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INDEX TO FINANCIAL STATEMENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

000-22828 Commission file number

MILLICOM INTERNATIONAL CELLULAR S.A.

(Exact name of Registrant as specified in its charter)

GRAND-DUCHY OF LUXEMBOURG

(Jurisdiction of incorporation or organization)

15 Rue Léon Laval, L-3372 Leudelange Grand-DuchyGrand Duchy of Luxembourg

(Address of principal executive offices)

Francois XavierFrancois-Xavier Roger, T: +352 27759 114    E: francois.roger@millicom.com

(Name, Telephone, E-mail address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12 (b) of the Act:None
Securities registered or to be registered pursuant to Section 12 (g) of the Act:None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Common Stock, par value $1.50 per share

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

108,297,507108,648,325 shares of Common Stock as of December 31, 20082009

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o    No ý

         Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

         If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

         Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

         o    U.S. GAAP    ý    International Financial Reporting Standards as issued by the International Accounting Standards Board    o    Other

         If 'Other' has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 o    Item 18 o

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FORWARD-LOOKING STATEMENTS

        Certain of the statements made in this document may be considered to be "forward-looking statements" as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995, such as statements that include the words "expect", "estimate", "believe", "project", "anticipate", "should", "intend", "probability", "risk", "may", "target", "goal", "objective" and similar expressions or variations on such expressions. These statements appear in a number of places throughout the document including, but not exclusively, "Information on the Company", and "Operating and Financial Review and Prospects". These statements concern, among other things, trends affecting the Company's financial condition or results of operations, capital expenditure plans, the potential for growth and competition in areas of the Company's business, the potential for new agreements or extensions of existing agreements to be signed with business partners or governmental entities or licenses to be granted by governmental authorities, and the supervision and regulation of the telecommunications' markets. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties; actual results may differ materially as a result of various factors.

        These factors include, but are not limited to:

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general economic conditions, government and regulatory policies and business conditions in the markets served by the Company and its affiliates;



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telecommunications usage levels, including traffic and customer growth;



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competitive forces, including pricing pressures, technological developments and the ability of the Company to retain market share in the face of competition from existing and new market entrants;



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regulatory developments and changes, including with respect to the level of tariffs, the terms of interconnection, customer access and international settlement arrangements, and the outcome of litigation and/or arbitration related to regulation;



•

the success of business, operating and financing initiatives, the level and timing of the growth and profitability of new initiatives, start-up costs associated with entering new markets, costs of handsets and other equipment, the successful deployment of new systems and applications to support new initiatives, and local conditions; and



•

the availability, terms and use of capital, the impact of regulatory and competitive developments on capital outlays, the ability to achieve cost savings and realize productivity improvements, and the success of the Company's investments, operations and alliances.alliances;



•

the ability to integrate our acquired businesses as anticipated or otherwise achieve the expected benefits of such transactions; and



•

various other factors, including without limitation those described under "Risk Factors" herein.

        Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of filing hereof with the U.S. Securities and Exchange Commission. Millicom International Cellular S.A. undertakes no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in Millicom International Cellular S.A.'s business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

        Unless the context otherwise requires, the term the "Company" refers only to Millicom International Cellular S.A., a stock corporation organized under the laws of the Grand-DuchyGrand Duchy of Luxembourg, and the term the "Group", "Millicom", "we", "us" or "our" refers to Millicom International Cellular S.A. and its subsidiaries, joint ventures and affiliates. Unless the context otherwise requires, when used herein with respect to a licensed area, "persons", "population" and "pops" are interchangeable and refer to the aggregate number of persons located in such licensed area and "equity pops" refers to the number of such persons in a licensed area multiplied by the Group's ownership interest in the licenses for such licensed area. The term "Attributable Subscribers"Customers" refers to 100% of subscriberscustomers in the Group's subsidiaries and the Group's percentage ownership of subscriberscustomers in each joint venture. Persons, population and pops data for 2008, 2007and2007 and 2006 have been extracted from the "CIA—The World Factbook" for 20082009 for countries where the license area covers the entire country. In addition, information on the countries in which Millicom operates has been extracted from the "CIA—The World Factbook" for 20082009 with updates, where appropriate, from the U.S. Department of State's website. Unless otherwise indicated, all financial data and discussions thereon in this annual report are based upon financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union and as issued by the International Accounting Standarb Board ("IFRS") and subscribercustomer figures represent the total number of mobile subscriberscustomers of systems in which the Group has an ownership interest. In this report, references to "dollars" or "$" are to U.S. dollars, references to "SEK" are to Swedish krona and references to "Euro" or "€" are to the Euro.

