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Executives

Emily Hunt – IR Officer

Mikael Grahne – President and CEO

Ricardo Maiztegui – Chief Commercial Officer, Latin America

Tom Gutjahr – Chief Commercial Officer, Africa

Julien Guth – Innovation Manager, Africa

Gloria Ortega – CEO, Millicom International Cellular SA, Colombia

Esteban Navarrete – Home Business

Marcelo Cataldo – Chief Officer, Solutions Latin America

Percy Grundy – Head of Mobile Financial Services

Max Leiva – Chief Technology Officer

Enrique Aznar – Chief Integrity Officer

François-Xavier Roger – CFO

Fernando Salvarezza – Regional Brand Manager, Latin America

Analysts

Sven Skold – Swedbank

Lena Osterberg – Carnegie

Andreas Joelsson – Seb Enskilda

Ric Prentiss – Raymond James

Erik Pers – Danske Markets

Craig Hackney – Religare Capital Markets

Stefan Gauffin – Nordea

Luigi Minerva – HSBC

Natasha Brigenski – Capital Group

Larry Gerston – Citi

Mauricio Fernandes – Bank of America, Merrill Lynch

Patrick O'Brien – Brown Advisory

Ben Gordon – GMT Capital

Cesar Tiron – Morgan Stanley

Mark Walker – Goldman Sachs

Millicom International Cellular SA (OTCPK:MIICF) Capital Markets Day Conference Call September 13, 2011 3:30 AM ET

Session 1

Emily Hunt

Good morning everybody. My name is Emily Hunt, I’m the Investor Relations Officer for Millicom. I’d like to welcome everybody here together with those who are joining us by the website this morning to Millicom’s Seventh Annual Capital Markets Day. Before we start I’d just like to draw your attention very briefly to our disclaimer regarding forward-looking statements, which you can see now on the screen.

In today’s 10 presentations, members of Millicom’s management team will be highlighting aspects of the group strategy and developments across the business under the theme Beyond Voice Building for the Future. There will be time for questions after each of the four sessions of presentations. And we’d be grateful if you keep your questions relevant to the presentations that you’ve had, that will be given in those sessions.

I’d now like to hand over to Mikael Grahne, CEO.

Mikael Grahne

Thank you Emily. And [technical difficulty] is a great place to be and it’s a great business. The business models are constantly evolving we are facing lots of challenges. And I think the successful companies operate in this arena, the ones who recognize early on these changes, adapt to them and help driving them. And I think, our performance record has tested that we belong in that category.

Let’s look at some of these evolutionary changes we’ve been facing here. Just a few things, growth factors, we used to grow from penetration market share. Increasingly our growth is coming now from data, mobile financial services and VAS. Penetration used to be all of our true level opportunities, now we are figuring out how we can extend our penetration profitable into the rural areas.

Pricing ARPU, the last years we’ve been suffering I would say double digit ARPU declines. I think that’s very clear signs that we have most of our stabilization in this arena, in South America the last five quarters, positive ARPU growth in Central America in the last two, clear signs of stabilization.

CapEx used to be about coverage, voice capacity, 3G initial CapEx. Now we’re looking much more into CapEx in IT and spectrum which will help the returns and efficiencies of our network.

Skills, naturally, you need a telecom skills, sales, marketing and distribution. In the future, we need the same but also when I emphasize on financial skills or new media skills or mobile health skills if that’s the arena we’re going to go into.

Customer profile historically outside Latin America, we were predominantly prepaid. Now with our data packages, we are moving increasingly into a postpaid customer base that’s fine to adapt and involve with the product services. Very simple in the past used to be single voice plus maybe some SMS packages. Now we have a huge amount of packet TIGOs as we call them multi-service products voice internet, entertainment and financial services, I’m going to talk a little bit about those.

And as and operate or it used to be all about single voice and SMS. In the future and already today, you can clearly say that we’re moving to a multi-plate platform of our internet fixed TV, mobile financial services. And you’ll see consolations as we’re having Central America where we have basically the full array of services in place. Someday we will have that in the rest of Millicom too.

So, by being quick, by adapting, by recognizing and by leading, you really can create revenue growth. I think 2002, our VAS revenues were less than $5 million and in 2011 we’re going to cross $1 billion. How did we do it? You know, recognized the opportunity, put dedicated resources and lead the evolution, very simple. How do we keep this growth going on into the future? That’s really unique skill marketing, the best distribution platform, smart pricing, understanding the customers’ perception on pricing and the right value added services product that meets our customers’ need.

How do you get there? It’s really the most important element that grey box there in the middle, be close to your customers. Truly understand their needs. And then develop package or products that meet these needs, what we call packet TIGOs. I will show you some examples of this, okay. For less than a $1, for example in Tanzania, you can buy 5 minutes on net or 100 SMS on net. And the target there would be young urban teenager, a young adult and people who are into intensive texting that is an example of this segment.

DRC, slightly different, slightly different, 45 SMS on that or 45 MMS, yes we sell MMS also in our markets. For $1, basically common package that fits all our customers, 50 minutes on net or DRC 100 SMS on net, Guatemala, 50 minutes on net with some SMS on top of it and so. And so, again, segment the products to key segments. When you got the $5 packages, you’re starting to get into the data world, social networks you see a few examples of it. $10, you start to see more it, more capacity and into you know, even getting into the social network side, again, targeted packages, to targeted customers. And when you go higher up, it just increases. But again, it’s all about being targeted.

So the most important part is to understand what makes sense to our customer but equally you have to understand the value in the cost context of the customer’s wallet, how do they look at our offerings from a value point of view, just a few examples there? For example, in Paraguay, you can buy 200 megabytes of data for one day or one pack of chewing gum, which one would you do as a customer. I think we look quite good in that choice.

If you look at Ghana, one soft drink for $0.80 or 40 on net. DRC one liter of gasoline or ten minutes of voice 60 SMS on net. Columbia, 2 cans of beer or TV on the mobile phone for a day. And Honduras, one movie ticket or Blackberry services for three days, this is our competition. This is what we compete for. And if we want to develop successfully new services, they have to make sense to our customer but they also have to be relevant to the other opportunities our customers have to spend money.

Final point here before I hand over to the people who really do all the work, I just talk about it. We basically are brutally focused around four categories, communication, information, entertainment and solutions. We have a regional capability in driving this. And we also have the same capability in the marketplace. And the reason that we are getting head or ahead here is that we really penetrate deep in every category and figure out the customer needs and develop and market the products that is satisfied their needs.

So, I will hand over to Ricardo and Tom. Each of them, lead the commercial operations. Ricardo in Latin America and Tom in Africa, and they’re going to talk a little bit more about the communication and entertainment category, Ricardo and Tom?

Ricardo Maiztegui

Good morning everybody. My name is Ricardo Maiztegui, I have been working for Millicom the last 13 years. I started as General Manager in Paraguay, later I became Area Manager of South America and now I’m the Chief Commercial Officer for Latin America. I would talk about communication and entertainment categories in Latin America and Africa together with Tom.

Okay, communication category is our biggest category of course. It contributes 74% of the total revenue. It’s growing at 8% rate last year. And penetration of the main product after voice is 51% in SMS. The gross margin is more or less the same that the average of the company. And the SMS gross margin is higher.

I would explain our strategy on the category. We see, we always say that we see ourselves as a fast moving consumer. And the strategy has evolved as the same as the Tylenol [ph] strategy. Many years ago, Tylenol had just one problem which is Tylenol. To fix one problem, which is one pain we have it, the audience was all the adults. And then, they discovered that they have an opportunity segment in the market. They discovered there are many other different things that to focus on and to solve customer needs.

So, they create their category stool. They make a broader value proposition for consumers to solve any kind of pain. They created categories which focus on which type of problem they are going to solve. They brought the segment from kids to adults. And they did the job on the packaging. So, in our business was more or less the same. One minute call used to be one minute call. But now depends on many different things and we have the opportunity to not to commonly decide [ph] the one minute and be different for every different segments.

And also the problem is much broader now, it is not, when you just make a call from your mobile, now is making calls, making SMS, accessing to internet, accessing to your Facebook from your mobile etcetera. So, we also have a broader value proposition that color all the products, communication and we offer the best quality for the best value for money. We also have our segments it’s in Arabic because Miguel doesn’t allow me to put the names of the segments, it’s confidential. We have our categories, communication, information, entertainment and service. And we also have our packet TIGOs that I will explain.

Okay. Now we have the segmentation. How do we segment our market? We first understand who is our consumer, and how he use the services because this is the information we have. So, we know, what do our consumer use voice SMS, data, when they use it, what time they access to Facebook, at what time they browse, at what time they chat with their friends and then how much they consume. Then we cross this information with the use and attitudes, so who are these people from a demographic point of view purchase power, which are their motivations. So, we make deep research on understanding the different type of people use our service.

And then we cross with lifecycle in the company and in the product because it’s not the same somebody that have just joined the company than the other one that is three year with us. He’s not the same a person that is starting to SMSing the other one that is now using full of our product, browsing and access to Facebook, to Twitter, whatever. So, we combine all the information and we come up with segments. Then, now we have, now that we have clear refined segment, now we have to serve each segment with a different approach.

So, in the past we have one minute call was the same for all. Now we discovered it’s very different when you have a hotspot need, let’s say a teenager needs to arrange a party for tonight, so he needs 100 minutes now, maybe tomorrow he will not be any minute, he just will SMS with the friends. But now he need to make many calls. So, he selects a hotspot need. So, what we create is the packet TIGOs. Packet TIGO is a package of one product or many products it could be a combination of them that offers significantly more value than the face value.

Let’s say that our face value for a minute in the prepaid plan is $0.10. So, with $1 you can make 10 minute, okay. So, in packet TIGO maybe 30 minutes is one third of the face value price. But this packet TIGO expires tonight. So, you have to use it 100% of the packet TIGO before tonight. So, for the consumer it has a huge value he can do much more than the normal price list. But for us it is very good too because not all 100% of the consumer use 100% of the package. So, as we see in the graphic, only 35% of the consumer use 100% of the package, then we have another 15% that us between 75% and 100% another 15% use between 50% and 75%. And 33% use less than 25% of the package. So, on the total average we take advantage too.

But the most important is that we prove that when our consumers start buying the proper package that we assigned for them, the ARPU goes up significantly between 6% to 18% in Guatemala for example. So, this is most important for us.

Okay, so at the end, the consumer is significantly happy or much more satisfied. We drive ARPU up. And now the challenge is the learning cube which is the best packet TIGO for every person at the proper time. And also we save a lot of money in advertising, because we don’t spend a single dollar on advertising on this. We do the offer, we sell the offer with our Tag and Trigger [ph]. What is the Tag and Trigger [ph]? We tag our consumers based on who they are, at which segment they belong, how do they pay postpaid, prepaid, when do they recharge. And then, when we have all the consumers tagged, when even happen, we send them with Trigger [ph] a sales process. We send them an SMS offer at the proper time to buy the proper product.

As an example, if I run out of balance, immediately I receive an SMS offering me many options. I can go and recharge from my credit card if I subscribe for it. I can recharge, I can ask TIGO to lend me some money. I can ask some balance to a friend. So, immediately they would send them an option to act on that moment. Or let’s say that I called to Mario, he has a very cool backtone. So, when I finish the call, I receive an SMS saying did you like the backtone you have just listened, just press star and you have it. So, it’s another example of Trigger [ph].

Why am I telling this? Because the Tag and Trigger [ph] have been shown much more effective than the typical massive brokers, it’s 10 times more effective. So, for us, it’s a very, very good tool to sell thousands of different packet TIGOs to the proper target at the right time they need it.

In the future on packet TIGOs, now we are starting on doing Trigger events not based on me but based on other consumers that are important like me. As an example, your son have just run out of balance. So, if nothing happened to him but something happened to my son, I can act on this.

Okay. In the category, our biggest challenge and opportunity for us is to convert SMS user into lifestyle user, what is this. Today, in the past we put a lot of effort making our consumers to do, to entering the SMS product, to use the SMS. We did a pretty good job because we have 50%, more than 50% penetration on the SMS, and we are taking into account that we have a literacy rates in our markets are pretty big and Central America is around 25% to 30%. So, having a 50% penetration is huge.

But what we discover is that the biggest opportunity is to compare SMS user which are people that use SMS time to time to lifestyle user are those people that use the SMS every day. So, it’s part of their lives. For every point that we convert, an SMS user to lifestyle user, we gain 5% of ARPU increase on the probe SMS and it’s a lot of money for us.

So, I will hand off to Tom Gutjahr, that is our Chief Commercial Officer for Africa that will tell experience on Africa in the communications category.

Tom Gutjahr

Good morning. I’m Tom Gutjahr, I’m in-charge of commercial operations in Africa. I’m going to give you some examples on what we’re doing in Africa in terms of smart pricing. First we will see a short TV spot which we have done in DRC. No, it’s going to come later, I’m sorry.

In their CB [ph] have launched something which we call the dynamic tariff, the dynamic tariff is a customer proposition where customers get a variable discount based on the sales sides where they are, meaning if there is a lot of capacity in a specific place where the customer is, he gets a higher discount. If there is less free capacity on the network side, the customer gets a lower discount. What is good about this service is, first of all, that we are using our network capacity very efficiently, making optimum use of our investments. It makes also the comparison of prices more complicated for the end customer which can be a benefit in markets where TIGO has a very high market share.

[Video Presentation]

Good. What I would like to show you next is the example of Tanzania. In Tanzania, we are extremely strong in the Darussalam and Coastal region. We still have more room to grow in our part of the country. So, what we have done is, we have differentiated our price strategy. On the left side, you see a promotion which we’re doing in the rest of the country giving double air time. So, we’re really focusing on our different market segments, market positions in different parts of the country. And this has also led to significantly up-tick in customer activations in Tanzania.

The Hogan Packs [ph] in Rhonda, in Rhonda the challenge was to really grow market share quickly, to grow revenues quickly but not to sacrifice ARPU. So, what we did is an African version of the packet TIGOs. We said the customers, look, if you pay $0.30 we will give you 30 minutes. But the customer needs to use the 30 minutes within 24 hours. The effect of this is a win-win situation for TIGO and for the customer because the customer gets actually a very nice per minute rate but TIGO gets a very nice ARPU because if a customer uses this kind of offer every day, we get to ARPUs, only for outgoing onward traffic of $6 and more.

The strategy which we’re applying in places where TIGO is not the number one player is the dual sim phone. In Africa, customers obviously want to use offers from several mobile operators if they are very price sensitive. And normally a customer does not migrate from his existing operator to his new operator in a day, normally he will try the offer of the second operator and then step migrate. We are taking advantage of this phenomenon and we are actively proposing dual sim phones in some markets, where one simcard is locked to TIGO network and the other simcard is open.

What we have seen is that customers appreciate this kind of proposition very much. Meaning, they’re actually able and they’re willing to pay the market price for this phone. And we do need to subsidize these phones anymore. We can even tell them with a small margin. In some markets basically all of the phones which we are selling are dual sim phones. It even goes so far that our distribution network of competition is selling our dual sim phones because also their customers will like to have this kind of phone which is exactly what we want.

One aspect which is I think a very positive signal for the future is the synergies which exist between the communications and entertainment category and mobile financial services. We’re going to have a separate presentation on mobile financial service a little later. But what I can tell you is, our first results show that there are some positive synergies. So, in Tanzania for example, we’re seeing that ARPU on uses of TIGO peso is twice as high as normal ARPUs. We are seeing in Ghana on a relatively still small customer base of NFSUs as their ARPUs are 15% higher. And the churn is 20% higher.

And also, the air time which we sell in these places for the use of communications and entertainment product has a higher margin because many customers start by air time actually from the TIGO financial service account and not through the traditional distribution channel.

Yeah, this is what I can tell you here. And I hand over to Ricardo.

Ricardo Maiztegui

So, conclusion at the moment for communication category is that our segmentation strategy is working. It’s driving ARPU up, churn down and increase our consumer engagement. The Tag and Trigger [ph] has proven to be extremely effective for us, 10 times more effective than the normal broadcast. And now we are able to deliver the proper offer at the right time to every segment and every consumer. And even for a high penetration service like SMS, we have a huge opportunity to continue growing from converting users to lifetime users.

Okay. Now we will talk about entertainment category. Entertainment, we define entertainment as a service that are happened at the later time of our consumers. And use our network, where they’re paying, the consumer is going to pay for an entertainment service or that we create or generate advertising inventory, it doesn’t means that if I pay for my backtone, I am generating revenue for Millicom. But if I allow Millicom to put a backtone, advertising backtone from the Coca-Cola in MySpace, I am generating an advertising inventory that the company sells. And this is how we see all our advertising moreover said advertising strategy. We generate stock, advertising stock that we want to sell to other companies or to our customers.

So, the category includes Mobile TV, realtones, backtones, messaging, group messaging, games, TV both in infotainment and all kind of products, access to all these kind of social networks.

Category, represent a 7% of the total revenue. It is growing at 14% rate last year. Our flag product which is the backtone, has a 25 penetration across all markets and still growing at 2% to 3%, 2 to 3 points per year. And the gross margin is lower because we have to share some revenue with our partners.

Okay. So, how far can we go with existing moreover in the backtones? So, you see 25% penetration, you have a future opportunity to go. But when you analyze and we go to the enter in the segments, the high ARPU which represents just one percent of the population and the second tier represents 2% of the population, they have penetration that are more than 50%, from here it’s more than 50% the penetration. So, there are opportunities, there are other 50% of course.

But in the lower segment, the penetration is significantly lower. And this is because we are facing purchase power problems because a person that spends $2 or $3 a month can’t afford a $0.50 per month backtone service. So, now what we are creating is content that don’t require to paying intellectual rights to fair parties. So, we are selling through tones, we are selling songs that are generic, that don’t pay price for other parties. And the way we are planning to grow this category.

Tom Gutjahr

Introduce you to the concept of star copy for ringback tones. I’ll move over here. You know, ringback tone is the service where you hear a music when you call somebody while you’re waiting for the other party to pick up the phone. Now star copy is a feature to make ringback tones easier to use, meaning, you call somebody, you listen to his ringback tone, you like his ringback tone, and you press star to copy the ringback tone and to buy it.

It’s a feature to increase usability for the customer to make it easier to buy the service and we have immediately seen huge pickup in ringback tone usage in several markets. In Rhonda the penetration has increased 4% in only the first week when we launched it. But also in Ghana we had 126% increase in daily ringback tone downloads. So, the point which I’m making here and I’m showing you our example from Tanzania is that it’s really important to constantly work in usability and push the services, you know, in order to achieve growth.

If you remember a few years ago, when customers bought ringback tones, they needed to pay a monthly fee for the content. This was good, but there were some people who didn’t actually have enough money on their accounts to pay for the contents, so they were automatically dropped out of the service. Now what we did as a next said, we said okay if the monthly fee is a burden let’s spill them a day so we broke down this theme to 30 small payments. We then later worked on the ease of selecting content in the menu.

We came up with short lists with local content, with smaller short quotes. And the newest evolution here is what I’ve just shown you this star copy. And we see a permanent increase in revenues but also in product penetration in Tanzania but also in other markets, and I think it’s the way forward for many, many other services.

[Video Presentation]

Ricardo Maiztegui

Okay. We offer TIGO TV in our markets. It was a product that was not growing very well in Bolivia. So, we innovate on the way the consumer access to a product and in the past they had to browse internet, go to the proper site and then enter in the service now, we offer US is the access which is TIGO Star, hash send and then they are in the service. So, it’s significantly simple to enter. And also we are just the content, we are what we find out, with doing research and understanding our customer is that what works is local news life, the best of YouTube and football life, the local football life when the people don’t have the possibility to show at home, they would like to show on TV from their mobile. So, it’s a significant growth in the product in the last year.

Infotainment service, which means enter to a horoscope on this kind of products. We also innovate in the way that people access, we used to have an IVR so you have to browse all the IVR and looking what you want. Now we have our US as the access, the same you use to press star, number, hash and send and then you – all the menu pop-ups. You pick the content you want. And then, you may send, you receive a call and you listen to the content you want to. So, this create 70% growth in the product.

In access to games from the phone, we used to sell individual games sending an SMS. Now we create a club which is you pay a monthly fee, you access to any of the 300 games we have. And you can use it or you can use for a month. So, this increase significantly the pro-penetration for times and the use as people keep engaged on this product for more than eight weeks. Tom?

Tom Gutjahr

So, when we talk about services usability is extremely important. We need also, we need to be careful to really develop the right services for Legacy handsets. Many customers in Africa still have relatively old mobile phones which do not support many features. Traditionally services which have worked very well were SMS based services and we’re expanding this. But we also think that there is still room to grow for waste services meaning everything which works through IVR, buying content through IVR etcetera. Services which we have launched recently are for example, the SMS chatting in Ghana, which has a very nice pick up in usage but also using Facebook through SMS for those people who cannot use Facebook through internet for some reasons.

Ricardo Maiztegui

Okay. Now we’re going to talk about our future source of growth in the category. So, smartphones is one of the most important things because smartphone provider platform where we can try any kind of service, multimedia services. So, the growth, the penetration of smartphone is key in the strategy. Also it’s based on new valuable position for the consumer, give me your attention and I’ll give you entertainment. Also, we’ll base on the consumer to consumer stimulation. We think we find a way to have our real opportunity on the smart war applications. And the gamification which is convert our business that the consumer have to do every day in again where he find entertainment while he’s doing a transaction.

So, what needs your attention in exchange of entertainment? The massive broker is over, no war came on, the people are not paying attention to our message. They only pay attention when they said the proper message at the proper time. But when we try to talk to the Y-Generation, to the people that are between 12 to 24 it’s very difficult because, first you have to catch them, you can’t catch them in one place only. They don’t just watch TV, they watch TV while they are checking, browsing on internet and also they are doing, they are chatting with friends with Facebook or with a messenger or whatever.

And maybe they’re doing the homework at the same time, at least my kids do it. So, it’s very difficult to capture their attention in these multimedia and multi tasking process. So, what they say is I’m not going to go where you ask me to go, you have to come to me. Find me where I am. And give me relevant reverse pertinent payment and then I’m going to listen to you.

So, the other pillar is consumer to consumer stimulation. Consumers trust much, much more in other consumers than in the company, in the other company though. When people, we have these needs and growers [ph] with more than 26,000 people that are so globally says that when the people have to buy something, 90% of the people look for our recommendation of our peer or our other consumer opinion that postdating the way with 80%. But only 62% looks for what the advertising say. So, it’s the trust on the peers are significantly more important than the trust in the brand of the message, of the brand.

So, we have a strong experience on consumer to consumer stimulation. We have our different collect products on the SMS, with 13% penetration. We have this Give Me Balance with peer to peer with 20% penetration. We show that Copy a Tune is a fantastic tool peer to peer process to sell backtones. So, we have the experience, now we’re going to go for more opportunities in the consumer to consumer stimulation. So, today consumer lends than balance.

