million, should the weighted average discount rate decrease by one percentage point from the
approximately 5.0 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 pension funds' fixed income portfolios (including index-linked bonds) as of December 31, 2004, 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 900 million.

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To
secure these obligations TeliaSonera has pension funds, with plan assets equivalent to SEK 15,838 million based on market values as of December 31, 2004. The pension
funds' assets are used as prime funding source for the pension obligations, and consisted of approximately 56 percent fixed income instruments and approximately 44 percent shares and
other investments at year-end 2004. The expected return on the pension funds' plan assets is approximately 5.7 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 positive outlook. These ratings represent a solid investment grade level and are thus expected to allow TeliaSonera
continued good access to the financial markets.

On
March 25, 2005, following TeliaSonera's announcement of its agreement with the Cukurova Group to purchase additional shares in Turkcell Holding to gain majority control of Turkcell,
Standard & Poor's placed long- and short-term credit ratings on TeliaSonera AB on CreditWatch with negative implications. A downgrade, if any, of TeliaSonera stemming from increased exposure to
Turkcell and higher leverage would probably be limited to one notch. On March 30, 2005, Moody's affirmed long-and short-term credit ratings of TeliaSonera AB, but changed the outlook
from positive to stable.

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 3 percent of the Group's total borrowing as of December 31, 2004. 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. (ISDA) agreement. The permitted exposure to each counterpart depends on the rating of that counterpart. As
of December 31, 2004, the aggregate exposure to counterparts in derivatives was SEK 229 million, calculated as a net claim on each counterpart.

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Any surplus cash is typically 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 0.3 percent, 0.6 percent and 1.4 percent in 2004, 2003 and
2002, respectively.

Insurable risks

The insurance cover is governed by corporate guidelines and includes a common package of different property and liability insurance programs. The business units
and other units being responsible for assessing the risks decide the extent of actual cover. Corporate Insurance at TeliaSonera AB manages the common Group insurance programs and uses a captive,
TeliaSonera Försäkring AB, as a strategic tool in managing the insurance programs. The risks in the captive 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

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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 guarantee provisions:                                 |  |             
|Blocked funds in bank accounts                            |  | 996         
|For deposits from customers:                              |  |             
|Blocked funds in bank accounts                            |  | 93          
|For off-balance sheet items:                              |  |             
|Blocked funds in bank accounts                            |  |            
|For long-term liabilities to credit institutions:         |  |             
|Real estate mortgages                                     |  | 20          
|Chattel mortgages                                         |  | 15          
|Current receivables                                       |  | 38          
|Shares in Turun Puhelin Oy                                |  |            
|Shares in Suntel Ltd.                                     |  |            
|Shares in Svenska UMTS-nät AB                             |  | 513         
|Shares in OAO MegaFon                                     |  |            
|                                                          |  |             
|Total collateral pledged                                  |  | 1,675       
|Contingent liabilities                                    |  |             
|Credit guarantee on behalf of Svenska UMTS-nät AB         |  | 1,007       
|Credit guarantees on behalf of OAO MegaFon                |  |            
|Credit guarantees on behalf of other associated companies |  | 8           
|Performance guarantees on behalf of Xfera Móviles S.A.    |  | 544         
|Guarantees on behalf of Ipse 2000 S.p.A.                  |  |            
|Other credit and performance guarantees, etc.             |  | 548         
|FPG/PRI, other pension guarantees                         |  | 182         
|                                                          |  |             
|Total contingent liabilities                              |  | 2,289       
|                                                          |  |             

As
of December 31, 2004, total contingent liabilities represented the following maturities.

|Maturity
SEK in millions |  | 2005 |  | 2006 |  | 2007 |  | 2008  |  | 2009 |  | Later years |  | Total
|------------------------ |  | ---- |  | ---- |  | ---- |  | ----- |  | ---- |  | ----------- |  | -----
|Contingent liabilities   |  | 452  |  | 176  |  | 71   |  | 1,408 |  |     |  | 182         |  | 2,289

Some
loan covenants agreed limit the scope for divesting or pledging certain assets.

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

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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, 2004, Svenska
UMTS-nät had, under the credit facility, borrowed SEK 2,014 million, of which TeliaSonera guarantees 50 percent, or SEK 1,007 million. In
February 2005, the guarantee was reduced to a maximum of SEK 2,650 million each for TeliaSonera and Tele2.

As
of December 31, 2004, 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 2005 and onwards. TeliaSonera's part of the cash collateral amounts to EUR 110.3 million, equivalent to
SEK 996 million.

As
of December 31, 2004, TeliaSonera had three commitments in relation to Xfera Móviles S.A.



These
commitments may be partly overlapping. For instance, 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. As of December 31, 2004, TeliaSonera has a recorded provision of EUR 51 million, equivalent to SEK 460 million, for its
commitments and obligations on behalf of Xfera and management believes that there is currently no need for additional provisions.

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 3 million, EUR 19 million and EUR 40 million as of December 31, 2004, 2003 and 2002,
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 (EUR 9 million) which is recorded 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

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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
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 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.

In
its normal course of business, TeliaSonera is involved in a number of legal proceedings. These proceedings primarily involve claims arising out of commercial law issues and regulatory
matters. TeliaSonera is also involved in administrative proceedings relating principally to telecommunications regulations, competition law and consumer protection issues. Except for proceedings
described below, TeliaSonera is not involved in any legal, arbitration or regulatory proceedings expected to have a material adverse effect on its business, financial condition or results of
operations.

TeliaSonera
has disputes with Tele2 and Vodafone concerning interconnect prices in Sweden. TeliaSonera believes that it has recorded sufficient provisions.

TeliaSonera
has received a claim for damages from Elisa in Finland in the amount of EUR 300 million regarding alleged excessive mobile termination fees since 1997. A
provision of EUR 5 million is recorded. However, the outcome of a potential dispute is very difficult to assess due to lack of clear legislation and lack of case law. Similar claims from
the Finnet Group are likely to come.

TeliaSonera
is currently involved in litigations with former shareholders of the Brazilian mobile operator Tess, relating to such shareholders' disposal of their investments in Tess as
well as certain call options and subscription rights in Tess.

32.    Cash Flow Information

Financial items

Interest received and interest paid for each year was as follows.

|                  |  | January-December
|----------------- |  | ----------------
|
|
|Interest received |  | 601             
|Interest paid     |  | -1,559          
|                  |  |                 
|Net position      |  | -958            
|                  |  |                 

Income taxes

Income taxes paid for the years 2004, 2003 and 2002, totaled SEK 3,132 million, SEK 1,308 million and SEK 122 million, respectively.

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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 fair value of assets acquired and liabilities assumed in subsidiaries and the total cash flow from acquisitions were broken down as follows.

|                                                                        |  | January-December
|----------------------------------------------------------------------- |  | ----------------
|
|
|Intangible fixed assets                                                 |  | 10,081          
|Tangible fixed assets                                                   |  | 3,062           
|Financial fixed assets, accounts receivable, inventories etc.           |  | 1,556           
|Cash and cash equivalents                                               |  | 1,024           
|Revaluation reserve                                                     |  | -1,641          
|Minority interests                                                      |  | -3,615          
|Provisions                                                              |  | -153            
|Long-term liabilities                                                   |  | -558            
|Current liabilities                                                     |  | -850            
|                                                                        |  |                 
|Total purchase consideration                                            |  | 8,906           
|Less purchase consideration paid prior to 2004                          |  | -366            
|Less purchase consideration in terms of new share issue (prior to 2004) |  | -1,843          
|Less cash and cash equivalents in acquired group companies              |  | -1,024          
|                                                                        |  |                 
|Net cash outflow (+)/inflow (-) from acquired group companies           |  | 5,673           
|Purchase consideration for other acquisitions                           |  | 496             
|                                                                        |  |                 
|Total cash outflow (+)/inflow (-) from acquisitions                     |  | 6,169           
|                                                                        |  |                 

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See
note "Acquisition of Orange Denmark and Eesti Telekom" for more information on significant transactions in 2004. The fair value of assets divested and liabilities transferred in
subsidiaries and the total cash flow from divestitures were broken down as follows.

|                                                              |  | January-December
|------------------------------------------------------------- |  | ----------------
|
|
|Intangible fixed assets                                       |  | 1,747           
|Tangible fixed assets                                         |  | 187             
|Financial fixed assets, accounts receivable, inventories etc. |  | 5,618           
|Cash and cash equivalents                                     |  | 276             
|Provisions                                                    |  | -14             
|Long-term liabilities                                         |  | -20             
|Current liabilities                                           |  | -6,278          
|                                                              |  |                 
|Total sales consideration                                     |  | 1,516           
|Less cash and cash equivalents in divested group companies    |  | -276            
|Repayment of loans in group companies divested                |  | 5,046           
|                                                              |  |                 
|Net cash inflow from divested group companies                 |  | 6,286           
|Sales consideration for other divestitures                    |  | 509             
|                                                              |  |                 
|Total cash inflow from divestitures                           |  | 6,795           
|                                                              |  |                 

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,
|------------------------- |  | ------------
|
|
|Investments               |  | 11,702      
|Cash and bank             |  | 5,543       
|                          |  |             
|Cash and cash equivalents |  | 17,245      
|                          |  |             

Non-cash transactions

Vehicles

TeliaSonera leases vehicles through financial leasing, primarily from GE Capital. New acquisitions during the year entailed non-cash investments of
SEK 54 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, 2004, no such unbalance was recognized.

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Other cash flow information

Cash flow before financing activities and cash/non-cash effects of restructuring programs are broken down by business segment as follows.

|                      |  | January-December 2004
|--------------------- |  | ---------------------
|
|Sweden                |  | 13,081               
|Finland               |  | 4,032                
|Norway                |  | 1,208                
|Denmark               |  | -5,415               
|Baltic countries      |  | 2,982                
|Eurasia               |  | 863                  
|Russia                |  | -15                  
|Turkey                |  | 177                  
|International Carrier |  | -1,059               
|Holding               |  | 3,896                
|Corporate             |  | -3,338               
|                      |  |                      
|Total                 |  | 16,412               
|                      |  |                      

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Investments
by class of asset, changes in net interest-bearing liabilities and changes in capital employed and operating capital over the last nine-year period were as
follows.

|Investments by class of asset |                         |                                     |       |        |       |        |       |        |        |        |        |        |       |        |       |        |       |       
|----------------------------- | ----------------------- | ----------------------------------- | ----- | ------ | ----- | ------ | ----- | ------ | ------ | ------ | ------ | ------ | ----- | ------ | ----- | ------ | ----- | ------
|
|
|
|CAPEX                         |                         | 10,356                              |       | 9,373  |       | 14,345 |       | 17,713 |        | 16,580 |        | 7,701  |       | 7,663  |       | 9,637  |       | 8,304 
|                              | Other intangible assets |                                     | 752   |        | 850   |        | 5,119 |        | 1,316  |        | 509    |        | 373   |        | 248   |        | 233   |       
|                              | Real estate properties  |                                     | 103   |        | 196   |        | 237   |        | 269    |        | 552    |        | 53    |        | 370   |        | 1,478 |       
|                              | Machinery and equipment |                                     | 9,501 |        | 8,327 |        | 8,989 |        | 16,128 |        | 15,519 |        | 7,275 |        | 7,045 |        | 7,926 |       
|                              |                         | Mobile networks                     |       | 3,933  |       | 2,884  |       | 2,336  |        | 2,124  |        | 1,411  |       | 1,166  |       | 1,273  |       | 1,360 
|                              |                         | Fixed networks                      |       | 3,485  |       | 2,961  |       | 4,527  |        | 7,022  |        | 4,115  |       | 3,364  |       | 2,158  |       | 3,023 
|                              |                         | Other machinery and equipment       |       | 2,083  |       | 2,482  |       | 2,126  |        | 6,982  |        | 9,993  |       | 2,745  |       | 3,614  |       | 3,543 
|Acquisitions                  |                         | 10,364                              |       | 2,745  |       | 40,093 |       | 3,022  |        | 31,162 |        | 4,444  |       | 4,075  |       | 1,227  |       | 2,704 
|                              |                         | Goodwill and fair value adjustments |       | 9,785  |       | 2,413  |       | 30,929 |        | 448    |        | 22,893 |       | 335    |       | 223    |       | 50    
|                              |                         | Shares and participations           |       | 579    |       | 332    |       | 9,164  |        | 2,574  |        | 8,269  |       | 4,109  |       | 3,852  |       | 1,177 
|                              |                         |                                     |       |        |       |        |       |        |        |        |        |        |       |        |       |        |       |       
|Total                         |                         | 20,720                              |       | 12,118 |       | 54,438 |       | 20,735 |        | 47,742 |        | 12,145 |       | 11,738 |       | 10,864 |       | 11,008
|                              |                         |                                     |       |        |       |        |       |        |        |        |        |        |       |        |       |        |       |       

Investments
are broken down by business segments in note "Business Segments."

|Change in net interest-bearing liability                  |  |         |  |         |  |        |  |         |  |        |  |        |  |        |  |        |  |       
|--------------------------------------------------------- |  | ------- |  | ------- |  | ------ |  | ------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------
|
|
|
|Opening balance                                           |  | 8,847   |  | 25,034  |  | 10,661 |  | 20,235  |  | 7,527  |  | 6,767  |  | 14,609 |  | 13,534 |  | 12,065
|Increase (+)/Decrease (-) in long-term loans              |  | -12,925 |  | -6,257  |  | 6,931  |  | 4,317   |  | 11,753 |  | 2,632  |  | -591   |  | 2,658  |  | 2,404 
|Increase (+)/Decrease (-) in short-term loans             |  | 7,046   |  | -7,921  |  | 8,677  |  | -9,235  |  | 6,232  |  | -128   |  | -669   |  | 2,318  |  | 2,920 
|Increase (-)/Decrease (+) in short-term investments       |  | -3,412  |  | -4,832  |  | 3,776  |  | -7,424  |  | 1,086  |  | -1,062 |  | 315    |  | -345   |  | 586   
|Increase (-)/Decrease (+) in cash and bank                |  | -1,854  |  | -858    |  | -1,313 |  | -166    |  | -839   |  | -32    |  | 561    |  | -87    |  | -371  
|                                                          |  |         |  |         |  |        |  |         |  |        |  |        |  |        |  |        |  |       
|Change in net debt                                        |  | -11,145 |  | -19,868 |  | 18,071 |  | -12,508 |  | 18,232 |  | 1,410  |  | -384   |  | 4,544  |  | 5,539 
|Increase (-)/Decrease (+) in interest-bearing receivables |  | 6,561   |  | 3,383   |  | -1,564 |  | 4,101   |  | -5,803 |  | -2,163 |  | -2,258 |  | -298   |  | -426  
|                                                          |  |         |  |         |  |        |  |         |  |        |  |        |  |        |  |        |  |       
|Change in net borrowings                                  |  | -4,584  |  | -16,485 |  | 16,507 |  | -8,407  |  | 12,429 |  | -753   |  | -2,642 |  | 4,246  |  | 5,113 
|Increase (+)/Decrease (-) in pension provisions           |  | -522    |  | 298     |  | -2,134 |  | -1,167  |  | 279    |  | 1,513  |  | -5,200 |  | -3,171 |  | -3,644
|                                                          |  |         |  |         |  |        |  |         |  |        |  |        |  |        |  |        |  |       
|Change in net interest-bearing liability                  |  | -5,106  |  | -16,187 |  | 14,373 |  | -9,574  |  | 12,708 |  | 760    |  | -7,842 |  | 1,075  |  | 1,469 
|                                                          |  |         |  |         |  |        |  |         |  |        |  |        |  |        |  |        |  |       
|Closing balance                                           |  | 3,741   |  | 8,847   |  | 25,034 |  | 10,661  |  | 20,235 |  | 7,527  |  | 6,767  |  | 14,609 |  | 13,534
|                                                          |  |         |  |         |  |        |  |         |  |        |  |        |  |        |  |        |  |       

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|Capital employed and operating capital            |                                        |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |        
|------------------------------------------------- | -------------------------------------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------- | -------
|
|
|
|Fixed assets                                      |                                        | 153,145 |         | 153,042 |         | 172,812 |         | 94,914  |         | 91,340  |         | 53,487  |         | 49,198  |         | 49,471  |         | 47,399 
|Current assets                                    |                                        | 39,873  |         | 37,018  |         | 33,844  |         | 33,277  |         | 31,375  |         | 23,117  |         | 18,080  |         | 16,439  |         | 15,116 
|                                                  | Non-interest-bearing liabilities       |         | -25,828 |         | -28,375 |         | -29,569 |         | -25,871 |         | -21,014 |         | -16,956 |         | -16,436 |         | -13,042 |        
|                                                  | Non-interest-bearing provisions        |         | -13,402 |         | -14,775 |         | -18,182 |         | -10,749 |         | -7,826  |         | -7,242  |         | -6,002  |         | -5,329  |        
|Non-interest-bearing financing                    |                                        | -39,230 |         | -43,150 |         | -47,751 |         | -36,620 |         | -28,840 |         | -24,198 |         | -22,438 |         | -18,371 |         | -17,943
|Dividend (for 2004 as proposed by the Board)      |                                        | -5,610  |         | -4,675  |         | -1,870  |         | -600    |         | -1,501  |         | -1,470  |         | -1,400  |         | -1,210  |         | -1,152 
|                                                  |                                        |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |        
|Total capital employed                            |                                        | 148,178 |         | 142,235 |         | 157,035 |         | 90,971  |         | 92,374  |         | 50,936  |         | 43,440  |         | 46,329  |         | 43,420 
|Shareholders' equity                              |                                        | 121,656 |         | 112,393 |         | 108,829 |         | 59,885  |         | 55,988  |         | 32,893  |         | 29,344  |         | 25,487  |         | 24,413 
|Less dividend (for 2004 as proposed by the Board) |                                        | -5,610  |         | -4,675  |         | -1,870  |         | -600    |         | -1,501  |         | -1,470  |         | -1,400  |         | -1,210  |         | -1,152 
|Minority capital                                  |                                        | 7,457   |         | 3,441   |         | 5,120   |         | 204     |         | 320     |         | 210     |         | 210     |         | 306     |         | 218    
|                                                  | Long-term interest-bearing liabilities |         | 12,942  |         | 25,867  |         | 32,124  |         | 25,193  |         | 20,876  |         | 9,123   |         | 6,491   |         | 7,082   |        
|                                                  | Current interest-bearing liabilities   |         | 11,733  |         | 4,687   |         | 12,608  |         | 3,931   |         | 13,166  |         | 6,934   |         | 7,062   |         | 7,731   |        
|                                                  | Provisions for pensions                |         |        |         | 522     |         | 224     |         | 2,358   |         | 3,525   |         | 3,246   |         | 1,733   |         | 6,933   |        
|External financing                                |                                        | 24,675  |         | 31,076  |         | 44,956  |         | 31,482  |         | 37,567  |         | 19,303  |         | 15,286  |         | 21,746  |         | 19,941 
|                                                  |                                        |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |        
|Total financing                                   |                                        | 148,178 |         | 142,235 |         | 157,035 |         | 90,971  |         | 92,374  |         | 50,936  |         | 43,440  |         | 46,329  |         | 43,420 
|Interest-bearing financial fixed assets           |                                        | -2,448  |         | -6,112  |         | -8,419  |         | -7,510  |         | -4,968  |         | -5,563  |         | -5,561  |         | -4,401  |         | -4,058 
|Interest-bearing current assets                   |                                        | -18,486 |         | -16,117 |         | -11,503 |         | -13,311 |         | -12,364 |         | -6,213  |         | -2,958  |         | -2,736  |         | -2,349 
|                                                  |                                        |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |        
|Operating capital                                 |                                        | 127,244 |         | 120,006 |         | 137,113 |         | 70,150  |         | 75,042  |         | 39,160  |         | 34,921  |         | 39,192  |         | 37,013 
|                                                  |                                        |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |         |        

Operating
capital is broken down by business segments in note "Business Segments."

