Millicom

Hans-Holger Albrecht, President & CEO

A diversifying Digital Lifestyle leader in

Internet, Media and Mobile Financing

Revenues $bn

3,6

4,8

2009 2012

EBITDA $bn

1,5

2,1

2009 2012

+35% +36%

Cash Flow $m

456

981

2009 2012

+115%

273m population coverage with 47m mobile

customers

#1 or #2 market position in 12 out of 13

countries in Latin America & Africa

Leading Cable and Broadband companies

in 5 countries

Largest Internet company in Paraguay

Leading Internet company in Latin America

and Africa

This is Millicom

Millicom: Long standing track record in execution

Voice ARPU erosion

Little voice market penetration gain left

Expensive handset subsidies on post-paid data/smartphones

Consumer demand for digital services (music, video, apps)

Trends

Market changes challenge our growth prospects so we have to

accelerate our transformation

Exploding demand for mobile internet

24

47

2012 2015

Mobile BB subscribers

m

+97%

Exploding demand for mobile payments

Strong demand growth for Pay TV Strong macro environment

17

70

2012 2015

MFS subscribers

m

+307%

7

10

2012 2015

Pay TV subscribers

m

+45%

7%

12%

Population

GDP percapita

GDP per capita, Population growth ‘12-‘15

In %

Source: IMF, Millicom

Good news is that we have huge, immediate opportunities for growth

in our markets

Elevate Tigo from a telecommunications to a digital

lifestyle brand by becoming an integral part of our

consumers’ lives in a complete, helpful and

delightful way

Source: Millicom

The Tigo brand

Feature phone

Old world Telco

Fixed & mobile

internet

Content &

Entertainment Digital commerce

& services

Tablet & PC

Connected

TV

Smartphone

New world: Digital Lifestyle company

Increased stickiness

Higher share of wallet

Millicom has the payment mechanism

Increasing our focus on consumer demand for a digital lifestyle

Communication 72%

Information 11%

Entertainment 5%

Solutions 3%

MFS 1%

Cable 8%

Revenue contribution by category %, 2008

Revenue contribution by category %, 2012

Communication 95%

Information 1%

Entertainment 3%

Cable 1%

Millicom's DNA is an enabler of Digital Lifestyle in emerging countries

This is an evolution not a revolution

Cable

Building a

$2bn

Business

Tapping into

unique LatAm

TV and

Broadband

opportunity

MFS

Creating a

Blockbuster

Leveraging

consumer reach

to lead in high

growth mobile

financial

services

Mobile

From Volume

to Value

Building a

sophisticated,

value-oriented

mobile access

business

Commerce

& Services

Investing in

Growth

Investing in

high growth

internet

models in the

developing

world

Cost &

Capex

Optimization

Maximizing

efficiency

Relentless

focus on

streamlining

opex & capex

at central and

country level

$4,8bn $9bn

2012 2017

+ $0.9-1.3bn + $1.6-2.4bn + $0.6-1bn + >$1bn

Our mid-term strategy will rest on 5 pillars

Mobile

Source: Millicom

Macroeconomic and

Demographic Growth

Population, urbanization and GDP per capita are growing in every region

Both the addressable market and services penetration are expected to

expand

Shift from Voice to

Data

Changing customer

behaviour

We are consumer-centric and our customers are demanding an

increasingly diversified product offering

Trade channels are evolving and we reach customers anytime,

anywhere

Evolution of our

business model

A new world with larger than ever offer of devices running applications,

services, entertainment, financial and multiple other services

Data monetization is the key to future success

Demand for data is expected to increase; to some extent at the expense

of voice ARPU

1

2

3

4

There are 4 key drivers for the mobile business going forward

CAM 179

203

64 69

29 32

2012 2013 2014 2015 2016 2017

SAM

CAM

Africa

1,0

2012 2013 2014 2015 2016 2017

SAM

Africa

m, Millicom mobile footprint, 2012-2017

Note: Weighted average for countries in which Millicom has mobile

Source: IMF, Millicom

+ 4-5pp increases in urbanization

Market growth

&

Service penetration growth

Market growth

&

ARPU growth

Population development

Indexed to 100, Millicom mobile footprint, 2012-

2017

GDP per capita development

Macro economic and Demographic Growth

Shift from Voice to Data

95

100

119

70

80

90

100

110

120

130

Q1-12 Q2-12 Q3-12 Q4-12 Q1-13

Mobile

Digital

Mobile

Voice

Q1 10=1

Traffic growth (x factor)