        As a foreign private issuer, the Company is exempt from the proxy rules of Section 14 under the Securities Act of 1934, as amended (the "Exchange Act"), and the reporting requirements of Section 16 under the Exchange Act.

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PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

        Not applicable for Annual Reporting filing.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

        Not applicable for Annual Reporting filing.

ITEM 3.    KEY INFORMATION

Selected Financial Information

        The Group reports under International Financial Reporting Standards, as adopted by the European Union ("IFRS"), with no difference for the Group to IFRS as issued by the International Accounting Standards Board.

        The following table sets forth summary financial data of the Group as of and for the years ended December 31, 2009, 2008, 2007, 2006 2005, and 2004.2005. The data are based upon the Group's audited consolidated balance sheets as of December 31, 2009, 2008, 2007, 2006 2005 and 20042005 and audited consolidated income statements of profit and loss for the years then ended. The following information is qualified in its entirety by, and should be read in conjunction with, such statements.

        Unless otherwise indicated all financial data and discussions in this document are based upon financial statements prepared in accordance with IFRS.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

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RISK FACTORS

        In addition to the other information contained in this Annual Report, investors should carefully consider the risks described below. Our financial condition or results of operations could be significantly affected by any of these risks.

        The following discussion contains a number of forward-looking statements. Please refer to the "Forward-Looking Statements" discussion at the front of this Annual Report for cautionary information.

         An economic downturn, a substantial slowdown in economic growth or deterioration in consumer spending could adversely affect our operating results and financial condition.

        In 2008,2009, our business has beencontinues to be impacted by the general worldwide economic crisis and its effects will continue to impact on our results in 2009, as the economic outlook for the next year has worsened significantly and the global economic recession appears set to continue for some time.2010. Some recent events affected negatively the economies of the countries where we operate and could possibly impact our businesses: the decline of remittances from the United States (affecting Central America), raw material price decreasedecreases (affecting Chad, Paraguay, DRC,the Democratic Republic of Congo (DRC), Ghana) and less international tourism (impacting(affecting Senegal, Mauritius, Cambodia and Tanzania).

        In addition, further deterioration in the economic environment could have an adverse effect on the level of demand by our individual customers for our products and services. This could also impact the attainment of our growth, targets, such as thosethe one relating to mobile telecommunications, or thosethe one relating to broadband products and services.

Risks Relating to our Business

Emerging Markets Risks

         Many of the countries that we operate in have had a history of political instability and any current or future instability may negatively affect our revenues or ability to conduct our business locally.

        We offer mobile telephony and cable services in 1614 emerging markets in Central and South America, Africa and Asia. Many of the countries in which we operate are considered to be emerging economies and, therefore, can be subject to greater political and economic risk than developed countries. The governments of these 1614 countries differ widely with respect to type of government, constitution, and stability. Many of these 1614 countries lack mature legal and regulatory systems. Some of the countries in which we operate, particularly Chad and Sri Lanka,DRC, suffer from political instability, civil unrest, or war-like actions by anti-government insurgent groups. These problems may continue or worsen, potentially resulting in civil war in these countries. Other countriesIn addition to the above, Honduras was largely cut off from foreign aid as a result of the political events of June 2009 and there is still some risks that the recent elections in which we operate have only recently emerged from civil war and are attempting to rebuild their economies and governments, such as Sierra Leone andHonduras will not restore its standing in the Democratic Republic of Congo.international community.

        As a result of the above, we face several risks, ranging from the risk that our networks may be disrupted to the risk that we may have to evacuate some or all of our key staff from certain countries, in which case there is no guarantee that we would be able to continue to conduct our local business as previously. Any of these events would adversely impactaffect our revenues or results of operations.

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         Most of the countries in which we operate have weak legal and telecommunications regulatory regimes compared to those in developed countries and this creates risks for our operations.

        In order for our operations to provide mobile services, they must receive a license from the government of the country in which they operate. Our ability to operate is therefore dependent on the licenses granted by the government of each country. These licenses generally allow our companies to operate for a number of years, after which they are subject to renewal. To the extent that our

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operations depend on governmental approval and regulatory decisions, our local business may be adversely affected by changes in the political structure or by actions or decisions of specific government representatives in the relevant market. It is possible that a government could decide arbitrarily to revoke a license or impose new conditions that we do not agree with and may not get consulted about in advance. For example, we are currently in litigation with the government of Senegal, which purported to challenge the validity of our license when we refused to pay additional amounts for a license that we validly hold and that does not expire until 2018. We may not always have access to efficient avenues for appeal and may have to accept arbitrary conditions imposed upon us. This could adversely impactaffect our business and our revenues. Our favoredonly avenue of recourse ismay often be to the legaljudicial system of the relevant country; however, the legal and court systems of many countries in which we operate tend to be poorly developed and can be subject to political influence and other inherent uncertainties. It can therefore be difficult to obtain a rapid, fair and unbiased resolution of disagreements with governmental authorities.