Now, we’re planning to send lend me product which is lend me a packet TIGO, an SMS packet TIGO, a voice packet TIGO or data packet TIGO. And also pro recommendation consumer to consumer which is ranking of, which are the packet TIGO that my friend are buying, which are the top content, my top context in my form, which type of packet TIGO they are buying. And apps reviews, when I buy an app I make a review and offer this review to my colleague.

Okay. What is the opportunity for the operators in the application markets? You can say, operators are out, the only chance they have is to create their own app store and try to offer and compete with Apple Store, Android market store with the big players. Our pro-release this is what the big guys are going to do. But we are not going to do this. We think that if we have a chance, this will come up of our, the knowledge that we have from our consumers.

So, which are the issues in the value chain? It’s very difficult to pick or select an app when you have 425,000 apps as we have in the Apple store. Any of the, if you search by category, you will find any category have more than 3,000 options on up to 40,000 if you want to find a book. So, the problems are that consumer find difficult to make a choice even within a category. And also they have difficult to pay because in our markets, maybe you have the money to pay for a smart phone $300, $400, $500 but maybe you’ll have an international data card to enter and to pay in the market. So, this is another issue.

The developers have a lack of visibility. If you are in the first page, you’re okay. But if you’re in the second page, it’s more difficult to sell your app. And the Apple markets also have the issue of lack of payment methods in our markets. So, we see the opportunity on fixing problems in the value chain. So, consumer to consumer app advice is one of the features that we will explore.

Payment with TIGO money is the other feature. And doing marketing apps to our customer base by segmentation and attitude in our browsing behavior, you’re browsing something on the net. And then, I can check and send you a relevant app for you, is the kind of things that are based on our knowledge and can differentiate us from other competitors. And add value to their value chain on the app world. And we think that we have an opportunity to make money here.

Okay, conclusions. So, enter they mean business is growing and is evolving. New model for the Y-Generation has been enabled by the growth of smartphone but require engaging consumers with a new value proposition so, your attention in exchange of entertainment. The consumer to consumer, evolving consumer to consumer in the business process is something key to, and capitalize on consumer knowledge, segmentation plus other browsing patterns will give us opportunity to market apps on different products to sell to continue penetration in the category. That’s it, thank you very much.

Yes, of course. And we hand over to you, to Julien, our Innovation Manager in Africa.

Julien Guth

Hello, good morning, innovation in Africa. My name is Julien Guth and I run innovation for Millicom in Africa. Ambition is mission of my team is to create new and significant revenue streams. So, before I walk you through the agenda for today, I really want to share a review why we wake up every morning and go to work. What we are passionate about and what’s our purpose? And our purpose is really to deliver new consumer experience as it really matters to the people in our markets. We do believe that the best way to sustain Millicom growth over the next years.

So, what do we do? We first identify numerous areas of opportunities. Then, we I know what we call jobs to be done. The proxy for jobs to be done could be needs insight I’m going to spend on the next slide a limit more time on this concept of jobs to be done. But the idea is really to understand the consumers. When we have done that, we can move to the next phase which is about developing new value proposition, those value propositions that really matter to the people in our market.

And then, we take those value propositions and we go to market, and then we create both social and business impact. So, not only we focus on the executing contract but we are as well building innovation consumer centric capabilities to enable that. So, and to call this process, there is a notion, a call concept of the jobs to be done, what is the job to be done. So, it’s a set of fundamental task then stakeholder use the consumer or even the co-party client is trying to get down. So, let me give you an example, when you go to the supermarket and you are trying to buy a quarter inch drill. What you want is not really a quarter inch drill, is to have a quarter inch hole in your wall. But why, why do you want that. Because most of the time you want a nice picture frame with a picture of the people that you love. And why, why you want that? Because every time you’re going to see that picture, it’s going to bring you positive emotions.

So, that’s what we do. We always ask why? We work like anthropologists, we work like designers, we try to put ourselves into the shoes of the people and we look at the world through their eyes. So, that’s how we work. We understand our consumers. We try to get their jobs to be done.

And we do believe that’s the best way to ensure our work. So, what’s our growth strategy? When we speak about growth at Millicom, we consider two kinds of growth. So, growth of core business, and we have seen with term in Ricardo we are very committed to deliver on the core business as well. But we want to be ready for the next phase as well. And we want to create those new revenue stream for the next three to five years. And that’s what we called new growth. And for us, it’s not a question of should we focus on one, the other one.

We want to do both at the same time, but it’s not easy because it creates tension within our organization in terms of resource the location. So, that’s why we decided to invest in dedicated innovation team, we have a dedicated process and dedicated budget. So, what’s our growth roadmap? We have a strong core business, with mainly mobile businesses. But 2011 is really the year where we become financial services with the integration of a new business unit. And later on today we’ll speak about that.

We are closely looking as well in Africa the trouble of [inaudible] the idea of providing access to high speed internet through our clients in our market. And to build services on top of that like video, Television or any other kind of top services that we can provide to both consumers and as well as corporate clients. And we are always exploring new areas of opportunities, hence is a potential one and I’m going to discuss with you today other areas of opportunities that we are considering.

So, it’s very ambitious and to succeed, we really need to focus. And the other thing we do, we focused on three things to bring more users to our business platform, and it’s about creating most of the cost of our existing categories across new categories and is creating more loyalty. Our initiative around the micro insurance provider is a good example how we can create services that are going to drive a lot of loyalty across our subscriber base.

So, to do that we need to, we decided to invest in two things. The first one is to invest in the right thing. And in Africa we have 25 people dedicated on new growth, 25 innovators. At the original level, at the local level but as well as the Pan African level. So, we just created as a innovation federal program where we are building a young, a small army of young, creative, passionate project managers that are taking ownership of our innovation project on the ground. And the goal is really to fuel our innovation portfolio to increase our success freight and to decrease our time to market. And to do that as well, we created a specific innovation process.

And we have our own growth toolkit. So, the first thing we do as I mentioned before we identify our areas of opportunities. Let’s say, financial services was one in 2011. So, and one specific hour was savings. And we decided to create various specific business challenges what we’re going to focus on. And that business challenge was how can we have the event to save money. So, once we have that kind of business challenge in mind we go to the market and try to support the opportunities, we try to understand the jobs to be done from the consumer of the different stakeholders for your review.

We prioritize and so on and so on but once we understand when we decide to focus on one or several jobs to be done, we can move to the next phase which is about shaping new value proposition, those value propositions is going to really matter for the people in our markets. Once we have identified what we believe is a good value proposition through prototyping for focus group or any feedback that we can get from the market as well. Then we view the business go around it. We try to understand what’s going to be the revenue stream but as well all the processes and as well the processes, as well as the resources that we need to make it happen.

So, when we’ve got a good understanding of that and when we do believe we’re going to have good opportunity of the market, we move to the next phase, which is about seizing or plan. It’s about building the project plan it’s about building as a team and go to market. And of course we the value offer needs to go through a pilot. So, it’s a very iterative process and why do we want to do that because it’s a best way to stay relevant all along the way. And if at some point if we decided it’s not a good ID, we won’t be able to stop as soon as possible because if we fail, we want to fail cheap and fast. And we want to learn a lot along the way as well to increase our success rate going on.

So, let me share with you some selected jobs to be done that we identified on our markets. Let’s move to Tanzania. We’re trying to give more access to communication services for the people in the Guatemala pyramid especially in all areas. So, we’re trying to understand what are the jobs to be done? And what we realized that it’s not only about gaining access to communication, it’s about being able to give their mobile numbers to their friends and family or acquaintances to be able exist in the mind. So, it was about providing them with a mobile identity. Because if you don’t have a mobile number, and everything that it means around it, it means that we are on the path of the society. You are out-castled [ph].

So on all the existing solutions of the market are either too expensive of this part of the population, on convenient and personal enough. And I’m going to share with you how we try to solve that job, how we will try to get that job done.

The second job that I wanted to share with you is text message GRFC. And we wanted to increase the conception of our services at home. And we quickly realized that we are the big roadblock. Because people need to get electricity at home to call their family or their friends but as well to study or even watch TV. And the only things the solution to market is either too expensive or not convenient and I cannot share with you that again, are we going to solve these issues as well. So, that’s how we move to the innovation portfolio.

But before I go into specific project, I want to share with you some statistics. Right now we have two news growth projects going on across five countries. And that we aim in the six months to have 25 projects going on. So, let me share with you some of them.

Our first one is TIGO MIMI, that’s physically how we serve the mobile identity jobs. It’s a cloud solution and I’m going to spend a bit more time on that. So, second was TIGO Search, it is a way to give access to information on demand at a very low cost. And then, the last one, TINGO MINDA [ph], it’s how we sort of distribution and generation solution that’s how we solved the electricity jobs that we just mentioned before.

So, let me speak about TIGO MIMI, TIGO MIMI is really a way to pull the bottom of the pyramid we were lost cost mobile identity. And it’s a good way as well for us to increase our brand royalty especially in rural areas and as well as the penetration of all services. So, how does it work? It works at your Gmail account. In your Gmail, you have you email address, on the Cloud. And you can check it on any computer at any time anywhere. You have your login credentials. You have just an ID, you have your Cloud mobile phone that you can access from any TIGO phone.

So, how does it work from the consumer point of you? You are the wife of a farmer and you go through a TIGO agent, and the TIGO agent is going to provide you with your phone number and the passcode, no sim card, no phone is required. And then the next thing as we do with these information with your credentials, you go to your friends to family member and you ask, can I use your phone. And what you do, it’s with the phone of your friends, you code you’re going to login your credentials and then you’re going to access for uses the manual to your virtual cloud phone environment where you’re going to have your address book, your SMS history, your core logs. And then you will be able to make the phone call as well with your own credit. You will own your time.

And by the way, you’re going to have as well access to your TIGO cash account, that’s really the full mobile identity and it’s really private because as soon as you are going to log off, you’re going to give back your phone to your friend, but your friends would not be able to see any of the codes or any of the SMS that you sent or received. It’s your own virtual phone at a very low cost. And we just launched it and feedback from the market is phenomenal. And we’ll see it will go on.

So, second product I want to share with you is TIGO Search. And through all the consumer reserves we did in all our markets, we realize that there is a lot of information in our market. People those don’t have access to reliable information. And you know, information could be the actions right of the door, and the local currency, when is the next best ride for Kinshasa, where is the nearest clinic, because I have an app issue and so on and so on.

And you know, when you and I, we need that kind of information, we go on the internet, we Google it and we got it instantly. But for example in DSE, only 2% of the population has access to internet. So, how do you do, do you call your friends, your family but information is not reliable, it’s not fully on demand, it depends and so on and so on. So, that’s why we came up with the idea of TIGO Search. And TIGO Search gives a connected access to information on demand. And by the way, it turns as well of course into profit centers.

So, how does it work? It is very simple, you call our call center and you speak to one of our agent. You ask your request. And our agent is going to look for the information either on internet or in the set of databases that we are creating right now. And it’s going to give you the information on the slide. And we’re going to send you as well a confirmation with the information that is requested by SMS, like you saw it on your phone. We’re on the pilot phase, and feedback is very good so far.

Let me share with you now TIGO MINDA [ph]. So, the picture that you see is a real picture of the Kinshasa at night. And I just came back from Kinshasa, I was doing some interviews with consumers on the ground. I will always remember this course from Eric staff at a bank in Kinshasa. Usually I have money, I don’t have enough money to buy a generator, but and when I go back home, there is no light, there is no electricity, I feel like being dead, my life is tough during nighttime, okay.

So, that’s why we decided to create Tigo [inaudible] means power for all, and it’s an attempt to bring homes to live and it’s a first step, you know, home strategy in DRC. So, how does it work? You are a part of the middle of the period amid way of certain level of income who live in individual house or group of house most of the time. And so, you go to one of our Tigo shop, you pay some more installation and our local partners who going to come to you replace and then they install a solar kit smart box and GSM fixed phone.

As you a user owns the solar kit. So, solar kit is owned by our local partners is financing it. And to get access to it is electricity that produce of these installation, you need to pay a monthly fee. And how do you pay monthly fee, basically with a fixed GSM, you pay through anytime, because you can purchase a Tigo simcard and you can pay by anytime and going forward you’ll be able to pay for Tigo cash on the monthly basis.

So, how do we know that you’ve paid because we have all the information, the outbidding system and outbidding system is going to communicate with the smart box as the smart box is going to give you access to your electricity or is it going to cut your connection if you didn’t pay? And of course, if you pay you will be able to enjoy television, you’ll be able to switch on to live, but users be able to use a fridge, which is a big revolution for them.

And of course at anytime you will be able use fixed GSM phone to take a call because that’s why you sell first stepping to home strategy. And as I mentioned to you, we are in the final phase for that specific project and I was in DRC three weeks ago, getting feedback on the final phase and when I spoke with John [ph] is associate manager in a local bank, in some way usually, you know, sets good electricity, okay, good electricity. But for you electricity is an electricity, it’s a commodity. So, what does it mean, it’s a good electricity it’s more, there’s no power search, it’s reliable, it doesn’t break my appliances, its taking care of me, that’s good electricity.

So, in DRC we are trying to deliver good electricity to people. We’re on the pilot phase that all other operational challenge we are in that’s why we want to take all time with full pilot phase to really understand innovate all along the way of the different processes involved.

Let me speak now about new sector of opportunity for us, hardware business. We realize that in most of our countries that I-Share of the GDP comes from agriculture. And so, we wanted to understand just be relevant for the people in our country especially in the rural areas where something 80% of the people are living somehow indirectly or directly from farming.

So, we look at a business as a local level, but as well as a global level and we came across stunning statistics and I wanted to share two of them with you. So, one is first one is the following one. Into the next 40 years, the world will have to have to produce as much food as we have ever produced in the history of mankind. In the 40 years, as much food as we have ever produced in the history of mankind, why?

Population growths due to countries like India for example. But as well as arise of middle class in the emerging markets. So, how can we solve that of the global level, we can do two things, increase the crop of the yields, it’s a yields of the crop, I’m sorry, and as well to cultivate the remaining available land.

And second statistics I want to share with you is that 60% of the remaining land available in for crop land is in Africa. So, it means it’s, in a bond of in each story, Africa will see this population and maybe contributing feeding as a population of the world. So, what does it mean for us, which market a good opportunities in our footprint. And there are two countries very interesting for us, the first one is Ghana and the second one is Tanzania because of the low yield and because of the remaining available crop land.

So, that’s why we decided to build an agribusiness team in Tanzania to capture potential opportunities across this system. So, we are partnering with global and local NGOs, we are conducting, we’ve market and business intelligence that this really understands a market, who understands that jobs to be done from the different stake holders. And we are developing interesting TIGO services. So, we are working our first project and ADEs to deliver TIGO services and basically agriculture advices to small or older pharmacy in Tanzania for mobile phone to add them to increase their income.

So, TIGO for us could be through service fees, advertising for the input suppliers like the crop suppliers TIGO suppliers, data collection, we can collect other information from the farmers about the level of this different crops into the different arrangement that could be interesting as well for food processes of the input suppliers as well. And it’s a good cross selling opportunity as well, you know, these people going to increase their income will be able to [inaudible] [00:00:00] our services MFS that we’ll use TIGO cash account to agree on the term of the deal, when they’re going sell their crop.

So, that’s how we try to always stay relevant for the people in our market. So, we are very ambitious and we want to succeed and to succeed we need track measure and enable success. So, that’s why we invested in a different setup to track innovation. The idea is not only to track output basically everything that you can track, there’s a launch of a project like revenues, forfeits margin and other uses. But, as you saw in our process we do a lot of things before that. So, that’s why we need to monitor the inputs, what do we put in that process in that innovation process, our many financial resources as we commit to innovation on new wolf, many people are walking on new growth, management had the global [inaudible] local of our spending on new wolf.

But we are making sure as well as we’re respect the process that I just mentioned to you, how much field interviews did we do, how much, how many jobs to be done? Did we add 25, what basically to track how we are doing on in term of consumer understanding, how many value proposition did we create, did we test, did we kill because once again we are ready to fail as part of any innovation process, but if we fail, we fail cheap and fast.

And number of business plans [inaudible] we are building, so all the process are innovation that we are tracking. So, we do believe that’s a best way to track measure and share the innovation success. So, thank you very much for your time. And if you have any question, we are ready to take your question.

Session 2

Emily Hunt

I would just like to say that for those of you who are wondering whether we are going to hand out presentations, we are actually going to give you copies of pediatrics on a USB stick when you leave. So I just wanted to let you all know that.

And now I’d like to introduce Gloria Ortega who is going to talk about the information segment.

Gloria Ortega

Hi how are you? Can you hear?

Mikael Grahne

Yes.

Gloria Ortega

Good. Hello, many of you I have seen people I already know around. My name is Gloria Ortega, I have been 11 years with the company. Actually, I was remembering 11 years ago on September the 12th I joined Millicom to install the first broadband service in Paraguay. Back then it was a YMAX technology which was quite successful. It is still there.

So, well now I am talking about broadband in quite a different scenario technologically and with penetration, but before, between that first broadband installation roll and today, I have been GM in Paraguay. And then I went to Senegal, after that I was in Colombia and then in Salvador and I was regional manager for Tigo Paraguay in Colombia and I am in the transition to operations manager Latin America. So, today I am going to present the most sexy category the better building block we have, which is the information.

We will review are vision, our 4A strategy to drive penetration and how we manage heavy users. I am sure you have questions regarding CapEx tsunami. How are you guys going to deal with the revenues going slower than CapEx, we will talk about that in our experience. We truly believe this is a unique momentum for us to take this fantastic opportunity we have in Latin America for mobile broadband. I am going to limit my speech to mobile broadband in Latin America and how we accelerate penetration of the data and internet business, which is our information category in Latin America. So we think that this momentum is configured by five facts.

The first is that close services are increasing and increasing the offer. And when we say cloud services, we are not thinking about an accounting system or application in a cloud, we are talking about basic things for our markets. Facebook, is still an aspirational target for young people who cannot afford to have one computer and one $30 postpaid plan in their homes. So cloud services can mean Facebook, it can mean YouTube, it can mean, there are still group of people getting together on a Saturday night in our operations just to see you through.

It is like the meeting of Saturday night as let’s have a beer and let’s YouTube or their first email ever. So when we say cloud services, we mean many different things for many different targets. But what we do know is that cloud services are there, they are growing and every time we find more and more services in the cloud rather than in my hard disk in the computer. The second fact is that we already have the infrastructure.

We already have the towers, we already have the permissions, the rentals, electricity, the security, the planning, the engineers, we already have them. It is just use it, take advantage of it. And the third fact is that we know about consumers. Ricardo and Tom and we were talking about how do we address consumer needs with products. We are a consumer focus company, we are not product driven.

We keeping testing what customer needs, we go drill in the details on how to sell things. Sometimes little details like the text of your offer is a difference between being successful and unsuccessful. We in the category of information copy with pride this same fact from the guys in the communication category. We understand the needs of the customer, what is that you really need.

Many people don’t need internet, because they don’t even know. They feel internet is too far. Well, you go to them and you tell them, I can help you to get your first email. They know about Gmail, they know Hotmail but they don’t know internet. So we understand the customers and we take advantage of that understanding in this category.

The fourth fact and I think is one of the most important things and you were asking about is smartphones. Even though our [inaudible] penetration of smartphone is below 5%, that is a great opportunity for us to take the leadership in smartphone penetration. We believe, you will see later that smartphones are the driver for data penetration in our markets. We also believe that the tipping point to go massive is below $100. Today, smartphones are going down and even, there’s even people who is willing to have non-branded smartphone which today is already below $100.

And the last fact is that, the penetration in our markets for data is below 17%. Back 10 years ago, we saw an opportunity of cellular penetration in our markets and we took an advantage of that opportunity and we accelerated to get a SIM card in the people’s hands. Now we see exactly the same opportunity for us, the people who live in this category, we are not in high penetrative markets. We are exactly where we were 10 years ago, the difference is now we know, we will take advantage of our success of our infrastructure, of our consumer oriented approach.

This is our vision, we want to give our customers an experience beyond voice. Not only get new customers, but look at our old customers as new users for internet and for data. And we want to do it anywhere, anytime, you will see our 4A strategy very soon. And this also based on the fact that we want to be present in all devices, every time a customer’s calls us or every time a customer walks in our office we have one goal, we want that customer as a new customer for our category.

We see our – customers as new customers, we also look for new customers from our competitors and from the market. But 17% penetration is like, hey, what a great opportunity we have here. We want internet access for all, again, as I say not internet but the final benefit when it matters and where it matters. We also understand consumer needs and want to anticipate the consumption trends. Maybe today the new Facebook is being born. We want to take advantage, we want to be there, we want to be the first and of course we want to increase our too. The ultimate goal is that the customer chooses a packet Tigo for data instead of a soda or a chewing gum as Mikael was mentioning. This is some data, look at this fantastic 64% year-on-year revenue growth in the communication category. Good thing is that it already represents 11% of our revenues. And that the penetration is already close to 22% with similar growth margins year-on-year.

How do we accelerate data penetration? Well, some of you that have been following us for a couple of years must know about our 4A strategy, its affordability, accessibility, availability and affinity. We are just using the same strategy to accelerate data penetration. Let’s talk a little bit of each one of these. On affordability, the message here, the most important thing is right here. When a customer acquires a smartphone, his ARPU goes from the mid 20s to the 50s. Look at the ARPU difference and this is for existing customers and for new customers. So then you will ask, do a sell a $50 plan? Because this is not what Mikael was saying.

No, we have smartphones with plans starting at $25 maybe. Out of these $25 we pack a certain capacity for data, certain number of minutes and certain amount of SMSes in what we call the fixed postpaid fixed fee plan. Meaning that the customer would always pay 25 in his invoice, $25 and every month he will get these resources into his plan, the minutes, the SMS and the capacity. When he reaches his limit, he can reload voluntarily in any of our point of sales and then he can keep using his minutes or SMS or data. So this $50 is not the plan, this is the ARPU, meaning that the customer for himself uses this amount of money.

It is a very good average and the smartphone is the big difference. Of course, that’s not everything we have, we also have prepaid plans, we have plans per hour, per week, per weekend, you know, there is kids that as I said they want to YouTube on the weekends. But they don’t have money to afford a $50 plan. They don’t have money to buy even a postpaid plan, they don’t even have credit. So they get together in a weekend, everyone of them puts 1 or $2 and then they just, you know, hang around and they buy huge or big plans to navigate internet, to do YouTube or for their Facebook.

What we also do is what we call smart subsidio devices. We just do subsidies based on your plan. If you want to take a smartphone and you want a data plan, your subsidy level is better than if you don’t. Sorry, is there a microphone problem?

Okay, okay good. We partner with vendors. We were the first one that launched social plans with Blackberry. Do you all know what a social plan is? Blackberry launched a social plan with a very low price per month which only includes social applications, Facebook, Twitter, email. So we partnered with Blackberry, we launched this plan and we are very successful because we achieved a level in the pyramid where Blackberry is very aspirational. So, as smart subsidy you get a good data plan, you get your minutes, we will give you a smart subsidy, you commit to a certain level of money and then we can accelerate penetration with Blackberry and now also with androids.