1

2

3

4

5

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Revenue Traffic

Mobile revenue growth (year on year)

Acceleration of the Voice to Data transition- Record mobile data growth customers’ growth in Q1 2013

Good monetization of traffic growth: Data revenue and traffic growth are highly correlated

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

Q2 2012 Q4 2012

Changing customer behavior

Audio streaming traffic as % of total traffic

Video streaming traffic as % of total traffic

App download traffic as % of total traffic

80%

0%

5%

10%

15%

20%

25%

30%

Q4 2011 Q4 2012

50%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

Q2 2012 Q4 2012

228%

1/3 of total data

traffic +/-

Source: Millicom

Evolution of our Business Model

Evolving mass market shopping experience Serving the rising middle class

From mobile top-up to…

Pre-paid service bundles

Electronic mobile top up

Tigo Cash

Rising Middle class

Below $60 quality smartphones are available

Millicom provides technology and education to

new customers

1 2 3

1

2

3

Smartphone fairs

Mobile smartphone showcase

Cable &

Digital Media

Further development of our cable business can be a major driver

of Millicom’s growth

High-growth markets

Strong growth of cable businesses, driven by both the uptake of i) Pay TV and ii)

fixed broadband access

Under-served markets with only low quality/high price fixed line telco offers

Highly fragmented cable TV markets, offering possibilities for consolidation. No

strong competition

High strategic fit

with existing

business

Realizable synergies between fixed and mobile businesses

Offer a complete end-user product portfolio with both cable and mobile

Opportunity to grow the corporate business through the addition of fixed

Significant expertise in the management of cable, cable deployment, content and

sales already within the business

Initial success

clearly indicates we

can do much more

Healthy growth of the cable business since 2010

Successful integration of new acquisitions in Paraguay and Guatemala

Proven successful green field expansion in Guatemala

Source: Millicom

And our existing cable business is already delivering strong growth

Revenue and EBITDA development1

m$, 2010-2012

Cable home revenue has grown at

18% CAGR over the last three years

Growth is driven by the expansion of

the customer base

Low existing fixed penetration provides

ample opportunity for further growth

Current focus on customer growth,

which has been achieved with stable

margins

Notes: 1) Excludes corporate revenues, pro forma data

Source: Millicom

Revenue

EBITDA

166 185 231

2010 2011 2012

Customer and ARPU development1

k subs, $, 2010-2012

453 471

685

26 29 27

2010 2011 2012

Subs ARPU

Cross selling and churn reduction opportunity between

cable and mobile

Source: Company information, Millicom, Solon

Early results of conversion offers encouraging,

although testing and optimization of offers ongoing

685k Tigo cable HHs

19m Tigo mobile subs

1.2m Tigo cable & non-

Tigo mobile users

500k Tigo mobile & non-

Tigo cable subs in

HPs

1. Cross-selling opportunity between mobile &

cable

2. Churn reduction opportunity

from multiplay

33,0%

18,5% 16,5%

7,8%

1-play 2-play 3-play 4-play

76% churn

reduction

Churn levels of different product

bundles % annualized churn

Bundling increases lock-in effect of

customers: decreases churn

Source of significant opportunity for