        Even where we have other options, such as claiming compensation in arbitration proceedings for violations of a bilateral investment treaty, the process can be lengthy and costly. For example, the arbitration we filed against the government of Senegal before the International Center for the Settlement of Investment Disputes in November 2008 has not resulted in a decision on the merits and is not expected to be finally resolved in the immediate future. Even when the outcome is successful, the enforcement of any award favorable to us could be a challenge.challenging.

         Some of the countries in which we operate have political regimes that do not view foreign business interests favorably and may attempt to expropriate all or part of our local assets or impose controls on our operations.

        This risk potentially exists in any of the countries in which we operate, but might be highest in Bolivia at the moment under the current Government. The governmentGovernment of President Evo Morales in Bolivia has nationalized telecommunications company Entel, which had initially declared that a nationalization of the telecommunicationsbeen privatized under previous presidential regimes in Bolivia. Other such actions might take place in our sector may be contemplated in connection with the government's decision to regain more control over the Bolivian economy, as shown by certain measures implemented in the oil & gas sector in 2005-2006.2005 and 2006. We believe that nationalization of the telecommunications sector will probably not occur but that the Bolivian governmentGovernment will more likely attempt to impose measures to lower tariffs offered to customers and improve the offer and availability of mobile telephony and other telecommunications services in isolated rural areas, or increased taxes on private foreign-ownedforeign owned businesses such as Telecel, our Bolivian operation, to increase government revenues. Measures like these may have the effect of increasing our network rollout costs and reducing the profitability of our Bolivian operation.

         Most of the countries in which we operate have underdeveloped economies with low gross domestic product ("GDP") per capita and therefore the increased inflationary pressures and downturns could significantly impact our revenues.

        Our operations are dependent on the health of the economies of the markets in which we operate. We offer our services in emerging market countries with economies at various stages of development or structural reform. Most of the economies of the countries in which we operate have large sectors where a percentage of the local population earns a living on a day-to-day basis and primarily spends its income on basic items such as food, housing and clothing, and has less income to spend on mobile telephony services. Therefore, downturns in the economies of any particular country or region in which we operate may adversely affect demand for our services, which would result in reduced revenues.

        Some of these countries have historically experienced high inflation rates, although in the recent years inflation rates in all countries where we operate have been relatively low.low, if we exclude Ghana,

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following the significant devaluation of the local currency. Periods of significant inflation in any of our markets could adversely affect our costs and financial condition.

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         Most of the countries where we operate lack infrastructure or have infrastructure in very poor condition and, particularly in Africa, have an insufficient electricity supply.

        With the exception of Mauritius, the countries in which we operate often lack basic infrastructure or have infrastructure in poor or very poor condition, including in particular roads and power networks. The lack of suitable infrastructure is particularly acute in countries recovering from civil wars, such as the Democratic Republic of Congo, and in countries suffering from civil war-like events, such as Chad and Sri Lanka.Chad. In general, the rural areas in each of our operations often lack even the most basic infrastructure, as any development tends to be concentrated in urban areas. Millicom must often build its cell sites without the benefit of roads and other infrasctructures,infrastructures, which increases our network development costs.

        The electricity supply is insufficient in certain countries in which we operate (predominantly in Africa, with the exception of Mauritius) due to the growth experienced in such countries. We therefore have to rely on diesel-powereddiesel powered generators that we source, install, maintain and refuel. In Chad, at December 31, 2009 and 2008, almost 100% of our radio sites were powered by diesel-powereddiesel powered generators, and in the Democratic Republic of Congo it was the case for about 45%half of our sites. This increases our costs and impacts the profitability of our African operations.

         We have been subject to increasing foreign taxes or reducing tariffs in the countries in which we operate, which reduces amounts we receive from our operations and may increase our tax costs.

        Many of the foreign countries in which we operate have implemented new taxes or increased the rates of existing taxes applicable to corporations or reduced tariffs (interconnect rates) as a forced method of raisingin order to raise government revenue. Furthermore, competitive pricing pressure or the provisions of new tax laws may prevent us from passing these taxes onto our local customers. Consequently, any increase in taxes applicable to our local operating subsidiaries could reduce the amount of earnings they generate.

         We could be subject to the impact of a deteriorating economic environment within the developed countries.