Where we launched androids, we see that it is also being accelerated and the good news is that it doesn’t cannibalize Blackberry. And we also do some innovative and simple packing of SIM cards with applications. You can find in a supermarket a SIM card and the SIM card says this SIM card has Facebook and YouTube for example. You just take the SIM card, it is the same SIM card but you don’t have to go to a branch, you plug it in and it works. It is simple, you don’t need to do a provisioning to sign papers, you just pay for it, you take it, you plug it in and it works. And we will see some examples in the operations very soon.

Columbia, you can see in this picture 500 people in meeting everyday to sing songs, to get motivated and to go out in the streets, this is our direct sales force. We have a direct sales force in every operation, in every city and we go door by door in a very sophisticated system which is called DMS that you already might know. We go door by door offering data cards, phones, data plans, etcetera. If you look in Columbia, this is the internet traffic growth. In the upper line you will see the other operator’s traffic. You can see we grow faster than the market.

Again, as I said we do smartphone subsidies and our branches are fully oriented to sell. If you walk into a branch, you know, to ask a question or to request some services, the first thing you will see if furniture with beautiful phones at affordable prices with smart subsidies for you. If you want to buy something we won’t even give you a ticket, you don’t need to wait. We sell it right away, our sales people is right at the beginning of the branches and they are ready to sell you in 10 minutes, even a new postpaid plan and you will see how we do it. This is another example of Columbia.

There is a lot of secondhand Blackberries in our operations, you know, handsets coming from all the competitors or somewhere else, they are in the point of sales. So, the black card is a SIM card packing that is available in the point of sales. You just buy the black card, it has some balance and it also has all the provisioning needed for a Blackberry.

So you plug it in and your Blackberry immediately works and that includes the services of Blackberry, BBM, mail, etcetera. So it’s already configured for you. It has been a great success as you can see in the figures. Customer rates and revenue are spinning up, the in the Blackberry Columbian case, we are coping with pride black card and all the other operations.

Accessibility, the mass market distribution model. This is what we learnt when we accelerated cellular penetration in Latin America 10 years ago. And we are now repeating the story. We have a direct sales force, we go home by home, we go to where the people is, we offer them a plan but how can we offer a plan if we have to take the customer to the branch to activate a system. So we have a 10 minute activation system even for postpaid, including scoring, credit scoring and the full activation. Let me tell you a story why do we go home by home, because we want to be part of the first experience of a customer based on the benefit and I have an anecdote.

One day, there was this sales team in the neighborhood, so they went home by home and a lady opened the door and she said well, no I don’t want internet, thank you. And we said why? And she said well because I don’t have a computer. And then we saw in her living room there was a laptop on the table, so sorry ma’am but that’s a computer. No, no, that’s not a computer that’s my communication with my son. She actually has Skype and she had a computer but for her that was not a computer and that was not internet. That was the way she talked to her son. So we focus in the final benefit to drive penetration.

We invite people to be the owners of their first experience. So we go home by home and what would you like, hey, I would like an email because sending an email is aspirational. Okay, we can help you. Here you have a phone, here you have a data card. I have another story, it’s very funny. We went in the square of a small little town in one of the operations, it was a Sunday afternoon.

So people were calming, you know music and it was very funny because there was a funeral in the street. So very crowded funeral and then after the funeral, people will come and they will buy internet, data card from us. It is because we were where people were, it was very unfortunate it was a funeral but we sold like 10 data cards, you know, after the funeral in the square of a small town that was in Columbia.

And then we have prepaid and postpaid so now we will see a video of one of our direct sales team going in the streets and selling and you will see in the video that there is no logistic company. They just carry their tents, they go, they put it on, they cheer up and they sell with this 10 minutes activation system.

[Video Presentation]

And the other good practice is that, we also train our customers to use data. It’s one direct sales force, you just saw it and then we have what we call our data emboss trainers. It is an army of more than 5000 people in Latin America going out in the streets everyday again with a sophisticated system where we know where people is and we go there, it is rural and urban wherever we cover and we teach people. This is where we active their first email, their first internet. We show the benefit and sometimes they ask for help for configuration, for teach me how to do this YouTube on the web, etc, etc. So our vast trainers is the other force we have.

What we is seen is an increase of ARPU before and after the training, because we have a system where the vast trainer teaches someone then we have a system where he registers the teaching, so we track a customer’s ARPU before and after he is being trained and we see that he starts subscribing to data plans or back tones or whatever. But we not only do this directly to customers, what we are also doing now is, in the point of sale we train the point of sale so that he sells data plans and he sales value added services with customers, not only reloads. So in this little town where Dona Rosa sells sugar and chocolate and people trust Dona Rosa because she has been there for 20 years.

Now you go and hey Dona Rosa, can you give $1 of reload? Yeah, no problem I will give you $1 of reload but listen there is a special promotion, today unlimited internet for one more dollar, would you like to buy it? So you give Dona Rosa $2, one for your reload, one for your internet per day pack and then you leave with a plan to navigate for the day and you reload and Dona Rosa has the same application to sell your reloads electronically and to also sell you the pack, the packet to you, in this case it can be a back tone or the daily navigation. So this is our vast training force directly to customers and also through our point of sales.

Availability, we cover 52% of the total population with 3G coverers in our country. Out of which more than 80% are the urban areas. What we do is we cover the urban areas and then we monitor usage especially in our 2G data coverage. So when we see the 2G traffic going up in a certain location, that’s an indicator that either for a communal activities or for some reason there is data demand on the community.

So we take our 3G network, we plug it in and it’s like the 2G data traffic is our indicator on where to go and where to cover. So we keep going with coverage and of course every time we cover, we take our direct sales force and our training force there to immediately increase traffic in 3G.

And this is what I was telling you I am going to talk a little bit about how we manage heavy users. If we were talking today okay, you have this one day plan and you have this monthly plan, how do we manage people who is downloading videos everyday and how do we protect our network from these people to take all the payload, all the bandwidth available in the network despite the quality of our service. This is what we do, before we had this strategy, we now have this strategy. The before strategy, we call it the fair usage policy, you bought a limited number of Gigabytes, it could be five Gigs, for example.

Once you reach your capacity, the system will downgrade your speed 228 or to 256 to a lower speed to give unlimited access at a lower speed. What we do today is when you reach the limit of your capacity, you are addressed to what we call our Tigo portal. It is a portal, no matter what you type, you will always go to the portal. In the portal you are offered to pay to keep navigating.

You can buy packages per traffic or per time, meaning that you can buy one more Gig or one more hour or one day or one week or 10 Gig. You can buy per capacity, you can buy per time and once you pay, you can navigate again at the same good speed that you had. So the experience is better, heavy users pay more, regular users get a better quality. That’s the deal in our, that the traffic management tool. What you will see now is a very short video of the page itself. The video has to be silent so I hope it is silent.

So I will explain very quickly in the page the customers can see their consumption online so they know how far they are to reach their capacity limit. So here is the web, so you click here, this is your consumption, 100% so you reached whatever Gigs you bought. You can buy per hour, you can buy one day, per week, you buy, you accept and then you go and you can YouTube. You are again in the internet because you have paid, so now you can YouTube.

Once again, you reach your capacity, the capacity you bought you are again redirected, you can buy more, you can navigate again. It will always show you how far you are from the capacity or the time you purchased and then you can keep navigating. This is a very fast thing that, this is the way it works and this is the results. If you see in the graph, the upper side of the slide, you can see the heavy users and the regular users.

The blue column is the ARPU of these users before the Tigo portal. So as you can see the blue columns everybody had about the same ARPU because we are offering them this [inaudible] where we downloaded the speed etc, etc. After the Tigo portal, you see that the heavy users ARPU is double, almost double than the regular users ARPU. Why? Because they pay. But that’s not the only benefit for the customer also they feel like the speed is higher.

So they are happy to pay to get a better speed and a better quality. We were also happy, because if you see they gross margin graph, we had heavy users who even used more bandwidth than actually the money we collected from them, so gross margin was negative for these heavy users, hurting the network for the regular users.

So after the Tigo portal, gross margins for heavy users went positive, they went up. Customers are happy, if they need to pay they do, because they get better quality and the good thing is that we were able to release our network from these heavy users and get more regular users at the same space giving better quality.

And finally, I will talk about affinity. Remember, I told you we think we know the customer. We try to understand customer needs and we never offer, this is internet for this price. What we try to focus is in the insight of a customer. For example, for Mother’s Day we finance sometimes laptops or the smartphone for the mother or the Father’s Day or the kids.

We try to focus in the final why. What is behind internet, what is what the customer feels he needs and we try to give him that need. So now, you will see 3 or 4 different odds, these odds are for young and cool people. I had to watch is five times in order to understand the story.

So after this picture I will ask who understood and probably the young and cool will get it and the oldies like me, they won’t, because we tested and they really understand it well because they were native digital. But you know the 40s plus like I am, we had a hard time trying to understand, but here we go.

[Video Presentation]

Okay. Thank you very much. According to the schedule I welcome to my colleague Esteban Navarrete from the Home Business. And then Esteban and myself will take the questions from you. Thank you very much.

Esteban Navarrete

Thank you, Gloria. Let me talk about Home, what is Home for us? Home is the cable business, plus broadband business, plus fixed telephone. So who I am? I am Esteban Navarrete, like Gloria said. I joined Millicom two years ago and my background is 15 years working in the telecommunication business and specifically in the cable. So before to start I have to say two important things for you. The first one is, I start to speak English two years ago after that I didn’t speak a word, yeah. The second thing, very important is I couldn’t memorize everything until this point. So we will start right now talking about our business.

Yesterday night I met Lars. Lars is an analyst from Sweden who was working in this industry like analyst for the last 20 years. And he told me something very important for me. He told me, do you know when you bought the net, that is the cable operations in Central America, I didn’t understand why. But now I understand, you are there, you are here for the broadband. And that is the truth. We are here for the broadband. Yes, we have a lot of focus on the broadband business. In the fixed broadband business, in my case because I am home, but also we have a very relevant market in the pay TV, so we will talk about our market.

We operate in El Salvador, Honduras and also we are working in Costa Rica. In El Salvador and Honduras we have three problem that means we have all the probability that we can offer over fixed telephoning. And I have also a very good news to tell you in advance, last Friday early in the morning we received from the government of Costa Rica that the retention to give fixed telephoning. So we will start to give that services next week. We worked a lot yes, in the last months in this area and that is the reason why I can give you right now a preview of our commercial, let me show you.

[Video Presentation]

And let me show you another one.

[Video Presentation]

Okay. Where we can give that type of probes, because we have the right network and you can see here we have 83% of our network with the capability to give two way, that is if you compare that number with the most important markets in Latin America, [technical difficulty] and Chile they are in 64 and 75%. So we have the right network. If we have the right vision and we have the probes and also we have the countries and we have the network, what we did to develop that strategy.

We make this three pillars for the broadband. The first one is reliable connection, the second is the speed and the third one if value added services for our broadband strategy. So let me show, go deeper in each of these pillars. Why reliable connection? Because, we believe the stability and our customers say it is more important than in speed. Why is stability so important? Because, they prefer to be connected, they want to be connected first and the second step is talk about the speed. That is the reason why we take a lot of action to improve our network and to get the right stability. Let me show a commercial because we support each pillar with one commercial.

[Video Presentation]

The second pillar, very important, is the speed. We work a lot in terms of speed. We doubled twice in the last year, all our customer based on speed and we also did, we launched 10 Megabytes in all the regions. The three countries are receiving 10 Megabytes if they wanted. That is a huge difference with our competitors, because the higher speed that they offer is 5 Megabytes. So we have a tremendous differential there. Let me show the commercial.

And the third pillar and very entertained in the VAS. Why VAS over a broadband, because we believe, if you see this industry, the cable industry, in the last 5 or 10 years something very entertain was we only offer one type of probe, one monoprobe I said in Spanish that means we have some quantity of channels at one price, that was only analog and that was all. But now over broadband and we will see the same thing over TV, we can offer to our customers different type of probes.

For example, we already launched the speed button from Tigo, what means that? That means, that our customers can just push a button and try another speed, buy that speed for an hour, for a day and also they can buy it for, they can subscribe for all the month. So let me show how that works in our communication side.

[Video Presentation]

Okay. When I arrived at this market in 2009, what I found was our best offer at the moment was $25, 2 Megabytes. And I remember Mikael from – order to me, we need to change that history, we need to work very close with our customers and change that history.

And what we did was in 2010 we launched 3 megabytes and also 5 megabytes and we have the opportunity to raise the ARPU, to increase the ARPU. And in 2011, what we did, we did it again. Now we are offering 10 megabytes like I said and our ARPU is still going up. The other important business that we have and that is very important, we are the leader in the region is our cable TV offer. There we have three pillars also and it is a strong brand and anti piracy and digitalization.

Let me talk about our strong brand. Why we need to create a strong brand? First we join our brand to the Tigo Brand that was very good moment where we have operation mobiles, that is in El Salvador and also in Honduras. We keep our brand in [inaudible], you will see ahead, why. And we start to work in the motions to became a brand with more emotional for our customers and get that type of links. Let me show the commercial.

[Video Presentation]

Something very important that we said in that commercial is you have more, you have more quality. You have the relevant content for you, that is that we were working. And the other important pillar in the region is anti piracy, because we have still we have analog TV so we need to maintain, yes, our piracy and the level of piracy in the lowest level as possible. So we work a lot in this area, especially in this area, particularly with the industry and we did a lot of commercial. But let me show one of them.

[Video Presentation]

And the last pillar is the digitalization. That is reason why I believe in the future of TV, because we have the opportunity to segment that we offer and we have a lot of opportunity to give, to give customer what they want. So we learnt in the last two years a lot of different probe to the market, we launched DVR, we launched an interactive guide, we have, you can buy movies, you have pay per view. So let me show you one of the commercial that we used to teach to the people how to use these types of probes.

[Video Presentation]

Something very entertaining also in this area is, we have like you saw 17 HD channels. Our competitors, local and international who is more closer than us, they have 9, yes. We can create a big differential in this area also and it is about quality, it is not about quantity. But if we want about quantity, what we did is we launched digital, yes. That is the blue one is the regular channels, the red is the music channels, the yellow is pay per view channels and the green is HD channels. So if you see we are giving more than 200 channels in our best offer. But also we have a very affordable price for our customers in the lowest conditions. I am sure you want to hear something about our [inaudible] and we have a lot of ones. So I chose a few of them and I would talk about that.

We start first like I said, we have already integrated the bandwidth in Honduras and El Salvador. We already integrate our cross selling, for example, the people who sells fixed probes like pay TV or fixed broadband, they also sell 3G data cards, yes. And we in the last, until now we sell something like 7000, yes, data cards that means more than $200 thousand from revenue it’s amassed, current revenue it’s amassed. In terms of infrastructure, we create one network, that means our backbone and also our backbone in all Central America, we share with all the operations that we have.

Sure, something interesting to know is we don’t have two HR department, we don’t have two legal departments, we don’t have, we are already integrate, yes. And that was one of our strategy. At the beginning, we worked separately because we want to understand very well that business, now what we know is we can integrate it and we already did it.

So okay fantastic history, but what was the real achievement? Yeah. The first one, the most important for me is what our customer thinks about our probes. Here you Costa Rica, the yellow and the green lines are our local competitors, they are obvious, they are no smaller, they have almost a very interesting volume. But when you see the perception on the broadband, we have a very good differential. And also when we see the perception of our customers over cable business, we also have that differential. In El Salvador, but we have a different competitor, international competitor. We also have a differential in the broadband side and a very strong differential in the cable side.

Why it is important to have this differential in the cable side, because the first place that you grow is in over a broadband is in your cable business. So the first thing you have to do is branded the probes to your customers just to because it’s easier, because you know it, because you already sent the invoice every month. So what is the bandwidth, sorry, some CapEx. The broadband customer growth 77% that was our focus, our Home pass in 29%, we branded the probes and our branded growth 33%, yes. Something very interesting I know you want to know is how is your TV business, how it is working.

We grew 13% in the last two years. We now have almost 70 thousand RGOs and we are still going at 30% until we brought the net. A very interesting data also I can’t forget is we grew our fixed telephoning lines, yes, 108%. All if you see it in this way, like to see it, we grew in our TV business, we grew in our broadband business and we also grew in our telephoning business. We have abundance. Like I said we was growing in our single probes but also we grow in our bandwidth probe. If you see our share in bandwidths of our total customer base if around 26%, sorry 30% right now. We grew 4% at the same time we growing the single probes.

So what we need, probably you can think okay these guys was growing but what they did with the price. Maybe they down the price and they are growing, no. What we did was grow in the at the same time and we did it very fast, we now have 13% more than we had almost two years ago. So that was my presentation. I will be here to respond to your questions. Thank you.

Session 3

Marcelo Cataldo

Good afternoon. My name is Marcelo Cataldo. I am the regional Chief Officer for Latin America for the Solutions Category and we’re going to walk you through this presentation and I try to keep your attention after the lunch with Percy Grundy, which is my peer from Africa also running Solutions and Mobile Financial Services.

So, we’re going to cover three main points. The Solution Category as an overall. Then, we’re going to talk specifically about Mobile Financial Services and at the end we’re going to give you a couple of examples on the applications and services we are running for corporate and consumers.

What is the solution category about? As Mikael said, we have four categories and the two big ones are communications and information are bringing customers in through data or through communications. What we try to do in solutions is bring services that can simplify the lives and help our customers corporate and consumers to save time and money, right. So, we’re going to go through some examples and this category we divide our portfolio in four main groups. So, the first group is a zero balance product that Tom and Ricardo already covered a part of it.

The zero balance products are the suite category where we focus on customers with zero or very few balance. So, we lend them airtime so they can keep being communicated. And we have two main groups here. The first group is customer-to-customer. So, for example, the SMS, Gift and Collect is I send an SMS to Julien and I already paid for the answer he is going to bring me back. So, this is consumer-to-consumer, peer-to-peer lending and we also have Tigo Lends You, where we lend the balance to the customer and we’re going to cover that specific product in detail later in the presentation.

Then, Corporate Application. We have a few examples to show you also. We tried to improve the business of our corporate customers by bringing their mobile applications to help them deliver the business.

Mobile Financial Services is a full portfolio of financial services starting from the basic P2P transfer in market remittances and going on bill payment et cetera and we’re going to cover that in the next section.

And Mobile Services are services targeting consumers. For example, the contact backup and lot of our customers have very basic phones, we know that. So, instead of keeping their list of contact in the mobile, they keep it on the SIM card and through one of the services that we provide, we backup that so if they lose the phone or the phone is stolen, they don’t lose the contacts. So, this is just a simple example of the solutions we bring.

Voice mail services, we translate the voice into text. So, instead of getting into the voice to hear your message, you receive a text with a voice et cetera. There are lots of examples and at the end of the presentation we’re going to give two of them.

Let’s see a bit of our numbers in our Solution Category. Information is a number one year-on-year growth. We follow them with 46% of growth compared year-on-year and we represent 1% of contribution of good revenues. Some key products here, you’ll see that Tigo Lends You is increasing taking part of the peer-to-peer lending because it’s easier to borrow from Tigo than to borrow from the peers.

Our evolution in our category here two numbers, we represent in Africa and Latin America 10% of a VAS recurring revenues. And regarding the total recurring revenues in Latin America, we are near 3% in Africa 1% and growing.

Another important thing is that we in our strategy, we work with Percy to diversify our portfolio. If you see here, we started with a lot of dependency on the zero balance products and now as we bring MFS services and corporate and consumer applications we are being able to diversify our portfolio and keep growing.

How do we do that? Julien in the morning covered a lot of what we do in innovation and the framework. Based on those frameworks – on that framework we also in solutions, we are very specific into getting ideas to see what is the best thing for our consumer. So, we get from internal creativity, industry and providers et cetera. But, the key point I would like to emphasize here is the market research.

All our category managers of solutions in our operations they go every week into the field. They talk to the consumers, focus group, understanding really what is exactly that you need. How can I solve. This is how Tigo Lends You started, right? You are in your house, 11:00 pm and you run out of balance. Are you going to get out and walk x amounts of blocks or drive to top up. No, we can lend you. But, this is the consumer is telling us their needs and we are understanding their needs and transforming into services and solutions. So, a key thing that drives in our DNA if I can say and in all the categories is market research.

So, zero balance products, we are doing really, really well on this product. Based on what Tom and Ricardo mentioned this morning, we only lend money, airtime money to customers based on segmentation and profiling. That’s why as you can see here in the graph, we keep our bad debt very, very extremely low if I can say 1.2% for Latin America. Having a penetration of 39% in our total customer base and 76% on our zero balance customer base. So, a huge amount of people lending but with a very controlled bad debt. This is segmentation and profiling.

So, now we’re going to move into the Mobile Financial Services. I’ll handover.

Percy Grundy

Thank you. I’m Percy Grundy. Doing the same job what Marcelo does in Latin America. First, I want to talk about the size of the opportunity okay. And this is my case research. Half of the world is unbanked, half of the world doesn’t have a bank account. It’s not part of the formal financial system.

In our regions, this number is even bigger. 65% of people in Latin America doesn’t have a bank account. 80% of people in Sub-Saharan Africa doesn’t have a bank account. And this is of course a very large opportunity. The banks, the traditional banks brick and mortar banks, don’t have the skills to go after these consumers because they basically build very expensive physical branches that they have a very expensive back office behind them. While we have good building distribution network that have a great coverage and we can get to all these consumers. And of course, we have the mobile network that allows us to provide the services.

So, what we very clearly see is that being unbanked doesn’t mean being un-servable. Maybe they are un-servable for the traditional banks but a very large percentage of these people come through Mobile Financial Services. What we see is that as you go to the middle of a pyramid and even lower, actually people can be quite sophisticated in the way they manage their finances. Okay, they don’t have a bank account. Maybe they don’t have a good understanding of finance and maybe if you talk to them about interest rates and things like that, they would not know about this.

But, because they live with small amounts of money every day, they need to plan their cash flow in a very detailed manner and they need – sometimes they need to go in depth because they didn’t get a good cash flow. Sometimes they need to save. So, they can be quite sophisticated and we are focusing a lot on understanding how these consumers behave and building the services that are right for them.

Marcelo Cataldo

Okay. How are we’ve been able to capture these opportunity. I’ll talk about the MFS in LATAM. As you may know, Paraguay is a country that we launched first in Q2, 2010. We’ve been very successful over there reaching as of today, 17.6 penetration on our total customer base. We started within market remittances, which is – what is that in market remittance, a traditional in-market remittance let’s say, my mom lives in the countryside. So, every end of the month, I send her money so she can manage her payments et cetera. Or on the opposite side, I’m a student in the city and my mother sends me on a regular basis money so I can pay my university et cetera. So, this is what is in-market traditional remittance where we started.