33.    Business Segments

Profit Center breakdown

The Group's operations are managed and reported primarily by country-based Profit Centers (PC). PC consolidation is based on the same principles as for the Group
as a whole. Inter-segment transactions are based on commercial terms. Minor organizational adjustments were carried out in 2004, with operations shifted between PCs. Comparative years have been
restated in order to reflect current Group management and reporting.

The
geographic PCs have full profit responsibility for their business and are responsible for all operations, including marketing, sales, product and service development as well as
production and

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network
operations. The PCs make autonomous operational decisions within the framework of centrally established corporate policies and road maps.

PC
International Carrier is responsible for TeliaSonera's operations on the international carrier market. In 2004 and 2002, the carrying value of International Carrier was written down
by SEK 3,263 million and SEK 6,131 million, respectively (for 2002, see also note "Restructuring Costs"). In 2002, the carrying value of assets related to the Danish fixed network
operations was written down and discarded by SEK 3,033 million (see also note "Restructuring Costs").

TeliaSonera
Holding is responsible for the Group's non-core/non-strategic operations. The operations in Holding are being gradually divested through sales or
closing-down of operations. Corporate comprises Corporate Head Office, including the two operational units Marketing, Products and Services, and Networks and Technology, which acts on
behalf of the CEO by making corporate policies, by coordinating TeliaSonera group matters and by exercising a strong central control to exploit scale advantages and synergies. Corporate also includes
eliminations of inter-segment transfers and similar items.

Besides
net sales and operating income, principal segment control and reporting concepts are EBITDA excluding non-recurring items and operating capital, respectively (see
definitions to "Ten-Year Summary" and section "Reconciliation of EBITDA Excluding Non-recurring Items to Operating Income" below). No income statement items below operating
income have been allocated to reportable segments.

|                                             |  | January-December 2004 or December 31, 2004
|-------------------------------------------- |  | ------------------------------------------
|
|Net sales                                    |  | 40,448                                    
|External net sales                           |  | 39,667                                    
|EBITDA excluding non-recurring items         |  | 16,730                                    
|Non-recurring items                          |  | 645                                       
|EBITDA                                       |  | 17,375                                    
|Depreciation, amortization and write-downs   |  | -4,693                                    
|Income from associated companies             |  | 14                                        
|Operating income/loss                        |  | 12,696                                    
|Operating capital                            |  | 20,530                                    
|of which Segment assets                      |  | 34,432                                    
|of which Segment liabilities                 |  | -13,902                                   
|Equity participation in associated companies |  | 518                                       
|Investments                                  |  | 4,087                                     
|of which CAPEX                               |  | 3,974                                     
|Number of employees                          |  | 11,256                                    
|Average number of full-time employees        |  | 10,346                                    

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|                                             |  | January-December 2003 or December 31, 2003 (restated)
|-------------------------------------------- |  | -----------------------------------------------------
|
|Net sales                                    |  | 42,601                                               
|External net sales                           |  | 41,607                                               
|EBITDA excluding non-recurring items         |  | 17,723                                               
|Non-recurring items                          |  | -341                                                 
|EBITDA                                       |  | 17,382                                               
|Depreciation, amortization and write-downs   |  | -6,484                                               
|Income/Loss from associated companies        |  | -6                                                   
|Operating income/loss                        |  | 10,892                                               
|Operating capital                            |  | 20,656                                               
|of which Segment assets                      |  | 34,245                                               
|of which Segment liabilities                 |  | -13,589                                              
|Equity participation in associated companies |  | 492                                                  
|Investments                                  |  | 3,105                                                
|of which CAPEX                               |  | 3,105                                                
|Number of employees                          |  | 10,948                                               
|Average number of full-time employees        |  | 10,476                                               

|                                             |  | January-December 2002 or December 31, 2002 (restated)
|-------------------------------------------- |  | -----------------------------------------------------
|
|Net sales                                    |  | 43,822                                               
|External net sales                           |  | 41,912                                               
|EBITDA excluding non-recurring items         |  | 15,910                                               
|Non-recurring items                          |  | -919                                                 
|EBITDA                                       |  | 14,991                                               
|Depreciation, amortization and write-downs   |  | -6,942                                               
|Income/Loss from associated companies        |  | -4                                                   
|Operating income/loss                        |  | 8,045                                                
|Operating capital                            |  | 24,925                                               
|of which Segment assets                      |  | 35,828                                               
|of which Segment liabilities                 |  | -10,903                                              
|Equity participation in associated companies |  | 498                                                  
|Investments                                  |  | 4,927                                                
|of which CAPEX                               |  | 4,663                                                
|Number of employees                          |  | 11,521                                               
|Average number of full-time employees        |  | 11,521                                               

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.

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Fixed Communications include Internet and data services and equipment sales. Other includes non-core/non-strategic operations and
Corporate as well as eliminations of inter-segment transfers and similar items.

|                                             |  | January-December or December 31,
|-------------------------------------------- |  | --------------------------------
|
|
|External net sales                           |  | 38,199                          
|Depreciation, amortization and write-downs   |  | -5,312                          
|Income/Loss from associated companies        |  | 1,820                           
|Operating income/loss                        |  | 12,973                          
|Operating capital                            |  | 85,683                          
|of which Segment assets                      |  | 97,201                          
|of which Segment liabilities                 |  | -11,518                         
|Equity participation in associated companies |  | 16,936                          
|Investments                                  |  | 8,524                           
|of which CAPEX                               |  | 5,104                           
|Number of employees                          |  | 10,808                          
|Average number of full-time employees        |  | 9,191                           

Reconciliation of EBITDA excluding non-recurring items to operating income

TeliaSonera's management uses "EBITDA excluding non-recurring items" as one of the principal measures for monitoring profitability in segment
reporting. Management believes that, besides operating income, EBITDA excluding non-recurring items is also a measure commonly reported and widely used by analysts, investors and other
interested parties in the telecommunications industry. Accordingly, EBITDA excluding non-recurring items 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. Non-recurring items 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 non-recurring items. Comparative figures for 2002 have not been restated. When calculating EBITDA excluding non-recurring items, 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 non-recurring items, 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 non-recurring items is not a measure of consolidated financial performance under IFRS or U.S. GAAP and may
not be comparable to other

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similarly
titled measures for other companies. EBITDA excluding non-recurring items is not meant to be predictive of potential future results.

For
illustrative purposes, the following table sets forth the relationship between operating income, EBITDA and EBITDA excluding non-recurring items.

|                                                     |  | January-December
|---------------------------------------------------- |  | ----------------
|
|
|EBITDA excluding non-recurring items                 |  | 30,196          
|Non-recurring items                                  |  | 645             
|                                                     |  |                 
|EBITDA                                               |  | 30,841          
|Depreciation, amortization and write-downs (Note 10) |  | -15,596         
|Income from associated companies (Note 11)           |  | 3,548           
|                                                     |  |                 
|Operating income/loss                                |  | 18,793          
|                                                     |  |                 

The
following table sets forth non-recurring items.

|                                                                        |  | January-December
|----------------------------------------------------------------------- |  | ----------------
|
|
|Restructuring charges and implementation costs to gain merger synergies |  | -617            
|Transaction expenses related to the merger with Sonera                  |  |                
|Certain pension-related items                                           |  | 741             
|Net capital gains/losses (excluding associated companies)               |  | 521             
|                                                                        |  |                 
|Total                                                                   |  | 645             
|                                                                        |  |                 

Restructuring
charges and implementation costs to gain merger synergies are excluding depreciation, amortization and write-downs of intangible and tangible assets but include reversals
of provisions and foreign exchange rate effects.

EBITDA
excluding non-recurring items, non-recurring items, EBITDA and operating income are broken down by geographical business segments in section "Profit Center
breakdown" above.

34.    Human Resources

Employees, salaries, and social security expenses

Acquired operations in 2004 added 3,078 employees, of which 734 in Orange Denmark and 1,957 due to Eesti Telekom becoming a subsidiary at year-end. At
the same time, divestitures and streamlining efforts resulted in a decrease of the number of employees by 418 and 272, respectively, totaling 690. Hence, the net change during 2004 was an increase by
2,388 employees to 29,082 (26,694) at year-end.

The
breakdown by business segment is presented in note "Business Segments." The number of employees net increased by 700 in Profit Center Denmark and by 1,481 in the Baltic countries. In
TeliaSonera Holding, the number of employees net decreased by 423, while the other reportable segments in total reported an increase by 630 employees year on year.

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The
average number of full-time employees was as follows.

|                |  | January-December
|--------------- |  | ----------------
|
|
|Sweden          |  | 10,948          
|Finland         |  | 6,750           
|Norway          |  | 718             
|Denmark         |  | 1,160           
|Lithuania       |  | 3,672           
|Latvia          |  | 632             
|Estonia         |  | 38              
|Kazakhstan      |  | 401             
|Azerbaijan      |  | 382             
|Georgia         |  | 159             
|Moldova         |  | 185             
|Russia          |  | 79              
|United Kingdom  |  | 52              
|Germany         |  | 45              
|United States   |  | 32              
|Sri Lanka       |  |                
|Other countries |  | 128             
|                |  |                 
|Total           |  | 25,381          
|                |  |                 

The
Swedish operations were conducted virtually throughout the country, and operations outside Sweden in 26, 28 and 30 countries during the years 2004, 2003 and 2002, respectively.

The
number of female and male Group senior executives was 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 |  | 54          
|Men   |  | 219         

The
data for 2002 refer to those companies included in the Group on December 31, 2003.

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Absence
due to illness, as a percentage of ordinary work hours excluding leave time and vacation, was distributed as follows in the Group's Swedish units.

|                             |                                                                                | January-December
|---------------------------- | ------------------------------------------------------------------------------ | ----------------
|
|
|Total absence due to illness |                                                                                | 6.3             
|                             | 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 for the Group, along with social security expenses, were as follows.

|                                          |  | January-December
|----------------------------------------- |  | ----------------
|
|
|Salaries and other remuneration           |  | 8,674           
|Social security expenses                  |  |                 
|Employer's social security contributions  |  | 1,902           
|Pension expenses                          |  | 347             
|Contractual pensions for early retirement |  | 94              
|                                          |  |                 
|Total social security expenses            |  | 2,343           
|                                          |  |                 
|Total                                     |  | 11,017          
|                                          |  |                 

Pension
expenses for all boards of directors and presidents in the TeliaSonera Group totaled SEK 17 million, SEK 23 million and SEK 39 million
for the years 2004, 2003 and 2002, 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 salary was expensed in the respective year, but settled
in cash in the following year.

|                |  | January-December
|--------------- |  | ----------------
|
|
|Sweden          |  | 28              
|Finland         |  | 40              
|Norway          |  | 4               
|Denmark         |  | 17              
|Lithuania       |  | 13              
|Latvia          |  | 6               
|Estonia         |  | 0               
|Kazakhstan      |  | 2               
|Azerbaijan      |  | 4               
|Georgia         |  | 0               
|Moldova         |  | 1               
|Russia          |  | 0               
|United Kingdom  |  | 0               
|Germany         |  | 2               
|United States   |  | 2               
|Sri Lanka       |  |                
|Other countries |  | 5               
|                |  |                 
|Total           |  | 124             
|                |  |                 

Remuneration to corporate officers

Principles

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 of the other directors, elected by the Annual General Meeting. In addition, remuneration is paid to the chairman of the
Board's Audit Committee in the amount of SEK 75,000 per year and SEK 50,000 per year to each of the other members of the Audit Committee. No separate remuneration is paid to directors for other
committee work. Directors appointed as employee representatives are not remunerated.

Remuneration
to the Chief Executive Officer (CEO), the Executive Vice President and other members of Executive Management consists of a base salary, certain taxable benefits, variable
salary, and pension benefits. Employee stock options have been allotted to other members of Executive Management on terms equal to those applicable to other employees. "Other members of Executive
Management" refers to the six individuals who are directly reporting to the CEO and which, along with

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the
CEO and the Executive Vice President, constituted TeliaSonera Executive Management on December 31, 2004.

Variable
salary to the CEO and to the Executive Vice President is capped at an amount equal to 50 percent and 35 percent of the base salary, respectively. For other members
of 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 in each
officer's area of responsibility and individual performance objectives.

In
addition to general employment benefits, TeliaSonera offers the following benefits to members of Executive Management employed in Sweden: 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. One other member of Executive Management employed in Finland has standard local benefits provided to other TeliaSonera Finland managers.

Pension
benefits, stock options and other benefits to the CEO, the Executive Vice President and other members of Executive Management as described above form part of each individual's
total remuneration package.

Remuneration and other benefits during the year

|SEK                                                     |  | Board
remuneration/
Base salary |  | Variable
salary |  | Other
benefits |  | Pension
expense |  | Financial
instruments |  | Other
remuneration |  | Total     
|------------------------------------------------------- |  | ------------------------------- |  | --------------- |  | -------------- |  | --------------- |  | --------------------- |  | ------------------ |  | ----------
|Chairman of the Board                                   |  | 696,254                         |  |                |  |               |  |                |  |                      |  |                   |  | 696,254   
|Chief Executive Officer                                 |  | 6,240,000                       |  | 2,215,000       |  | 196,329        |  | 5,194,822       |  |                      |  |                   |  | 13,846,151
|Executive Vice President                                |  | 3,201,670                       |  | 844,900         |  | 113,130        |  | 1,606,695       |  |                      |  |                   |  | 5,766,395 
|Other members of Executive Management (six individuals) |  | 16,166,563                      |  | 4,069,442       |  | 2,133,394      |  | 10,520,167      |  |                      |  |                   |  | 32,889,566
|                                                        |  |                                 |  |                 |  |                |  |                 |  |                       |  |                    |  |           
|Total                                                   |  | 26,304,487                      |  | 7,129,342       |  | 2,442,853      |  | 17,321,684      |  |                      |  |                   |  | 53,198,366
|                                                        |  |                                 |  |                 |  |                |  |                 |  |                       |  |                    |  |           

Comments on the table:



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Stock options

In exchange for Sonera warrants, one Finnish other member of Executive Management was granted TeliaSonera warrants in connection with the merger and, as of
December 31, 2004, held 117,500 warrants of series 2002/2005:A. The warrants are exercisable between June 1, 2001 and June 30, 2005. The exercise price is set to SEK 70.62
per share.

Two
of the Swedish other members of Executive Management 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 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 2004.

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 equals the base salary. All pension benefits are unassailable, i.e., are not subject to conditions concerning future employment.

The
age of retirement for the Executive Vice President 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, amounting to 32.5 percent of the pensionable salary, for that part of salary exceeding 20 income base amounts.
Pensionable salary equals the base salary. All pension benefits are unassailable, i.e. are not subject to conditions concerning future employment.

The
age of retirement for other members of Executive Management 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 equals 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 one other member of Executive Management 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 the statutory TEL pension plan.

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 monthly base 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 Executive Vice President as well as other members of 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 the company, the employee shall be entitled to severance pay equal to the monthly base
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 the employee 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 Remuneration Committee.

Remuneration
to other members of Executive Management is decided by the CEO in consultation with the Remuneration 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, TeliaSonera has not recorded 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.

Summarized
information about warrants outstanding as of December 31, 2004 by exercise price is as follows. On the last trading day of the year, December 30, 2004, the
closing price for the TeliaSonera share on the Stockholm Stock Exchange was SEK 39.80.

|      |  | Outstanding |  | Of which exercisable
|----- |  | ----------- |  | --------------------
|
|69.00 |  | 11,925,000  |  | 0.42                
|70.62 |  | 5,956,650   |  | 0.50                

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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                                           |  | 2004   |  | 2003  |  | 2002  
|--------------------------------------------------------- |  | ------ |  | ----- |  | ------
|Reported net income/loss                                  |  | 12,964 |  | 9,080 |  | -8,067
|Less: Compensation expense                                |  |       |  | -18   |  | -121  
|                                                          |  |        |  |       |  |       
|Pro forma net income/loss                                 |  | 12,964 |  | 9,062 |  | -8,188
|Pro forma basic and diluted earnings/loss per share (SEK) |  | 2.77   |  | 1.94  |  | -2.62 

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.

If
fully exercised, options outstanding as of December 31, 2004 in the 2001 ESOP will entail an increase in share capital of approximately SEK 38 million, equal to a
0.2 percent increase in the number of shares.