both our mobile and cable businesses

Addressable

market Potential gains

for MIC

Sell mobile

to cable

subs

Sell cable

to mobile

HHs

Cable & Digital Media- Pay TV and broadband access provide strong

growth opportunities

Pay TV market potential % of HH with Pay TV subscription, 2012

Fixed broadband market potential % of HH with broadband subscription, 2012

Source: Millicom, Dataxis

Target range Target range

10%

17% 21% 21%

29% 30%

44%

49%

62%

BO PY GT SV HN BR CR CH AR

3% 5%

7% 8%

10%

30%

43% 44% 47%

PY BO HN GT SV BR CR AR CHCR BO SV GT HN PY BO PY GT HN SV CR AR CL BR

BR AR CL

MIC

weighted

average

Strong penetration growth potential with Pay TV penetration at ~20%, Fixed broadband

penetration at ~10%

Mobile

Financial

Services

Key messages

All focus now on replicating success in all markets

Speed and penetration growth is now number one priority

In lead markets, gross margins are improving each quarter

3

We are on track to building a blockbuster

MFS is already a huge success in Tanzania and further success stories are emerging in

Paraguay and Rwanda

We have already captured a higher market share than in mobile voice

MFS could be a $1bn revenue opportunity

2

MFS is a huge opportunity for us

In Millicom markets, 80% of the population is unbanked

MFS penetration is 8% of Millicom mobile customers’ base at YE2012

1

The MFS market is growing strongly, especially in Africa

Notes :1) 2017 own projection based on growth implied by Gartner projection Source: Gartner, World Bank, Innopay, Solon

Global MFS users1

m, 2011-2016

Global MFS transaction volume1

$bn, 2011-2016

106 172

244 347

494

617

878

2011 2012 2013 2014 2015 2016 2017

CAGR

42%

161 212

261 320

393 448

550

2011 2012 2013 2014 2015 2016 2017

CAGR

23% MFS market is in a very early stage of

development – especially in Africa the

market is expected to grow

exponentially

Key growth drivers

Focus of mobile operators and

other players developing MFS

market

Low density of banking

infrastructure

International remittance flows

Opportunity is to bank the

unbanked populations

Africa

“Mobile money could become a general

platform that transforms entire economies.”

Kevin Donovan, World Bank

Mobile Financial Services - To bank the unbanked

MFS market size Millicom countries

bn$, at market maturity

30%

Notes: 1) In constant USD

Source: Economist, Safaricom, Millicom,

Market-

share

Micro-

insurance

Microcredit

Salary

payments

Saving accounts

Merchant

payments

Utility

bills

Aid

payments

Online

payments

International

remittances

Self top up Money transfer

Millicom MFS revenue

potential in 2017:

$600-1,000m1

Online

Our Online business will reach over $1bn in revenues

Source: Company information, Millicom, Solon

Latam Africa

Launched businesses

eCommerce in Latin America and Africa could be worth

over $50bn if they develop similarly to the US

eCommerce market development

in the US 10 years ago… bn$1, 2002-2007

1) Retail only, excl. travel; 2) For translation of the market potential also population and GDP per

capita were accounted for besides internet penetration rates

Source: Worldbank, IMF, Comscore, eMarketer, Millicom, Solon

…could translate into a >50bn$

market opportunity in LatAm and

Africa2 bn$, 2012-2017

42 53

67 82

102

123

2002 2003 2004 2005 2006 2007

15 20

28 35

46 56

2012 2013 2014 2015 2016 2017

From US and European examples we know:

The market segments and business

models that work best and are most

attractive

How to run e-commerce businesses and

what their key success factors are

Ultimate success in the e-commerce market in

Africa and Latin America will depend on

Selecting the right segments / business

models

Executing fast and in the right way

Having a first mover advantage

E-Commerce will be an enormous opportunity in all our markets

Source: Millicom, Solon

Everyone will buy

online

In mature markets currently mainly via PC

In emerging and mature markets development will happen soon,

and mainly via smartphone and other mobile devices

Retail opportunity

in developing

markets is huge

People have less choice than in mature markets - less offline

retail, fewer category killers offline, fewer chains, fewer malls

Online retail will take a bigger market share of total retail than

online retail in mature markets

Every market

develops

From craigslist, free online classifieds, where no payment or

complex infrastructure is needed

To eBay, the more advanced online flea market model with

integrated payment

To organized online retail, where people value reliable delivery,

convenience and choice

Core beliefs

The biggest opportunities in our JV with Rocket Internet are

e-commerce, marketplaces, and lead generation

Everyone will buy

online

Underserved and rapidly developing markets

Fragmented market landscape, no dominant players yet

Rocket Internet is a proven expert in launching e-Commerce

platforms

Retail opportunity

in developing

markets is huge

Synergies with mobile business through expanded customer reach

via SMS, care, BTL cross-promotion

High margin business as no costs related to inventory or supply

chain

Very scalable business model

Every market

develops

High margin business as no costs related to inventory or supply

chain

Allows for C2C business, which represents a large share of

commercial interaction in developing countries

Likely to benefit from trend towards social online activity

E-Commerce

Lead generation

Marketplaces

The opportunity

Source: Company information, Millicom, Solon

Two Rocket Internet ventures show how successful we are

at growing new businesses

Outdoor and sports retailer

Founded in 2011

Already #1 online outdoor sports

retailer in Brazil

Boost from football World Cup 2014

and Olympics 2016

26 173

430

724

1 022

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012

Avg daily orders Net revenue

Net revenue and average daily orders # of orders, Q4 2011-2012

KANUI

Fashion and merchandise

retailer – Zalando and

Amazon model

Founded in 2012

20 147

348 497

Q1 2012 Q2 2012 Q3 2012 Q4 2012

Avg daily orders Net revenue

Net revenue and average daily orders # of orders, 2012

Jumia

Source: Millicom, Solon

Avg growth

pm

150%

Avg growth

pm

142%

Significant synergy potential among Millicom’s pillars

MFS

Commerce

& Services

Mobile

Cable

Synergy potential among

Millicom’s pillars

Source: Millicom

1 2

4 5

3

Leveragable assets & capabilities

1 Brand, customer base, distribution network,

CRM, billing, backhaul, content

2 Brand, customer base, distribution network,

CRM, billing, mobile network

3 Customer base, distribution network, CRM,

billing, mobile network

4 Connectivity drives commerce, Commerce &

Services customer reach

5 Billing, Commerce & Services customer reach

Cost & Capex Optimization

Ambition level 2017- excluding Online

Source: Millicom

Achievement 2012 Ambition 2017

Revenue 8pp growth > $9bn

EBITDA margin 40% after Corporate

Costs

Stabilize above 35%

after Corporate Costs

Capex/revenues 19% Below 15% from

2016 and onwards

ROIC 24.7% >25%

Share of non

voice/digital ~ 30% Over 50%

Cash generation $750m > 1.2 bn

How we do it: The basic principles behind realizing our growth ambitions

Guiding Principles

Provide a clear long-term vision and strategy

Set long term financial and non-financial goals

Set and define investment priorities

Structure follows strategy: Business unit

organization

Enable support and value creation at the

operations

Empowerment of GM in countries

Professionalize talent management

Invest in a new and more diverse set

of skills and expertise

Entrepreneurship, agility, speed

Follow the “Golden Rules”

Focus on long-term value

creation

Strategy

Organization

Structure Role of the HQ

Culture

Incentives Mode of work

People

Skills Expertise

Source: Millicom

This is Millicom

Millicom strategy rests on five pillars: mobile, cable & digital media, MFS,

Online, supported by continued focus on costs and capex optimization

3

Millicom empowers its markets, invests in new skills and builds further on its

entrepreneurial roots

4

Millicom has the ambition to double revenues over 5 five years to $9 billion,

with an EBITDA margin around 35%

2

Millicom is evolving from a mobile voice company into a digital lifestyle leader

dedicated to emerging markets

1

Thank You!

Questions & Answers