        Many of ourthe countries in which we operate receive significant inflows of funds from relatives and friends in developed countries that work abroad. A significant deterioration in the developed country economies could impact the ability of those abroad to continue remitting funds because of job losses or reduced wages. Lower remittances would reduce the disposable income which would impact our revenues. A changeThe deterioration in developed economies could also put pressure on the situation was noticed in Central America where remittances went downamount of about 5% inforeign aid the last quarter of 2008.

         The recent increase in food prices within developed countries could have an inflationary impact on the emerging market economies.

        A significant increase in food prices within our operating markets could impact the consumers' abilityprovide to pay for our products and services. Currently, we have not seen a noticeable difference in consumer behavior towards our products and services. This might be because there is an agricultural sector in many of the economiesdeveloping countries in which we operate whichand could be providing protection against inflationary food prices seen in developed countries, or because our products and services are essential for basic communication which is relatively high onincrease the list of customer needs and therefore consumers are making sacrificeslocal governments' need to continue spending on our services. However, this situation could change if food prices remain higher than before or increase.generate revenue through taxation.

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         Currency fluctuations or devaluations may reduce the amount of profit and the value of assets that we are able to report.

        Exchange rates for currencies of the countries in which our companies operate fluctuate in relation to the US$ and such fluctuations may have a material adverse effect on our earnings, assets or cash flows when translating local currency into US$. For each venture that reports its results in a currency other than the US$, a decrease in the value of that currency against the US$ reduces our profits while also reducing our assets, our liabilities as well asand our future dividends. To the extent that our operations retain earnings or distribute dividends in local currencies, the amount of US$ we receive is affected by fluctuations of exchange rates for such currencies against the US$, which could affect our results of operations. In addition, exchange rates are impacting Millicom's earnings, assets and cash flows as weour operating subsidiaries have US$ debts, pushed down to the operations,debt, because of lack of available financing in local currencies.

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        We generally doare not able to hedge our foreign currency exposures, because of lack of available intrumentsinstruments in the countries where we operate. Millicom had a net exchange loss of $56$32 million for the year ended December 31, 2008,2009, compared to a gainloss of $15$52 million for the year ended December 31, 2007.2008.

         Most of our operations receive revenue denominated in the local currency of the country of operation. In the future, any of the countries in which these operations are located may impose foreign exchange controls which will restrict our ability to receive funds from the operations.

        Most of the operations in which we have interests receive substantially all of their revenues in the currency of the countries in which they operate. We derive substantially all of our revenues through funds generated by our local operations and, therefore, we rely on their ability to transfer funds to the Company.

        Although there are foreign exchange controls in some of the countries in which our mobile telephone companies operate, none of these countries currently significantly restrict the ability of these operations to pay interest, dividends, technical service fees, and royalties andor repay loans by exporting cash, instruments of credit or securities in foreign currencies. AlthoughHowever, existing foreign exchange controls may be strengthened in countries where we have so far experienced no major difficulty in obtaining permits to allow our operations to upstream cash directlyoperate, or indirectly to the ultimate parent company of the Millicom group, this may not be the case in the future. Foreignforeign exchange control restrictionscontrols may be introduced in countries where we operate or strengthened where such restrictions already exist, or other countries where we operate that do not currently haveimpose such restrictions, may decide to impose them, in which casescase, the Company's ability to receive funds from the operations will subsequently be restricted, which will negatively impact the Company's revenues.

        In addition, in some countries, it may be difficult to convert large amounts of local currency into foreign currency because of limited foreign exchange markets. The practical effects of this are time delays in accumulating significant amounts of foreign currency and exchange risk, which could have an adverse effect on the Group's results of operations.

         Our ability to reduce our foreign currency exposure may be limited by restrictions on borrowings in local currency.hedging instruments.

        At the operations level, we seek to reduce our foreign exchange exposure through a policy of matching, as far as possible, cash inflows and outflows. Where possible and where it is financially viable, we borrow in local currency to help hedge against local currency net inflows. Our ability to reduce our foreign currency exchange exposure may be limited by the lack of long term financing in local currency. As such, there is a risk that we may not be able to fund our local operation's capital expenditure needs or reduce our foreign exchange exposure by borrowing in local currency.

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         We own our operations through holding companies in jurisdictions which may effect changes to their respective laws that may unfavorably affect our financial status or tax treatment.

        We hold the interests in our mobile telephone companies through our subsidiaries in various jurisdictions in and outside Luxembourg, mainly but not exclusively through holding companies incorporated in the Netherlands and the Netherlands Antilles. The laws or administrative practices relating to taxation (including the current position as to withholding taxes on dividends paid by our local operations and tax concessions we have obtained in certain of our countries of operation), foreign exchange controls, or other matters, are periodically subject to change. Any such change could have a material adverse effect on our financial affairs and on our ability to receive, or the tax treatment of, funds from our local operations.