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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 2004 and 2003.

|                                              |  | 2002  |  | 2001 
|--------------------------------------------- |  | ----- |  | -----
|Fair market value of underlying share (SEK)   |  | 45.60 |  | 62.00
|Expected volatility of underlying share (%)   |  | 50.0  |  | 47.3 
|Expected dividend yield (%)                   |  | 0.4   |  | 0.3  
|Risk-free interest rate for expected term (%) |  | 4.59  |  | 4.24 
|Expected 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 compensation cost has been incurred in 2004.

A
summary of the 2001 stock option activity and related information for the years ended December 31, 2004, 2003 and 2002 is presented below.

|                                                            |  | Number of options |  | Weighted average
exercise price (SEK) |  | Weighted average
fair value (SEK)
|----------------------------------------------------------- |  | ----------------- |  | ------------------------------------- |  | ---------------------------------
|Options outstanding at December 31, 2001                    |  | 15,300,000        |  | 69                                    |  |                                  
|Granted (exercise price higher than the share market price) |  | 592,000           |  | 69                                    |  | 9.02                             
|Forfeited                                                   |  | -1,590,000        |  | 69                                    |  |                                  
|Options outstanding at December 31, 2002                    |  | 14,302,000        |  | 69                                    |  |                                  
|Forfeited                                                   |  | -1,752,000        |  | 69                                    |  |                                  
|Options outstanding at December 31, 2003                    |  | 12,550,000        |  | 69                                    |  |                                  
|Forfeited                                                   |  | -625,000          |  | 69                                    |  |                                  
|Options outstanding at December 31, 2004                    |  | 11,925,000        |  | 69                                    |  |                                  
|Options exercisable at December 31, 2001 and 2002           |  |                  |  |                                      |  |                                  
|2003                                                        |  | 12,550,000        |  | 69                                    |  |                                  
|2004                                                        |  | 11,925,000        |  | 69                                    |  |                                  

The
exercise price for options outstanding as of December 31, 2004 was SEK 69. The weighted-average remaining contractual life of those options is 0.42 years.

2002 stock option schemeseries 2002/2005:A-B

On November 4, 2002, the extraordinary General Meeting of TeliaSonera AB (then Telia 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

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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 |  | 70.62 
|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 these 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 2004 and 2003, according to the said terms, the exercise
price of the series A warrants was adjusted by the 2003 and 2002 cash dividend per share, respectively.

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 subscription
criteria were not reached and consequently decided to cancel all warrants of series 2002/2005:B.

If
fully exercised, warrants outstanding as of December 31, 2004 in the 2002/2005 series A 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 completed purchase price calculation recorded in 2003.
The assumptions used in calculating the fair value of the 2002/2005 option schemes, at the date of grant, relating to the exercise price of

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warrants
is presented in the table above. The other weighted average assumptions used in calculating the fair value were as follows. No new options were granted in 2004.

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, 2004, 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                             
|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                             
|Forfeited                                                   |  | -100               |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 5,956,650          |  | 71.62                                 |  |                                  
|Warrants outstanding on December 31, 2004                   |  | 5,956,650          |  | 70.62                                 |  |                                  
|Warrants exercisable on December 31,                        |  |                    |  |                                       |  |                                  
|2002                                                        |  | 5,798,880          |  | 72.02                                 |  |                                  
|2003                                                        |  | 5,956,650          |  | 71.62                                 |  |                                  
|2004                                                        |  | 5,956,650          |  | 70.62                                 |  |                                  
|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                             
|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                             
|Cancelled                                                   |  | -5,277,790         |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  |                   |  |                                      |  |                                  
|Warrants exercisable on December 31, 2002 and 2003          |  |                   |  |                                      |  |                                  

2002 stock option schemeseries 2002/2008:A-F and 2002/2010:A-F

On November 4, 2002, the extraordinary General Meeting of TeliaSonera AB (then Telia 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

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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       
|2002/2008:B       
|2002/2008:C       
|2002/2008:D       
|2002/2008:E       
|2002/2008:F       
|2002/2010:A       
|2002/2010:B       
|2002/2010:C       
|2002/2010:D       
|2002/2010:E       
|2002/2010:F       
|Total             

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 were 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 exceeded 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 exceeded the development of the value of the reference index during the same period.

Holders
of warrants of series 2002/2008:C, 2002/2008:F, 2002/2010:C and 2002/2010:F were 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 exceeded the development of the value of the reference index for a peer group of companies during the same
period.

In
February and March 2004, the Board of Directors of TeliaSonera concluded that the subscription criteria were not reached and consequently decided to cancel all warrants of
series 2002/2008:A-F and 2002/2010:A-F.

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 completed purchase price calculation for the merger recorded in 2003. 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

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exercise
price of warrants is presented in the table above. The other weighted average assumptions used were as follows. No new options were granted in 2004.

|                                              |  | Series 2002/2008:A-F |  | Series 2002/2010:A-F
|--------------------------------------------- |  | -------------------- |  | --------------------
|
|Fair market value of underlying share (SEK)   |  | 29.50                |  | 34.70               
|Expected volatility of underlying share (%)   |  | 50.0                 |  | 50.0                
|Expected dividend yield (SEK)                 |  | 1.67                 |  | 1.74                
|Risk-free interest rate for expected term (%) |  | 5.5                  |  | 5.5                 
|Expected life of warrants (years)             |  | 5.31                 |  | 5.49                

A summary of the 2002/2008 and 2002/2010 stock option schemes as of and changes in the years ended December 31, 2004, 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                             
|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                             
|Forfeited                                                   |  | -584,000           |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 9,444,600          |  | 347.38                                |  |                                  
|Cancelled                                                   |  | -9,444,600         |  |                                      |  |                                  
|Warrants outstanding on December 31, 2004                   |  |                   |  |                                      |  |                                  
|Warrants exercisable on December 31, 2002, 2003 and 2004    |  |                   |  |                                      |  |                                  
|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                            
|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                             
|Forfeited                                                   |  | -35,000            |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 101,800            |  | 108.17                                |  |                                  
|Cancelled                                                   |  | -101,800           |  |                                      |  |                                  
|Warrants outstanding on December 31, 2004                   |  |                   |  |                                      |  |                                  
|Warrants exercisable on December 31, 2002, 2003 and 2004    |  |                   |  |                                      |  |                                  
|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                            
|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                            
|Forfeited                                                   |  | -241,352           |  |                                      |  |                                  
|Warrants outstanding on December 31, 2003                   |  | 3,429,236          |  | 49.09                                 |  |                                  
|Cancelled                                                   |  | -3,429,236         |  |                                      |  |                                  
|Warrants outstanding on December 31, 2004                   |  |                   |  |                                      |  |                                  
|Warrants exercisable on December 31, 2002, 2003 and 2004    |  |                   |  |                                      |  |                                  
|                                                            |  |                    |  |                                       |  |                                  

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|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
|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
|Forfeited                                                  |  | -52,000    |  |      |  |      
|Warrants outstanding on December 31, 2003                  |  | 2,246,000  |  | 33.64 |  |      
|Cancelled                                                  |  | -2,246,000 |  |      |  |      
|Warrants outstanding on December 31, 2004                  |  |           |  |      |  |      
|Warrants exercisable on December 31, 2002, 2003 and 2004   |  |           |  |      |  |      

Profit-sharing system

The then subsidiary Telia Finans AB made provisions totaling SEK 3 million and SEK 1 million for costs of employee profit-sharing for the years 2003
and 2002, respectively.

35.    Restructuring Costs

TeliaSonera has engaged, and may in the future need to engage, in restructuring activities, which require management to make significant estimates related to
realizable values of assets made redundant or obsolete (see note "Depreciation, Amortization and Write-Downs") and expenses for severance and other employee separation costs, lease cancellation and
other exit costs. Should the actual amounts
differ from these estimates, future results could be materially impacted. Major restructuring activities decided in 2004, 2003 and 2002 were as follows.

Implementation of integration synergies in the Danish mobile operations

Following the acquisition of Orange Denmark and to realize synergy gains, management in 2004 decided to integrate the Danish mobile operations previously run
separately by Telia and Orange. The integration program involves branding, customer migration, new service portfolio, premises, personnel and handling of overlapping GSM networks and UMTS licenses.
Personnel overlaps exist mainly within management, administration, network operations and product and services development. At year-end 2004, the two companies employed a workforce of
1,050 and notice was given of a redundancy of 300 employees. The redundancy process began January 3, 2005, and will be carried out in accordance with Danish legislation. Under this program
TeliaSonera recorded integration provisions and impairment charges related to licenses and other intangible fixed assets as well as a release of a license fee liability. The program is expected to be
completed in 2005.

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Each of the elements of the Danish mobile integration costs would result in future cash outflows except for write-downs and releases, which are
non-cash in nature. The material elements of the integration costs were as follows. There were no related cash outflows in 2004.

2004SEK in millions

Integration
charges

Cash
outflow

Change in
integration
provisionIntegration provision, opening balance





Workforce reduction

154



154Leasing and service contracts, technical sites

2



2Leasing contracts, offices

22



22Dismantling of technical sites and offices

176



176Legal and other expert fees

2



2Other costs

8



8Exchange rate differences

-1



-1Integration provision, closing balance





363Write-downs of licenses and other intangible fixed assets

497

Release of license fee liability

-221

Total charges/total cash outflow

639




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.

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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.

|                                               |  | 2003 |  | 2004
|---------------------------------------------- |  | ---- |  | ----
|
|Integration provision, opening balance         |  |     |  |    
|Workforce reduction                            |  | 27   |  | -10 
|Leasing and service contracts, technical sites |  | 211  |  | -3  
|Leasing contracts, offices                     |  | 66   |  | -4  
|Dismantling of technical sites and offices     |  | 19   |  |    
|Other costs                                    |  | 16   |  | -1  
|Reversal, not utilized                         |  |     |  |    
|Exchange rate differences, timing effects      |  |     |  |    
|                                               |  |      |  |     
|Integration provision, closing balance         |  |     |  |    
|                                               |  |      |  |     
|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 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 negotiated with the trade
unions to determine which of the permanent employees were affected by the redundancy. Of these employees, approximately 300 have left TeliaSonera Sweden or been redeployed within the Group. The
remaining redundancies were handled through natural attrition, tailored pension plans and within the framework of Telia Resources and Redeployment, which manages redundancies in wholly-owned Swedish
operations.

In
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
was 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
2003, the number of employees was reduced by 478 to 3,586 at year-end, and in 2004, the workforce was reduced by another

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466
employees. 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.

|                                                  |  | 2003 |  | 2004
|------------------------------------------------- |  | ---- |  | ----
|
|Restructuring provision, opening balance          |  |     |  |    
|Workforce reduction                               |  | 435  |  | -44 
|Other costs                                       |  | 4    |  | -4  
|Reversal, not utilized                            |  |     |  |    
|Reclassification to pension provision             |  |     |  |    
|                                                  |  |      |  |     
|Restructuring provision, closing balance          |  |     |  |    
|                                                  |  |      |  |     
|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 were
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.

158

---



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.

|                                                                 |  | 2002  |  | 2003 |  | 2004
|---------------------------------------------------------------- |  | ----- |  | ---- |  | ----
|
|Restructuring provision, opening balance                         |  |      |  |     |  |    
|Workforce reduction                                              |  | 45    |  |     |  | 45  
|Leasing and service contracts, technical sites                   |  | 113   |  | -39  |  | 74  
|Leasing contracts, offices                                       |  | 11    |  |     |  | 11  
|Dismantling of technical sites and offices                       |  | 157   |  |     |  | 157 
|Other costs                                                      |  | 193   |  |     |  | 193 
|Exchange rate differences                                        |  |      |  |     |  | 6   
|                                                                 |  |       |  |      |  |     
|Restructuring provision, closing balance                         |  |      |  |     |  | 486 
|                                                                 |  |       |  |      |  |     
|Write-downs and discards of intangible and tangible fixed assets |  | 3,033 |  |     |  |     
|                                                                 |  |       |  |      |  |     
|Total charges/total cash outflow                                 |  | 3,552 |  | -39  |  |     
|                                                                 |  |       |  |      |  |     

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. Further, the strategic refocusing and restructuring has enabled Telia International Carrier to
substantially scale down the number of offices and technical facilities, as well as led to reduced operating and maintenance costs and leased lines.

Management
also estimated that, as part of the restructuring, Telia International Carrier would reduce its original workforce of approximately 800 persons by more than 50 percent,
most of which was executed in 2002 and 2003. Approximately half of the restructuring provision has been used in 2003 and 2004. The remaining part will be used later during the phase-out of
long-term contracts.

159

---



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.

|                                                        |  | 2002   |  | 2003 |  | 2004 
|------------------------------------------------------- |  | ------ |  | ---- |  | -----
|
|Restructuring provision, opening balance                |  |       |  |     |  |     
|Workforce reduction                                     |  | 303    |  | -40  |  | 263  
|Leasing and service contracts, technical sites and land |  | 2,860  |  | -66  |  | 2,794
|Leasing contracts, offices                              |  | 186    |  | -2   |  | 184  
|Dismantling of technical sites and offices              |  | 230    |  |     |  | 230  
|Customer compensation                                   |  | 233    |  |     |  | 233  
|Legal and other expert fees                             |  | 151    |  | -1   |  | 150  
|Timing effects                                          |  |       |  |     |  |     
|Reversal, not utilized                                  |  |       |  |     |  |     
|Exchange rate differences                               |  |       |  |     |  |     
|                                                        |  |        |  |      |  |      
|Restructuring provision, closing balance                |  |       |  |     |  | 3,854
|                                                        |  |        |  |      |  |      
|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 |  |      
|                                                        |  |        |  |      |  |      

Lower
than expected restructuring costs, mainly due to the French operations but also to redundancies in Sweden and certain customer contracts, enabled reversals of the restructuring
reserve in 2004 and 2003.

Streamlining the core business

At the beginning of 2002, Management started a program to streamline the core business. The program was finalized in 2004. 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.

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. Telia Resources and Redeployment handles redundancies in wholly-owned Swedish

160

---



operations
and supported 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 included re-training, but also severance pays and early-retirement costs. 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.

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.

|                                                   |  | 2002 |  | 2003 |  | 2004
|-------------------------------------------------- |  | ---- |  | ---- |  | ----
|
|Restructuring provision, opening balance           |  |     |  |     |  |    
|Workforce reduction                                |  | 389  |  | -75  |  | 314 
|Other costs                                        |  | 53   |  | -2   |  | 51  
|Reversal, non-utilized                             |  |     |  |     |  | -78 
|                                                   |  |      |  |      |  |     
|Restructuring provision, closing balance           |  |     |  |     |  | 287 
|                                                   |  |      |  |      |  |     
|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 |  |     
|                                                   |  |      |  |      |  |     

36.    Auditors' Fees and Services

Remuneration

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 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. Auditors are elected by the Annual General Meeting.

161

---



PricewaterhouseCoopers
AB has served as TeliaSonera AB's independent auditor (Group auditor) since April 28, 2004. Ernst & Young AB and KPMG Bohlins AB jointly served as
TeliaSonera's independent auditors for fiscal 2003 and up to April 28, 2004. Ernst & Young AB served as TeliaSonera's independent auditor for fiscal 2002.

January-DecemberSEK in millions2004

2003

2002PricewaterhouseCoopers ABAudits

41

9

Audit-related services

0

2

Tax services

1

2

5All other services

3

3

Total

45

16

5Ernst & Young ABAudits

7

28

28Audit-related services

3

11

31Tax services

2

7

6All other services

24

0

Total

36

46

65KPMG Bohlins ABAudits

10

25

Audit-related services

1

11

Tax services

1

3

All other services

5

1

Total

17

40

Other accounting firmsAudits

3

1

4Audit-related services, tax services and all other services

8

0

2Total

11

1

6Total

109

103

76


Audit committee pre-approval policies and procedures

The audit committee of the board of directors of TeliaSonera AB is responsible, among other matters, for the oversight of TeliaSonera's independent auditors,
subject to the requirement of Swedish law. The board of directors has adopted a policy regarding pre-approval of audit and permissible non-audit services provided by the
independent auditors.

This
policy outlines the procedures for the approval of four categories of services provided by the independent auditors, namely, audit, audit-related, tax and other services.

Audit services

Audit services include, among other things, the annual financial statement audit, quarterly reviews, information system and procedural reviews, attestation
engagements and other procedures required to

162

---



be
performed by the independent auditors to be able to form an opinion on TeliaSonera's consolidated financial statements.

The
annual audit engagement is subject to the specific approval of the audit committee. The audit committee monitors the audit services engagement on a quarterly basis and has the
authority to approve any changes in the terms, conditions or fees in the annual audit engagement. All audit services, not specifically included under the audit services engagement letter, which exceed
SEK 250,000 on a project basis, must be approved by the audit committee or the chairman of the audit committee. Any other audit services, not specifically included under the audit services engagement
letter which cost less than SEK 250,000 on a project basis, may be approved by TeliaSonera's chief executive officer or chief financial officer subject to such services being reported to the audit
committee in the following quarterly meeting of the audit committee.

Audit-related services

Audit-related services comprise assurance and related services that are reasonably related to the performance of the audit or review of TeliaSonera's financial
statements, including, among other things, certain due diligence services, assistance with understanding and implementing accounting and reporting requirements, financial audits of employee benefit
plans, audit procedures required to comply with regulatory reporting matters, and assistance with internal control reporting requirements.

All
audit-related services to be provided by the independent auditors, which individually exceed SEK 250,000 on a project basis, must be approved by the audit committee or the chairman
of the audit committee. Any audit-related services which cost less than SEK 250,000 on a project basis may be approved by the chief executive officer or chief financial officer subject to such
services being reported to the audit committee in the following quarterly meeting of the audit committee.

Tax services

Tax services consist of services such as tax compliance, tax planning assistance and general tax advice.

All
tax services to be provided by the independent auditors, which individually exceed SEK 250,000 on a project basis, must be approved by the audit committee or the chairman of the
audit committee. Any tax services which cost less than SEK 250,000 on a project basis may be approved by the chief executive officer or chief financial officer subject to such services being reported
to the audit committee in the following quarterly meeting of the audit committee.

Any other services

As a general rule any other services to be provided by the independent auditors are either prohibited or require the specific approval of the audit committee or
the chairman of the audit committee.

