Telenor Buys Serbian Phone Network

August 2006

STOCKHOLM -(Dow Jones)- Norwegian telecommunications operator Telenor Monday said it has won an auction in Serbia to buy a 100% share of the mobile operator Mobi 63, one of two mobile operations in Serbia.

Telenor said its bid, EUR1.51 billion, secures a 100% share of Mobi 63, and a 10 year license for GSM 900/1800 and 3G operation for the company, subsequently renewable for a successive 10 year period on application.

"We are naturally excited at expanding our footprint and adding this new company to the Telenor group. Serbia has long been an interesting market for us," said Jon Fredrik Baksaas, Telenor president and chief executive.

"The acquisition of Mobi 63 will allow us to further our aim of creating a strong Telenor operational hub in this prioritized geographical area with long-term synergies across the companies," Baksaas said.

At the end of 2005, Mobi 63 had a reported customer base of around 2.5 million, an active customer base of around 2.1 million and a market share of around 45%.

Reported network coverage is about 90% of the territory and over 95% of total population. According to Telenor, estimated revenues for 2005 were around EUR233 million with an earnings before interest, taxes, depreciation and amortization, or EBITDA, margin of about 53%. EBIT for 2005 was around EUR96 million and CAPEX for 2005 was EUR44 million. Mobi 63 is debt free, Telenor said, and has around 950 employees.