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         Our failure to comply with worldwidelocal and international laws and regulations could result in liabilities and sanctions and this would have a material adverse effect on our business.

        We are subject to several laws and regulations with worldwide application, including as promulgated by:

•

the Organization for Economic Cooperation and Development (OECD),



•

the European Union (EU), through directives that are either directly applicable or that get translated into the law of the country of incorporation,



•

the federal laws of the United States of America, including the securities laws thereof and the U.S. Foreign Corrupt Practices Act of 1997, and



•

the Grand-DuchyGrand Duchy of Luxembourg, where the Company is incorporated.

        These laws and regulations impactaffect where and how our business may be conducted. In addition, our shareholders, lenders, suppliers or other entities with which the Company and its operating subsidiaries conduct business may be subject to or seek to comply with these laws and regulations. Even though the Company has increasedmaintained a focus on its compliance efforts, there is always a risk that non-compliance issues may arise with respect to the Company or its operating subsidiaries or any employee thereof. Any instances of non-compliance may result in consequences ranging from negative publicity and reputational damage to criminal and civil liability and the application of fines or disgorgement of profits to the Company on account of any of its employees or directors or the employees or directors of any of its operating subsidiaries. Any of the foregoing would have a negative impact on our business, financial condition or the results of operations.

Risks Related to our Operations and the Mobile Telephony Market

         We face intense competition in the mobile telephone operator market.

        Our mobile telephony operations face competition from other mobile telephone operators in the markets in which they operate, as well as fixed line operators in some markets. Our main competitorcompetitors are AmerciaAmerica Movil, MTN, Zain, France Telecom, Vodafone and Telefonica.

        We expect that additional mobile telephony licenses will be granted in some of our existing markets. Moreover, additional licenses may be awarded in markets where we already face competition from other technologies that are being or may be developed and/or perfected in the future. In some of our markets, there may be more mobile telephone operators than the market is likely to sustain. In addition, in some of our markets, our competitors may have a greater coverage area than us.we do. The mobile telephone operators in each market compete for customers principally on the basis of services offered, quality of service, coverage area, accessibility of distribution and price. Many of our competitors have substantially greater capital resources than we do. Price competition is significant.

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        In addition, new competitors, such as mobile and fixed line operators in developed markets that are able to leverage their existing networks may enter emerging markets. The level of competition is influenced by the continuous and swift technological advances that characterize the industry, the regulatory developments that affect competition and alliances between market participants.

        There is also a risk that, as new competitors enter into our markets and price competition intensifies, our customers may move to another mobile telephone operator. This may result in a decline of our revenue, declining, which would adversely affect our results of operations.

        Any failure by us to compete effectively or aggressive competitive behavior by our competitors in pricing their services or acquiring new customers could have a material adverse effect on our revenues and overall results of operations.

         The mobile telephony market is heavily regulated.regulated and taxed.

        The licensing, construction, ownership and operation of mobile telephone networks, and the grant, maintenance and renewal of mobile telephone licenses, as well as radio frequency allocations and interconnection arrangements, are regulated by national, state, regional or local governmental

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authorities in the markets that we service. In addition, such matters and certain other aspects of mobile telephone operations, including rates charged to customers and the resale of mobile telephone services, may be subject to public utility regulation in the relevant market. Our operations also typically require governmental permits, including permits for the construction and operation of cell sites. WeWhile we do not believe that compliance with these permit requirements generally has a material adverse effect on our company. However,company, we may become subject to claims or regulatory actions relating to any past or future non-compliance with permit requirements.

        Changesrequirements and any change in the regulation of our activities, such as increased or decreased regulation affecting prices or requirements for increased capital investments, may materially adversely affect us. We saw increased taxation over the last year as a result of budgetory pressure from many governments because of the economic crisis.

         Most of the countries in which we operate do not have universal service obligations and if such obligations were implemented the profitability of our operations may be negatively impacted.