Any
services pre-approved by the chairman of the audit committee must be reported to the full audit committee at the next scheduled meeting of the audit committee.

163

---





37.    Acquisition of Orange Denmark and Eesti Telekom

Description of and reasons for the acquisitions

On October 11, 2004 TeliaSonera for cash consideration acquired Orange's mobile operations in Denmark (Orange Denmark). After the acquisition of shares
over the Tallinn Stock Exchange, the previously associated company AS Eesti Telekom became a majority-owned subsidiary of TeliaSonera as of December 28, 2004.

The
acquisitions have been accounted for using the purchase method of accounting. Under this method, TeliaSonera has allocated the total purchase price to assets acquired and liabilities
assumed based on their relative fair values. The determination of fair values has been based on independent appraisal. The results of the Danish mobile operations have been included in the
consolidated financial statements since October 11, 2004, while the results of the Estonian operations has been recorded as share of earnings in associated companies under the equity method of
accounting during 2004 and will be included in the consolidated financial statements as of January 1, 2005.

TeliaSonera
currently operates mobile and fixed line communications as well as cable TV business in Denmark. With the acquisition, TeliaSonera is executing its strategy to increase its
mobile customer base in Denmark. Following the acquisition, TeliaSonera has approximately 1.1 million mobile customers in Denmark and is the third largest Danish mobile operator. The
acquisition is expected to generate synergies related to closing down overlapping parts of the GSM networks, managing only one brand and closing down of overlapping functions and premises. The
combined operations will have critical mass and operational scale, sufficient to improve TeliaSonera's ability to meet the demands of the business customer segments, but also to enable continued
improvement of the consumer service offer.

AS
Eesti Telekom is a holding company, whose shares are listed on the Tallinn Stock Exchange and global depository receipts (GDRs) on the London Stock Exchange. Eesti Telekom's two
wholly-owned subsidiaries EMT and Elion provide mobile and fixed telecommunications services. The mobile operator EMT is the market leader in mobile communications in Estonia. Elion is the largest
telecommunications and IT provider in Estonia and is the market leader in fixed network calls, in Internet subscriptions and in data communication solutions. Consolidating Eesti Telekom is an
important step in pursuing the strategy to strengthen TeliaSonera as the leading telecom operator in the Nordic and Baltic region.

Financial effects

The acquired businesses contributed net sales and net income to the Group as follows.

SEK in millions

Net
sales

Net
incomeOrange Denmark (October 11December 31, 2004)

607

-696Eesti Telekom (December 28December 31, 2004)



171Total

607

-525


164

---



The
following table shows the TeliaSonera Group pro forma net sales, net income and earnings per share, had the acquisitions taken place at January 1, 2004 and including fair
value adjustments.

|                                                     |  | January-December 2004
|---------------------------------------------------- |  | ---------------------
|
|Pro forma net sales                                  |  | 81,937               
|Pro forma net income                                 |  | 12,964               
|Pro forma basic and diluted earnings per share (SEK) |  | 2.77                 

Purchase consideration, goodwill and cash-flow effects

Details of purchase consideration and goodwill were as follows.

SEK in millions

Orange
Denmark

Eesti
TelekomPurchase considerationCash consideration

5,522

472Consideration in terms of new share issue (prior to 2004)



1,843Transaction related direct expenses

26

Total purchase consideration

5,548

2,315Less fair value of net assets acquired (as specified below)

-1,685

-1,655Less amortization of fair values before the company becoming a subsidiary



-142Less goodwill (net of amortization until 2003) before the company becoming a subsidiary



-515Additional goodwill

3,863

3


Transaction
related direct expenses capitalized by TeliaSonera in connection with the acquisitions represent bankers' fees as well as transaction related legal and accounting fees, and
other direct fees and expenses.

The
determination of fair values of assets acquired and liabilities assumed is based on preliminary appraisal; thus, such values and goodwill are subject to refinement.

The
cash-flow effects were as follows.

SEK in millions

Orange
Denmark

Eesti
TelekomTotal cash purchase consideration

5,548

472Less paid before the company becoming a subsidiary



-461- of which in 2004



95Less acquired cash and cash equivalents

-183

-840Net cash outflow (+)/inflow (-) from acquisition

5,365

-734


165

---



Assets acquired and liabilities assumed

Book values and fair values of assets acquired and liabilities assumed were as follows.

|                                                              |  | Orange Denmark |  | Eesti Telekom
|------------------------------------------------------------- |  | -------------- |  | -------------
|
|Trade names                                                   |  |               |  |             
|Patents, licenses and rights of way                           |  | 1,133          |  | -629         
|Interconnect and roaming agreements                           |  |               |  |             
|Subscriber contracts                                          |  |               |  | 536          
|Buildings, land and land improvements                         |  | 628            |  | -258         
|Mobile networks                                               |  | 618            |  | -326         
|Fixed networks                                                |  |               |  |             
|Equipment, tools and installations                            |  | 422            |  | -241         
|Investments in associated companies and other equity holdings |  | 1              |  |             
|Deferred tax asset                                            |  | 365            |  |             
|Other financial fixed assets                                  |  |               |  |             
|Inventories                                                   |  | 23             |  |             
|Receivables and other current assets                          |  | 596            |  |             
|Cash and cash equivalents                                     |  | 183            |  |             
|                                                              |  |                |  |              
|Total assets acquired                                         |  | 3,969          |  | -918         
|Revaluation reserve                                           |  |               |  |             
|Minority interests                                            |  |               |  |             
|Other provisions                                              |  |               |  |             
|Long-term liabilities                                         |  | -553           |  |             
|Short-term liabilities                                        |  | -813           |  |             
|                                                              |  |                |  |              
|Total liabilities assumed                                     |  | -1,366         |  |             
|                                                              |  |                |  |              
|Net assets acquired                                           |  | 2,603          |  | -918         
|                                                              |  |                |  |              

There
were no purchased in-process research and development assets acquired.

Collateral pledged and contingent liabilities assumed

Collateral pledged and contingent liabilities arising from the acquisitions were as follows.

SEK in millions

Orange
Denmark

Eesti
TelekomCollateral pledged



Contingent liabilities (other guarantees)



2


166

---



38.    Specification of Shareholdings and Participations

Associated companies

|                                                                                  |  |    |  |                 |  |                 |  | Equity
participation in
consolidated
accounts |  | Book value in
each parent
company
|--------------------------------------------------------------------------------- |  | -- |  | --------------- |  | --------------- |  | --------------------------------------------- |  | ---------------------------------
|
|
|
|Parent company holdings                                                           |  |    |  |                 |  |                 |  |                                               |  |                                  
|Swedish companies                                                                 |  |    |  |                 |  |                 |  |                                               |  |                                  
|Overseas Telecom AB, 556528-9138, Stockholm                                       |  | 65 |  | 1,180,575       |  | SEK 118         |  | 504                                           |  | 426                              
|isMobile AB, 556575-0014, Luleå                                                   |  | 50 |  | 996,008         |  | SEK 0           |  | 0                                             |  | 0                                
|Multicom Security Investment AB, 556635-7298, Stockholm                           |  | 49 |  | 1,842,263       |  | SEK 184         |  | 202                                           |  |                                 
|TA Teleadress Information Investment AB, 556635-7306, Stockholm                   |  | 49 |  | 893,168         |  | SEK 89          |  | 85                                            |  |                                 
|Lokomo Systems AB, 556580-3326, Stockholm                                         |  | 40 |  | 676,504         |  | SEK 0           |  | 1                                             |  | 1                                
|Service Factory SF AB, 556575-5682, Stockholm                                     |  | 27 |  | 535,400         |  | SEK 0           |  | 0                                             |  | 0                                
|Telefos AB, 556523-6865, Stockholm                                                |  | 26 |  | 2,560,439       |  | SEK 0           |  | 177                                           |  | 0                                
|SNPAC Swedish Number Portability Administrative Centre AB, 556595-2925, Stockholm |  | 20 |  | 400             |  | SEK 0           |  | 5                                             |  | 3                                
|Other operating, dormant and divested companies                                   |  |    |  |                 |  |                 |  | 0                                             |  | 0                                
|Companies outside Sweden                                                          |  |    |  |                 |  |                 |  |                                               |  |                                  
|OAO Telecominvest, St. Petersburg                                                 |  | 26 |  | 4,262,165       |  | RUR 43          |  | 865                                           |  | 814                              
|Drutt Corp., Wilmington, DE                                                       |  | 25 |  | 1,000,000       |  | USD 0           |  | 6                                             |  | 7                                
|Infonet Services Corp., 954148675, El Segundo, CA                                 |  | 20 |  | 94,367,361      |  | USD 1           |  | 1,045                                         |  | 1,038                            
|Other operating, dormant and divested companies                                   |  |    |  |                 |  |                 |  | 0                                             |  | 12                               
|                                                                                  |  |    |  |                 |  |                 |  |                                               |  |                                  
|Total                                                                             |  |    |  |                 |  |                 |  |                                               |  |                                  
|                                                                                  |  |    |  |                 |  |                 |  |                                               |  |                                  
|Subsidiaries' holdings                                                            |  |    |  |                 |  |                 |  |                                               |  |                                  
|Swedish companies                                                                 |  |    |  |                 |  |                 |  |                                               |  |                                  
|Svenska UMTS-nät AB, 556606-7996, Stockholm                                       |  | 50 |  | 501,000         |  | SEK 50          |  | 513                                           |  | 489                              
|SmartTrust AB, 556179-5161, Stockholm                                             |  | 46 |  | 111,000,000     |  | SEK 1           |  | 80                                            |  | 78                               
|Other operating, dormant and divested companies                                   |  |    |  |                 |  |                 |  | 0                                             |  | 0                                
|Companies outside Sweden                                                          |  |    |  |                 |  |                 |  |                                               |  |                                  
|AS Sertifitseerimiskeskus, 10747013, Tallinn                                      |  | 50 |  |                |  | EEK 2           |  | 2                                             |  |                                 
|AS Intergate, 10705049, Tallinn                                                   |  | 50 |  |                |  | EEK 15          |  | 8                                             |  |                                 
|Lattelekom SIA, 4000305278, Riga                                                  |  | 49 |  | 71,581,000      |  | LVL 72          |  | 526                                           |  | 612                              
|Punwire Paging Services Ltd, Chandigarh                                           |  | 49 |  | 14,699,780      |  | INR 147         |  | 0                                             |  | 0                                
|Turkcell Holding A.S., 430991-378573, Istanbul                                    |  | 47 |  | 214,871,670,000 |  | TRL 214,871,670 |  | 6,767                                         |  | 7,856                            
|Turkcell Iletisim Hizmetleri A.S., Istanbul                                       |  | 13 |  | 196,050,092,922 |  | TRL 196,050,093 |  | 6,243                                         |  | 4,353                            
|Telekolmio Oy, 0785319-6, Hämeenlinna                                             |  | 40 |  | 3,200           |  | EUR 1           |  | 24                                            |  | 26                               
|OAO MegaFon, 7812014560, Moscow                                                   |  | 36 |  | 2,207,204       |  | RUR 20          |  | 2,515                                         |  | 2,213                            
|Helsingin GSM-Palvelut Oy, 1546079-8, Helsinki                                    |  | 35 |  | 700             |  | EUR 0           |  | 11                                            |  | 11                               
|AUCS Communications Services v.o.f., Hoofddorp                                    |  | 33 |  |                |  | EUR 159         |  | 17                                            |  | 64                               
|Johtotieto Oy, 0875145-8, Helsinki                                                |  | 33 |  | 170             |  | EUR 0           |  | 1                                             |  | 0                                
|Suomen Numerot NUMPAC Oy, 1829232-0, Helsinki                                     |  | 25 |  | 3,000           |  | EUR 0           |  | 0                                             |  | 1                                
|UAB TietoEnator Consulting, 2594163, Vilnius                                      |  | 26 |  | 4,160           |  | LTL 0           |  | 3                                             |  | 3                                
|Voicecom OÜ, 10348566, Tallinn                                                    |  | 26 |  |                |  | EEK 0           |  | 2                                             |  |                                 
|Operators Clearing House A/S, 18936909, Copenhagen                                |  | 50 |  | 2,000           |  | DKK 2           |  | 4                                             |  | 2                                
|Eltel Networks Länsi Oy, 0731522-4, Paimio                                        |  | 21 |  | 11,430          |  | EUR 0           |  | 7                                             |  | 7                                
|Other operating, dormant and divested companies                                   |  |    |  |                 |  |                 |  | 0                                             |  | 2,385                            
|                                                                                  |  |    |  |                 |  |                 |  |                                               |  |                                  
|Total                                                                             |  |    |  |                 |  |                 |  | 19,613                                        |  | 20,401                           
|                                                                                  |  |    |  |                 |  |                 |  |                                               |  |                                  

167

---



The share of voting power in Overseas Telecom AB is 42 percent and 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 Other associated companies for the comparative year chiefly related to companies acquired and divested. The former
associated company AS Eesti Telekom became a subsidiary in 2004. Divestitures in 2004 included Slottsbacken Venture Capital KB, INGROUP Holding AB, TiFiC AB and eWork Scandinavia AB. COOP Bank AB was
liquidated, while Geyser Interactive Learning AB and Intermezzon AB went bankrupt. Altogether, the Group's equity participation in the named companies amounted to SEK 2,397 million and the book
value in each parent company to SEK 2,159 million.

168

---



Other holdings of securities

|                                                                   |  |    |  |             |  |         |  | Book/fair value in
consolidated
accounts |  | Book value in
each parent
company
|------------------------------------------------------------------ |  | -- |  | ----------- |  | ------- |  | ---------------------------------------- |  | ---------------------------------
|
|
|
|Parent company holdings                                            |  |    |  |             |  |         |  |                                          |  |                                  
|Swedish companies                                                  |  |    |  |             |  |         |  |                                          |  |                                  
|NGF NetGame Factory AB, 556588-3344, Stockholm                     |  | 10 |  | 147,000     |  | SEK 0   |  | 0                                        |  | 0                                
|Slottsbacken Fund Two KB, 969660-9875, Stockholm                   |  | 18 |  |            |  | SEK -   |  | 5                                        |  | 5                                
|Hyglo AB, 556601-6761, Stockholm                                   |  | 8  |  | 16,800      |  | SEK 0   |  | 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 |  | 124                                      |  | 40                               
|Vision Capital L.P., LP64, Saint Helier                            |  | 6  |  |            |  | USD 2   |  | 4                                        |  | 3                                
|Atrica, Inc., 770532447, Santa Clara, CA                           |  | 1  |  | 249,377     |  | USD 0   |  | 0                                        |  | 0                                
|Intelsat, Ltd., Bermuda                                            |  | 0  |  | 522,064     |  | USD 2   |  | 7                                        |  | 7                                
|Other operating, dormant and divested companies                    |  |    |  |             |  |         |  | 0                                        |  | 67                               
|                                                                   |  |    |  |             |  |         |  |                                          |  |                                  
|Total                                                              |  |    |  |             |  |         |  |                                          |  |                                  
|                                                                   |  |    |  |             |  |         |  |                                          |  |                                  
|Subsidiaries' holdings                                             |  |    |  |             |  |         |  |                                          |  |                                  
|Swedish companies                                                  |  |    |  |             |  |         |  |                                          |  |                                  
|Other operating, dormant and divested companies                    |  |    |  |             |  |         |  | 0                                        |  | 0                                
|Companies outside Sweden                                           |  |    |  |             |  |         |  |                                          |  |                                  
|Digital Media & Communications II L.P., 3037042, Boston, MA        |  | 22 |  |            |  | USD -   |  | 8                                        |  | 16                               
|Digia Oy, 1073758-3, Helsinki                                      |  | 15 |  | 51,833      |  | EUR 0   |  | 49                                       |  | 49                               
|Wideray Corp., 3269105, San Francisco, CA                          |  | 14 |  |            |  | USD 0   |  | 10                                       |  | 0                                
|Eveo Inc., 3028413, San Francisco, CA                              |  | 10 |  | 2,000,000   |  | USD 0   |  | 0                                        |  | 0                                
|Allegis Capital, LLC, 199817710056, Los Altos, CA                  |  | 7  |  |            |  | USD -   |  | 0                                        |  | 0                                
|Magnum Communications L.P., Cayman Islands                         |  | 7  |  |            |  | USD -   |  | 14                                       |  | 11                               
|CellGlide Ltd., 04573898, London                                   |  | 6  |  | 136,081     |  | GBP 0   |  | 11                                       |  | 11                               
|Oy Merinova Ab, 0778620-2, Vaasa                                   |  | 6  |  | 800         |  | EUR 0   |  | 1                                        |  | 0                                
|Dejima, Inc., 3255772, Palo Alto, CA                               |  | 4  |  | 805,338     |  | USD 0   |  | 0                                        |  | 0                                
|Diamondhead Ventures, L.P., 3145188, Menlo Park, CA                |  | 4  |  |            |  | USD -   |  | 10                                       |  | 4                                
|InPhonic, Inc., 2711215, Sacramento, CA                            |  | 4  |  | 744,198     |  | USD 0   |  | 4                                        |  | 5                                
|Codetoys Oy, 1082133-9, Espoo                                      |  | 3  |  | 636,851     |  | EUR 0   |  | 0                                        |  | 0                                
|Santapark Oy, 1095079-8, Rovaniemi                                 |  | 3  |  | 10,000      |  | EUR 0   |  | 2                                        |  | 2                                
|Siennax International B.V., Amstelveen                             |  | 3  |  | 1,841,211   |  | EUR 0   |  | 0                                        |  | 9                                
|Bytemobile, Inc., 3255024, Mountain View, CA                       |  | 2  |  | 735,476     |  | USD 0   |  | 5                                        |  | 4                                
|Pargas Telefon Ab  Paraisten Puhelin Oy, 0135996-3, Pargas        |  | 2  |  | 7,100       |  | EUR 0   |  | 1                                        |  | 0                                
|PacketVideo Corp., 2924300, San Diego, CA                          |  | 1  |  | 262,467     |  | USD 0   |  | 1                                        |  | 1                                
|Helsinki Halli Oy, 1016235-3, Helsinki                             |  | 1  |  | 36          |  | EUR 0   |  | 4                                        |  | 4                                
|Intellect Capital Ventures, Palo Alto, CA                          |  | 0  |  |            |  | USD -   |  | 24                                       |  | 24                               
|TelAdvent LP, Boston, MA                                           |  | 0  |  |            |  | USD -   |  | 11                                       |  | 15                               
|Kiinteistö Oy Mechelininkatu 34 A, 0881551-1, Helsinki             |  | 0  |  | 280         |  | EUR 0   |  | 1                                        |  | 1                                
|Kiinteistö Oy Turun Monitoimihalli, 0816425-3, Turku               |  | 0  |  | 1           |  | EUR 0   |  | 1                                        |  | 1                                
|Technopolis Oyj, 0487422-3, Oulu                                   |  | 0  |  | 27,433      |  | EUR 0   |  | 1                                        |  | 1                                
|Participations in other real estate and housing companies, Finland |  |   |  |            |  | EUR -   |  | 21                                       |  | 25                               
|Participations in other local phone companies, Finland             |  |   |  |            |  | EUR -   |  | 7                                        |  | 7                                
|Other operating, dormant and divested companies                    |  |    |  |             |  |         |  | 0                                        |  | 45                               
|                                                                   |  |    |  |             |  |         |  |                                          |  |                                  
|Total                                                              |  |    |  |             |  |         |  | 326                                      |  | 357                              
|                                                                   |  |    |  |             |  |         |  |                                          |  |                                  

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The parent company's and subsidiaries' respective holdings of Other securities for the comparative year chiefly related to companies divested.
Divestitures in 2004 included Wireless MainGate AB, Eutelsat S.A., Juniper Financial Corp., Oy Finnet International Oy, Metro One Telecommunications, Inc., Fonecta Group Oy, Radiolinja Eesti AS
and Phonetic Systems Ltd. Taste Now AB, Reach-U Holding Oyj, Nerileran AB, Incirco AB and Internetprint Nordic AB went bankrupt. Altogether, carrying values of the named companies
were SEK 112 million in the Group and SEK 112 million in each parent company.