Now, what have we have done to increase in the last time, the penetration. We have taught our customer that this is an ecosystem where they can do other things that in-market transaction and I’ll give two examples here. The first one is an advertising that we have from Paraguay teaching our customers that work on the informal markets they don’t have bank accounts et cetera. How can they improve very small businesses using our infrastructure. In Paraguay, we call the product Giros Tigo, right because Giros is the local name that they recognize for the remittance, right. We’re going see an example here.

[Advertising]

So, we educate our consumers so they can understand that Giros Tigo is not only for the traditional remittance. Another example on how we are capable of driving transactions that have been penetration is the service bill payments. Again, based on consumer insight, we started with a prototype and now we have new ways of helping the customer pay the bills, through our MFS infrastructure and you can see that the transactions are growing.

Service bill payments could be electricity bills, Tigo Bills. So for example, a customer buys a modem, data card in countryside and he has to go, I don’t know how many blocks or travel to a city to get to a branch to pay the invoice. They can pay on our distribution network through MFS.

Two key things that are driving this up. 52% of our point-of-sales taking bill payments are in unbanked areas and in rural areas. And our capillarity, Paraguay has 240 districts. We cover as of today, 194 districts and the traditional payment network cover more or less a 100. So, we are there for the customer.

I’ll hand over to Percy for Africa.

Percy Grundy

Okay, let’s talk about Africa. Many of you who are in Tanzania one year ago, it was exactly around this time of the year, when we launched the product and you just saw at that time we did some market research and you just saw that we were starting to push the basically the Tigo Money product in Tanzania. It’s called Tigo Pesa over there. I can report one year later that the results are very encouraging. We have reached 10% penetration in our subscriber base of people who are actively using the product. These are not registered users. We have a lot more register users. This is people that have used product over the last 60 days.

We see a very strong growth potential. We see a month-to-month growth in the double digits and we are gaining a lot of market share from the mobile money leader which launched sometime before. So, I’m going to show a video about Tanzania and you’re going to be able to see more about this.

I want to talk as well about Ghana. In Ghana we have launched a micro-insurance product. I have a couple of slides on this one. I’m going to go into more detail. But, basically it’s a loyalty tool that we are rolling out slowly because we want to make sure the results. But, the results we see from the first six months of this product being launched are very positive.

Basically, we see that people that receive this benefit increase their ARPU in 15% and their churn drops in 20%. And we are working in all the other markets in Africa. We launch Mobile Money in Rwanda in May and initial results are fantastic. It’s growing faster than what we would have expect and we are at different phases of the rollout in all the other markets.

There are lot of factors not just the internal rollout but there are regulatory approvals that we need to get. So, the time that different countries are going to come in will be different for each market. But, we are working in all the markets.

So, basically what we’re going to see now is video, a short video about Tanzania, about how the product is working and we’re going to have some customers talking about how they use the product.

[Video Presentation]

So, what is Tigo Pesa, what is the product? At this point, it’s a very simple product for people. Walk to an agent, do the cashing process basically give cash and get eMoney in return. They walk out of the agent, they can keep that money in their wallet. They can send it to somebody else. They can pay a bill. They can walk to another agent and take the money out and they can use the eMoney to buy airtime. It’s a very simple transactional product. But, we will see the huge potential that we have to build other products on top of that.

I want to mention a couple of things about a video that you may have noticed. First is the value proposition that we are doing to the consumer. One of the consumers talking in the video was talking about how he use to go to a bus station, give the money to the bus driver and bus driver would take it to their family in a province. And this is a very expensive, risky process and the money takes some time to arrive to the family member.

So, with Tigo Pesa, this is simplified. It’s of course it’s a lot more affordable and we are basically substituting this type of more traditional services that people were using for remittances. The other thing that you show in the video is a consumer talking about how he decided although there are options in mobile money, he decided to go to our Mobile Money offer because how strong we are in our mobile brand, right. In Dar es Salaam especially, we are very, very strong. We have a fantastic presence and people value our brand. They have our brand in a very higher regard. So, the movement we put mobile money offering, we benefited from the strength of our mobile brand and we’re seeing a lot of people moving to us because of that.

The third thing I want to mention about the video is you show this mobile Vacalus [ph]. This is an innovative concept that we introduced. We saw that our competitor is developing their agent network and there are fiscal agents that they go on grant and they people can go there and do transactions. But, we say, why do we apply to mobile money. What we are good at doing it which is going where the consumer is.

So, we develop this concept of mobile Tigo Pesa agents are basically people that follow the consumers. If there is some market there in one area of the city, they will be there. The next day, there is a big fair in a small town near Dar es Salaam they will be there and they are generating a lot of transaction there registering a lot of usage for Tigo Cash and this is something that is working very well for us and we know our competitors are not as good as building this army of people that can reach the consumer.

I want to talk about micro-insurance in Ghana, okay. As I mentioned, this is a loyalty tool but we are slowly transforming it as well into a revenue – generating direct revenue from this tool not just the benefit from the reduce churn and increased ARPU. We have a consumer site sometime ago in Ghana, okay.

In Ghana, funerals are extremely important. As a social phenomenon it’s probably is the biggest, is bigger than even weddings. So, when somebody passes away, the family need to organize a big funeral and this takes some time and takes money and many people find themselves in a situation where they have no way to finance the funeral. At the funeral they will get donations from the people who come and they will get some money back. But, they have this cash outflow they need to do to organize the funeral and this is the big issue in Ghana because people go into short loans and things like that just to get this money.

So, we made this proposition to the market. We said, okay, if you are loyal to your customer and you maintain a minimum level of ARPU with us. You can register yourself and family member and if somebody passes away, we will give an amount of cash. The acceptance of this product is fantastic. People can believe that something like this exists.

We don’t even talk too much about the insurance people don’t talk about insurance. Life insurance, if you tell people, hey, this is life insurance. They say, what is life insurance? I don’t know. But, we say, this is a family care product that is going to cover you in case of something very sad happens in family and we have seen in the pilot phase where we limiting the number of customers in the product increasing ARPU and reduction in churn that are very, very encouraging.

The other thing that we are doing is we are starting to offer a premium on top of this coverage that has to do with your monthly spending that you can pay. So, you can top up on this insurance and we have seen a very high acceptance of the people where we have offered the possibilities to top up on what they have. So, this is a very encouraging product that is showing us all the possibilities of Mobile Financial Services in our markets because we’re addressing needs that are not covered by anyone at this point.

Again, it’s a 30-day funeral insurance, right. We don’t call it funeral insurance but that’s what it is and basically we have a lot of control of it because we can move the level of ARPU you need to have in order to get it because it’s a short-term insurance, we can –we define the rules basically. And again, we’ve seen the affect of the increased ARPU, the reduced churn. People love this product.

But, what’s begin – what we are doing now, all right. We talk about remittances and bill payments in Paraguay. We talk about Mobile Money in Tanzania. We talk about life insurance in Ghana. What is the potential of what we are doing? Basically, if we compare ourselves with a traditional bank that needs to have a number of elements in order to operate. They need have the branches, brick and mortar branches, they need to have – they need to provide cards, they need to provide support to users, ATMs et cetera, et cetera.

We can build financial services around the Mobile Wallet, okay which comes at a much lower cost and we can offer similar services that people are getting from rational banks. Of course, this would require some type of partnership, some type of license but the possibilities are to provide loans, to provide interest varying deposits and the type of services we are doing already, cash-in, cash-out et cetera.

So, this is to give you an idea of the portfolio we have right now in Millicom regarding Mobile Financial Services. The first line or the existing products, it doesn’t mean that we have each product in each market but we have at least have launched this product in some of our markets. You have a very good understanding of zero balance products, Tigo Lends You, Give Me Balance, Give and Collect, I won’t enter into much details about that.

Remittances, we are into local remittances today. We have a huge potential. We are working on international incoming remittances to our markets and there is a longer term opportunity as well for outgoing international remittances.

Right now, we have merchant payments and bill payments but we can do other types of thing. We can co-brand credits and debit cards with the credit companies and the banks. We can do payment processing. These areas we are working on. We have life insurance in Ghana. We have handset insurance in Latin America, but, there are many opportunities to go into other areas of insurance, accident, health, crop insurance. We talk about agribusiness. This is a product that would combine agribusiness with Mobile Financial Services.

Today, people are using the Mobile Wallet to save just by keeping the money in e-cash. But, in the future we could provide interest paying savings on this type of products and we can go into credit as well. We are in discussions and we are working in pilots with financial institutions to provide a small loan, small overdraft. We are not doing the lending ourselves at this point. We don’t plan to do the lending ourselves at this point. It’s the financial institution that is doing that. We’re bringing the customer and there are many more possibilities to go into microcredit, to go into loans to SMEs et cetera, et cetera.

So, let’s go back to Marcelo.

Marcelo Cataldo

Just to add a point regarding the financial services. We talk about operations or joint ventures or commercial agreement with financial institutions. As an example, we already have one in Honduras. So, it’s not that – it’s the thing could be decided or could be possible. We understand that for some products depending on the market and the regulations, we require an alliance with a financial institution and this is what we have or how we launch our product Tigo Money in Honduras in alliance with a bank institution.

Okay, just a few examples on Corporate Applications and Mobile Services. We have a lot of products in different markets. I picked a few of them here. On the Corporate Applications, we offer packaged suite of mobile applications allowing the customers to increase the efficiency of the businesses as I said and these are packages that you get installed in your phone and you actually use it.

Pre-sales, which is an example that I’m going to give you now. Collections, location, some machine-to-machine also control of guards et cetera. There are lot ideas there. But examples are there. I will cover one in the next slide. And also, we offer specialized application for companies that require something specific to be developed. Usually, the bigger ones we have in our markets.

So, how does the pre-sale models work? We have to keep in mind that a lot of our customers, even the corporate customers they use very low end phones. Pre-sales, you can imagine an SME company in Paraguay and Honduras, 50 guys that are salesmen. All day in the street, motorcycles et cetera. The company cannot afford smartphone which is a lot of expensive and the risk et cetera.

So, we build our applications to be very simple but in a feature phone or on a bridge phone using USSD for example. When the salesmen arrives into the customer premises, he would get into a new SSD menu and he will check in so that will trigger and SMS through our network. So, in the salesmen premises the supervisor can actually check the location of the salesmen.

So, just to give you a few examples here of the screenshots the supervisor will get to see in his office. He will be able to track where the salesmen was and with a list of the time he get in, the time he get out and the time he was at that customer. And these, we are using it with our own sales force on the corporate side to track the efficiency of our salesmen. How many visits you can have? How can we optimize the routes for the salesmen et cetera, et cetera. So, helping our corporate customers to do their business in a more efficient way.

Two examples on the Mobile Services, vending machines. This solution allows a Tigo customer to use his or her mobile balance to pay for coffee, drinks, snacks. In these machines, that actually has a SIM card inside with an application built in. This service was pilot in Paraguay in our offices and when corporate customers came to see and how it works, they actually asking us to deliver and we are now a days working with two universities in Paraguay to deliver this in their premises.

Another example, M-Ticketing. With M-Ticketing, the consumer can buy a ticket sending an SMS to a short code from nothing fancy, it’s just an SMS. So, you can use it on every phone. We piloted this solution at the Paraguay National Expo Fair, which is the most important fair that we have in Paraguay. We set up three turnstiles and over 5,000 customers accessed the expo just sending them SMS to this short code.

So, this is the Solutions Category. It’s a very challenging category because we have a such diverse portfolio of products and we base our strategy in three main areas were products like for example Tigo Lends You were highly penetrated. We tried to optimize the product, new products. We try to push the penetration and working with innovation, we tried to bring new products into our customer base.

Thank you.

Max Leiva

So, good afternoon ladies and gentlemen. My name is Max Leiva. I was hoping to an introduction from my friend over there. But, apparently he forget. No, by now you’re probably asking yourselves, how in the work these guys do all of that and this is a part where I come and tell you that it’s with technology, right, because I’m the group CTO.

So today, I’m going to present to you our IT transformation program. Basically, I have divided the presentation into three areas. The first one is division, which consists of four different pillars as you see there; organization, service delivery, technology and security. Then, I’ll discuss a little bit some of the main projects that we’re currently executing that have to do with that vision. And then, I’ll conclude with some closing remarks.

So, first let’s address the first question. Why transform IT and the big idea here is that we want to become a smarter pipe and you have probably being listening to us since the few last Capital Markets Day that we are trying to become a smarter pipe and you have seen now in these previous sessions some of the products that we have developed in the four categories that you see in this slide. So, the idea is to continue to develop faster and faster, more killer applications in to this each one of these categories. And in the process we want to generate more revenue, reduce the cost, generate more customer stickiness and increase our brand equity.

So, I’ve been talking to couple of you in the coffee breaks and lunch about how fast the industry has been moving. So, we’re going from an era that was voice centric and prepaid centric. And now, everybody is talking about apps, social networks. This thing is extremely exciting and this is where most of our profits are going to keep coming in the future.

The other thing that we talked about is also that in the past it use to take us a little bit long to develop our products that you have seen there. But, going forward that we need to develop them faster and faster and faster, right. In the past, with each one of the applications or solutions that we developed we were putting more and more boxes in our network and this of course makes it very difficult to operate and maintain. So, in the future we need a more simple, open and service oriented architecture.

Before, we use to a have separate billing system. For example, for prepaid another one for postpaid, another one for voice, another for data et cetera. But, our consumers they don’t care about that. They care about multiservice. They care about multi-payment methods or products that are combined between prepaid and postpaid or hybrid as we call them and with real time flexibility because that was data is all about. And of course, security has to be enabled in everything that we do in terms of technology.

So, what is our vision? Our vision is to aim to be the best – to have the best-in-class IT processes and IT systems in our markets so that we can develop faster than our competitors so that we can provide better consumer experience than them and that we can provide better security and that we can provide better flexibility.

So, we’ll invest in some of them. We are asking this morning, how much are we talking about. We are seeing that investment of over $300 million is needed in a three year program to complete our strategy. And it has been divided into four pillars say, which I mentioned already; organization, service delivery, technology and security. So, let me address each one of those in little bit more detail.

The two things that a company does and you have seen already our strategy a basically been crafted already. But, the second thing that a company does is to execute this strategy, right. And the way we execute this strategy is only with people and that’s why we believe that our organization, our technical organization has to be the best in our market so that we can develop products in a much faster way than our competitors.

The major undertaking that we have done in Latin America, it has been to merge both the IT organizations and the network organization so as to leverage on the strengths of each one of those organization. So, in IT there is a huge knowledge about internet, software development, which is becoming something very important in our organization. In the network organization, the strengths have been always robust process oriented organization. It has always been about availability. I mean you don’t see it to many telecommunications network going down. These are career grade, 24/7 type of mentality.

So, this is what we have done today in the first half of this year in Latin America. In Africa, we want to do the same thing but before we implemented we’re going to strengthen the IT organizations and this is something that we’re currently doing today.

We have also been exploring with outsourcing in IT in some of the areas, especially in Africa with ultimate objective of seeing if our managed services makes sense for us as same as some of our competitors. But, we believe strongly that the strategic capabilities have to be with us before we offshore it somebody else.

The other thing that we are excited about is this solution factories and in this morning Ricardo and Gloria were mentioning some of the products that have been very successful in our market. And one of it is the Tag & Trigger and the idea here with the solution factories is that we are using them to develop things that are not readily available with off-the-shelf systems. For anything that is not out there, yet available. We are making them with the solution factory so that we don’t lose the first to market opportunity in our markets.

So, that was the organization dimension of the vision.

The second one is service delivery and service delivery is all about exposing our networks, our existing networks to the development communities be them local or international. But, the idea here is to keep generating more revenue streams and also to maintain the lifecycles of the hundreds or thousands eventually products that we’re going to have in each of these categories. And the good thing is that we have implemented a very formal governance process, methodologies and procedures in place such that we make sure that we have full quality assurance in the whole service delivery and that our cost are extremely low.

The third dimension of the vision is technology and I know that this chart looks extremely complex. But, let me make it simple for you. Visualize this block as Lego [ph] blocks. They are so small that you can put them together to form more complex structures out of that and the good thing is that with these blocks being loosely coupled, best in class blocks what we can do in the future is continue to make our technology or our architecture be completely align with the business needs. So, as the business needs keep changing with the years, we will be able to have the flexibility to keep building the structures that are needed to flirt.

Last but not least, we have this security problem which is the forth I mentioned about our vision and the idea here is that we’re going to go from the level the yellow that you see here to the green level and the idea is that by the end of 2012, we want to be certify both by the ultimate security standard and security which is the ISO 27001 and the main points being that we will have formal security organization in place which we are currently developing. We already have a CISO or chief information security officer globally and we are hiring CISOs also in all our markets.

So, we’re going to have a very robust organization for security. And also the idea is to build a risk management approach to securities. It’s not just about putting anti-virus or firewalls. It’s not only about technology, it’s about the risk managed approach. So, those are the four dimensions; organization, service delivery, technology and security.

So, let me talk about a little bit more about the projects that are currently implementing. The first one is real time billing, convergent billing and this if you would take the analogy of this smart pipe, this is putting the intelligence on the pipe. This will allow us to develop products faster and to provide multiservice type of billing to our users. So, we’re really excited about this product and had I already been given excellent results in Columbia and Ghana. By 2012, we will complete South America and Africa and all of our markets will be ready by 2013. So, that was real time conversion billing.

The other project that is already giving us great results in the markets where we have implemented it is the CRM, which are customer relationship management systems and these are all about the consumer, this systems provide 360 degree view in a single application. So, all our reps in the call center and the branch offices, they have a complete access with the history of the consumers in a single application. So, whenever our consumers go to the branch office, it’s call it or as Gloria was describing this morning, people can live with [inaudible] activated with Tigo in less than 15 minutes.

So, in Columbia and El Salvador has already been implemented. Latin America will be completed in2012 and the rest of the markets in 2013.

The other major project that we are undertaking is the ERP and these are enterprise resource planning systems that the advantage that they provide is that they integrate the main areas of the company. So, for example, from planning to supply chain, since all these areas become integrated, it increases dramatically the productivity of our employees and in the same time, it reduced cost and provides better analytical information so that we can make better decision going forward.

In Latin America we have a pilot already undergoing and in Latin America it will be completed by 2012 and the rest of the markets in 2013. The last example that I brought you was the solutions factories which I already mentioned is to produce anything that is not available out there of the shelf. We have produced several products that are giving us competitive advantage in our markets and in Latin America have been completed. We’re currently implementing them in Africa and it will be ready by next year.

So, as concluding remark I just wanted to mention that for our group, IT is priority number one and that’s why we reinforcing our organizations, our service delivery framework and also our processes, procedures and the technology. Thank you very much.

Okay, I think right now, after this we’re going to have Q&A session. So, no, Enrique. Sorry, Enrique, I was making the same mistake as my colleague did. Thank you.

Enrique Aznar is going to present the next presentation.

Enrique Aznar

Yeah, thank you for the introduction Max. Well, I realize the last I’m obstacle between lunch and coffee. So, I’ll try to be very brief on my message to you. My name is Enrique Aznar. I joined Millicom about six months ago. It will be six months tomorrow. As Head Chief Corporate and Chief Governance and Compliance and I’m now acting as Chief Integrity Officer. The position is a new position that reports to the chief executive officer and the chairman of the audit committee.

I’m a lawyer. I’ve been working in different positions and the last two positions I had were in similar roles with Tyco International and Nokia Siemens Networks, companies that have had kind of connection with some corporate kind. And, the purpose of – well, it’s not secrete that Millicom operates in countries that are challenging countries from many points of view. Countries that have some rule-of-law challenges, some human rights challenges and some of them are perceived as very corrupt countries. So, we need to be very vigilant about how we operate in those countries.

Millicom has developed over the past years, a very robust pretty robust compliance program. But, management decided that well, it was not sufficient to have pretty robust compliance program but we needed to have the resources to make sure that our employees make decisions that are legal, that are ethical and are in line with our values. That’s why they created this Tigo Integrity Officer, office position and we are now in the process of recruiting integrity managers. One manager per operation in which we are currently operating. So, we’ll be a team of 15 people including me.

The other thing is that Millicom decided also that we wanted to be the most responsible telecom operator in the countries where we operate. And we are going to align the Tigo Integrity Office in that direction to support the business to achieve the objective that we have. And some of them I’m going to share here with you today.

We’re going to address what are our beliefs, what is our strategy, what tools we have and what are the initiatives that we have already put in place. We strongly believe that telecommunication is a powerful tool for economic development playing a great role in addressing the digital divide. We are convinced that the responsibility towards people and the planet is central and vital to our success.

There is a direct and indirect relationship between social responsibility and our financial performance and that there is a strong interdependence between business and society. You have seen today some examples on how telecommunications companies can really improve the quality of life in the countries where we operate. We have a unique opportunity by being Multinational Corporation operating in these very challenging countries to bring some goodwill to these countries. So, we have a unique opportunity.

But, what are we’re going to do. How are we going to make sure that we have an impact in these communities? Well, we have developed this integrity strategy that has four elements. The first is reducing cost and risk. The thing is that we believe that by implementing our approach, as I said from a compliance perspective and also from a social responsibility perspective we are consolidating a culture but we have not only protecting the company, we are protecting the investors but we are also contributing to the societies in which we operate.

So, the first one reducing cost and risks, we achieve by implementing policies and procedures that prevent the livelihood or reduce the livelihood that we incur in situations that trigger fines or penalties. How do we do that? Well, we are active at prevention, detection and correction of any wrong doing.

Second and third, gaining competitive advantage and developing legitimacy and reputational capital. We do it by implementing, by executing upon our business model, our mission. We have spoken today about availability, affordability, accessibility and affinity and you have seen some of the other things that we’re doing. This includes trying to attract, try to increase our reputation to attract and retain talent and by making philanthropic contributions that I’m going to touch upon some of them. Fourth one is achieving win-win outcomes through synergistic value creation.

Well a stockholder engagement is fundamental in our operations. And then, some of our stakeholders for example are our customers. We have seen a few minutes that by understanding our social needs and converting them into an economic opportunity like in Tigo Cash, we are not only improving the quality of life of the people in those countries where we operate but we are also making some money, some business for our shareholders.

So, in reality we are focusing not only our shareholders which we do very seriously but also on the quality of our – quality and development of our employees, people in the communities where we operate, the customers that we have and also the governments and the regulators of the countries where we operate.

So, what tools are we using to implement all these strategies? Well, we based our framework on the guiding principles of the United Nations Global Compact that basically focus on four areas, human rights, labor standards environment and anticorruption. And we are developing policies and practices in connection with all these four principles.

Also, we have selected and this is something that we have done. Our employees have done. We have selected three values that are our DNA. One of the main tasks of the integrity office together with other offices like human resources is to make sure that all these principles, all these values are embedded in our day-to-day activities. And the Integrity Office fundamentally they focuses on the integrity value and we are going to develop some initiatives and some KPIs, key performance indicators to measure our progress in this area.