        The purpose of universal service is to provide access to persons in non-urban areas and isolated areas with telephone and other telecommunications services by the telecommunications build-out in rural areas through subsidies. There is a telecommunications divide in all of the countries in which we operate in relation to access to telecommunications services (mobile, internet access, higher bandwidth telecommunication services) between urban and rural areas. When such services are available, they usually come at a significantly higher cost to the customer than in urban areas due to the lower population density in rural areas that are often hard to reach due to the lack of the most basic infrastructure, in particular roads and electricity. The goal of universal service is to promote the availability of quality services at fair, reasonable and affordable rates in all areas of the country, to increase access to advanced telecommunications services, and to enhance the availability of such services to all consumers, including those in isolated rural areas at rates that are reasonably comparable to those charged in urban areas. For instance, India has implemented a universal service obligation in its New Telecom Policy 1999 funded by telecommunications operators paying a part of their net earnings into the Universal Service Obligation Fund (USOF). We therefore believe that universal service obligations are a trend in telecommunications that willmay eventually become law in the countries in which we operate.

        To date, none of the emerging markets in which we operate in have universal service obligations.

        We expect that mostsome of the countries in which we operate willmay do so in the future. We believe this maywill have a negative impact on our profitability.

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         We face substantial competition for obtaining, funding and renewing mobile telephone licenses.

        We may pursue new license opportunities. In each market we face competition for licenses from major international telecommunications companies as well as from local competitors. While we typically try not to pay large amounts for mobile licenses, the competition for the granting or renewal of licenses is increasingly intense worldwide. As such, we might have to pay substantial license fees in certain markets, as well as meet specified network build out requirements. We may not be successful in obtaining or renewing any mobile telephone licenses or, if licenses are awarded, in obtaining those licenses on terms acceptable to us. If we obtain further licenses or renew existing ones, we may need to seek future funding through additional borrowings or equity offerings, and we may not obtain such funding on satisfactory terms or at all.

         Our markets areThe industry is characterized by rapid technological change, which could render our products obsolete and cause us to incur substantial costs to replace our products.

        Fixed network and other system equipment used in the mobile telephone industry have a limited life and must be replaced frequently due to damage or as a result of ordinary wear and tear.

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In addition, substantial expansion of existing networks is required to remain competitive. Our networks are based on the GSM standard. In our Latin America markets, Mauritius and Rwanda, we have both GSM and 3G networks. The GSM standard has been most appropriate for our markets because it has the greatest availability of handsets with strong functionality and has relatively low repair and maintenance costs. As new technologies develop,are being developed besides GSM and 3G, such as third generation systems, including WiMAX and 3G,LTE, equipment may need to be replaced or upgraded or a mobile telephone network may need to be rebuilt in whole or in part, at substantial cost, to remain competitive. Unforeseeable technological developments may also render our services unpopular with customers or obsolete. To the extent our equipment or systems become obsolete, we may be required to recognize an impairment charge to such assets, which may have a material adverse effect on our results of operations. LTE or 4G is currently under implementation in some countries. Its benefits are still unknown and we may have to invest significant amount of money to follow competition and to secure our competitivness with this technology.

         The mobile telephony sector may be forced to open up access to its spectrum which may create further competition.

        In line with the current trendtrends in the U.S. and European Union, ("EU"), where the European Commission intendsspectrum regulation may intend to change spectrum regulation in such a way that spectrum (900 Mhz and 1800 Mhz bands) formerly reserved exclusively for GSM operators wouldcould be opened to other uses, such as 3G or LTE, and/or new spectrum is freed such as the 700 Mhz band, we could find that new competitors are given access to the spectrum bands we operate in. Among the markets that we operate in, we believe that the region most likely to follow the trends in EU telecommunications regulation is Africa.our markets. Although we do not believe such changes will occur in the near future, we believe EU telecoms regulatorythese developments are likely to impactinfluence telecom regulatory trends in other parts of the world, particularly in Africa.world. If such trends become law, our competitive position in the relevant countries may become adversely affected.

         If we cannot successfully develop and manage our networks and distribution, for example as a result of natural disasters, we will be unable to expand our subscribercustomer base and will lose market share and revenues.

        Our ability to increase our subscribercustomer base depends upon the success of the expansion and management of our networks and distribution. The build-out of our networks and distribution is subject to risks and uncertainties which may delay the introduction of service and increase the cost of network construction. Such uncertainties may include natural disasters, such as the tsunami in Sri Lanka (as occurred in late December 2004), the risk of hurricanes, volcanic activity and earthquakes in Central America, and flooding in low-lying areas in Bolivia and Paraguay (as occurred in the first quarter of 2007) and in South-East Asia.. Other risks include sabotage and theft, which is an ongoing risk particularly in Colombia DRC and Sri Lanka.DRC. To the extent we fail to expand our network and distribution capabilities on a timely basis, we may experience difficulty in expanding our subscribercustomer base.

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        In addition, our ability to manage our operations successfully is dependent upon our ability to implement sufficient operational resources and infrastructure. The failure or breakdown of key components of our infrastructure, including our billing systems, may have a material negative effect on our profits and results of operations.