39.    Swedish GAAP

TeliaSonera's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). Accounting practices for
Swedish publicly quoted companies are governed by the Swedish Annual Accounts Act (Årsredovisningslagen, ÅRL) and by standards and statements issued by the Swedish
Financial Accounting Standards Council (Redovisningsrådet) and its Emerging Issues Task Force. The main differences between Swedish accounting practices and IFRS, relevant to
TeliaSonera, are as follows.

Business combinations

Effective January 1, 2004, TeliaSonera adopted IFRS 3 "Business Combinations" and the related revisions to IAS 36 "Impairment of Assets" and IAS 38
"Intangible Assets," involving a number of deviations from Swedish GAAP. Goodwill and other intangible assets with indefinite useful lives will no longer be amortized but tested for impairment at
least annually. The minority interest should include minority shareholders' portion of the fair value of assets acquired and liabilities assumed. In step acquisitions, the fair values of the net
assets in a previously held associate are revalued to the fair values on the date it becomes a consolidated subsidiary. Any increase in the fair values is recorded directly to a revaluation reserve in
shareholders' equity. Under Swedish GAAP any previous acquisition is not restated.

Further,
IFRS have a broader definition of identifiable intangible assets to be valued in a business combination. On the other hand, restructuring provisions are not allowed in a
purchase price allocation under IFRS.

Write-up of tangible fixed assets

Following a useful-life analysis and a subsequent management decision to change certain depreciation periods in the fixed network, the parent company
under ÅRL made a one-off write-up of tangible fixed assets as of December 31, 2003. This method is not allowed under IFRS.

40.    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.

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TeliaSonera
prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The main differences between Finnish Accounting
Standards (Finnish GAAP) and IFRS, 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 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.

Effective
January 1, 2004, TeliaSonera adopted IFRS 3 "Business Combinations" and the related revisions to IAS 36 "Impairment of Assets" and IAS 38 "Intangible Assets," involving
among other things the following deviations from Finnish GAAP; goodwill and other intangible assets with indefinite useful lives will not be amortized but tested for impairment at least annually and
the minority interest should include minority shareholders' part of the fair value of assets acquired and liabilities assumed.

Impairment of fixed assets and long-term investments

IFRS 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.

Pensions and other post-employment benefits

Finnish GAAP do not specifically address the accounting for pensions and other post-employment benefits, such as health care. Generally, companies
account for various retirement arrangements in accordance with local practice. In Finland, arrangements for retirement, disability, death and termination benefits, both defined benefit and defined
contribution plans, are accounted for as defined contribution plans and are generally funded through payments to insurance companies or to trustee-administered pension funds. Under IFRS, TeliaSonera's
statutory TEL pension (own pension fund) and supplementary pension benefits are treated as defined benefit plans. The pension provision is determined by actuarial calculations, using prescriptive
methods and assumptions.

Financial instruments

According to Finnish GAAP derivative financial instruments designated as hedges are normally not recorded until maturity. Trading contracts, which expire within
the following year, are valued at the lower of cost or market value. From 2004 onwards, however, the revised Finnish Accounting Act allows, but do not require, companies to recognize derivative
financial instruments at fair value. 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. The criteria for hedge accounting are not as strict as under IFRS.

Under
IFRS, all derivatives are recorded in the balance sheet at fair value. Changes in the fair value of derivatives are recorded either in earnings or in a separate component of
shareholders' equity,

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depending
on the intended use and designation of the derivative at its inception with strict criteria for hedge accounting.

Under
Finnish GAAP, marketable securities are 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. From 2004 onwards, however, the revised Finnish Accounting Act allows, but do not require, companies to recognize marketable securities at fair value (unrealized gains and losses as a
separate component of shareholders' equity). Under IFRS, 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 allow, but 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 require the recognition of a deferred tax asset under such circumstances.

41.    U.S. GAAP

Differences in principles

TeliaSonera's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), 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, 2004, 2003 and 2002 and
net income for each of the years in the three-year period ended December 31, 2004. The significant differences between IFRS 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, 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.

TeliaSonera
may bundle services and products into one customer offering. Offerings may involve the delivery or performance of multiple products, services, or rights to use assets
(multiple deliverables). In some cases, the arrangements include initial installation, initiation, or activation services and involve consideration in the form of a fixed fee or a fixed fee coupled
with a continuing payment stream. Telecom equipment is accounted for separately from service where a market for each

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deliverable
exists and if title to the equipment passes to the end customer. Costs associated with the equipment are recognized at the time of revenue recognized. The revenue is allocated to equipment
and services in proportion to the fair value of the individual elements and recognized when the respective equipment is delivered and services rendered.

Under
U.S. GAAP, the amount allocated to delivered items is limited to the amount that is not contingent upon delivery of additional items or meeting other specified performance
conditions. Costs associated with the equipment are under U.S. GAAP recognized in an amount equal to the revenue recognized and cost in excess is deferred to the extent those costs are not in excess
of the expected remaining revenues for the item.

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, 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 was reversed.

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 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, 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 TeliaSonera 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 extend for 3-15 years from the respective transaction dates, TeliaSonera is not bound by any other outstanding
commitments or contingent obligations related to these properties.

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Stock-based compensation

Under current IFRS, TeliaSonera does not record an expense with respect to its employee stock option programs, implemented in 2001 and 2002. Until the third
quarter of 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.

By
decisions made by the Board of Directors of TeliaSonera AB in February and March 2004, all unvested employee stock option series were cancelled, due to
non-fulfillment of certain exercise criteria.

Non-current Assets-Held-for-Sale

Under U.S. GAAP and under IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations," an entity should classify a non-current
asset as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Once classified as held for sale, the asset should be
measured at the lower of its carrying amount and fair value less costs to sell and cease depreciation and amortization. TeliaSonera will not adopt IFRS 5 until January 1, 2005 and consequently
assets held for sale are currently not separately disclosed or accounted for.

Pensions

Under IFRS, pension assets, defined benefit pension liabilities and expenses are determined in a similar manner to U.S. GAAP. However, under IFRS, the prior
service cost, transition adjustments and
expenses resulting from plan amendments are generally recognized immediately. Under U.S. GAAP, these expenses are generally recognized over a longer period.

Under
U.S. GAAP and unlike IFRS, when the accumulated benefit obligation (ABO) exceeds the fair value of plan assets, a liability at least equal to the unfunded ABO must be recognized in
the balance sheet. To the extent that the unfunded ABO exceeds the liability already recognized, an additional minimum liability (AML) must be recognized as a reduction of shareholders' equity, net of
tax. If the unfunded ABO is less than the liability already recognized, no further liability is recognized. An accumulated AML was recognized in 2004.

In
2000, Alecta, a Swedish pension insurance company, announced a refund of pension premiums paid. Part of the refund was repaid in cash and the remaining balance could be applied
against future

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premiums,
be paid in cash over several years, or be paid in a lump sum. Under IFRS, TeliaSonera recognized the present value of the total refund as other operating revenue. Under U.S. GAAP, cash
refunds were recognized up until 2003 as other operating revenue when received.

Restructuring costs

Under IFRS, 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 in 2004 and in 2002 related to workforce reduction and certain other exit costs did not meet the U.S. GAAP requirements and accordingly were reversed and
instead recognized as incurred. For restructuring accruals recorded in 2003, the U.S. GAAP requirements related to workforce reduction were met.

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 IFRS. This reconciliation item reflects adjustments for the differences between IFRS and U.S. GAAP relating to the associates.

Financing of associated companies

TeliaSonera, under IFRS, 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, when the functional currency for a subsidiary or an associated company is the currency of a hyper-inflationary 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.

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Goodwill

Until 2003, under IFRS applicable at the time, TeliaSonera amortized 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 are not 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 applied 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.

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. TeliaSonera did not
recognize any impairment loss as a result of assessing impairment.

Effective
January 1, 2004, TeliaSonera adopted IFRS 3 "Business Combinations," involving among other things that goodwill is no longer amortized but will be tested for impairment
at least annually.

Merger with Sonera Oyj

The merger of Telia and Sonera was announced in March 2002 and finalized in 2003. Under IFRS, the TeliaSonera shares and warrants issued to Sonera
shareholders and warrantholders in the exchange offer and the mandatory redemption offer were valued based on the quoted closing market price of TeliaSonera shares as of the respective dates of the
Board of Directors decisions to issue new shares. 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 and warrants issued to Sonera shareholders and warrantholders in consideration for the
merger were valued based on a weighted average share price for the five consecutive trading days starting two days before and ending two days after the announcement day.

Furthermore,
under IFRS, the total fair value of TeliaSonera warrants issued was recorded as part of the purchase consideration. Under U.S. GAAP, the fair value of fully vested warrants
was recognized as part of the purchase consideration, while the fair value of the unvested warrants was amortized to expense over the future remaining vesting period as stock-based employee
compensation cost. By decisions made by the Board of Directors of TeliaSonera AB in February and March 2004, all unvested warrants were cancelled, due to non-fulfillment of certain
exercise criteria.

In
assessing the fair value of other intangible assets under IFRS applicable at the time of the merger, roaming and interconnect agreements with other operators as well as most of the
customer list ("portfolio of customers") did not meet the definition of an intangible asset. Therefore, TeliaSonera under IFRS did not assign 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 were recorded as intangible assets and are amortized over their remaining useful lives.

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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 affected the amount of goodwill from the transaction under U.S. GAAP. Under IFRS applicable at the time of the merger, the
purchase price allocated to identifiable assets and liabilities was amortized based on the estimated useful life of the identifiable assets and liabilities. The excess purchase consideration after
this allocation is described as goodwill and recognized as a separate asset. Under IFRS applicable at the time of the merger, TeliaSonera amortized goodwill arising from the merger over a useful life
of 20 years. Under U.S. GAAP, goodwill arising in a business combination shall not be amortized. Effective January 1, 2004, TeliaSonera adopted IFRS 3 "Business Combinations," involving
among other things that goodwill is no longer amortized.

Other business combinations

Effective January 1, 2004, TeliaSonera adopted IFRS 3 "Business Combinations." IFRS 3 states that acquired identifiable assets, liabilities, and contingent
liabilities should be measured initially at 100 percent of the fair values at the acquisition date, irrespective of the extent of any minority interest. In other words, the identifiable assets
acquired, and liabilities and contingent liabilities incurred or assumed, must be initially measured at full fair value, including any minority interest's share of the acquired item.

Consequently,
minority interest under IFRS 3 includes the minority's portion of the net fair values acquired. Under U.S. GAAP, fair values are only included to the share of net assets
acquired and the interest's historical carrying value prior to the acquisition of the additional interest remains unchanged. In step acquisitions under IFRS, the fair values of the net assets in a
previously held associate are revalued to the fair values on the date it becomes a consolidated subsidiary. An increase in the fair values is recorded directly in equity and included in a revaluation
reserve, while a decrease is recorded as a write-down in the income statement. Under U.S. GAAP any previous interest is not restated.

Under
IFRS 3, a provision for restructuring costs on acquisition may be recognized only if the acquiree already recognized a provision. Under U.S. GAAP, a provision may be recognized if
a plan to exit an activity or terminate employees has been initiated before the acquisition.

Under
IFRS, the UMTS license acquired in the Orange Denmark transaction was valued at zero net of a related liability to the Danish authorities. As of the acquisition date, management
had decided to hand back the license which led to a write-down of the value of the license and a release of part of the recorded liability. The remaining liability equaled the fee agreed
to be paid on returning the license. Under U.S. GAAP, since it was TeliaSonera's intention to return the license, the net liability equivalent to the fee agreed to be paid to the Danish authorities
was recorded already in the purchase price allocation. The different treatment also affected the amount of goodwill from the transaction under U.S. GAAP.

Hedging acquisitions of shares

Unlike IFRS, to be able to use hedge accounting under U.S. GAAP, the hedged item, inter alia, cannot be related to a minority interest in a consolidated
subsidiary. The acquisition price for a foreign subsidiary should be calculated by using the currency rate at the transaction date. The change in fair

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value
of the derivative that has been used to hedge the acquisition is recognized as foreign currency gain or loss in other operating revenues or expenses.

Income taxes and exchange rate differences

Deferred tax and exchange rate differences are calculated for all differences between IFRS and U.S. GAAP, when applicable, for deferred tax including related
recalculations to reflect enacted tax rate changes.

Translation into U.S. GAAP

Application of U.S. GAAP had the following effects on consolidated net income and shareholders' equity.

|                                                    |  | January-December
|--------------------------------------------------- |  | ----------------
|
|
|Net income/loss under IFRS                          |  | 12,964          
|Revenue recognition                                 |  | -415            
|Impairment charge                                   |  |                
|Sale and leaseback                                  |  | 120             
|Stock-based compensation                            |  |                
|Pensions                                            |  | -145            
|Restructuring costs                                 |  | 77              
|Share of earnings in associated companies           |  | -41             
|Financing of associated companies                   |  | 0               
|Associated companies in hyperinflationary economies |  | -174            
|Goodwill                                            |  |                
|Merger with Sonera                                  |  | -2,128          
|Other business combinations                         |  | 546             
|Hedging forecasted acquisitions of shares           |  | -2              
|Deferred tax                                        |  | 1,491           
|                                                    |  |                 
|Net income/loss under U.S. GAAP                     |  | 12,293          
|                                                    |  |                 

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|                                                     |  | December 31,
|---------------------------------------------------- |  | ------------
|
|
|Shareholders' equity under IFRS                      |  | 121,656     
|Revenue recognition                                  |  | -4,843      
|Sale and leaseback                                   |  | -956        
|Pensions                                             |  | -2,672      
|Restructuring costs                                  |  | 212         
|Share of earnings in associated companies            |  |            
|Financing of associated companies                    |  | 3           
|Associated companies in hyper inflationary economies |  | -4,919      
|Goodwill                                             |  | 6,011       
|Merger with Sonera                                   |  | -535        
|Other business combinations                          |  | -1,094      
|Hedging forecasted acquisitions of shares            |  | -2          
|Deferred tax                                         |  | 4,310       
|Exchange rate differences                            |  | 101         
|                                                     |  |             
|Shareholders' equity under U.S. GAAP                 |  | 117,272     
|                                                     |  |             

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-December
|----------------------------------------------- |  | ----------------
|
|
|Income statements under U.S. GAAP               |  |                 
|Net sales                                       |  | 81,395          
|Income from associated companies                |  | 3,108           
|Operating income/loss                           |  | 16,632          
|Income after financial items                    |  | 15,286          
|Income taxes                                    |  | -1,693          
|Minority interests                              |  | -1,300          
|Net income/loss                                 |  | 12,293          
|Basic and diluted earnings/loss per share (SEK) |  | 2.63            

179

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|                                           |  | December 31,
|------------------------------------------ |  | ------------
|
|
|Balance sheets under U.S. GAAP             |  |             
|Fixed assets                               |  | 154,154     
|Current assets                             |  | 41,946      
|Assets-held-for-sale                       |  | 1,052       
|Total assets                               |  | 197,152     
|Shareholders' equity                       |  | 117,272     
|Minority interests                         |  | 5,077       
|Provisions                                 |  | 16,250      
|Long-term loans                            |  | 12,942      
|Short-term loans                           |  | 11,733      
|Long-term liabilities                      |  | 4,182       
|Current liabilities                        |  | 29,696      
|Total shareholders' equity and liabilities |  | 197,152     

Expected future amortization of other intangible assets

Given the current ownership structure and the same exchange rates as in 2004, 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                                        |  | 2005  |  | 2006  |  | 2007  |  | 2008  |  | 2009 
|------------------------------------------------------ |  | ----- |  | ----- |  | ----- |  | ----- |  | -----
|Expected amortization of other intangible fixed assets |  | 3,597 |  | 3,597 |  | 3,535 |  | 3,088 |  | 2,983

Recently issued accounting pronouncements

FAS 123(R)

In December 2004, FASB Statement No. 123 (revised 2004) "Share-Based Payment" (FAS 123(R)) was issued. FAS 123(R) is a revision of
FASB Statement No. 123 "Accounting for Stock-Based Compensation" and supersedes APB Opinion No. 25 "Accounting for Stock Issued to Employees," and its related implementation guidance.
FAS 123(R) requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award
(with limited exceptions). FAS 123(R) is effective as of the beginning of the first interim or annual reporting period that begins after June 15, 2005. TeliaSonera under U.S. GAAP
accounts for stock-based awards at fair value in accordance with FAS 123 and does not expect the adoption of FAS 123(R) to have a material effect on its earnings and financial position.