We have taken already some initiatives. The first one is the creation of the Tigo Integrity Office in 2011 and we have agreed as a company that we want to generate social return of all our corporate investment in five years. Listening to my colleagues today, I’m convinced that we are going to achieve this objective much earlier and we are implementing some measures in that direction.

We are currently working on reduction of our emissions, our impact on the environment, our impact on people. We focus very much on the protection of children, we make sure that we have strict policy on child labor et cetera et cetera. I could list many of the things that we are doing.

We also have created the initiative of our CEO, business assurance group which is a meeting of the executive team. We meet on a monthly basis to align to decide objective to achieve these goals to measure our progress and to discuss new initiatives. And we also taken consolidated holistic approach to governance risk and compliance. In addition to this our company, our board of directors has a committee on corporate social responsibility and our colleague Ricardo Maiztegui, he is responsible for the Tigo Together initiatives under the CSR umbrella.

The connection with CSR or Tigo Together, I’m going to show you here some numbers that are available in our corporate social responsibility report that you can see in more detail there. Basically, I’m trying to illustrate that we take this things seriously that we focus on three areas, environment, education and healthcare and the initiatives or the framework it comes from the corporate, from the group. But, execution is left to the operations that adopt the initiatives to the needs of the local communities.

To illustrate that, I’m going to share with you a video of some of the activities that our Tigo Foundation in Guatemala has taken place, had carried out in connection with education.

[Video Presentation]

Well, this is just one example of some of the activities that we take in our corporate social responsibility front. You have an exhaustive list in our 2010 corporate social responsibility report in our website and I will now – we’re happy to take any questions that you may have in the Q&A session.

Session 4

Fernando Salvarezza

Good afternoon all, my name is Fernando Salvarezza., I’m brand and consumer understanding for Latin America. I know this has been a long journey, and you are anxious to have François’ numbers, so I will be straight to the point.

I am going to talk to you about media consumption shifting that is happening in our markets. I’m going to show you some examples on how we are facing this shift and this is also driving to the creation of new distribution channels and new revenue streams. Those are the topics that I’m going to talk in the next minutes.

So let’s look at some numbers, in Bolivia for example of our users two out of three of our users who watch TV uses Internet. I think that’s an amazing number. In Colombia for example, 56% of our target uses Internet and this doesn’t mean that TV is losing width, what it means is the share of the screen is switching from TV to Internet and online streams.

And for example of all Internet users in Colombia we asked them if they, do they watch less TV because of the use of Internet, 40% answered yes and I’m sure that the digital natives [ph] will answer yes because they never use that, watch that Internet at all, so this number must be greater than this.

Another very interesting fact in Latin America is that Internet users in Latin America are more willing to engage with brands than the average of the world. That means it’s most probably that they click “Like” in the Facebook page of a brand. And why this is good for brands, because these people, the one that engaged with it, also says that, 71% also said that they are more willing to buy from these brands and 66% said that feel more loyal to these brands. So this is very interesting in Latin America also.

So what all this means, this means that – this doesn’t mean that we have seen little change the way we are basing media because Internet and digital media is totally different than the traditional media. Why? Because as Ricardo said earlier when people are using the Internet there are multitasking, probably they have many tasks open, probably they are listening to music or reading, answer the form et cetera et cetera.

So we cannot send or push unwanted method that we use to do on traditional media. That’s our challenge. Our challenge is to produce content that our users, our target choose to watch and choose to share. So we are doing some actions in this matter and I’ll show you some examples.

For example, so is the case we did a couple of months ago in Honduras when we launched the iPhone 4. We used our Facebook platform on our Facebook friends to launch a challenge asking them, what they would do for a Tigo iPhone phone. They have to upload a video for all the community and telling the community what would they do. So the video that has most votes, the users that has got the most votes are invited to take the challenge and if he do it he get the iPhone.

So the numbers of this iPhone was that in three weeks we raised our Facebook fan more than 42% and the video was uploaded to our channel in YouTube and it has more than 53,000 views. This is important because of the switch of the investment, I told you earlier. These 53,000 views of the video doesn’t have anything for us, it’s very important and it’s very interesting what is happening with this new media.

So let’s see a video of the action, the video you’re going to watch are some of the samples that were uploaded by the users, so that’s the quality you’re going to see.

[Video Presentation]

Okay. So thousands of people got the message and most of them got the message from their friends on Facebook.

This is another initiative, we are launching this initiative right now in Colombia, is called, I want my Tigo, “Quiero Mi Tigo” and we build a, let’s call it, social commerce platform and advertising where are any of our users on Facebook can choose the Smartphone he wish and this decision is spread over his circles in Facebook and their friends can collaborate within a group payments to his wish and reach he’ll reach the amount necessary to buy the Smartphone.

So we are seeing from the first week that we are launching this that for example when we are reaching [inaudible] the amounts get raised or maybe this guy is telling friends instead of giving a gift why don’t you put some money and get a Tigo. It has an e-commerce bundle in the application.

So we are in the prelaunch phase, we have 50,000 participants. I’m going to show you a video with the basic of directions.

[Video Presentation]

Okay. Very simple up here. And I’m going to show – tell you for example that how are we facing this media shift. This action has some on and off-line communication, but do you know in Paraguay our brand Tigo is very close to football, actually we’re the sponsor of the national team. And in Paraguay the derby of the premier league like Arsenal and Chelsea here is Olimpia versus Cerro Porteño. And can you imagine how many times final of Olimpia and Cerro Porteño have been played in the stadium with all the stadium full and the crowd yelling for the team.

So that’s what we did, instead of buying static advertisement on the stadium like we used to, we set up this challenge again on Facebook asking teams of friends to participate, and the team s that has the most votes was selected to play in the half time of the derby with a full stadium.

We have 25% increase of the Tigo fans of Paraguay page in 10 days. I’m showing you a video of that.

[Video Presentation]

Okay. Those are samples of what we are doing with this media where people where our target participate of the message. I think most of our communication from now on will have this interactive dimension which I think is very important to reach the equity we want for our brand. And also all this media shift is leading to new distribution channels, I’m talking about who of you remember when was the last time you buy music software, airline tickets, auto reservation, car rentals et cetera on a brick and mortal store. This is also happening because of all this shift. And we are as are industry are very active on pushing the shift.

And we know that in the next year a significant part of our sales will also be online, I mean airtime top ups, entertainment products, financial services, paquetigos, handsets and SIM cards et cetera et cetera. So we are building this platform and also this platform will allow us to do micro segmentation that’s one of the things that the e-commerce will allow us and that is supporting our segmentation strategy that is pushing up our growth.

Also, of course, online sales will reduce our distribution costs.

And the last thing I want to tell you is also the shift is leading new revenue streams. Ricardo earlier talked about the Tigo Media that is happening in Guatemala, it has five months live. What we do is, we ask our customer base if they allow us to put advertising messages in their handsets in which way back tones, in banners and web portals and after calls pop-ups. 20% of Guatemala customer base opt in for this. This give us 200 million monthly impressions of stock Tigo [ph] impressions that we are selling to advertisers. That in five month has given us $ 50,000 of sales monthly. We are selling this stock to some of these brands, McDonald’s, Citi, Fuji, Danone et cetera et cetera.

Okay. So that’s what I wanted to tell you, the conclusions are: a media shift is happening in our markets, we know it, we are facing it. Our communication, our brand recognition, our promotional communication is having interactive dimension where our target hits in both of the methods. We also are using the new online social channels to push up our sales.

Gloria, earlier talked to you about the Tigo Portal that is e-commerce and this is supporting our segmentation strategy, it’s lowering our distribution cost and we also building some new revenue streams like the one which I saw with the mobile advertising.

Thank you. And now François-Xavier, over to you.

François-Xavier Roger

Good afternoon, sorry I don’t have any videos as to show you and again I think we are the only ones who are showing up so many what we’re doing for next year. We want to be still in the young and cool gamer. I have also the privilege of being the last one to make a presentation and as a consequence and I know that many of my colleagues are pushing back, they are pushing back few concepts to me. So, I will have the privilege of trying to address all new nets expectations.

So, let’s move to more serious stuff, many times when I meet you guys I have one question which is what is management focus upon and this is one of the main issue that I want to address. As you know for the last couple of years we’ve being focusing on growth, on profitable growth as where which mean that we have been focusing a lot on revenue growth and EBITDA margin.

We are still focusing on that so we can see that in terms of management focus these remains of top priority. You know that for the last four year we put much more emphasizes on cash flow generation with a lot of success I must say, I think that we did tremendous effort on that and as we know we’ve been generating last year about 25% of revenues in cash.

Now, we are maturing even one step further up and what we would like to do is to, in fact what we are starting to do is to spend much more focus and energy on return on invested capital and I will show you a couple of examples of what we have been doing and what we expect to do in the future.

What is important as well is to understand that we do not want to favor or prioritize any of these three components at the expense of another one, which mean that for example if we have opportunities of growth and profitable growth, but if we does not generate any cash or if we does not generate any return on invested capital we’ll not go for it.

Even this is valid for external growth, so for example if we see an opportunity in terms of external growth, a company to buy but if we don’t see any return on invested capital within a certain timeframe. I will detail it a little further, we we’ll not go for it. So, which mean that we’ll be selective in the growth that we will support.

Let’s talk first of profitable growth, so looking backwards at what we did in 2010 if we breakdown the growth between the four categories so we had an 11.2% growth out of which 45% was coming from communications. So mainly voice on SMS a traditional or co business that we had for years. You could see really the pickup of information, which is once again data which is a second largest growth contributor and solution starting to pickup already.

Entertainment, we have been little bit struggling with this category, which is really dependent on promotional activities and we picked up that customers who are little bit tired of some of the promotions we did so we need to reinvent that category.

If we look at the same – summarizes for the first part of 2011, as expected we had announced and shared with you. We can see that communication is slowing down in terms of contributions of growth. While actually the total growth didn’t considered about the same level at 11.4. We can see that as expected information and data on specially 3G is picking up and is becoming is the first growth driver of the company.

Solution remains as a significant growth driver and in last month, we started to fix it a little bit. Other is mainly non-recurring items such as telephone equipment for example, which is of lesser interest because it’s is for lesser interest because it’s not recurring item. So moving from that point where do we expect to be and what do we expect to have as main growth components for the year 2012 and 2013.

We expect communications to deliver about 3% percentage – 3 point of growth. Information, we expect that it will deliver around 3% to 4% percentage of growth, entertainment between 0 and 1 point and solution should gain scale. With what we saw with MFS, we expect that it should be around 2 to 3 points.

So in terms of aim we confirm what we had said last year for 2012 and 2013, which means we expect to get to growth around 10%. There could be some volatility even if you look at the lower end and the higher end of this range. So it’s around 10 points let’s say between 8 and 11 points.

Talking about growth, I would like to give you a little bit more flavor on the main component of our growth as you just saw, which is data. And so data is both 2G and 3G except to whenever it is precise. If you look at our global or data business, we have today 6 million users, out of a total customer universe in Latin America, this is only for Latin America. I’m not addressing Africa because we have just started. So which mean that we have to about one-fourth of our customers using data today with an average of ARPU on data only which is at $4.5.

In order to better understand this category, we need to break it down into sub parts. Because – I mean the profile of these sub categories is fairly difference as you will see. Data cards a little bit less than 1 million customer with a high ARPU, $16, so attractive. This contributes about 53% of total data revenue in Latin America and this is business that is growing nicely. We have an issue though and I’ll come back to that later on, which is traffic management because this is where we have the bulk of traffic conception.

Then we have, I would say premium part of data, which we provided here with BlackBerry because we have more visibility on this specific category. So, it’s about half a million customers with nice ARPU as well $15 on data only. This contributes a little bit less than 30% of revenues, this is the fast growing segment. There, I mean the issue is more about margin, I will come to that a little bit later and the challenge is really to push penetration because we have 0.5 million customers, but we can certainly do better.

And then, we have all the other customers of 3G. We have 4.6 million of them with low ARPU. This contributes only 18% of our revenues, but this is a fastest growing segment. So we’ve – this is a fairly [inaudible] cluster though, given that there you have iPhone, but you have basic 3G handsets as well. So there we have to drive both penetration on usage and I am going to give you some additional information on that.

To better understand where we are in terms of data, let me give you some additional information. The breakdown of revenue by technology today it’s predominantly 3G, which is a fastest growing part, but we still have 30% of the traffic on data, which goes on 2G, which we do not see as something negative at all. I mean it’s absolutely neutral in terms of margin, so there is no issue at all, but we prefer customers to use 3G because of use these get access to better service.

By device as we saw more than half of revenues are coming from data cards less than one 1,000 by BlackBerry and less than 20% on other hand sets. And by payment type, this is fairly different from what we have invoice, actually it’s almost the reverse. It is predominately postpaid which is 80% of revenues and 20% which is prepaid. And the fastest growing is postpaid. Once again we don’t see that as negative and I will show you an example of what it means in concrete terms, but it is good way to develop the ARPU as well.

The opportunity even if we have achieved already something significant and something very attractive, we believe that the opportunity is still very large. If we look in terms of penetration today, we have about 7% to 8% of customer base in Latin America who has a 3G enabled handset. So you can see the very significant potential and that we have in terms of penetration. And even if we take the small share of the total customer base, it is 7% to 8%. Only 55% of them are using data toady and it’s even going down because probably the latest customers are not choosing the service, 3G service yet.

So, not only do we have an opportunity in terms of penetration, but we have an huge opportunity in terms of usage. And this usage we have already addressed it fairly well, given that if you look at the blue line, which is the ARPU on data only – the data ARPU only on 3G handset. As you can it has been growing very nicely. I think it’s close to $7 today on 3G handset. So, we expect that it will grow significantly further than that.

If we look at the revenue breakdown by device, data cards is predominantly obviously a data with 90% of revenues from data cards are coming from data. Also, you have about 7%, which is coming from voice, which is essentially the Skype and other similar products as well as little bit of value-added services.

If you look at BlackBerry, it is much more interesting. You have voice is little bit more than half of the business. But you have about one third of revenues coming from BlackBerry users, which is on data. And you have only 12%, which is on value-added services. So there we can see that this premium segment represent a good opportunity to push even further of us. So, we need to push voice and data as well, but there we can do better.

And if we look at the all the other handsets, it’s predominantly voice, which represents two-third of the total revenues. Thus which gives you an idea of what we can do on BlackBerry as a consequence and there we need to work much further on data, because it is a very, very small portion of the ARPU today.

Talking about growth, I wanted to share with you an example. I picked it up at Colombia, don’t believe that I took the best example. And I could have taken another country, but I took an example with 4,000 2G customers in Colombia that in July 2010 that we migrated with a 3G plan, which is really an excellent example of what we have been able to achieve in order to drive ARPU up as you have seen.

For more than a year now in South America, ARPU has been going up and I think over the last two quarters in Central America as well. This is one other reason why we could do it. By converting these guys from 2G to 3G with the plan, we increased ARPU by almost 50%, moving from $31 to more than 45. And as you can see it cannibalizes a little bit on voice on this specific example, because it is not always the case by the way, but on this specific example there was a little bit of reduction in terms of voice ARPU.

But as you can see these guys were consuming less than $1 of data and then one year later they are consuming $16 of data only. And the beauty of it as well is that it did not cannibalize others. In others, we have SMS. In that specific example by the way SMS increased as well. So not only do we develop the business with a little bit of dimensions of core business, but we can develop the new businesses as well such as such as all these service.

How much did it cost? To do that obviously we had to do some subsidy. So, in this specific case we spent about $0.5, which means that we had to pay back less than of one year. So, this is an excellent driven of growth, revenue growth and excellent driver of ARPU stabilization and even further of ARPU increased and it increases as well as EBITDA.

It may slightly dilute the EBITDA margin, which mean that – I don’t know I you had the customer with a similar example, a customer who had $10 ARPU with 50% EBITDA margin. If you convert it to a $15 ARPU with a $7 ARPU – $7 EBITDA margin, the EBITDA margin increases from 5% to 7%, but the EBITDA margin may move from 50% to 47%. But, what really matters is the absolute amount.

Doing that kind of program and support led us to this result which is I think really, really satisfactory. For the first two years of data we could see that data was a good opportunity with a nice growing business. And about a year ago we shared with you that we intended to accelerate the investment and the promotional investment, many subsidies, behind 3G, because we saw that there was an opportunity. So we started to invest in Q4 last year and you can see that we totally changed that dynamic and the momentum of the growth and we intend to pursue that even further.

So the strategy now is really in terms of data cards and BlackBerry where we have low penetration – low penetration to increase the penetration while for all the other handsets, the strategy is to increase both the ARPU and the penetration as well.

Let’s move now from growth to cash generation. By the way, I didn’t talk about EBITDA margin. I talked a lot about it last year. There is – there is nothing new there, but there is no change, we shall review is the strategy is, which is to maintain an EBITDA margin in the mid-40s. We are still with the – same exactly the same plan, and to invest whenever we could see opportunities which is exactly what I showed you a minute ago.

Just one thing because I – there was a question this morning about the different level of margins according to the business, the type of business that we have. If you take the average margin of Millicom, voice is lower than the average margin of – EBITDA margin of Millicom while VAS today it will be different in the future with MFS, but VAS today or SMS for example, have higher EBITDA margin. On data, there is an EBITDA margin, which is in line with the average of Millicom, which means that it is higher than the voice as a consequence.

Moving to cash, I’m not going to explain to you how we generate cash, because I think we have had three years of strong cash flow generation, so I think we have already demonstrated ability to generate cash. I wanted more to cover with you because I know there is significant interest in it what are we going to do with the cash. We have two ways to use the cash; the organic one, CapEx obviously.

Our objective is really as far as CapEx is concerned to share as much as we can our asset base. This is the reason why we took those initiatives with StarWars. We expect to do more of it; I’ll talk a little bit further about it. And the object you as far as CapEx is concerned is to try to control the value of CapEx as a percentage of revenues to a level very similar to what we have today.

In terms of cash use, spectrum, we know that there might be or there will be some availability of spectrum in some of our markets. We don’t always know when and where and how much it’s going to cost, but we will make sure that we grab the spectrum that is available whenever it’s available and whenever it’s needed and this is especially true for 4G. We believe that it is necessary in terms of long-term investment to get access to the spectrum.

License renewal for mobile, this is always something that we on the radar screen. We want to make sure that we pay market prices. So the next – that we have obviously much more visibility. We know that the next countries where we have to renew our licensees are Chad and Bolivia and there is part of the license renewal as well in Colombia. So we are not too concerned about the renewal itself, but we need to make sure that we play market price at all times.

And as we shared earlier, we could potentially acquire licensees for financial services, which could be done in different shapes and forms if necessary acquiring small banks, but we don’t think that this is going to be a significant amount.

In terms of external use of the cash, dividends, we have introduced dividend policy three years ago, a regular dividend policy, with 26% payout ratio the first year then we moved it to 28%, then 32%. We are committed to it. As you could see as well since it is a payout ratio of net profit excluding exceptional items, this is highly – the amount that will be paid is only dependent on the level of net profit and our net profit has increased already in the first part of the year by more than 30% of our last year without saying that there is potentially when looking at the industry as a whole probably some room you know to increase the payout if the Board decides to do it.

I’m not going to make any announcement in terms of dividend now, so don’t have any expectation. We do that usually after having discussed it and after having the Board approval most likely in mid-February.

Share buyback, as you know, we have announced this year fairly extensive and ambitious share buyback program. This is the topic of my next slide, so I’ll cover it in a minute.

Acquisition, we are always looking at opportunities to make acquisition as leading operators in mobile or to acquire skills in financial services, a little bit what we said earlier. Our cable assets as well, you had the presentation from Esteban, we are very happy with what we have seen so far and we believe that it makes a lot of sense for us to acquire cable assets.

Talking about share buyback, what have we done so far? We have acquired 3.1 million shares since the beginning of the year at an average price of $108, a little bit more than $108. We have spent $338 million so far since the beginning of the year, which means that we have already done 42% of yearly targets.

We are, I would say, almost on track to do the 800 million given that we are buying, as you can see, because it’s totally transparent today, you can see it on the NASDAQ OMX website. We buy about 50,000 to 60,000 shares so which means that given the number of days that are left, we should be in a position to get close to the global to the total target.

We have decided now contrary to what we have said before initially to do some tactical share buyback in the U.S. after the close period, which means from the beginning – from the middle of October, but we’ll do a little bit of share buyback in the U.S. and the OTC market with Pink Sheets no more than 5,000 a day, so it’s purely tactical just to have job the remaining U.S. ordinary shares.

We consider that the conversion process has worked extremely well, because we have 93% of the shares now in the form of SDRs and more than 80% of the former ordinary shares in the U.S. have now been converted into SDRs. We thank you, by the way, for your support on that. So in order to facilitate the conversion of the last remaining shares, we may do a little bit of share buyback in the U.S. from mid-October.

Moving to the last part, which is probably the most important, the ROIC, which is one area where we focus really a lot upon today. We have good track record and we have some ambitions there and we have set for ourselves different targets according to the area where it applies for their existing business, for the new business lines, and for an external growth.

If you look at our track record for return on invested capital so far, we are very happy to share with you the fact that we have today a return on invested capital which is about 28%, which is more than two times our WAAC. The WAAC of Millicom is probably around 11.5%. So I think it’s really extremely satisfactory.

And what is even more satisfactory is the fact that this is not something that we have accumulated over the last 25 years, this is something that we keep on working upon, because if you look at our track record over the last two years, any additional CapEx or any additional investment that we did, including external growth such as Amnet or Navega where we took an additional stake, contributed to an additional ROIC. So that’s very satisfactory. And in terms of target that we set for ourselves for our ROIC, we expect to be able to maintain the ROIC at the existing level or even to increase it if we can.

What can we do in order to secure a good return on invested capital? We have a certain number of initiatives; some of them are not new, we have been doing them from years. Just go quickly through them. Asset productivity improvement, as I said earlier, we are strong believers in the fact of sharing assets. We did it for a significant part of our towers, but we could do that as well for backtone, backhaul. We could do it even potentially for spectrum.

And it makes even more sense in countries where you have low ARPU, such as Africa, because when you have a low ARPU, which is the case of Africa, there is no real direct relationship between ARPU and EBITDA, but let’s say the dollar of CapEx that you have to put on the table in an low ARPU environment is quite high. So in order to make sure that we get to a decent return, sharing assets makes even more sense. So we could share the spectrum for 3G for our 4G for example.

You heard some of my colleagues making presentation about the way to increase capacity utilization, traffic management, promotion that we do for example to increase the use of our network at night or during low usage times. We can reach some synergies between fixed and mobile as well, especially on fiber. For example, in Central America, we are currently merging if I can say so the former Navega Amnet and Tigo network using only one single network and removing a couple of dozens or hundreds of kilometers of fiber.

CapEx management, we will be even tougher than we have ever seen on CapEx, which means that we accept the fact of not investing on some CapEx projects if we are not totally convinced that there is decent return in terms of ROIC.