         Rapid growth and expansion may cause us difficulty in obtaining adequate managerial and operational resources and restrict our ability to expand successfully our operations.

        Our future operating results depend, in significant part, upon the continued contributions of key senior management and technical personnel. Management of growth will require, among other things:

•

stringent control of network build-out and other costs;



•

excellence in sales, marketing and distribution;



•

continued innovative product development;

across our operations, such as sharing of information, human resources, best practices and technologies and centralized negotiations of financing and supply contracts for network equipment.

        As part of our cost reduction program, we have sold most of our towers in Ghana (see note 35), which creates a significant value through a combination of cash, reduction of operating expenses, decrease of future capital expenditure and retention of a majority stake in the newly created tower company, which bought our Ghanian towers.

        Introducing new technologies.    We willmay consider introducing new technologies in markets where customer demand is strong for the relevant technologies or products and where we believe theythe introduction of the new technologies are likely to generate substantial incremental revenue.

        Some voice technologies, like VoIP (Voice over Internet Protocol), are becoming increasingly widespread. VoIP allows voice communication by sending data packages with voice encapsulated over data networks. These services are increasing their presence to compete with fixed-line services and international calls rather than with mobile telephony services.

        We are beginning to see strong demand for broadband services in some of our markets, particularly in the relatively more mature markets in Latin America. We are looking at the ways in which we can meetmeeting this growing customer demand, including deploying new technologies where this is economically justified. One of them iswith our 3G (WCDMA) using HSDPA(HSDPA) networks since this provides a very spectrally efficient wireless solution. This technology is beinghas been deployed in Asia and Africa in the 2100MHz spectrum while in the Americas 3G isLatin America using the current existing 850 and 1900MHz spectrum.

        Other new technologies will startare starting to appear. One of them is mobile WiMAX 802.16m, Ultra Mobile Broadband (UMB) and Long Term Evolution (LTE) and mobile WiMAX 802.16m based on a new OFDMA technology. This eventually willThese technologies allow operators to have an all IP packet only connection. On case by case basis, where ever we find convenient we are acquiringWe may acquire LTE and/or WiMAX licenses or spectrum in our countries of operation where they are available to ensure we can offer LTE and/or WiMAX- based services if and when our customers demand them and we are able to offer these services at reasonable prices.

        In the case thatIf future successful technologies are different from the onethose adopted by the company then this will forceus, we may decide additional investment in network equipment replacement and training.

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        Introducing new products and services.    In 2009,2010, Millicom will continue to launch innovative value addedvalue-added services likesuch as music related services, interactive content services and advanced SMS services to address the needs of our customers. In selected markets, in 2009, Millicom tested the mobile payment and transactional services that will addprovide added convenience to Millicom's customers. This will be another tool for us to retain customers.customers and grow revenues and earnings.

        Sales, marketing and distribution.    We pursue a low-cost, innovative and high-impact approach to sales, marketing and distribution. Except in a few countries, , we do not provide handset subsidies for our prepaid subscribers.customers. As a result, we typically have low overall subscribercustomer acquisition costs. In addition, we are focused on strengthening our distribution footprint and expanding our mass-market customer reach by distributing prepaid cards through mass-market or retail outlets such as local convenience stores, newspaper stands, and street vendors.

        We believe that our focus on branded prepaid services helps us to expand our market share and reduces our operating costs. We focus our advertising on cost-effective promotions. We have rebranded almost all of our products under the tigo® brand.

Competitive Strengths

        We believe that our competitive strengths enable us to benefit from the increasing demand for the services provided by mobile operators in emerging markets. Our competitive strengths include:

        Established prepaid operator.    Our focus on prepaid mobile services for the mass market offers the advantage of lower subscribercustomer acquisition and operating costs, which typically results in higher margins

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and a faster average payback time (on average, less than three months). In addition, prepaid customers allow us to eliminate customer bad debt issues and billing and collection costs. The introduction of prepaid mobile services has opened up the market for mobile services to customers who have previously been denied access to mobile service. Increased demand for prepaid mobile services is also arisingrising from business users and those customers who purchase prepaid credits in order to control their telephone costs, creating a new segment of the market.

        Delivering profitable growth.    One of our key strengths is our ability to grow our businesses while enhancing our operating profitability. We have generally been able to acquire our licenses at low cost with minimum build-out requirements. We aim to achieve strong subscribercustomer growth while decreasing subscribercustomer acquisition costs through the creation of well-known perceived price leading brands. Additionally, we have developed an extensive distribution network at low cost that provides our customers with broad service coverage, further leveraging our brand namesname in most of our operations.