FAS 132(R)

In December 2003, FASB Statement No. 132 (revised 2003) "Employers' Disclosures about Pensions and Other Postretirement Benefitsan
amendment of FASB Statements No. 87, 88, and 106" (FASB 132(R)) was issued. It does not change the measurement and recognition provisions of FAS 87, 88 and 106 or the disclosure requirements of
the original FAS 132, which it replaces. FAS 132(R) requires additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. For foreign plans,

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FAS 132(R)
is effective for years ending after June 15, 2004. TeliaSonera pre-adopted the additional disclosure requirements.

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 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 effective date of certain provisions of FAS 150 for certain mandatorily redeemable financial
instruments has been deferred by FSP FAS 150-3. Under the FSP, certain mandatorily redeemable shares are subject to the provisions of FAS 150 for the first fiscal period
beginning after December 15, 2004. Other mandatorily redeemable shares are deferred indefinitely but may be subject to classification or disclosure provisions of FAS 150. Adoption of
FAS 150 did not and will not have a material effect on TeliaSonera's earnings and financial position under U.S. GAAP.

FAS 151

In November 2004, FASB Statement No. 151 "Inventory Costsan amendment of ARB No. 43, Chapter 4" (FAS 151) was issued.
FAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal years
beginning after November 24, 2004. FAS 151 should be applied prospectively. The provisions of FAS 151 do not have a material effect on TeliaSonera's earnings and financial
position under U.S. GAAP.

FAS 152

In December 2004, FASB Statement No. 152 "Accounting for Real Estate Time-Sharing Transactionsan amendment of FASB
Statements No. 66 and 67" (FAS 152) was issued. FAS 152 is effective for financial statements for fiscal years beginning after June 15, 2005. Restatement of previously
issued financial statements is not permitted. Currently, the provisions of FAS 152 are not relevant to TeliaSonera.

FAS 153

In December 2004, FASB Statement No. 153 "Exchanges of Nonmonetary Assetsan amendment of APB Opinion No. 29" (FAS 153)
was issued. FAS 153 amends APB 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. FAS 153 is effective for non-monetary asset exchanges occurring in fiscal

181

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periods
beginning after June 15, 2005. Earlier application is permitted for non-monetary asset exchanges occurring in fiscal periods beginning after December 16, 2004.
FAS 153 should be applied prospectively. TeliaSonera does not expect that the adoption of FAS 153 will materially affect its financial position or results of operations under U.S. GAAP.

FIN 46(R)

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 46(R)).
FIN 46(R) 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. Adoption of FIN 46(R) 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 No. 00-21 "Revenue Arrangements with
Multiple Deliverables" (EITF 00-21), providing further guidance on how to account for multiple element contracts. EITF 00-21 became effective for all arrangements entered into
on or after January 1, 2004. The effects on TeliaSonera's accounting for multiple element contracts by adopting EITF 00-21 are described under the heading "Revenue recognition"
above.

EITF 03-1

In March 2004, the Emerging Issues Task Force (EITF) within FASB reached a consensus on Issue No. 03-1 "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments" (EITF 03-1). The issue is to determine the meaning of
other-than-temporary impairment and its application to debt and equity securities within the scope of FASB Statement No. 115 "Accounting for Certain Investments in Debt
and Equity Securities." The impairment methodology for investments accounted for under the equity method is predicated on the notion of other-than-temporary. The taskforce
reached a consensus that the application guidance in EITF 03-1 should be used in determining when an investment is considered impaired, whether that impairment is
other-than-temporary and the measurement of the impairment. EITF 03-1 was effective for other-than-temporary impairment evaluation made in
reporting periods beginning after June 15, 2004. The Board has directed the FASB staff to delay the effective date for the measurement and recognition guidance contained in paragraphs
10-20 of EITF 03-1. Applying the other provisions of EITF 03-1 did not have a material effect on TeliaSonera's consolidated financial statements under U.S. GAAP.

182

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Report of Independent Registered Public Accounting Firm

To
the Shareholders of TeliaSonera AB

We
have audited the accompanying consolidated balance sheet of TeliaSonera AB and its subsidiaries as of December 31, 2004, and the related consolidated statements of income, of cash flows and
of changes in shareholders equity for the year ended December 31, 2004. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of TeliaSonera AB and its subsidiaries at December 31,
2004, and the results of their operations and their cash flows for the year ended December 31, 2004, in conformity with International Financial Reporting Standards.

As
discussed in Notes 1 and 10 to the consolidated financial statements, with effect from January 1, 2004, the Company prospectively adopted IFRS 3, "Business Combinations."

International
Financial Reporting Standards vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and
effect of such differences is presented in Note 41 to the consolidated financial statements.

PricewaterhouseCoopers
AB

Göran
Tidström
Authorized Public Accountant

Stockholm,
Sweden
April 4, 2005

183

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Report of Independent Registered Public Accounting Firms

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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 41 to the consolidated financial statements.

|Ernst & Young AB                        |  | KPMG Bohlins AB                          
|--------------------------------------- |  | -----------------------------------------
|Lars Träff
Authorized Public Accountant |  | Thomas Thiel
Authorized Public Accountant
|Stockholm, Sweden
March 3, 2004         |  |                                          

184

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Report of Independent Registered Public Accounting Firm

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, 2002 and the related consolidated income statement, statement of cash flows and statement of
changes in shareholders' equity for the year 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 audit. 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. These financial statements were audited by
other auditors whose report has been furnished to us, and our opinion, insofar as it relates to amounts included for Sonera Corporation (before conversion to International Financial Reporting
Standards), is based solely on the report of the other auditors.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 audit provides a reasonable basis for our opinion.

In
our opinion, based on our audit and the report of the 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 the consolidated results of its operations and its cash flows for the year 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 41 to the consolidated financial
statements).

Ernst &
Young AB

Torsten
Lyth
Authorized Public Accountant

Stockholm,
Sweden
March 19, 2003

185

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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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the 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 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 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

186

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Ten-Year Summary

|TeliaSonera Group
Financial Data (IFRS)                                  |  | 2004    |  | 2003    |  | 2002    |  | 2001    |  | 2000    |  | 1999    |  | 1998    |  | 1997    |  | 1996    |  | 1995   
|------------------------------------------------------------------------ |  | ------- |  | ------- |  | ------- |  | ------- |  | ------- |  | ------- |  | ------- |  | ------- |  | ------- |  | -------
|Income statements (SEK in millions)                                      |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|Net sales                                                                |  | 81,937  |  | 82,425  |  | 59,483  |  | 57,196  |  | 54,064  |  | 52,121  |  | 49,569  |  | 45,665  |  | 42,430  |  | 38,953 
|Operating income                                                         |  | 18,793  |  | 14,710  |  | -10,895 |  | 5,460   |  | 12,006  |  | 5,946   |  | 7,220   |  | 3,218   |  | 3,264   |  | 3,296  
|Income after financial items                                             |  | 17,448  |  | 13,899  |  | -11,616 |  | 4,808   |  | 11,717  |  | 5,980   |  | 7,143   |  | 3,128   |  | 3,353   |  | 3,410  
|Net income                                                               |  | 12,964  |  | 9,080   |  | -8,067  |  | 1,869   |  | 10,278  |  | 4,222   |  | 5,011   |  | 2,222   |  | 2,337   |  | 2,484  
|EBITDA excluding non-recurring items                                     |  | 30,196  |  | 30,700  |  | 15,692  |  | 12,915  |  | 13,087  |  | 14,059  |  | 13,309  |  | 12,324  |  | 13,185  |  | 11,990 
|EBITDA                                                                   |  | 30,841  |  | 32,035  |  | 9,421   |  | 13,299  |  | 21,425  |  | 12,875  |  | 15,070  |  | 10,679  |  | 10,961  |  | 11,219 
|Depreciation, amortization, and write-downs                              |  | 15,596  |  | 17,707  |  | 20,844  |  | 13,975  |  | 8,222   |  | 7,652   |  | 7,146   |  | 7,298   |  | 7,154   |  | 7,378  
|Balance sheets (SEK in millions)                                         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|Intangible fixed assets                                                  |  | 70,493  |  | 61,820  |  | 68,106  |  | 26,816  |  | 25,198  |  | 2,146   |  | 1,844   |  | 1,566   |  | 1,809   |  | 941    
|Tangible fixed assets                                                    |  | 47,542  |  | 49,161  |  | 56,172  |  | 47,314  |  | 43,807  |  | 33,318  |  | 34,801  |  | 39,239  |  | 38,366  |  | 37,703 
|Financial fixed assets                                                   |  | 35,110  |  | 42,061  |  | 48,534  |  | 20,784  |  | 22,335  |  | 18,023  |  | 12,553  |  | 8,666   |  | 7,224   |  | 5,724  
|Current assets                                                           |  | 39,873  |  | 37,018  |  | 33,844  |  | 33,277  |  | 31,375  |  | 23,117  |  | 18,080  |  | 16,439  |  | 15,116  |  | 14,093 
|Total assets                                                             |  | 193,018 |  | 190,060 |  | 206,656 |  | 128,191 |  | 122,715 |  | 76,604  |  | 67,278  |  | 65,910  |  | 62,515  |  | 58,461 
|Shareholders' equity                                                     |  | 121,656 |  | 112,393 |  | 108,829 |  | 59,885  |  | 55,988  |  | 32,893  |  | 29,344  |  | 25,487  |  | 24,413  |  | 23,083 
|Minority interests in equity                                             |  | 7,457   |  | 3,441   |  | 5,120   |  | 204     |  | 320     |  | 210     |  | 210     |  | 306     |  | 218     |  | 13     
|Provisions                                                               |  | 13,402  |  | 15,297  |  | 18,406  |  | 13,107  |  | 11,351  |  | 10,488  |  | 7,735   |  | 12,262  |  | 14,146  |  | 17,122 
|Interest-bearing liabilities                                             |  | 24,675  |  | 30,554  |  | 44,732  |  | 29,124  |  | 34,042  |  | 16,057  |  | 13,553  |  | 14,813  |  | 9,837   |  | 4,513  
|Non-interest-bearing liabilities                                         |  | 25,828  |  | 28,375  |  | 29,569  |  | 25,871  |  | 21,014  |  | 16,956  |  | 16,436  |  | 13,042  |  | 13,901  |  | 13,730 
|Total shareholders' equity and liabilities                               |  | 193,018 |  | 190,060 |  | 206,656 |  | 128,191 |  | 122,715 |  | 76,604  |  | 67,278  |  | 65,910  |  | 62,515  |  | 58,461 
|Capital employed                                                         |  | 148,178 |  | 142,235 |  | 157,035 |  | 90,971  |  | 92,374  |  | 50,936  |  | 43,440  |  | 46,329  |  | 43,420  |  | 40,357 
|Operating capital                                                        |  | 127,244 |  | 120,006 |  | 137,113 |  | 70,150  |  | 75,042  |  | 39,160  |  | 34,921  |  | 39,192  |  | 37,013  |  | 34,161 
|Net debt                                                                 |  | 7,062   |  | 18,207  |  | 38,075  |  | 20,004  |  | 32,512  |  | 14,280  |  | 12,870  |  | 13,254  |  | 8,710   |  | 3,171  
|Net interest-bearing liability                                           |  | 3,741   |  | 8,847   |  | 25,034  |  | 10,661  |  | 20,235  |  | 7,527   |  | 6,767   |  | 14,609  |  | 13,534  |  | 12,065 
|Cash flows (SEK in millions)                                             |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|Cash flow from operating activities                                      |  | 24,403  |  | 26,443  |  | 12,449  |  | 10,416  |  | 10,152  |  | 10,715  |  | 10,301  |  | 8,920   |  | 9,783   |  | 11,392 
|Cash flow from investing activities                                      |  | -7,991  |  | -3,443  |  | -5,553  |  | 3,632   |  | -37,121 |  | -10,701 |  | -8,967  |  | -12,426 |  | -14,744 |  | -10,297
|Cash flow before financing activities                                    |  | 16,412  |  | 23,000  |  | 6,896   |  | 14,048  |  | -26,969 |  | 14      |  | 1,334   |  | -3,506  |  | -4,961  |  | 1,095  
|Cash flow from financing activities                                      |  | -11,102 |  | -16,412 |  | -10,344 |  | -6,608  |  | 26,818  |  | 1,005   |  | -2,301  |  | 3,896   |  | 4,784   |  | -1,144 
|Cash flow for the year                                                   |  | 5,310   |  | 6,588   |  | -3,448  |  | 7,440   |  | -151    |  | 1,019   |  | -967    |  | 390     |  | -177    |  | -49    
|Free cash flow                                                           |  | 14,118  |  | 17,351  |  | 3,877   |  | -6,506  |  | -5,845  |  | 2,828   |  | 2,638   |  | -707    |  | 1,480   |  | 2,868  
|Investments (SEK in millions)                                            |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|CAPEX                                                                    |  | 10,356  |  | 9,373   |  | 14,345  |  | 17,713  |  | 16,580  |  | 7,701   |  | 7,663   |  | 9,637   |  | 8,304   |  | 8,524  
|Acquisitions                                                             |  | 10,364  |  | 2,745   |  | 40,093  |  | 3,022   |  | 31,162  |  | 4,444   |  | 4,075   |  | 1,227   |  | 2,704   |  | 2,053  
|Total investments                                                        |  | 20,720  |  | 12,118  |  | 54,438  |  | 20,735  |  | 47,742  |  | 12,145  |  | 11,738  |  | 10,864  |  | 11,008  |  | 10,577 
|Business ratios                                                          |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|EBITDA margin (%)                                                        |  | 36.9    |  | 37.2    |  | 26.4    |  | 22.6    |  | 24.2    |  | 27.0    |  | 26.8    |  | 27.0    |  | 31.1    |  | 30.8   
|Operating margin (%)                                                     |  | 22.9    |  | 17.8    |  | -18.3   |  | 9.5     |  | 22.2    |  | 11.4    |  | 14.6    |  | 7.0     |  | 7.7     |  | 8.5    
|Return on sales (%)                                                      |  | 15.8    |  | 11.0    |  | -13.6   |  | 3.3     |  | 19.0    |  | 8.1     |  | 10.1    |  | 4.9     |  | 5.5     |  | 6.4    
|Depreciation, amortization, and write-downs as a percentage of net sales |  | 19.0    |  | 21.5    |  | 35.0    |  | 24.4    |  | 15.2    |  | 14.7    |  | 14.4    |  | 16.0    |  | 16.9    |  | 18.9   
|CAPEX as a percentage of net sales                                       |  | 12.6    |  | 11.4    |  | 24.1    |  | 31.0    |  | 30.7    |  | 14.8    |  | 15.5    |  | 21.1    |  | 19.6    |  | 21.9   
|Total asset turnover (multiple)                                          |  | 0.43    |  | 0.42    |  | 0.36    |  | 0.46    |  | 0.54    |  | 0.72    |  | 0.74    |  | 0.71    |  | 0.70    |  | 0.69   
|Turnover of capital employed (multiple)                                  |  | 0.56    |  | 0.55    |  | 0.48    |  | 0.62    |  | 0.75    |  | 1.10    |  | 1.10    |  | 1.02    |  | 1.01    |  | 0.99   
|Return on assets (%)                                                     |  | 10.5    |  | 8.7     |  | -5.7    |  | 5.7     |  | 13.6    |  | 9.4     |  | 11.9    |  | 6.0     |  | 6.6     |  | 7.1    
|Return on capital employed (%)                                           |  | 13.8    |  | 11.6    |  | -7.7    |  | 7.8     |  | 18.9    |  | 14.4    |  | 17.6    |  | 8.6     |  | 9.6     |  | 10.2   
|Return on equity (%)                                                     |  | 11.6    |  | 8.5     |  | -9.7    |  | 3.3     |  | 23.9    |  | 14.2    |  | 19.2    |  | 9.3     |  | 10.3    |  | 11.8   
|Equity/assets ratio (%)                                                  |  | 60.1    |  | 56.7    |  | 51.8    |  | 46.2    |  | 44.4    |  | 41.0    |  | 41.5    |  | 36.8    |  | 37.2    |  | 37.8   
|Debt/equity ratio (multiple)                                             |  | 0.03    |  | 0.08    |  | 0.23    |  | 0.18    |  | 0.37    |  | 0.24    |  | 0.24    |  | 0.60    |  | 0.58    |  | 0.55   
|Interest coverage ratio (multiple)                                       |  | 7.6     |  | 5.1     |  | -4.7    |  | 3.0     |  | 7.3     |  | 8.5     |  | 10.4    |  | 5.3     |  | 6.1     |  | 6.7    
|Self-financing rate (multiple)                                           |  | 1.18    |  | 2.18    |  | 0.23    |  | 0.50    |  | 0.21    |  | 0.88    |  | 0.88    |  | 0.82    |  | 0.89    |  | 1.08   
|Share data                                                               |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|Number of shares (millions)                                              |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|-at the end of the period                                                |  | 4,675.2 |  | 4,675.2 |  | 4,605.8 |  | 3.001.2 |  | 3.001.2 |  | 8.8     |  | 8.8     |  | 8.8     |  | 8.8     |  | 8.8    
|-average, basic 1)                                                       |  | 4,675.2 |  | 4,667.6 |  | 3,124.3 |  | 3,001.2 |  | 2,932.8 |  | 2,851.2 |  | 2,851.2 |  | 2,851.2 |  | 2,851.2 |  | 2,851.2
|-average, diluted 1)                                                     |  | 4,675.2 |  | 4,668.4 |  | 3,125.3 |  | 3,001.2 |  | 2,932.8 |  | 2,851.2 |  | 2,851.2 |  | 2,851.2 |  | 2,851.2 |  | 2,851.2
|Basic and diluted earnings/loss per share (SEK)                          |  | 2.77    |  | 1.95    |  | -2.58   |  | 0.62    |  | 3.50    |  | 1.48    |  | 1.76    |  | 0.78    |  | 0.82    |  | 0.87   
|Cash dividend per share (SEK) 2)                                         |  | 1.20    |  | 1.00    |  | 0.40    |  | 0.20    |  | 0.50    |  | 0.52    |  | 0.49    |  | 0.42    |  | 0.40    |  | 0.35   
|Cash dividend per share (USD) 2, 3)                                      |  | 0.17    |  | 0.13    |  | 0.05    |  | 0.02    |  | 0.05    |  | 0.06    |  | 0.06    |  | 0.05    |  | 0.05    |  | 0.05   
|Total cash dividend (SEK in millions) 2)                                 |  | 5,610   |  | 4,675   |  | 1,870   |  | 600     |  | 1,501   |  | 1,470   |  | 1,400   |  | 1,210   |  | 1,152   |  | 1,000  
|Payout ratio (%)                                                         |  | 43.3    |  | 51.4    |  | n/a     |  | 32.1    |  | 14.3    |  | 34.8    |  | 27.9    |  | 54.5    |  | 49.3    |  | 40.3   
|Shareholders' equity per share (SEK)                                     |  | 26.02   |  | 24.04   |  | 23.63   |  | 19.95   |  | 18.66   |  | 11.54   |  | 10.29   |  | 8.94    |  | 8.56    |  | 8.10   
|Comparative figures under U.S. GAAP                                      |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |         |  |        
|Net sales (SEK in millions)                                              |  | 81,395  |  | 82,099  |  | 59,336  |  | 56,957  |  | 53,849  |  | 51,931  |  | 49,389  |  | 45,542  |  | 42,363  |  | 38,955 
|Net income (SEK in millions)                                             |  | 12,293  |  | 10,628  |  | -8,755  |  | 4,443   |  | 9,991   |  | 4,218   |  | 3,600   |  | 2,133   |  | 2,288   |  | 2,485  
|Shareholders' equity (SEK in millions)                                   |  | 117,272 |  | 111,780 |  | 110,269 |  | 58,589  |  | 51,870  |  | 29,168  |  | 25,575  |  | 23,167  |  | 22,253  |  | 20,971 
|Balance sheet total (SEK in millions)                                    |  | 197,152 |  | 200,787 |  | 217,464 |  | 132,495 |  | 123,689 |  | 77,974  |  | 68,598  |  | 66,716  |  | 63,356  |  | 59,282 
|Basic and diluted earnings/loss per share (SEK)                          |  | 2.63    |  | 2.28    |  | -2.80   |  | 1.48    |  | 3.41    |  | 1.48    |  | 1.26    |  | 0.75    |  | 0.80    |  | 0.87   