A good example of it so we have not made any final decision and it is on a case-by-case basis, but in Africa, in rural areas, we are not totally convinced today that there is an attractive return. So in that case we may decide or we have already decided in some areas not to go in some of these rural areas just for the sake of going if we don’t have an attractive return.

On the other hand we have decided to push CapEx with high return projects such as backhauls, backtone, 3G capacity. As you would see for example on 3G we have had an excellent return so far, so it makes a lot of sense to push this category.

Another way of doing it, which is what you heard already today, not to do any unlimited plans but push for pay-for-use policy in order to make sure that we have a return on CapEx, which is in Europe or in the U.S. they are facing a very difficult situation with an exponential growth of traffic but a smooth growth of data revenues.

The other item is obviously margin protection, something that we have been really working upon lot over the last couple of years with a lot of success with a specific focus on returns on subsidy. We are spending more and more money on subsidy, so we always make sure that we get a decent return. We are trying to get return between nine months or below one year anyway.

Leverage fixed cost between fixed and mobile, this is something that Esteban covered in his presentation. We always had every year a lot of programs of cost savings, cost avoidance, but even when we design new products obviously MFA and all these products, we always pay very much attention to the kind of return we can get without talking of pricing where we believe we have a super capability.

Finally, talking about ROIC, the – one of the excellent lever of ROIC improvement is certainly tax optimization and planning. We have said that last year that we would work significantly on this item that you could see in H1 our average – our effective tax rate decreased very significantly and we are taking some other initiatives in order to improve the situation in that regard.

Moving now to – from the existing business to new business opportunities, what does it mean ROIC? We can’t expect to get a 28% ROIC straightaway when we start a new business such as data two or three years ago such as MFS today. So the target that we have in that case is to reach an ROIC superior to the WAAC of Millicom medium term, which means three to five years.

And if we look at the situation for data, mobile in Latin America, we have invested over the last three years about $300 million of CapEx. We started with a low ROIC, but you can see almost three years, a little bit less than three years after the initial investment we already have an ROIC up 17% to be compared with the WAAC of 11.5% for Millicom. So we have really a very strong discipline there even for innovation.

If we look – and I want to give you an example of the way we manage our ROIC on a daily basis, because ROIC is not just something for Mikael, for myself, or a couple of executives. It is something that we can really use on a daily basis as a decisional tool. And I took the example of data for Latin America. As we saw earlier, if we look at the different subcategories, so we have an attractive ROIC on data cards on BlackBerry and not so much yet on other handsets. So when you see that you are highly tempted to set let’s push data cards or let’s push – let’s promote BlackBerrys.

If you look at the gross margin, then you start to have a slightly different view. You see that you have an outstanding gross margin on data cards, less attractive gross margin on BlackBerry, and a very attractive gross margin on other handsets. So there you are probably tempted to say let’s heavily promote on push and support data cards and other handset but maybe less BlackBerrys.

But if we look at ROIC, we have a totally different picture, especially on data cards because we have far less attractive ROIC at 9%. We have an attractive, I would say very attractive, ROIC on BlackBerrys and a very, very good ROIC on other handsets.

The main reason for it is linked to the fact that data cards are contributing to 53% of revenues, but they eat 90% of the capacity. 90% of the traffic is made with data cards. And BlackBerry, for example, we have a lower margin, why, because we pay a few to RIM, but – I mean we pay a few but there is a service attached to it, one of the service is that they compress the data. So it’s very efficient BlackBerry in terms of capacity utilization of the network, on the top of it there was a store that answer [ph] for us. So we can accept actually a lower margin as there is a low traffic utilization. And the other handsets it’s very well-balanced, I would say, with fairly reasonable data traffic utilization.

So you know as I was saying earlier, this type of study or this type of analysis are really decisional tools because from that point we can really make decisions. What is the kind of decision made on data cards? So we said let’s not do any unlimited programs, we have to move to pay-for-use not even fair usage policy because it adds partially but not totally, but we have to move to pay-for-use policy, and I will say you in the next slide what it means in terms of results.

BlackBerry, okay, nothing really wrong, we have a lower gross margin, reasonably attractive ROIC, so we need to work on margin improvements along with BlackBerry – with RIM by the way.

And other handsets, they are very attractive combination that we start to subdivide between groups because there you have different groups, but we see with a lot of interest the arrival of Android products, why, because we don’t pay the fees that we pay to RIM for example, and on the top of it the handsets are cheaper so they are cheaper which means that we make less subsidy so it will preserve our margin. So we see that development of Android as something very positive.

And you know with this type of thinking on WAAC, we have managed to keep perfectly parallel growth between traffic and revenue and data, which is something that you will not see for sure in Europe, you will not see that in the U.S. where you have an exponential growth of traffic and the smooth growth of revenues. So we could do it in our markets, but we have been extremely active and extremely disciplined, I would say, in the process in our markets. So you can see through that example that ROIC is not just something that we presume to investors once in a while, it is something that we live in a daily basis.

Moving one step further, ROIC, we touched it a little bit few minutes ago. The ROIC for MFS, we know that the EBITDA will be significantly lower than what we have today. Today we have an EBITDA margin which is around 46%. We believe that probably the EBITDA at much where it is for MFS will be probably around mid-30s.

But, it looks totally acceptable to us, why, because there is hardly any CapEx. Most of these products, MFS, are SMS-based, so there is basically no CapEx. So we expect as a consequence to have an outstanding ROIC at maturity. So this is the reason why even this move, this progressive move, towards ROIC an increasing important that it has for us on a daily basis makes even more sense.

ROIC, we can use it as well for external growth and this will be the main KPI that we will use if we buy a company or if we buy any target. We want to make sure, which is probably the reason why we did not buy a lot of stuff over the last couple of years and we don’t feel any pressure to do so, because we are very disciplined once again and we want to make sure that we get an ROIC which is superior to the company WAAC for the medium to long-term and saying there are more than seven years.

And I just want to – I don’t want to just throw that to you without sharing a couple of examples of what it means of the last three acquisitions that we have done so far. So we have bought DRC for $35 million in 2005, Colombia $125 million in 2006, and Amnet for $510 million in 2008. So in total we have spent $670 million over the last six years in M&A.

If we look at DRC, when we bought that business in 2006, we had 7% market share in Kinshasa/Bas Congo which we talk of new Kinshasa/Bas Congo because this is a new region where we try today. Only less than $18 million of revenues, minus 37% of EBITDA margin, and you can understand why we didn’t pay high price for this asset. CapEx $95 million in that year and operating free cash flow we were sending quite a lot of money because we had a negative operating free cash flow even before financing of more than $100 million, ROIC minus 47%.

Let’s look at the situation today. Market share of Kinshasa/Bas Congo we are number one, 39% market share. Revenues, close to $130 million; EBITDA, we almost changed the sign from minus 37% to plus 31%. CapEx, really under control; operating free cash flow, we were actually close to positive, we wish may even be positive this year. Probably ROIC I just took the number in June 2011, because it was more since we had the figure for the ROIC, so 18%. If we compare it with the WAAC of 13% might be 14% in the U.S. [ph] 13% to 14%, I think we can be happy with what we have delivered there.

Moving now to Colombia, we acquired the business in 2006 or 2007 with 13.8% market share. Revenue wise, this is one of the few countries where we have revenue market share information, because the government is publishing it. Revenues of about $450 million, EBITDA margin fairly low 21%, high CapEx, negative cash flow generation, and negative ROIC. We were making big losses.

Then I put an intermediary stage, because we suffered as your may remember a fairly big setback with significant reduction in interconnection rates which totally changed the profile of our business, so we lost tremendously market share as a consequence so we had only in 2008 an 11% market share on value. We got the same level in revenues, much lower EBITDA margin. We lost I think something like $80 million of EBITDA margin a year overnight. CapEx was about at the same level and as you can see from a cash point of view it was a nightmare without talking of the ROIC.

Where are we today? 14.2% market share, so very significant increase, and as you can see it’s even better than in terms of customers because I think we have been able to grab the high-value customers there so very interesting. Significant revenue increase; there is a little bit of foreign exchange there, but to me a small portion of it.

EBITDA margin, we even exceeded the level we had in 2007. CapEx going down and I think that’s even the initiative that we took for example with towers would certainly help us to even do better. Positive cash flow and we have as you know we passed positive in terms of net profit in Q1 and already we are 3% in terms of ROIC. We are not yet to the objective. I said the objective around seven years. We bought that business in 2006, so we still have a few years. I am very confident that we will be on the objective. So we can consider we are on target for this one.

Cable TV, fixed broadband, what referring to the presentation made by Esteban earlier that we bought that business more recently in 2008, I don’t have the ROIC because we were not this year we didn’t have the business with us. $187 million of revenue, 52% EBITDA margin, very strong CapEx about 20% of revenues, strong cash flow generation as well.

Where are we today? $226 million which means we have grown double digits every year so which is very good, especially let’s not forget that we bought that business just at the time of economic crisis in 2008. So to grow double digits two years in a row was very good. EBITDA margin, a little bit of pressure but we voluntarily did it because we wanted to upgrade the programming that we offer to our customers. So we voluntarily decided to invest more into programming at least in it at an initial stage.

CapEx, the same thing; we decided to invest more in the first couple of years after we took over in order to upgrade the facility and the offering that we give to our customers, still an attractive of operating free cash flow. ROIC 2% and so we have a target to be at more than 11% in seven years so which is in 2015. Once again, I’m very confident we will get there even before 2015 and we need to – we are really working upon – we are really working on it in order to be able to do it.

So that’s what I wanted to share with you really our management focus exactly as we did in the past revenue growth, profitable growth, EBITDA, cash flow generation, and really what is new is return on invested capital. Just one last word is that we are even working. It’s not finalized yet, but possibly on the fact of introducing ROIC in the incentive scheme for the executive and top managers.

Thank you. And I’ll take the questions now with Mikael.

Question-and-Answer Session 1

Emily Hunt

Okay, we now have about 15 minutes for questions. And as I mentioned before, if you could keep your questions relevant to the presentations that are been given by Ricardo, Tom Gutjahr would be grateful and please wait for the microphone and if you could state your name and company.

Sven Skold – Swedbank

Good morning Sven Skold from Swedbank in Stockholm. I’m wondering how big of a challenge is IT services and billing, when you develop more and more services, is that a significant cost income, is it an increasing cost. And can you coordinate between different markets here to get some sanities?

Julien Guth

[Inaudible] that Max will cover that in one of the profession – but significant investment and increasing cost.

Lena Osterberg – Carnegie

Lena Osterberg, Carnegie. Just a question on, do you have any sort of calculations for your share of wallet for your customers, the existing customers that you have, how much that is increasing and what other services are in that case going down or is it a case of income also coming up?

Ricardo Maiztegui

We conduct daily survey in our point of sales and we ask to every point of sales, how much they sale from our probe and how much they sale for each of the company, so we track these on a daily basis. And we take actions with this tracking to increase our sales in specific areas of the CD or rural areas or whatever. So, it’s a daily tool.

Tom Gutjahr

Ricardo saying there, we don’t really have any statistics, but what we know if we build relevant services, people are paying for that and then they have to make choices, maybe don’t buy a chew gum or a beer or whatever I showed you there as an example. So, we believe we can’t expand the consumer wallet by the services with a clear evidence of that.

Andreas Joelsson – Seb Enskilda

Just a question on the innovation, you showed quite number of successful innovation, but what’s the hit trade in your total innovation toolkits sort to say and how much patience do you have with service, once you have launched it?

Ricardo Maiztegui

We have patience, we know that we’re going to change and we are ready to and in fact of most failure in our process. And regarding the patience question, we know that when we come up with a specific planning, it’s a end product will be always very different, so something that we even track is a number of table, that we have along the way because if we don’t change our strategy from the starting point it means that we have something wrong. So, we’re encourage it as well so. And regarding patience depends on the type of projects, so we have shorten project, but we have longer term project. So, it’s on the project basis I would say, but we’re patience enough.

Julien Guth

Just to add to that, I think we have a quite low rate of failure because as you see we spend a lot of time understanding the job to be done or the consumer need. So, the failure in the beginning could be that our product design is not matching, but because we spent so much time on the need [inaudible] it’s there or sooner or later we get the right product to meet that need.

Ric Prentiss – Raymond James

Tommy mentioned that in Africa there’s a lot of old phones still out there, do some of these applications required smartphones are just higher level feature phones and how do you anticipate getting the newer phones out there?

Ricardo Maiztegui

I mean, I think you need to have services and applications for all types of phones, so you cannot really afford to exclude a segment and then you can choose your granularity in terms of segmentation, but I would say you need to have something for the very basic phones and you need to a compelling of, for the smartphones even though they might maybe not have to critical master day, but maybe tomorrow.

Ric Prentiss – Raymond James

And then for Ricardo, in your presentation you mentioned Smartphones and Tablets and then didn’t hear a lot more about Tablets, is it that they’re too expensive still or their future plan. We’ve been having a lot of discussions in other markets about, are Tablets really ready to take off, or is it too early so?

Ricardo Maiztegui

For the moment we are not selling Tablets, but in the future, we’re going to do it, if consumer demand it, okay, but what we say, we develop products for now Smartphones and we focused on all the opportunities that Smartphones offer and in the future we’re going to do it for application on the Tablets too. What was the question behind?

Unidentified Analyst

Yes, hello again. Just wondering about how Millicom is thinking about, I mean, first of all, the services that you develop yourself or through vendors, the SMS post services. And on the other hand, at least if I look at my usage, I hardly use any SMS services anymore, most of the services I use are in the network when the cloud. How is Millicom thinking about this and does it differ from market to market, I assumed that for example central [inaudible] is very different from south in DRC et cetera, what is your way of thinking?

Mikael Grahne

Sorry, can you repeat the question, please?

Ricardo Maiztegui

I grabbed that. In a simplicity what, you know, all markets about to say and all regions in the market you’re in are not the same. So, again understand the relevant consumer need in the market you’re in. So, if it’s more advanced than of a cloud services, it’s less [inaudible] of a basic SMS, so tail of the market to the needs in the area we’re in. No, I guess, if you refer in the on SMS to Blackberry messenger, we started to track that, I think it’s, we haven’t seen any major trend SMS is still growing for us, but we are alerted to that and to ask this more of a question of a pricing issue if that is a substitution, we’re happy as long as we have price model.

Erik Pers – Danske Markets

My question was also about Smartphones, can you give us an idea what levels of penetration you have in your various regions the Smartphones today. And also, if you’ve seen an ARPU difference and what that is between Smartphones and Unsmartphones?

Ricardo Maiztegui

Covered in relevantly in depth by Gloria, if you can hold that for a few hours.

Craig Hackney – Religare Capital Markets

Just in terms of device subsidies, can you give us a sense of where you see that moving both in Latin America and Africa. Should we expect to see a peak in latter for [inaudible] next year and then a deplaning need for device subsidies and then maybe the peak coming in two or three years for Africa, how do you see that moving over the next few years, please?

Ricardo Maiztegui

I think you’re familiar with all your, but last year, this time that we’re going to accelerate subsidies in Latin America to drive data consumption and data penetration, we done that. So, when you look then subsidies going or heard you probably the subsidies side on the postpaid, I believe is a permanent future. So, in other words, somebody has a subsidize phone and when it comes to replacement you probably have to subsidize that too, two trends that should drive that cost, down there’s a full basically falling handset prices of the absolute amount that you have to subsidize to get the price points will be reducing overtime. And Africa, we just in the very beginning on the data side, so it’s still too early to drop conclusion, but certainly on the postpaid side, I think the subsidize there to – and as Gloria will show anybody goes to you know, side will have a significantly higher end and normal voice phones. So, we are happy for that trend.

Unidentified Analyst

[Inaudible]. Can you elaborate a little bit more on what you mean by ultra broadband in terms of services and technology and also this health platform that you described the future?

Ricardo Maiztegui

What you mean, [inaudible] in term of technology [inaudible] of the consumers, [inaudible] ready to build or to give access to fast high speed internet and then to be able to build a new services on top of that as I mentioned before it could be radio, it could be television, but it could be any kind of a cloud services for consumers, but as well corporate clients could be an option. So, we are having a close look at on the Africa side.

Unidentified Analyst

And does it mean selective fixed line, fiber, [inaudible] [00:00:00] services?

Julien Guth

Our challenge is to give you some information, but no dollar with for competitive reason. So, we just wanted to highlight you that this is an area we’re looking into – whenever we have plans that are going to be public, we are going to bring them into the market.

Unidentified Analyst

And so, the lack of payment means of payments in Africa, does it mean you have an opportunity to cut revenue sharing deals with big apps stores, is that something you’re looking at?

Ricardo Maiztegui

Yes, but we as well as our Latin American experience, so [inaudible] or billing, capabilities to give access to existing app stores something we’re looking at as well.

Unidentified Analyst

[Inaudible] Just a question on packet Tigo, please. I was wondering whether your competitors are offering very similar products and how that price versus your products and also in terms of where penetration is today, you mentioned it was 40% in [inaudible] various segments where do you think penetration of packet Tigos can get to?

Ricardo Maiztegui

Okay, yes, our competitor are starting doing copying the strategy and we think that penetration of packet Tigos will continue going because value proposition for consumer is significantly better than just the standard price. So, we see huge opportunity to continue to grow on packet Tigos penetration.

Unidentified Analyst

Question for Gutjahr, you mentioned the financial services platform, potentially a health platform, recently we saw in Canada, Rogers filed to become a bank. What kind of a regulatory items you’re getting into as you look at maybe being an alternate energy company, just kind of how, and how does it play into the getting into these different platforms?

Tom Gutjahr

It is very different market by market, if you look at some of the base of pyramid on the financial services, we seemed to be able to offer in market money transfer to the Korea service, so that’s a good platform to get started. At some point of time, little bit more complex products and some of them might require banking license. So, to get that banking licensing, we have two options, we can either apply for one or perhaps look at the option or do a joint venture or even acquiring a small bank if that’s require and then just reduce that small bank to a basic financial service institution that would offer, you know, cover our needs, no branch network and so on.

So, it will depend on the market, but at some point of time we will cross those barriers, to review a full service, the mobile financial service operator. And on the health side, that’s something that we just started look into, we know there is a growth there, simply haven’t had the resources to capitalize – energy I think again like anything we do, we always test the regulatory side to understand what we can and not do and what the obligations around that, the energy provision always done by a third-party like in the DRC example.

Mikael Grahne

I think we have time for one more question.

Unidentified Analyst

Yes. I have a question regarding dynamic pricing which is interesting in order to stimulate usage and also to have the networks run efficiently. But, is the competition also following in terms of dynamic pricing and do you see a risk that this in a sense create a new price pressure in the market?

Ricardo Maiztegui

Yes, some of our competitors are using dynamic pricing and yes, at some point of time, it’s probably it’s going to normal in the market, but it’s a good tool, it’s a very good tool because you basically give a great value proposition and you increase your utilization on your asset base, so it makes sense.

Emily Hunt

Okay. I think we’re going to have a 15 minute break now for coffee which is back upstairs where you registered. And let’s reconvene at 10:20 past time. Thanks.

Question-and-Answer Session 2

Emily Hunt

Question there from [inaudible]. Does someone have the microphone?

Stefan Gauffin – Nordea

I got it here.

Emily Hunt

You got it, okay. Stefan?

Stefan Gauffin – Nordea

Coming back to my, the question I wanted to ask earlier to Gloria, it is regarding the ARPU where you showed that the ARPU of a smartphone subscriber goes from $18 U.S. to $50 U.S. in Central America and I just want to understand if it’s like for like. If it’s the same subscriber what ARPU they had before and then the ARPU afterwards?

Gloria Ortega

That’s both. It is on what we call the handsets renewal and new customers. When a customer’s contract is due dated, it can be 18 months or 12 months, he would go the branch and say okay, my contract is done what do you have for me? We call that the renewal process. So what we do is in that moment we try to push an ARPU increase on the monthly plan and what we offer in exchange is a very good, nice smartphone with a smart subsidy. So the answer is that $50 would be both renewals and new customers.

Stefan Gauffin – Nordea

Does the $50, does that include an installment fee for the handset?

Gloria Ortega

No, that wouldn’t, no. That will include the voice ARPU, the data ARPU and the VAS ARPU and other ARPU such as roaming. It is the total revenue we get from one customer after he has a smartphone.

Stefan Gauffin – Nordea

Okay, sounds pretty good.

Emily Hunt

Question from Peter Curt [ph].

Unidentified Analyst

Thank you, [inaudible]. A question on the cable fixed broadband side please. Could you tell us a bit about your network strategy as you presumably are looking to grow penetration and take up in these markets and is the MNet experience is something that you will potentially be looking to replicate in other markets? And secondly a question for Mikael, please, 12 months ago Mikael you told us that margins on mobile data were higher than on voice. Could you update us on how that relationship has developed as penetration of data is growing? Thank you.

Esteban Navarrete

What I believe is, yes in the fixed volume we have a lot of land to win, yes. And if we want to replicate that strategy in another markets, I am sure Mikael will answer that question.

Mikael Grahne

Okay, on the margin side François will cover that in his presentation. On the sort of the broadband strategy as we said we want to be in fixed and mobile. We are now going to own the link to the Home. So our intention is over time to expand the kind of set up we have in Central America to our other markets. Primarily quicker in Latin America, but eventually also in Africa.

We made an attempt to get some small scale start, test started in Africa but we fell down on the usage of the pole, the electrical poles, the governments in Africa haven’t decided how and on what basis they would rent them out. Just so that you know we do broadband the last mile to Home in the air, that’s very important from role up point of view and the course point of view. So over time we would look at having the same capability in the other markets.

Emily Hunt

If you could pass the mic to [inaudible], thanks.

Unidentified Analyst

Just looking at your data cards, could you give us a sense of data card penetration? Your monthly ARPU of data cards and then whether you are seeing on prepaid data cards, lots of evidence of multiple SIMs.

Gloria Ortega

The penetration varies from operation to operation. ARPU you see in the mid 15 approximately.

Mikael Grahne

There is a breakdown in the Q2 [inaudible] release on the data card penetration, as well as on the ARPU. You can look at it there.

Unidentified Analyst

Okay, thanks. And then multiple SIM cards and prepaid data cards, are you.

Gloria Ortega

We do multiple SIM cards in the countries where we are not leaders. Mostly, some countries in Africa and also in Columbia, quite successfully, because we offer the customer a second option to their legacy line.

Mikael Grahne

So this is a very specific strategy where we have a lower market share. Where we have a high market shares we don’t do that.

Emily Hunt

I think we can have some questions from this side.

Mikael Grahne

Yes, gentleman here.

Unidentified Analyst

I just wondered about the bundled penetration number you gave. You had mentioned you had risen to 30% on cable, I mean that still looks relatively low to me. I wondered if you could talk about how your competitors are doing on bundled products and where you think you might get to on that.

Esteban Navarrete

In the line of the bundled offer, we still have a lot of potential to grow, yes. If you compare with some other operations or I don’t know USA market or European markets, they are around 40%, 45% say in some places like Chile for example, they have 2%, two probes for each home, that is an incredible number. And what we have around 1.4 right now, yeah, we are .38. But what we believe is we are growing very fast but it’s not only our only place to grow.

Because like I said, we still are growing in our singles probes, so we are growing in the two things at the same time, means a strange type of career because you want to grow in the bundle but at the same time your total customer base is growing. So go to 2 we will take some time but the important thing is we grow, we grow in the bundle, we grow in the single probes and we grow in the bundle and we also grow in the ARPU.

Mikael Grahne

As far as quadruple bundles, that’s at its very infancy. That hasn’t taken off, so in other words you would say fixed broadband, pay TV, fixed telephony and mobile. The limited experimentation we done on a quadruple indicates that there is a higher adaptation level if somebody has this three fixed products in their home that they would take a data card so that they will allow them basically to use the broadband when they are out. But we are continuing testing different way to stimulating that but right now the off take is very low.

I think you have to put the arm higher up because you know.

Unidentified Analyst

A question on program costs. You have quite a lot of channels in your package and how has program cost developed over time and what do you see for the future?

Esteban Navarrete

Without giving an accepted number what I can say this we are lowest that the European and US market has. What I can say is they are around 43% like we studies and we are lower significantly in the lowest in that.

Mikael Grahne

We get some strong support from the content owners for our expansion because you know we have proper subscriber reporting, we pay all the relevant fees and that sort of they have a greater interest to supporting us and reduce the amount piracy which is in the market. Because there are two forms of piracy out there, one is that you just somebody cooks into the cable and sort of puts it into your home and the second is the sort of illegal operators who just pull down the signal from the satellite and sell them in a neighborhood area.

Luigi Minerva – HSBC

Yes, good morning, it’s Luigi Minerva from HSBC. Two questions, the first one, when you move from the fair usage policy to pay per use, can you do it straight away or does it require a change in the contract relationship with.

Gloria Ortega

Yes, it is a change management. First we move for all our gross odds new customers and then going back depending on their regulatory situation of the contract in each country made a change management plan based on due date of contracts and first to heavy users of course. So we are in the process of moving, each country has a plan.

Mikael Grahne

So it has to be clear on that point. The majority of our markets, the vast majority are still on the fair user policy. We are in a transition which only has started in the few markets. It’s going to take probably 12 month period to roll this out.

Luigi Minerva – HSBC

And the second question is on, if you can translate your services focus strategy into the CapEx outlook, you mentioned the pressure on network. So maybe a CapEx resale indication [inaudible].

Gloria Ortega

Louis representation on the finance of the data business again.

Luigi Minerva – HSBC

Okay. Thank you.

Natasha Brigenski – Capital Group

Thank you Gloria. Natasha Brigenski from Capital Group. I would like to hear a bit more about the smartphone price changes and what you are seeing in terms of handsets and who are the manufactures who are giving you the best products.

Gloria Ortega

We see a dramatic drop in prices. I mean every new, every way of that we have negotiation prices of smartphones are going down. We even started now a non-branded smartphone strategy for the base of the pyramid and we could find found below $100. We see that smartphone penetration is a great opportunity because it is going to go up. Because it is aspirational and because we have in place this distribution model that we will apply for smartphone.

Gloria Ortega

Yes, non-branded, below 100 already and branded not yet but it is dropping very fast.

Unidentified Company Representative

The gentleman with a blue.

Unidentified Analyst

Hi shall I go? Yes. DM the data card numbers that you have been reporting I guess the same numbers. The credits has been quite modest. So just it looks like an active strategy versus the smartphone growth we have seen. Is that likely to continue and I wondered just why the sort of clear kind of prioritizing smartphones over Dongles. Thanks.

Mikael Grahne

I think the uptake we have had is simply a reflection of the demand. But I think we are quite strong uptake on our data cards. If I look at the Q2 earnings release. So it is not any strategy, it’s just a simple demand issue. [Inaudible].

Gloria Ortega

It is because, remember it’s about ARPU also. Even we sell the smartphone and a data card to the same customer. So it’s about ARPU, it’s about getting the money to telecoms instead of the chewing.

Ric Prentiss – Raymond James

Yeah, Ric Prentiss, want to follow up on the smartphone question a little further. Gloria you mentioned that, you said it was the driver, the tipping point is getting the under $100 level as you look at the line of smartphones when do you think the majority of your smartphones would be at that $100 cost to you?

Gloria Ortega

I expect it to be next year. It will be in a couple of months, because we are close. There are going to be also different layers of smartphones but what we saw is that they are precision of customers, the intake of broadband in customers starts with a smartphone because it is the closest they have. Remember, to have a data card they need a computer. So in data card we have to follow the computer penetration, with a smartphone it’s just the hand and their ability to learn.

Ric Prentiss – Raymond James

And then paying back you know the manufacturers we have met with a lot of US carriers recently, there is a lot of excitement obviously with the Apple device but it costs a lot. A lot of excitement with androids as far as the price drops really coming pretty dramatically. Very quite on the Microsoft Nokia front from US operators. Can you share with us a little about thoughts on Apple and on android and Microsoft Nokia.

Gloria Ortega

It depends on the strategy for the different segments. We have offer for iPhones in the market, that’s for the high end marketing corporate mainly. There is huge pool for Blackberry in Columbia. Columbia is a Blackberry market and it’s a pool market. Even though we are also offering androids and it’s picking up. And android is like the entry level because of price and also as you said it’s picking up and prices are dropping. So we actually is what we do is we select the models based on the insight we do focus groups and try to understand what customers want.

And base of that we offer smartphones in different areas, social areas so in high income areas you will have the iPhone and the Blackberry available and in poor areas you might have the lowest android available. So where it matters we have the offer and we have it through the direct sales and also in branches.

Mikael Grahne

Yeah, I would like to compliment the cover things. We see the price is dropping very fast, we don’t know exactly when but in the next 18 months or something we believe that this $100 is very critical and we think that is the tipping point for smartphone penetration. The other thing that is relevant is that it’s a different stroke for different people meaning there is people who like the virtual keyboard and have no problem with that. So, android or iPhone very, very good. Android had obviously a price advantage over iPhone. But iPhone is more inspirational.

So, Blackberry is more for corporate use and for people who like the real physical keyboard. And in Latin America we have seen a marked preference for physical keyboard. So, some manufacturers are coming with android operating system touch screen and also physical keyboards. So there is all kinds of offers there. And the thing that we have seen is that one doesn’t cannibalize on the other as basically more of the choices for different types of consumers. So, it’s very exciting and this is I think is going to drive a lot in terms of usage, in terms of revenues and obviously, smartphones have better growth margin than a dongle.

Gloria Ortega

Our customer specially the girls say, I want my boyfriend to have an iPhone but I want to get married to a Blackberry user.

Unidentified Analyst

I was wondering if maybe you could say something about the SAAC levels in relations to ARPUs. So, your $50 ARPU customers what sort of SAAC would you attribute to them?

Mikael Grahne

François will go through the gross margin on smartphones and investment they do on the returns. So he will cover that.

Unidentified Analyst

I only compliment saying that it’s a lower than the average in Europe or the states you saw this very positive activation process and we have also smart commission systems based on what we want to sell.

Emily Hunt

Any more questions, no. We’re running a bit ahead of schedule. So, I think we’ll bring lunch forward. We’ll have lunch at 12:00 and it will be back upstairs. And so, you have effectively a bit more time now before lunch. And we’ll reconvene I think after 1:00. Thank you.

Question-and-Answer Session 3

Operator

Anybody have any questions on the presentations about session?

Unidentified Analyst

[Inaudible] Goldman Sachs. Two questions, if you could talk a little bit about the impact of how the number or the increase in the number of products impacts churn in specific markets, if you have any numbers that are Tanzania or some other countries where the impact of churn for increasing the number of products like money payment services.

Percy Grundy

Well, some specific measurements that we have that I mentioned that micro-insurance in Ghana, reduces churn compare to similar group in 20%. I don’t have any specific number for Mobile Money Tanzania in terms of the churn. But, ARPU of Mobile Money users in Tanzania is twice our average ARPU.

Unidentified Analyst

And then, in terms of like the money transfer services, how do you – I guess how do you charge for that. Is it a one-time fees, is it incorporated like bundle products.

Percy Grundy

Okay. If you are talking about the Tanzania model, Marcelo can described the Paraguay model slightly different. In Tanzania, the cashing is free, okay. The transfer has a fixed fee that we charge regardless of the amount and the cash out has a fee that is related to the amount you cash out. I hope it is clear.

Marcelo Cataldo

What we have is we charge in the same way that the traditional remittances work in our region. So, the person that is sending the money is paying for the fee.

Unidentified Analyst

Thank you.

Unidentified Analyst

[Inaudible]. You can just add to that. What kind of margins do you make on the fees that you take given that, it seems that agent obviously get paid more in terms of joining Pesa in Tanzania. So, is it high margin, low margin, how is that work.

Percy Grundy

I don’t think I will disclose specific number. I will say the margins that we get are lower than in the mobile business for two reasons. One if because we are building a business. So, when you’re building a business, of course you need to invest. But, we think Mobile Financial Services come with a lower EBITDA margin than Mobile Services. But, on the other hand they come with a very low CapEx as well. So, the returning investment can be as good as in the traditional mobile business.

Unidentified Company Representative

François has information to talk about that in his presentation.

Unidentified Analyst

Hello again, I have a question about CapEx. Maybe François, I will get back to that. But, the 300 million that you expect to spend here is that – when does it start. Will it start in 2010? Did it start in the beginning of 2011 and is it included in the group guidance for this year for example.

François-Xavier Roger

No, the CapEx as already started and it will be concluded in 2013.

Operator

It is included in this year’s guidance.

François-Xavier Roger

Yeah.

Operator

We had a question at the back actually. Yes.

Unidentified Analyst

Thank you. Just again in Tigo Pesa, you talking about taking market share and I think you alluded to attributing it to the brand strength in Dar es Salaam coupled with your mobile agent. Do you see any other reasons as to why you think you’re taking market share with that product?

Marcelo Cataldo

I think the main reason what I just mentioned, our ability to build our agent network, I think it’s quite good and of course, our mobile brand is benefiting us a lot. I think our implementation is very good. We have not decided –we have decided at this point not to go into a let’s say a price competition, right. Our tariff survey is very similar to our competitor. There might be some pricing in the future. But, for the time being, it’s about the product offering, it’s about the brand, it’s about ability to build agent network.

Unidentified Analyst

I was just wondering, who is the supplier for your billing system the new onset that you’re implementing now, the real-time billing.

Unidentified Company Representative

Okay. In Latin America, we have a different one than in Africa currently and we are building our strategy around the best of brick components. So, it’s not just a single vendor but the best thing in each category. So, I cannot give you their specific. I don’t want to interfere with the process of global procurement that is currently on going as well. But, we have in the likes of Oracle, Comverse, Huawei, Ericsson et cetera depending on which block we are talking about.

Unidentified Analyst

But, you had implemented it in two countries already now.

Unidentified Company Representative

Right.

Unidentified Analyst

But it will not be the same supplier that seen in those countries?

Unidentified Company Representative

No.

Unidentified Company Representative

We implemented some of the parts in some of the countries. So, there are still building components going on.

Larry Gerston – Citi

Thanks. Larry Gerston [ph] from Citi. On Mobile Financial Services, could you give some idea of the difference in margin in particular countries where you see gain a banking license and what you have to do it in partnership with a bank? I know you can’t get details but this gives us some idea sort of the top side opportunity in those different regulatory situations. Thank you.

Unidentified Company Representative

I can answer for Africa. We are not sharing any –with the current model we are not sharing any of the revenue with the banks. So, let’s say in Tanzania bank provides a trust account for the actual cash that deposited and we transact with the money. So, our revenues – the revenues we obtain from the transactions, we are not sharing it with the banks. If the question was going on there.

Larry Gerston – Citi

Thanks.

Mauricio Fernandes – Bank of America, Merrill Lynch

I have a question. Mauricio Fernandes, Bank of America, Merrill Lynch. Can you provide comparison to what you are competitors are doing across the markets as far as solutions in general but specifically on Mobile Financial Services, how better you are or how more advanced you are compare to some of them or one of them.

Marcelo Cataldo

In Latin America, what I can say is we were the first to launch Mobile Financial Services in Paraguay and Central America. So, the application is already live in three countries. We operate in Central America, Honduras, Salvador and Guatemala and Paraguay. We are in the process for Colombia and Bolivia. But, in these four markets we were the first to launch.

Unidentified Company Representative

And so far we haven’t seen any competitors.

Unidentified Company Representative

But, we know they are working on it.

Marcelo Cataldo

Yeah, very few pilots and things to try but nothing serious if I can say.

Unidentified Company Representative

In the case of Africa it’s a little bit different. All the operators are working in this area in different levels of development. We have seen some of them. Some of them have achieved some level of success. But, I will say the vast majority has not being successful in this business yet and we think our ability to implement is quite a strong. Again, I don’t want to say we are the only ones that know how to do this. But, I think we are amongst the best ones out there that are implementing these types of services.

Patrick O’Brien – Brown Advisory

Patrick O’Brien, Brown Advisory. Marcelo, you mentioned international money transfer as a potential in the future. But, it’s my understanding that the international banking laws where the money laundering and so on make that very difficult. How do you solve that problem?

Marcelo Cataldo

Well, that depends on how you position yourself in the value chain. I cannot disclose much of our strategy and the contracts we are going into. But, our idea is to do the delivery part, the last mile and everything related to anti money laundry and controls and controls where we part of the company doing the transfer itself.

Patrick O’Brien – Brown Advisory

Yeah, would that be a bank.

Marcelo Cataldo

I’m sorry.

Patrick O’Brien – Brown Advisory

Would that be a bank on the other end of the transfer.

Unidentified Company Representative

There is a bank…

Patrick O’Brien – Brown Advisory

A bank would be your partner.

Marcelo Cataldo

No, obviously when you transfer money from country to country, you have a bank in between, of course.

Patrick O’Brien – Brown Advisory

In between, but you need a network in the other country. A bank network as I understand it, it doesn’t really suit most of the people that do these sorts of money transfers.

Marcelo Cataldo

Well, in the traditional money transfer business, you can pick up your money in any MoneyGram, Western Union store that is not a bank. So, that’s last mile where the money actually is delivered. It’s not a financial institution. It supported by a financial institution which we are also in the same way to do it.

Patrick O’Brien – Brown Advisory

Okay.

Ben Gordon – GMT Capital

Ben Gordon, GMT Capital. Is there a major initiative to add merchants for mobile payments? Do you think you can effectively create a credit card like network in some of these countries or is the major push just around remittances right now? You talked about in Paraguay having point-of-sales.

Marcelo Cataldo

Our product portfolio will evolve and of course our distribution network will evolve based on the requirements of the products, right. If you need to cash out larger amounts or if you need to do sophisticated process or bigger processes to do something like a payment or whatever. We evolve our application through the Mobile Wallet and also we pick on our distribution network, the point-of-sales that allow us to do some transactions.

Unidentified Company Representative

These payments don’t necessary have to be with the credit card. Already we’re seeing in Paraguay because we start to have more critical scale that some retailers advertise Tigo Cash accepted here. So, basically it becomes electronic money that you can pay in many locations. The more we build the scale, the more of these opportunities going to be there.

Marcelo Cataldo

In Paraguay for example, 97% – 93% of the population that has debt cards, they cash out all the money once a month and they use the cash during all the months. So, the amount of credit cards or debit cards is not related to how the money flows in the market.

Ric Prentiss – Raymond James

Ric Prentiss, Raymond James. Two question if I could. First, American folklore has a very famous saying, why do you rob banks, that’s where the money is. As you think about getting into this part of it, what you’re doing to address physical security when you start collecting more cash and then maybe from the IT side, what you’re doing from a fraud standpoint.

Marcelo Cataldo

Okay. In the mobile business that we are now we – our distribution network moves a lot less money than actually moves for airtime top up. So, we leverage on the security and the infrastructure built on to move on our principal business to do this for Mobile Financial Services, which is quite significantly lower than actually money on the business.

Percy Grundy

And I can add to that to the physical security. The agents are smaller entrepreneurs in many cases. It can be like a chain of petrol stations and in many cases actually they are cash out agents which want to reduce the cash they keep in their shop. So, it’s actually an opportunity to address that. Many of them already address their security concerns about handling cash with the other business they run. They say, it’s a petrol station or it’s a shop.

Marcelo Cataldo

On the IT side.

Max Leiva

On the IT side, maybe I can clarify a little bit. We have a set of a logical controls that we have in place. So, look at them like reinforcement to the existing socks controls that we have. But, they are related to security and we do periodic audits. I mean very extensive audits just to make sure that we are having a revenue linkage.

Marcelo Cataldo

To add a point based on what Percy has just said, most of the point of sales they balance cash-in and cash-out. So, if you see the actual flow of money at the end of the day, the money is equivalent debt and credit, right. As far as the security, all the customers operate in the Mobile Wallet with a pin. It’s a same way that the customers with a credit card or debt card et cetera they operate.

Ric Prentiss – Raymond James

The second question is if you think about your competition to the earlier question. It’s seems like some of the competition here that you mentioned in your presentation was like loan shops and bus drivers who have been kind of collecting some pretty nice fees for providing these services in the past. Any response from these guys with the baseball bats as you start taking some business away from them?

Percy Grundy

I don’t think we have seen any specific response or something that we have to worry about. I think we are giving a great value proposition for the consumers and the consumers coming to our side.

Marcelo Cataldo

In Latin America, what we seen that smaller companies doing transfer or whatever they call us and they want to use our service. They are trying to move from the manual service using Giros Tigo and becoming a dealer or something, it’s a plus point, right.

Ric Prentiss – Raymond James

As you start to grow these financial services business, as they start to get more scale, what do you with the flow of the cash?

Percy Grundy

With the eMoney that with the cash that we…

Ric Prentiss – Raymond James

You collect insurance premiums, you collect Tigo Cash payments.

Percy Grundy

It’s a source of revenue for us. I’m not sure if I follow your question.

Unidentified Company Representative

Cash balance…

Marcelo Cataldo

Depending on the country and depending on the regulation, money is on a trust account on bank following the same principles of financial institution. So, the money is there. It is part of – depending on the agreement that we have with the bank could be part of the business or revenue we have with the bank. But, the money is there.

Unidentified Company Representative

We have an online reconciliation with the trust account. So, we know exactly how much cash is in the trust account and there are some activities let’s say, some of this eMoney converting to airtime, right. So, people are buying airtime. So, that cash belongs to Tigo. So, we take that cash out of the trust account. Some cash goes out because some of our super dealers can come and take care of it if they are returning certain money. But, what we see is that, it’s not an issue at all. We have a constant monitoring of that. We have people in the teams dedicated at monitoring these trust account on a constant basis.

Unidentified Company Representative

I think there is a cash that – the profit that we make on the transaction that is a normal cash that we handle ourselves. Plus there is a working capital and this cash doesn’t belong to us. So, that one we pay really much attention to what we do because we will have to give it back to the people it belongs to at a given stage. So, we pay very much attention to it and we have – we are working on it in order to make sure that we manage it properly because potentially this amount of cash could be equate to size evolved. So, we need to make sure that we manage it properly both from a security point of view and that even in terms of investment that is specially in the current environment that we don’t invest that cash in for example with counterparty risk for example. So, we are really taking care of it as well.

Operator

Question from Craig and then from Owen.

Unidentified Analyst

Just once again, as the cash business or the financial services business both scale. I guess there is a chance that banking regulators in various countries who want to bring it into the regulatory net and you may be forced to formalize partnerships with banks and financial institutions. Do you think that caps the margin potential in the business that going forward you’ll need to give away a portion to the financial services and institution.

Unidentified Company Representative

At this stage, we don’t see active dialogues with the regulatory body. We are trying to sort of educate the finance minister more than maybe the telecom minister on the benefits of this. Again, any challenge you do faces in our business, we just have to adopt final solution and move on. So, if that would happen, we would try to figure out how do we keep on growing and keep enhancing our margins. So, that’s just one of the challenges we are facing. But, at this stage we don’t see that.

As far as that question, as I said in the beginning, we might either get the license or buy something small bank that we would restructure to be able to offer that service and keep our margin. So, those options are on the table.

Unidentified Analyst

[Inaudible] Investments. I have a couple of question if I may. First of all, how do you manage your agent structure in terms of cash handling because I would assume that most money will move from cities to rural areas. So, there is a continuous cash flow from the city away to other regions.

Secondly, are your agents exclusively working for you or do they also accept cash or mobile e-payments from your competitors as well. Thirdly, are you considering to open your system to link with other operators that you can transfer from one operator to another one. And finally…

Unidentified Company Representative

Just wait for response because otherwise we lose it.

Percy Grundy

Let me address those questions. Most of our agents in Africa, they work with what we call super dealer. So basically, the super dealer is financing the business for them and he is buying eMoney from us and providing cash to the agents, right. So, this is not something that we are doing as directly.

In some cases, let’s say there are money corridors. So, let’s say in Tanzania, most of the money flows from the Dar es Salaam to the provinces. So the Dar es Salaam agents are mainly cashing agents where the super dealer provides to this agent with eMoney while the agents in the provinces are mostly cash out agents where the super dealer provides them with physical cash. A transaction where actually doesn’t go through our system. It’s a super dealer that has an arrangement with an agent to provident that.

Regarding, sharing the agents and interconnection, we believe that these are things that make sense, okay. We believe that this would actually increase the size of the ecosystem. So, we are open to this possibility. Of course, it has to be with in a way that is attractive for us, that will make the business better in the future. But, we are open to these discussions. There are number of discussion in this area going on. I don’t see that this is something that’s going to happen in the short term. But, it’s a matter of time. Eventually, there will be sharing of agents, there will be interconnection among the different mobile money systems.

Unidentified Company Representative

I just want to add on what Percy just commented regarding the distribution of money. As I said before, we leverage on the actually distribution of money and the mega dealers and dealers and point-of-sales for our core business and we are supported by the DMS tool. So, we are able to track and understand how the money flows, where the money flows and how can we support them.

Unidentified Analyst

Could you also indicate how many days the cash is actually installed in trust fund or in a bank account and if you want to receive the interest generated on these accounts.

Unidentified Company Representative

Well the cash is stored as long as – as the cashing has been made. As the eMoney has been purchase, right. So, that account tends to grow with time. Let’s take the cash that is ours, we take it out regularly, in regular periods of time. At this point, we get a very small interest rate on that trust account in Tanzania. This is different from market to market. So, each financial regulatory authority as a view on what should happen with the interest of the trust account.

Unidentified Analyst

But, in several countries you do receive the interest rates.

Unidentified Company Representative

In some of the markets we do receive. It’s not a large interest rate. It’s very, very small.

Unidentified Company Representative

And depends on the local regulation.

Unidentified Analyst

Okay. Thank you.