---

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|TeliaSonera Group
Operational Data                                                       |                                         | 2004   |        | 2003   |        | 2002   |        | 2001   |        | 2000   |        | 1999   |        | 1998   |        | 1997   |        | 1996   |        | 1995  
|---------------------------------------------------------------------------------------- | --------------------------------------- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------
|Sweden                                                                                   |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Mobile telephony, total subscriptions (thousands)                                        |                                         | 4,243  |        | 3,838  |        | 3,604  |        | 3,439  |        | 3,257  |        | 2,638  |        | 2,206  |        | 1,935  |        | 1,745  |        | 1,438 
|Mobile telephony, total GSM/UMTS (thousands)                                             |                                         | 4,117  |        | 3,706  |        | 3,467  |        | 3,295  |        | 3,076  |        | 2,348  |        | 1,703  |        | 1,180  |        | 824    |        | 463   
|Mobile telephony, total NMT (thousands)                                                  |                                         | 126    |        | 132    |        | 137    |        | 144    |        | 181    |        | 290    |        | 503    |        | 755    |        | 921    |        | 975   
|Mobile telephony, outgoing traffic (millions of minutes)                                 |                                         | 3,814  |        | 3,313  |        | 3,201  |        | 3,016  |        | 2,591  |        | 2,089  |        | 1,745  |        | 1,554  |        | 1,221  |        | 1,046 
|Mobile telephony, incoming traffic (millions of minutes)                                 |                                         | 2,573  |        | 2,400  |        | 2,272  |        | 2,067  |        | 1,766  |        | 1,416  |        | 1,091  |        | 885    |        | 677    |        | 612   
|Mobile telephony, traffic per customer and month (minutes)                               |                                         | 131    |        | 128    |        | 131    |        | 127    |        | 123    |        | 121    |        | 114    |        | 111    |        | 99     |        | 106   
|Mobile telephony, SMS messages (millions)                                                |                                         | 905    |        | 794    |        | 488    |        | 389    |        | 185    |        | 46     |        | 13     |        | 4      |        |       |        |      
|Mobile telephony, GSM churn (%)                                                          |                                         | 10     |        | 11     |        | 12     |        | 8      |        | 8      |        | 9      |        | 14     |        | 12     |        | n/a    |        | n/a   
|Mobile telephony, ARPU (SEK)                                                             |                                         | 227    |        | 252    |        | 262    |        | 285    |        | 308    |        | 332    |        | 362    |        | 345    |        | 366    |        | 399   
|Broadband ADSL/LAN, subscriptions (thousands)                                            |                                         | 526    |        | 394    |        | 317    |        | 194    |        | 27     |        | 2      |        |       |        |       |        |       |        |      
|Broadband dedicated access, subscriptions (thousands)                                    |                                         | 7      |        | 5      |        | 4      |        | 3      |        | 2      |        | 1      |        | 1      |        | 1      |        | 1      |        | 1     
|Internet dial-up access, subscriptions (thousands)                                       |                                         | 817    |        | 823    |        | 763    |        | 747    |        | 687    |        | 598    |        | 439    |        | 230    |        | 105    |        | 9     
|Fixed telephony, PSTN subscriptions (thousands)                                          |                                         | 5,390  |        | 5,493  |        | 5,579  |        | 5,663  |        | 5,783  |        | 5,889  |        | 5,965  |        | 6,010  |        | 6,032  |        | 6,013 
|Fixed telephony, ISDN channels (thousands)                                               |                                         | 725    |        | 790    |        | 836    |        | 922    |        | 838    |        | 630    |        | 424    |        | 244    |        | 129    |        | 49    
|Finland                                                                                  |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Mobile telephony, total subscriptions (thousands)                                        |                                         | 2,297  |        | 2,428  |        | 2,790  |        | 239    |        | 149    |        | 33     |        | 8      |        |       |        |       |        |      
|                                                                                         | of which Sonera                         |        | 2,297  |        | 2,428  |        | 2,490  |        |       |        |       |        |       |        |       |        |       |        |       |       
|Mobile telephony, outgoing traffic (millions of minutes)                                 |                                         | 4,820  |        | 4,743  |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, incoming traffic (millions of minutes)                                 |                                         | 2,147  |        | 2,090  |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, traffic per customer and month (minutes)                               |                                         | 253    |        | 232    |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, SMS messages (millions)                                                |                                         | 993    |        | 832    |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, GSM churn (%)                                                          |                                         | 29     |        | 17     |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, ARPU (EUR)                                                             |                                         | 38     |        | 38     |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Broadband, subscriptions (thousands)                                                     |                                         | 243    |        | 150    |        | 82     |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Internet dial-up access, subscriptions households (thousands)                            |                                         | 113    |        | 149    |        | 181    |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Fixed telephony, PSTN subscriptions (thousands)                                          |                                         | 525    |        | 570    |        | 503    |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Fixed telephony, ISDN channels (thousands)                                               |                                         | 215    |        | 234    |        | 219    |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Norway                                                                                   |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Mobile telephony, total subscriptions (thousands)                                        |                                         | 1,308  |        | 1,195  |        | 1,089  |        | 970    |        | 850    |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, traffic per customer and month (minutes)                               |                                         | 175    |        | 164    |        | 156    |        | 133    |        | 130    |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, SMS messages (millions)                                                |                                         | 1,171  |        | 1,043  |        | 756    |        | 501    |        | 302    |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, ARPU (NOK)                                                             |                                         | 339    |        | 342    |        | 330    |        | 310    |        | 308    |        |       |        |       |        |       |        |       |        |      
|Denmark                                                                                  |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Mobile telephony, total subscriptions (thousands)                                        |                                         | 1,115  |        | 472    |        | 421    |        | 288    |        | 263    |        | 170    |        | 112    |        |       |        |       |        |      
|Mobile telephony, SMS messages (millions)                                                |                                         | 2,542  |        | 1,041  |        | 175    |        | 61     |        | 39     |        | 23     |        |       |        |       |        |       |        |      
|Internet dial-up access, subscriptions (thousands)                                       |                                         | 43     |        | 28     |        | 34     |        | n/a    |        | n/a    |        | n/a    |        | n/a    |        | n/a    |        |       |        |      
|Cable TV, subscriptions (thousands)                                                      |                                         | 201    |        | 195    |        | 188    |        | 179    |        | 175    |        | 170    |        | 164    |        | 145    |        | 137    |        | 135   
|                                                                                         | of which Internet broadband (thousands) |        | 126    |        | 104    |        | 81     |        | 58     |        | 30     |        | 11     |        | 3      |        |       |        |       |       
|Fixed telephony, prefix and contract customers (thousands)                               |                                         | 212    |        | 172    |        | 223    |        | n/a    |        | n/a    |        | n/a    |        | n/a    |        | n/a    |        | n/a    |        |      
|Baltic countries                                                                         |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Mobile telephony, subscriptions, Estonia (thousands)                                     |                                         | 595    |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Fixed telephony, subscriptions, Estonia (thousands)                                      |                                         | 426    |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, subscriptions, Latvia (thousands)                                      |                                         | 649    |        | 534    |        | 447    |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Mobile telephony, subscriptions, Lithuania (thousands)                                   |                                         | 1,338  |        | 1,052  |        | 851    |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Fixed telephony, subscriptions, Lithuania (thousands)                                    |                                         | 819    |        | 828    |        | 936    |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Eurasia                                                                                  |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Mobile telephony, subscriptions (thousands)                                              |                                         | 3,866  |        | 2,385  |        | 1,614  |        |       |        |       |        |       |        |       |        |       |        |       |        |      
|Human Resources                                                                          |                                         |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|Number of employees as of December 31                                                    |                                         | 29,082 |        | 26,694 |        | 29,173 |        | 17,149 |        | 29,868 |        | 30,643 |        | 30,593 |        | 32,549 |        | 34,192 |        | 33,065
|Average number of employees during the year                                              |                                         | 25,381 |        | 26,188 |        | 17,277 |        | 24,979 |        | 30,307 |        | 29,546 |        | 31,320 |        | 33,930 |        | 34,031 |        | 32,825
|                                                                                         | of which, in Sweden                     |        | 10,948 |        | 11,321 |        | 12,593 |        | 20,922 |        | 25,383 |        | 25,414 |        | 27,540 |        | 30,474 |        | 31,290 |       
|                                                                                         | of which, in Finland                    |        | 6,750  |        | 6,408  |        | 1,142  |        | 775    |        | 999    |        | 662    |        | 521    |        | 421    |        | 178    |       
|                                                                                         | of which, in other countries            |        | 7,683  |        | 8,459  |        | 3,542  |        | 3,282  |        | 3,925  |        | 3,470  |        | 3,259  |        | 3,035  |        | 2,563  |       
|                                                                                         | of which, women                         |        | 11,427 |        | 10,936 |        | 7,546  |        | 9,196  |        | 11,521 |        | 11,268 |        | 11,486 |        | 13,703 |        | 12,416 |       
|                                                                                         | of which, men                           |        | 13,954 |        | 15,252 |        | 9,731  |        | 15,783 |        | 18,786 |        | 18,278 |        | 19,834 |        | 20,227 |        | 21,615 |       
|Salaries and remuneration (SEK in millions)                                              |                                         | 8,674  |        | 8,460  |        | 6,732  |        | 8,852  |        | 9,543  |        | 9,184  |        | 9,098  |        | 9,472  |        | 8,876  |        | 7,948 
|Employer's social security contributions (SEK in millions)                               |                                         | 1,902  |        | 1,950  |        | 1,804  |        | 2,614  |        | 3,055  |        | 2,895  |        | 2,762  |        | 2,807  |        | 2,719  |        | 2,606 
|Salaries and employer's social security contributions as a percentage of operating costs |                                         | 16.4   |        | 14.9   |        | 14.9   |        | 19.4   |        | 25.5   |        | 26.2   |        | 25.8   |        | 28.5   |        | 29.9   |        | 29.5  
|Net sales per employee (SEK in thousands)                                                |                                         | 3,228  |        | 3,147  |        | 3,443  |        | 2,290  |        | 1,784  |        | 1,764  |        | 1,583  |        | 1,346  |        | 1,247  |        | 1,187 
|Operating income per employee (SEK in thousands)                                         |                                         | 740    |        | 562    |        | -631   |        | 219    |        | 396    |        | 201    |        | 230    |        | 95     |        | 96     |        | 100   
|Change in labor productivity (%)                                                         |                                         | 10.8   |        | -4.9   |        | 53.5   |        | 31.9   |        | 8.3    |        | 17.9   |        | 20.2   |        | 8.4    |        | 5.4    |        | 9.1   
|Net income per employee (SEK in thousands)                                               |                                         | 511    |        | 347    |        | -467   |        | 75     |        | 339    |        | 143    |        | 160    |        | 65     |        | 69     |        | 76    

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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.

Non-recurring items

Non-recurring items 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 non-recurring. Comparable periods have not been restated.

Adjusted equity

Reported equity less the (proposed) dividend.

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.

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Acquisitions

Investments in goodwill and fair-value adjustments, shares, and participations.

EBITDA margin

EBITDA excluding non-recurring items expressed as a percentage of net sales.

Operating margin (EBIT margin)

Operating income expressed as a percentage of net sales.

Return on sales

Net income expressed as a percentage of net sales.

Total asset turnover

Net sales divided by the average balance sheet total.

Turnover of capital employed

Net sales divided by the average capital employed.

Return on assets

Operating income plus financial revenues expressed as a percentage of the average balance sheet total.

Return on capital employed

Operating income plus financial revenues expressed as a percentage of average capital employed.

Return on equity

Net income expressed as a percentage of average adjusted equity.

Equity/assets ratio

Adjusted equity expressed as a percentage of total assets.

Debt/equity ratio

Net interest-bearing liability divided by adjusted equity.

Interest coverage ratio

Operating income plus financial revenues divided by financial expenses.

Self-financing rate

Cash flow from operating activities divided by gross investments.

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 is based on the number of shares at the end of the period.

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Pay-out ratio

Dividend per share divided by basic earnings per share

ARPU

Average monthly revenue per user.

Churn

The number of post-paid customers that have left the company expressed as a percentage of the average number of post-paid customers.

Labor productivity

Year-on-year percentage change in the ratio of net sales at fixed prices to the average number of full-time employees.

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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Risk Factors

We operate in a broad range of geographic product and service markets in the highly competitive and regulated telecommunications industry. As a result, we are
subject to a variety of risks and uncertainties. Set forth below is a description of some of the factors that may affect our business, financial condition and results of operations.

Competition from a variety of sources, including current market participants, new entrants and new products and services, may adversely affect our results of
operations.

We
are subject to substantial and historically increasing competition and price pressure. Competition has led to an increased customer churn and a decrease in customer growth rates as
well as to declines in the prices we charge for our products and services and is expected to have similar effects in the future.

Virtually
all of our markets are characterized by direct and indirect competition. We have, for example, experienced significant competition in mobile voice services from new market
entrants such as Hi3G Access AB (operating under the brand name "3"), which owns a UMTS license in Sweden, Norway and Denmark. We are also experiencing increased competition from
non-traditional operators, including Mobile Virtual Network Operators (MVNOs), which are telecommunications service providers that typically do not own their own network infrastructure
but, rather, lease capacity from network operators. In addition, our fixed network businesses face competition from mobile operators as a result of the trend of traditional users of fixed network
services switching some or all of their demand to mobile phone services. This indirect competition is expected to increase as new services such as Internet telecommunications gain acceptance.

In
order to meet the increased competition we have launched a program to focus our service portfolio to reduce technical and organizational complexity, with the aim to seek growth in the
selected services and to achieve a competitive cost level. There is, however, a risk that we will not be successful in implementing our program due to operational or regulatory reasons or otherwise.

Further,
our International Carrier business has historically been subject to fierce competition and severe price pressure. Should competition increase and such severe price pressure
continue, we may
face problems in restructuring our International Carrier business and as a result we may incur significant restructuring costs.

We face structural impediments in continuing to grow our Nordic telecommunications business.

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 for many of our products and services will make it more
difficult for us to match our previous subscriber growth or to achieve growth rates that are comparable to less developed markets.

We operate in a highly 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 at both the national level and the transnational level, such as by the
European Union. If we are found not to have complied with applicable regulations, we may be subject to damage awards, fines, penalties, injunctions or suspensions. For example, in Finland we have
received claims for damages in substantial amount for alleged excessive mobile termination fees charged since 1997.

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

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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.

Competition
in fixed voice access in Sweden can reduce our revenues and profitability. We currently have approximately 95 percent of the consumer fixed voice access market in
Sweden, but in 2004 we opened up the fixed voice access market for competition by offering wholesale access services to other operators. Should the wholesale access services be regulated and required
to be offered on terms and conditions that do not provide an adequate return on our investments, our revenues and profitability could be negatively affected.

Further,
a new regulatory regime will enter into force in Finland in March 2005 whereby tariffs for calls from a fixed telephone to a mobile telephone will be set by the fixed
line operator and not, as is now the case, by the mobile operator. As we are mainly a mobile operator in Finland, the change is expected to have a negative impact on our revenues.

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 adversely affect our business and results.

For
further information regarding the regulatory regimes to which our business is subject, see "Information on the CompanyRegulation."

We have only limited control of our associated companies and the success of our investments in these companies depends on the actions of our
co-owners.

We
conduct some of our activities, particularly 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 and Lattelekom SIA in Latvia and, as a result, we have limited influence over the conduct of these businesses. Under the governing documents for
certain of these entities, our partners have control over or share control of key matters such as the approval of business plans and budgets, and decisions as to timing and amount of cash
distributions. The risk of actions outside our or our associated company's control and adverse to our interests or disagreement or deadlock is inherent in jointly controlled entities. In Russia for
instance, certain shareholders of MegaFon are involved in a dispute relating to the ownership of a 25.1 percent interest in MegaFon.