Operator

Do you have any more questions. No. Okay we are running ahead of schedule again. So, if you’d like to go up for break and collect your presentations, your electronic copies of presentations. I’ll be upstairs waiting for you and then, we will reconvene I think at quarter to two for the last session.

Thank you.

Question-and-Answer Session 4

Unidentified Company Representative

I think it’d be great if there are any questions for Fernando if we could take those first before we come onto the Françoise presentation. So if there are any questions on Fernando’s presentation – maybe that will go to someone later okay let’s take questions then. Yes. Thanks.

Unidentified Analyst

Yes. Did you say anything about CapEx guidance for next year?

François-Xavier Roger

No, it’s the same issue that we have every year. I mean, we have just started the budget process so that we finalized at the beginning of December. We do it quite late in the year, which I think is reasonable especially in the current economic context. So we have – no, so we have little bit of an idea, but we have no final figures for 2012. So we traditionally give the guidance because this is one of the item that we give in our guidance at the beginning of next year.

Unidentified Analyst

I got the feeling from your presentation that it should remain at a high level at least for –

François-Xavier Roger

I don’t know what you call at a high level. I have a different feeling because I said that our intention was to control it. So it depends what you call high level, but let’s say I would say the absolute amount matters less than what we get out of it which is exactly the purpose of my presentation. So I mean at the end of the day if there was more or less it doesn’t really matters what matters is the return we get on it. And as you could see, we put a lot of emphasis on focus on the returns.

Unidentified Company Representative

If you could pass it to Stefan, yes. Thanks.

Stefan Gauffin – Nordea

Just a question on the tax rate; if you could talk a little bit about that we have Colombia now turning to positive net profit and also probably more cash upstream from different organizations.

François-Xavier Roger

Yes, there are two topics there. In terms of tax, so indeed one of the reason why we moved to a better situation in terms of effective tax rate is the fact that Colombia moved to positive status in terms of tax so did Luxembourg as well with the redemption of the high yield bond. So that is certainly one item contributing to the improvement of our tax – effective tax rate.

We will try to give you more information going forward on tax and I think that what matters is we always used to give more information natural cash taxes which matters probably more than the effective tax rate. So we are working on it in order to improve our disclosure on this matter.

You were talking of upstreams. As you know last year we have been able to upstream close to $1 billion. I think we are on track to do about the same this year. The excellent news as well is that we have now succeeded in upstreaming cash from almost all markets with the exception of Colombia but okay there is no – we were in loss situation for a long time.

DRC is the only country with the exception of one there as well where we did not upstream in one way or the other time in the form of dividends or royalties or management fees, but in all other markets we have been able to upstream funds, which is something that I consider as extremely positive.

Unidentified Company Representative

Okay. Very well. Thanks.

Unidentified Analyst

Yes. What should we expect going forward with regards to dividends to minorities in Honduras and Colombia?

François-Xavier Roger

We distribute – when we have minority we distribute 100% of the net profit as the dividend policy locally. In Colombia. Anyway we have not distributed any dividends for the time being, because we are just passed positive in terms of net profit at the beginning of the year. But I mean we have an agreement with our partners to distribute 100% of the net profit as dividend.

Unidentified Analyst

So, that should be expected in Colombia going forward as well?

François-Xavier Roger

Yes, well after that we need to check exactly what are the needs in terms of cash locally as well due to – then depends on the CapEx program as well. But there is a possibility to upstream cash from Colombia, we will do it obviously, yes.

Just talking about cash upstream, I think three years ago Central America was contributing something like 150% I think of cash that we have because we were down streaming a lot of cash. Now, we don’t downstream any cash and today I think Central America is representing less say around 40% to 45% of the total cash that we have streamed, so which is very good because we are highly dependent on Central America in terms of cash repatriation.

Unidentified Analyst

Hi, this is [inaudible] from HSBC. What is the internal criteria you use for deciding between a share buyback and dividend payment. I mean Millicom is just yielding FCF yield 6% to 7%, but you are buying it at 11% cost of equity. So probably paying dividend might be a very good option than a share buyback.

François-Xavier Roger

First of all we do share buyback because we believe in the development of the business and the future of the business. Share buyback as well show the, offering the benefit of giving us more opportunity to stop it and to use the cash for external growth if we wanted to and – but last year for example we did significantly more dividend and less share buyback. This year it’s more share buyback and less dividend. So maybe next year it will be more balance depending on what the Board decides.

Unidentified Analyst

Two questions if I could, first on your return on investment capital, how do you include spectrum and license renewals? Do you include those in the definition of capital for ROIC?

François-Xavier Roger

Yes, I mean it’s with license it’s a long-term investment anyway. I mean the duration of license can be 10, 15, 20 years. So obviously there you need to apply the external growth criteria.

Unidentified Analyst

Now that all companies include that, so it’s very important to make sure, so that’s good.

François-Xavier Roger

Although, I mean we have a limited choice actually, but this is the reason why we said that the main objective is to make sure that we pay a market related price.

Unidentified Analyst

The second question is on the cable asset part of the potential for external acquisitions, can you talk to us about how you might filter the available opportunities, how you would prioritize and just what makes attractive cable asset as you look out there?

François-Xavier Roger

I mean the most attractive cable assets are probably in the market where we operate in and so basically as we apply the strategy on the mobile side that we want to be number one or number two in the markets we operate in, similarly we want to be number one or number two in cable. So, market by market there are pockets of smaller competitors that we can buy out and that’s happening and has happened over the last six months. So, that’s like number one priority and then probably number second one could be smaller operator in a new market, so we just can get started. And as you know in this industry, in the cable industry you can start small, you don’t necessarily have to go big and naturally if there will be a bigger asset somewhere to go after, we now think we have the skill and the leadership team to basically execute the bigger acquisition also on the cable side.

Unidentified Company Representative

Cesar, back, back there.

Cesar Tiron – Morgan Stanley

Hi, it’s Cesar from Morgan Stanley. Do you see any sign of micro driven slowdown in telecom spending in Central America and also can you continue to gain market trend in Colombia?

François-Xavier Roger

Sorry on Micro, what was your first question?

Cesar Tiron – Morgan Stanley

The first question was to any understand if there was any signs of micro driven slowdown in telecom spending in Central American countries?

François-Xavier Roger

No, I answered just on that when I speak probably before, in Central America, we have a large portion of our revenue in incoming international call and ever since the financial downturn that’s one segment that has been reducing consistently in size. And we expect that to continue to do so maybe on the long-time because of the Skype and the likes who deliver voice-over-IP. So – but we therefore are very busy ensuring that we can build the local revenues with value-added services data, we think the strategy is working. You had a second part of your question?

Cesar Tiron – Morgan Stanley

The second part of the question was to understand if you can still continue to gain market trend in Colombia?

François-Xavier Roger

Yes, I think we can. I mean we have all the strategies in place, all the activities are producing results, so at this stage we don’t see any major barriers for continued progress.

Unidentified Company Representative

We could take a question in front there and then this one on the side.

Mark Walker – Goldman Sachs

Hi, there, it’s Mark Walker from Goldman Sachs. Can you talk a bit more about the relationship between balance sheet efficiency, M&A opportunities and shareholder returns? Is there any scope to carry more financial leverage to make acquisitions or to increase the dividend or buyback? And then on mobile acquisitions where would you see the most obvious targets there? Thanks.

François-Xavier Roger

Okay, let me answer half of that. Just to repeat our strategy, we don’t believe in global scale or regional scale. The only scale we believe in being number one or number two in the markets we operate. And so with that mindset, an acquisition is perhaps a little bit opportunistic because it’s not a mandatory act to make us big. So if there is an asset in the territories where we operate that we could go in and buy and either it would be number one or number two or we can see that with the right resourcing and actions we can get there, we would do so. So that’s sort of somewhat opportunistic rather than a integral part of our strategy, if you can expand with the right assets we would do so.

And regarding Shelter remuneration, the both agreed three years ago to introduce a regular dividend policy, which as I said earlier has been increased over time. So, I think that there is a commitment to pursue the policy and as the Board will decide exactly what the amount will be, but let’s say even as I said earlier the base used for the payment of the dividend is increasing quite significantly.

In terms of external acquisitions of Millicom, there is no specific pressure for us to do anything, but there is no pressure either for us to be sitting on piles of cash, which is the reason why whenever we have excess cash we do not hesitate to return it to shareholders, which is what we did last year. We returned $1 billion to our shareholders, which for our company a $4 billion of revenues was not bad. And this year we have announced as well that we intended to return $1 billion to our shareholders even if our revenues will be higher, that’s not bad again. So, we will not be sitting on piles of cash. But if we find the right opportunity, we will go for it and we have the balance sheet to do it and we have cash and as we speak we still have about $1 billion of cash.

Mark Walker – Goldman Sachs

So, you are sort of comfortable with the sort of one time EBITDA financial leverage?

François-Xavier Roger

Yes, I mean one time is a good level and we have always said should we find the right opportunity, we would be ready to go up to two in terms of net debt to EBITDA ratio. Today, we have less than one, we have – even below 0.7, which is so according to our target of one, let’s say suboptimal and one is reason why we are doing an extensive share buyback program is to include that.

Mark Walker – Goldman Sachs

Thank you.

Unidentified Company Representative

One here, thanks.

Unidentified Analyst

So, just looking at voice tariffs around the Group, could you highlight any market where you are seeing particularly aggressive competitor pressure on voice tariffs, please.

François-Xavier Roger

You are all familiar with what happened in Africa in Q3 and Q4 where our competitors did substantial reduction on primarily across net rates. So typically in our industry and in our markets you have a great elasticity when you reduce the tariffs on net, because the behavior is this that you have three or four people you call a lot and if you give those – if you give the consumer a chance to call more attractive rates, normally you have more elasticity.

You have very limited elasticity on the across rate cuts and we know that for example from our experience in Colombia where the regulatory body basically labeled America Mobile as a dominant operator and they took their across rate from their customers to Tigo to somewhere around $0.40 per minute to $0.15 and I think over a six-month period we are 8% more incoming calls. So there was a clear revenue loss.

So we think the pricing actions we saw in Africa in Q3 and Q4 basically took out revenue from the market and impacted our growth rates as we saw in Q1 and Q2 and we haven’t seen that elasticity come back. In a number of Africa markets, we sort of still kept a small premium and that’s something that we are assessing if you can keep on holding them or if you have to adjust our tariffs.

Latin America, the pricing environment has been more stable. Latin America tends to be promotionally very intense, so we go through cycles of promotions, so that’s quite normal behavior there.

Unidentified Company Representative

Question from there.

Unidentified Analyst

A question on if there is any sort of regulatory changes, do you expect in any markets any tax system might come up, you had some countries which introduced them in the last financial crisis? Do you believe that there could be something else coming?

François-Xavier Roger

I think that’s the everyday life of operating, I guess in the emerging market used to be, but I guess it’s now in the developed markets too. So I think is there something actively going on, I think there is some taxes in Bolivia perhaps, but if you look at Millicom’s history, we’ve been faced with this every year with different tax year spectrum fee there. And I think our skill has been to consistently figuring out how we can take our cost and compensate that and invest more into business going forward.

So I expect these fees are more or less are going to continue to come up in our markets. But I think the Bolivia is on major, but impressive [ph]. Honduras, there is also a security tax, I think all of Colombia in order to improve the security situation there. I think the government is looking at imposing a revenue-based security tax.

Unidentified Analyst

And also, last question if I could go back to the question of fund raised though on CapEx, because I also thought that I saw on the slide that you said that you would rather maintain the level of CapEx to sales going forward.

François-Xavier Roger

I don’t think we said maintain – I think control.

Unidentified Analyst

Okay.

François-Xavier Roger

Wording is important. Once again I think that the absolute amount is less even than the return we get, but I mean I can understand that in a given year, I mean it impact cash flow generation, but as long as we get very good very good return we will do whatever is necessary, but without any pressure either. So when it’s not necessary we will not do it either.

Unidentified Analyst

On the share buyback program I don’t know if I missed anything in the presentation, but you have bought back 42% of the yearly target and given the liquidity on the Stockholm Stock Exchange are you convinced that you will reach the yearly target?

François-Xavier Roger

We are in a position to finish the year to close to it. Since you talk about the liquidity, by the way since we delisted from U.S. I want to clarify the liquidity issue because many of you are probably just looking at the number of shares that are traded on NASDAQ OMX only. But in Europe comparing to U.S. you have other platforms for trading, which accounts MTS because the European Union wanted to introduce on competition. So they authorized private dealers to trade with shares. So this MTS was with strange names such as [inaudible] and so forth are contributing to volume in Europe, which is about 50% in addition to 50% more than what the NASDAQ OMX is doing.

So, if you look at the volume – the average volume trading since we delisted combined between NASDAQ OMX Stockholm, NASDAQ, U.S. OTC market and this MTS, it was up about 530,000 shares on average per day. Before the delisting between NASDAQ OMX and NASDAQ US we were at 600,000. So there seems to be maybe slightly lower volume, but it’s too short here to draw any conclusion because it was summer time during that period, during the year. But let’s say the liquidity is marginally lower than what we had in Stockholm, and it corresponds to about 0.5% of the total number of shares traded on a daily basis, which I think is good.

So, we have enough capacity anyway to do that share buyback, think that for example as of today the limit we have is I think close to 65,000 shares per day for this week. So we don’t even do that, which is more than enough. So, I think we can get close, bottom line.

Unidentified Company Representative

The person at the back.

Unidentified Analyst

Just on the share buyback, just to understand – I don’t understand why you didn’t take advantage of a cheaper share price in the first half of the year, although you were authorized to do it. So your average price is 108, but you could both between 80 and 90 just to understand the rational.

Unidentified Company Representative

I would say for two reasons. First of all in Q1, we have much more limitation, especially we listed on NASDAQ at that time, because we could not buy before 15th of February. And then after that we entered quickly into blackout period for Q2. So there is a very limited number of days during which we can buy in Q1 which is a main reason.

And second, our share price is better than what is was in Q1 but we did not know at the time frankly speaking unfortunately and we don’t buy with the idea of buying at a low price. It’s extremely difficult anyway to forecast and we can’t forecast the share price. So, we can’t use any that information that we have. So, we buy currently for example we buy about 50,000 shares every day. Which is more I would say opportunistic than anything.

Unidentified Analyst

My second question is about whether the board or the management has been approached to purchase some of your operations either individually or in block and whether you can tell us if you have a policy for offers received as well as for acquisitions.

Unidentified Company Representative

Yeah, I mean – I think I have been about nine year in Millicom and by room on every quarter we are sold to somebody, but we are still here. Of course it’s a free world out there, if anybody wants to approach us please go on a webpage and look at our address and they can find us. And if that would be the case, you would hear about it. So, I don’t know if that would answer your question.

Unidentified Company Representative

But you always know as we always have discussions with some of our competitors and many subject, neither on commercial matters and pricing. For example, when we discussed always, I said sharing we discussed with some of our competitors, so at that occasions there might be discussions, but I mean this is normal business discussions.

Unidentified Analyst

So, can you remind us the KPIs in which top management is rewarded, thanks.

Unidentified Company Representative

Top management is rewarded sort of on a cash basis salary plus bonus and in 2011 the bonus components are revenue growth, EBITDA, operating free cash flow and key projects. And then we have an LTI component, the smaller part of that LTI component is just a reflection on your bonus and it’s paid over three years, so basically we have to be three years in the component to get the full. The second and the larger part is today a combination between earnings per share and TSR, total shareholder return and basically you have to wait three years and hit those TSR to get that an earnings per targets to get that payment. As we said we might build in the ROIC into management compensation for years for 2012.

Operator

Any other questions?

Unidentified Analyst

I had a question about spectrum CapEx, you mentioned you wanted to pay market prices for spectrum. Can you help us out with Colombia – to somehow ballpark what to expect. There was a spectrum sale there recently in another band of course, but we start representative and how shall we sort of estimate the market price for spectrum.

Unidentified Company Representative

We just brought some spectrum; I think its public in Colombia. So, we just brought some spectrum in Colombia and I think if you look at that price that for something we saw that we could get the return on, that’s public information.

Unidentified Analyst

But I mean for the renewal 2013 you start indicative for what we should expect, can you help us out some other way.

Unidentified Company Representative

Each situation is very specific.

Unidentified Analyst

Yeah, the license renewal in Colombia, the renewal in 2013, right.

Unidentified Company Representative

Shareholder factors into consideration to fix this minimum price, we don’t know that – the minimum factors there. So when we know we will see, but there are many factors that contribute to fix this minimum price plus the Colombian spectrum that we are using was acquired in several stages. So, it’s not that everything expires at the same time.

Unidentified Company Representative

But our expectations in Colombia would be that we could pay a renewal fee that allows us to continue to get returns.

Operator

Any more questions?

Unidentified Analyst

May I ask, are there any plans or possibilities to buyout minorities in Colombia, Honduras or is it El Salvador as well.

Unidentified Company Representative

No El Salvador, we don’t have.

Unidentified Analyst

Guatemala…

Unidentified Company Representative

I think in that we have very happy shareholder who are great partners with us in the business and are thrilled between the performers today and have the same optimistic outlook as we have for the future, so I don’t expect any major activity in that arena.

Unidentified Analyst

Probably just a small clarification, while calculating ROIC, do you use book value or the acquisition price?

Unidentified Company Representative

Sorry.

Unidentified Analyst

While calculating ROIC, do you use book value of assets or the acquisition price you paid to acquire those assets?

Unidentified Company Representative

Book or acquisition value, is the same.

Unidentified Company Representative

No, we use the acquisition price to calculate the ROIC we usually use, which means the net fixed assets plus working capital plus goodwill.

Unidentified Analyst

Okay. I also asked this question because if you buy something in 2008 for €100 and basically three years if it doesn’t make any money, the new base become €130 and not €100, I mean you see the point?

Unidentified Company Representative

Your question is on the on the calculation of the ROIC?

Unidentified Analyst

Yeah, basically something you buy in 2008, three years back and you don’t make any money, then the new base become 130 three years after I mean you had the cost of capital – keep on adding the cost of capital.

Unidentified Company Representative

Our target in terms of ROIC is with a certain maturity so which means as indicated the term is different according to the type of business that we are aiming. I mean if it is an existing business, new business or acquisitions, so we have a different term. But for example if we take an acquisition, the objective is not intermediate years, the objective is a final years.

So, I would say this is the case of net for example where we are decided in the intermediate years to reinvest behind the business to deliver growth, to make sure that the business is up to standard that we expect to deliver to our customers. So, we may depress the ROIC in the interim period. So the objective is more to achieve the certain target within a certain timeframe and to maintain it obviously after that as you could see with the existing business with the chart that I presented.

Operator

There was a question here.

Unidentified Analyst

Hi, [inaudible]. I was just wondering whether you got any more plans for towers sales and which countries you might still considering towers sales. And on the original deal that you did with Ghana, you gave some quantifiable estimates on the OpEx benefit, I never mentioned anything in terms of the actual CapEx benefits. Now as that deal progresses you actual able to quantify what the CapEx benefits are from the tower sales.

Unidentified Company Representative

First, we don’t plan really to do any significant additional set on leaseback deal on towers. Maybe with the exception of chard probably, but I think that we have done the bulk of what we to do. As I said we are now moving into a new area where we intent to share maybe network spectrum as for example our sister company Toledo [ph] is doing or all operators are doing in Sweden for example, which makes a lot of sense.

Just coming back to Ghana, so we have been doing that deal for little bit more than a year now. We are extremely happy to see that we already, because we have a shareholder in that business and we have a 40% stake. So it’s important for us to make sure that the business delivers.

As we speak we have 1.6 tenant per tower on average which we considered as very, very good and by the end of the year we should be at 1.8 tenant per tower. So which means that this company is really going to start delivering in terms of contribution, in terms of profit probably from next year.

In terms of CapEx, I don’t have the exact figure for Ghana, but the total value creation that we share with you is next to $600 million, which is a combination of cash that we got from it plus DCF of the additional EBITDA benefit in some of the countries, not in all, but in some of the countries in Africa where we are doing these deals we should improve the EBITDA between one to two points overtime because of this tower deals. This is the beauty of these deals by the way it’s not about tradeoff between the balance sheet and P&L. It’s not improved my balance sheet, but I deteriorate my P&L because the releasing cost that we have is actually lower than the former operating cost.

Why, because we built in when we negotiating with the partner that we have for this project. Leasing cost which is was in our operating cost, assuming already that we will get part of the sharing benefits for the leasing cost and plus in the 600 million we have DCF as well on the future CapEx – future CapEx saving for the future rollouts.

These CapEx savings might even be more important than what we initially thought especially with 3G because of the breezing effects. Because of the breezing effects the more customers you have using 3G. The area that you cover is shrinking, so as a consequence we may need for 3G probably we are likely to need more towers than we need it for 2G. So, then we can access to more towers than without having to build them and without put a lot of CapEx on the table.

Unidentified Company Representative

And in terms of the upcoming savings, EBITDA savings in Africa as we said before, don’t expect an improvement on our Africa margins. We will probably invest these extra margin in driving mobile financial services and other services. And finally we did not really value – we did not value at market price as the 40% stake that we have. We value it at 40% of the net book value of the towers we transferred, which is totally underestimated.

Why, because this business, if you take the business in Ghana for example with probably next year we should reach I guess probably two tenant per tower. This company is going to make profits, so one day if you want to monetize it and to exist, as you know these towers companies are valued at around 15 to 20 times EBITDA, there are – yes, probably around 15 times EBITDA while we are valued at 6 or 6.5 times EBITDA. So, if you want to monetize at a later state, we could and this I would say market value of this towers stake was not built at market price in the $600 million valuation that we did.

Unidentified Analyst

Can I just ask you a question on Central America as well. Are you seeing any impact from slowdown in the U.S. and in terms of cash repatriations about Central America having any kind of any impact on your business at the moment there?

Unidentified Company Representative

Well, there were some – I mean just looking at – if you tug into the U.S. looking at remittance data I think it was sort of positive in single digit until July and I think the obvious number came in negative, but I mean that’s one month. July was negative, after June it was positive.

Unidentified Analyst

Okay, thank you.

Operator

Any further questions. Okay, I would like to handover to Mikael for closing remarks.

Mikael Grahne

All right. Thank you, Emily. As I said in the beginning the emerging markets mobile business is highly dynamic and the marketplace and the business models are constantly changing. So with this day here, we wanted to demonstrate two things to you.

One is that we have the processes, the structures and the financial discipline in place to address these changes and find profitable growth opportunities, which I think also our track record will testify that. But, the second thing we wanted to demonstrate to you and that’s an even more important thing is we really have the people to delivery behind this change and I think Millicom is about passionate people who want to big things, but equally important they also have the humility to constantly learn and I think the speakers here all hopefully demonstrate that to you.

So, I want to thank you all of you who contributed to the presentations and I want to thank all the thousands of people we have out in the markets delivering day-in and day-out and hopefully making you to have the shareholders.

So finally, I want to thank you all for spending almost the whole day with us. I hope it was very productive. Thank you very much.

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