As
part of our strategy we may, where practical, increase our shareholdings in our associated companies. The implementation of such strategy, however, may be difficult due to a variety
of factors, including factors beyond our control, such as willingness on the part of other existing shareholders to dispose or accept dilution of their shareholdings and, in the event we gain greater
control, our ability to successfully manage the relevant businesses.

In
addition, the shareholding structure of our associated companies may change for reasons beyond our control. In Turkey, for example, regulatory actions affecting the other major
shareholder in Turkcell, may have an impact on the ownership structure of Turkcell.

We are subject to emerging market risks including that the value of our investments in telecommunications companies may be adversely affected by political,
economic and legal developments.

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 historically have been less predictable than in countries with more developed institutional structures. For example, the political situation in
each of the Eurasian countries in which Fintur has operations remains unstable. Each of these nations is

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experiencing,
or in the past experienced, financial difficulties, including weak local currencies and high external debt.

Other
risks associated with operating in emerging market countries include foreign exchange restrictions, which could effectively prevent us from receiving profits or selling our
investments. While none of the countries in which our international subsidiaries or associated companies are located currently have foreign exchange controls that affect us 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.

Changes in the economic, political, legal and regulatory environment and in our business plans or the business plans of our associated companies could cause us to
take charges or otherwise adversely affect our results of operations and financial condition.

Factors
generally affecting the telecommunications and technology markets, including significant declines in stock prices and market capitalizations of market participants, and changes
in the economic, regulatory, business or political environment, as well as our ongoing review and refinement of our business plans could adversely affect our affairs. In the future we may be required
to recognize impairment charges with respect to assets if our expectations of future cash flows attributable to these assets change, including but not limited to goodwill and fair value adjustments we
have recorded in the merger of Telia and Sonera, in our acquisition of NetCom, and in connection with other acquisitions we have made or may make in the future.

In
the past, we also 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. We may undertake similar initiatives in the future.

In
addition to affecting our results of operations, these actions 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 would have the effect of reducing, or possibly eliminating, our non-restricted reserves that are available to pay dividends.

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 networks. The
success of these investments will depend on a variety of factors beyond our control, including the availability of new and attractive services, the costs associated with providing these services, the
timing of their introduction and competition. For example, we cannot be certain that multimedia 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, including our UMTS networks.

Moreover,
competition in this market could prove to be intense as a result of (1) new entrants such as MVNOs, which typically do not have their own network infrastructure and thus
would not have our fixed cost burdens, (2) Wireless Local Area Network (WLAN) services, which are based on wireless short distance transmission networks and may be able to deliver wireless data
services at a lower cost than UMTS in concentrated areas, and (3) operators using non-UMTS technological standards to deliver competitive services.

Under
the terms of our UMTS licenses and the licenses of our joint venture UMTS investments, we have agreed to make significant investments in UMTS networks. If we or our our UMTS joint

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ventures
do not fulfill 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. For
example, we have significant ongoing investment and guarantee obligations in connection with our investments in Xfera Móviles S.A. For further information relating to our financial
obligations in connection with our international UMTS joint ventures, see "Report of the DirectorsLiquidity and Capital ResourcesContractual Obligations."

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 through our 50 percent owned associated company Svenska UMTS-nät AB, which has rights to the Swedish UMTS license
originally granted to Tele2.
We have made significant investments in and financial commitments to this venture. As this is a jointly controlled venture, there is a risk that the partners may disagree on important matters,
including the funding of the company. This risk may be magnified because TeliaSonera and Tele2 are significant competitors. A disagreement or deadlock regarding the company or a breach by one of the
parties of the material provisions of the cooperation arrangements could 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.

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 results of operations.

Our
consolidation strategy entails a variety of risks that could negatively affect our business, our results of operations and our financial position. For example, due to competition in
the identification of acquisition opportunities or strategic partners, we may make an acquisition or enter into a strategic alliance on unfavorable terms. There are also the risks that we will not be
able to successfully integrate and manage any acquired company or strategic alliance, 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 a limited number of suppliers for the provision of important equipment and services.

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 in
Sweden and Finland. The limited number of suppliers of these services and, the terms of our arrangements with current and future suppliers, may adversely affect us, including by restricting
operational flexibility.

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MegaFon, our associated company operating in Russia, may not obtain future financing on satisfactory terms and may be adversely affected by weaknesses in its
internal controls.

MegaFon,
a GSM operator in Russia in which we hold a 43.8 percent interest, may have to secure additional financing if it is to implement its current strategy of becoming a
provider of nationwide GSM services in Russia. 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 future financing. If MegaFon is unable to secure such financing on satisfactory terms or if the company is adversely affected by weaknesses in its internal controls, this may
adversely affect MegaFon's growth prospects as well as the value we derive from our investment.

Our consolidated revenues and profitability may decrease if the currencies in which we derive revenues 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 have in the past been relatively volatile and may therefore experience significant fluctuation against the Swedish krona. Any loss in value
of any such currencies against the Swedish krona will have a negative impact when 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 eight to nine years from 2002 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 in 2002 and 2004. There can be no assurance
that we will be able to use these tax assets 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 remuneration packages. If we cannot implement competitive remuneration packages, 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 with time and as new products are introduced. 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, may
result in significant restrictions on the location and operation of base stations or could subject us to claims for

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

Our affairs and the market prices of our shares could be influenced significantly by actions of the Kingdom of Sweden and the Republic of Finland, whose interests
may be different from other shareholders.

The
Kingdom of Sweden holds approximately 45 percent and the Republic of Finland holds approximately 13.7 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, 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.

In
addition, the Kingdom of Sweden is not under any contractual commitment that would restrict its ability to sell any shares and the republic of Finland has agreed not to sell any
shares in TeliaSonera for a period of 180 days as from December 8, 2004 without a prior written consent of Morgan Stanley & Co. International Limited. 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.

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Supplemental Information

The following information is provided for purposes of complying with certain requirements of the Form 20-F which are not satisfied in full by
the information in the Swedish Annual Report.

Item 3.A Selected Financial DataExchange Rates

The following table provides information with respect to the exchange rate for SEK per USD 1.00, based on the noon buying rate for cable transfers in SEK as
certified for customs purposes by the Federal Reserve Bank of New York. On March 31, 2005, the noon buying rate for SEK was USD 1.00 = SEK 7.0640. The annual average is computed
using the noon buying rate on the last business day of each month.

|USD/SEK exchange rate |  | Average |  | High    |  | Low    |  | Period end
|--------------------- |  | ------- |  | ------- |  | ------ |  | ----------
|Year                  |  |         |  |         |  |        |  |           
|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    
|2004                  |  | 7.3320  |  | 7.7725  |  | 6.5939 |  | 6.6687    
|Month                 |  |         |  |         |  |        |  |           
|October 2004          |  | 7.2453  |  | 7.3825  |  | 7.0723 |  | 7.0974    
|November 2004         |  | 6.9257  |  | 7.1406  |  | 6.7007 |  | 6.7363    
|December 2004         |  | 6.6969  |  | 6.8043  |  | 6.5939 |  | 6.6687    
|January 2005          |  | 6.8991  |  | 7.0069  |  | 6.6855 |  | 6.9779    
|February 2005         |  | 6.9800  |  | 7.1114  |  | 6.8275 |  | 6.8275    
|March 2005            |  | 6.8954  |  | 7.0716  |  | 6.7312 |  | 7.0640    

The
effects of exchange rate fluctuations are described in section "Financial Risk Management" in Note 30 to "Consolidated Financial StatementsIFRS."

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Item 4.C Organizational Structure

TeliaSonera AB is the ultimate parent company of the TeliaSonera Group and is also responsible for carrying out the 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
January-December 2004
(SEK in millions) |    
|------------------------------------ |  | -------------------------- |  | ------------- | --- | ---------------------------------------------------------- | ---
|Parent company                       |  |                            |  |               |     |                                                            |    
|TeliaSonera AB                       |  | Stockholm, Sweden          |  |              |     | 4,709                                                      |    
|Significant subsidiaries             |  |                            |  |               |     |                                                            |    
|TeliaSonera Sverige AB               |  | Stockholm, Sweden          |  | 100.0         |     | 32,440                                                     |    
|TeliaSonera Finland Oyj              |  | Helsinki, Finland          |  | 100.0         |     | 12,602                                                     |    
|NetCom AS                            |  | Oslo, Norway               |  | 100.0         |     | 6,142                                                      |    
|Fintur Holdings B.V.(1)              |  | Rotterdam, the Netherlands |  | 74.0          | (1) | 4,082                                                      | (2)
|TeliaSonera Mobile Networks AB(2)    |  | Nacka, Sweden              |  | 100.0         |     | 3,884                                                      | (3)
|Sonera Mobile Networks Oy            |  | Helsinki, Finland          |  | 100.0         |     | 2,708                                                      |    
|Latvijas Mobilais Telefons SIA       |  | Riga, Latvia               |  | 60.3          | (1) | 2,010                                                      |    
|UAB Omnitel                          |  | Vilnius, Lithuania         |  | 100.0         |     | 2,002                                                      |    
|AB Lietuvos Telekomas(1)             |  | Vilnius, Lithuania         |  | 60.0          |     | 1,796                                                      | (2)
|Auria Oy(1)                          |  | Loimaa, Finland            |  | 100.0         |     | 1,327                                                      | (2)
|TeliaSonera International Carrier AB |  | Stockholm, Sweden          |  | 100.0         |     | 1,173                                                      |    
|Sonera Carrier Networks Oy           |  | Helsinki, Finland          |  | 100.0         |     | 1,103                                                      |    
|AS EMT                               |  | Tallinn, Estonia           |  | 50.3          |     |                                                           | (4)
|Elion Ettevõtted AS                  |  | Tallinn, Estonia           |  | 50.3          |     |                                                           | (4)

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Item 7.A Major Shareholders

TeliaSonera terminated its ADS program in the first quarter of 2005 and, consequently, TeliaSonera only has one class of shares.

Based
on information received from the Finnish and Swedish book entry depository systems, Finnish Central Securities Depository Ltd and VPC AB, we estimate that as of
December 31, 2004, there were approximately 950 registered holders of TeliaSonera shares in the United States.

Item 7.B Related Party Transactions

We provide services to and obtain services and products from the Swedish and Finnish States, who are also our largest shareholders, on commercial terms. We have
also purchased from and provided telecommunications and related services to certain of our associated companies on commercial terms. We have also provided guarantees on behalf of, and pledged our
shares in, Svenska UMTS-nät, in which we have a 50 percent interest, and we have interest-bearing and non-interest bearing claims on

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MegaFon,
a company in which we hold a participating interest. For additional information on these related party transactions, see Note 9 to our consolidated financial statements.

Item 8.B Significant Changes

No significant change has occurred since the date of our consolidated financial statements included in this annual report.

Item 9.A Offer and Listing Details

|               |  | Stockholm Stock Exchange(1) (SEK) |  | Helsinki Stock Exchange(2) (EUR)
|-------------- |  | --------------------------------- |  | --------------------------------
|
|
|Year           |  |                                   |  |                                 
|2000           |  | 94.00                             |  | 49.60                           
|2001           |  | 71.00                             |  | 36.00                           
|2002           |  | 48.60                             |  | 21.10                           
|2003           |  | 38.70                             |  | 23.70                           
|2004           |  | 42.20                             |  | 29.50                           
|2003           |  |                                   |  |                                 
|First Quarter  |  | 34.90                             |  | 23.70                           
|Second Quarter |  | 34.00                             |  | 24.00                           
|Third Quarter  |  | 36.50                             |  | 30.20                           
|Fourth Quarter |  | 38.70                             |  | 32.40                           
|2004           |  |                                   |  |                                 
|First Quarter  |  | 40.20                             |  | 32.00                           
|Second Quarter |  | 35.40                             |  | 29.50                           
|Third Quarter  |  | 36.90                             |  | 31.10                           
|Fourth Quarter |  | 42.20                             |  | 35.30                           
|2005           |  |                                   |  |                                 
|First Quarter  |  | 43.20                             |  | 38.60                           
|Month          |  |                                   |  |                                 
|October 2004   |  | 38.90                             |  | 35.30                           
|November 2004  |  | 42.20                             |  | 38.00                           
|December 2004  |  | 41.60                             |  | 37.90                           
|January 2005   |  | 41.20                             |  | 38.60                           
|February 2005  |  | 43.20                             |  | 39.20                           
|March 2005     |  | 42.20                             |  | 38.70                           

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Item 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 Companies Registration Office under the
company registration number 556103-4249.

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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."

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.

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

U.S. holders of TeliaSonera shares 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.

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. 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

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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 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.

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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.

Item 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. 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. 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 and
further to SEK 5.3 billion in September 2003 and February 2005, respectively, 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 2.65 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.

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Item 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.

Item 10.E Taxation

The following summary is based on the tax laws of Sweden and the United States and the U.S.Sweden Tax Treaty 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 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 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
Board has the intention to propose to the AGM a repurchase of shares. In case the AGM decides in accordance with the Board's proposal, a description of tax aspects for the
shareholders is included into the document describing the repurchase offer.

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

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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.

United States Federal Income Taxation

The following is a description of the material U.S. federal income tax consequences of the ownership of our shares. The description addresses only the U.S.
federal income tax consequences to U.S. holders (as defined below) who hold our shares as capital assets. This section does not apply to you if you are a member of a special class of holders subject
to special rules, including:



Moreover,
this summary does not address the U.S. federal estate and gift or alternative minimum tax consequences of the ownership of shares. 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 on the date hereof. All of the foregoing is subject
to change, possibly with retroactive effect.

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For
purposes of this summary, a "U.S. Holder" is a beneficial owner of our shares that, for U.S. federal income tax purposes, is:



If
a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds our 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.

You should consult your own tax advisor regarding the United States federal, state and local and the Swedish and other tax consequences of owning and disposing of
shares in your particular circumstances.

Taxation of Dividends

Under the United States federal income tax laws, and subject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any
dividend we pay out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) is subject to United States federal income taxation. If you are a
noncorporate U.S. holder, dividends paid to you in taxable years beginning before January 1, 2009 that constitute qualified dividend income will be taxable to you at a maximum tax rate of 15%
provided that you hold the shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding period
requirements. Dividends we pay with respect to the shares generally will be qualified dividend income.

You
must include any Swedish tax withheld from the dividend payment in this gross amount even though you do not in fact receive it. The dividend is taxable to you when you receive the
dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other
United States corporations. The amount of the dividend distribution that you must include in your income as a U.S. holder will be the U.S. dollar value of the Swedish kroner payments made, determined
at the spot Swedish kroner/U.S. dollar rate on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any
gain or loss resulting from currency exchange fluctuations during the period from the date you include the dividend payment in income to the date you convert the payment into U.S. dollars will be
treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the
United States for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings and profits, as determined for United States federal income tax purposes, will be
treated as a non-taxable return of capital to the extent of your basis in the shares and thereafter as capital gain.

Subject
to certain limitations, the Swedish tax withheld in accordance with the Treaty and paid over to Sweden will be creditable against your United States federal income tax liability.
Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the maximum 15% tax rate. To the extent a refund of the tax withheld is available to
you under Swedish law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against your United States federal income tax liability

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Dividends
will be income from sources outside the United States. Dividends paid in taxable years beginning before January 1, 2007 generally will be "passive" or "financial
services" income, and dividends paid in taxable years beginning after December 31, 2006 will, depending on your circumstances, be "passive" or "general" income which, in either case, is treated
separately from other types of income for purposes of computing the foreign tax credit allowable to you.

Distributions
of additional shares to you with respect to shares that are made as part of a pro rata distribution to all of our shareholders generally will not be subject to United
States federal income tax.

Sale or Exchange of Shares

Subject to the PFIC rules discussed below, a U.S. holder who sells or otherwise disposes of shares will recognize capital gain or loss for United States federal
income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in your shares. Capital gain of a noncorporate
U.S. holder that is recognized before January 1, 2009 is generally taxed at a maximum rate of 15% where the holder has a holding period greater than one year. The gain or loss will generally be
income or loss from sources within the United States for foreign tax credit limitation purposes.

Passive Foreign Investment Company Rules

We believe that our shares should not be treated as stock of a PFIC for United States federal income tax purposes, but this conclusion is a factual determination
that is made annually and thus may be subject to change. If we were to be treated as a PFIC, gain realized on the sale or other disposition of your shares would in general not be treated as capital
gain. Instead, if you are a U.S. Holder, you would be treated as if you had realized such gain and certain "excess distributions" ratably over your holding period for the shares and would be taxed at
the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each
such year. With certain exceptions, your shares will be treated as stock in a PFIC if we were a PFIC at any time during your holding period in your shares. Dividends that you receive from us will not
be eligible for the special tax rates applicable to qualified dividend income if we are treated as a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable
year, but instead will be taxable at rates applicable to ordinary income.

Item 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 or obtained by mail upon payment of prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information. Copies may also be
obtained from the SEC website at http://www.sec.gov.

Item 15. Controls and Procedures

(a)Disclosure Controls and Procedures.Our Chief Executive Officer and our Chief Financial officer, after evaluating the
effectiveness of the Group's disclosure controls and procedures (as defined in US Exchange Act Rules 13a-15(e)) as of the end of the period covered by this
Form 20-F, have concluded that, as of such date, the Group's disclosure controls and procedures were effective.

(b)Internal Control over Financial Reporting. There were no changes in the Group's internal control over financial reporting
that occurred during the year ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Group's internal control over financial reporting.

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Item 16.C Principal Accountant Fees and Services

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.

In
2004, one of our former auditors, Ernst & Young, disclosed to us that an affiliated firm had provided services for one of our subsidiaries that may have been prohibited by the
SEC's auditor independence rules. The aggregate fees for the service were less than USD 7,000 each year during 2001-2004. The audit committee reviewed the information provided by
Ernst & Young and determined that it was reasonable to conclude that Ernst & Young's independence was not affected by this matter.

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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.

|              |  | TELIASONERA AB
|------------- |  | --------------
|April 7, 2005 |  | By:           
|              |  | By:           

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SECURITIES AND EXCHANGE COMMISSION  Washington D.C. 20549    TELIASONERA AB  Exhibits to Form 20-F

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