        Track record of innovation.    We believe that innovation is another key to our success. In nearly all of our markets, we were the first to launch branded prepaid mobile services which now predominateare prevalent in our markets. We have been the first to focus on non-traditional distribution channels to increase our mass-market prepaid customer reach in our markets. For example, we have used freelance distributors, such as street vendors, and sold prepaid cards in mass market outlets, which has reduced our sales and marketing costs. We have also introduced e-PIN and per second billing in most of our markets. We pioneered the introduction of all you can eat plans in Africa with our "X-treme promotions". We will offerare offering 3G broadband services in our Latin American markets, Mauritius and Rwanda.We are offering WiMAX services in thosesome selected countries where we have acquired WiMAX licenses (such as in Paraguay, Bolivia and El Salvador), and will continue to expand if and when our customers demand these services and we are able to provide them at reasonable prices. Because we focus on prepaid services and low costs, we believe that we offer the best value proposition to the customer.

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        Low operating costs and high capital efficiencies.    We establish services in markets that we believe offer high potential financial returns and substantial operational leverage. While we have always had a strategy to control costs, we initiated a stricter centralized cost reduction program for all of our operations in 2002 that we continue to apply today. We operate sizeable networks covering areas of the highest population density and business activity. Any further build-outs of our network infrastructure are demand-driven.demand driven. In addition, our migration to GSM has lowered our investment per capacity minute with faster payback times. Historically, our operations have generated an operating profit before depreciation and amortization within 12 to 18 months of start-up.

        Integrated strategy.    We actively pursue the many synergies inherent in our multi-countrymulticountry operations and the increasing scale in our existing markets. Such synergies include sharing information and best practices about services, human resources, technologies and market strategies; centralized negotiation of financing and of supply contracts for network equipment, and the rollout of a single brand, tigo®, to most of our operations. For example, our operations in Africa have been able to draw on the operational and managerial experiences and resources of our operations in Central and South America, which allows us to operate in Africa with a low cost base.America.

        Diversified operations.    We believe our 1614 mobile operations based in 1614 countries on three continents as at December 31, 2009 provide a balance of established cash flow generation and high-growth potential. Our diversification across countries and continents also lessens our exposure to unfavorable changes in a single market or currency. For example, we have continued to grow our total mobile subscribercustomer base and operating profitability despite the expiry of our BCC contract in Vietnam in May 2005 and the divestiture of our operations in Peru and Pakistan.

        Highly skilled senior management.    Our highly skilled senior management havehas extensive experience in both the telecommunications industry and the fast-moving consumer goodsFast-Moving Consumer Goods sector, which are critical to properly implement our operating strategy. Many of our senior executives have spent more than 10 years working in emerging markets and have demonstrated their ability to manage costs while managing rapidly growing businesses and starting up and successfully integrating new businesses, as has been the case in Colombia and recently with our Amnet Operationsoperations in Central America.

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License Acquisition

        As we established an early presence in most of the markets in which we operate, in most cases we have been able in most cases to secure our licenses at low cost. Historically, we have been successful in renewing our maturing licenses, generally on terms similar to the original licenses, although we may not be able to do so in the future. In some cases, we operate with prominent local business partners through companies over which we typically exercise management control.

        Licenses are generally sought through a competitive application process in which the license is awarded on the merits of the application. In some cases, our operations pay royalties on revenue or income to governments and all of our mobile operations pay interconnection fees to other telecommunications operators during the license period. Although the pursuit of mobile telephone licenses is usually highly competitive, historically our operating companies have been successful in obtaining licenses in preference toover other license applicants, including major international telecommunications companies.

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        It may happen fromFrom time to time, that Millicom meets difficulties when negotiating the terms of existing licenses. Millicom is currently engaged in a dispute with the Senegalese government regarding the maintenance of the existing Sentel license. The government of Senegal alleges that it has cancelled Sentel's license and seeks damages against Sentel and Millicom under various theories. Millicom believes that the action filed by the Republic of Senegal is baseless and ignores the agreement between Sentel and the Republic of Senegal to submit any dispute concerning the license to an international arbitration forum. Millicom's commitment to its business in Senegal remains strong and its subsidiaries Millicom International Operations, B.V. and Sentel intend to vigorously pursue all available remedies in the matter before thean international arbitration forum. Millicom is still in effective control of its Senegalese operations and discussions with the Senegalese authorities are in progressseeking ways to find an amicable solution to both parties.with the Senegalese authorities.

Management Structure

        The Millicom management team is led by Chief Executive Officer and President, Mikael Grahne, the formerpreviously Millicom's Chief Operating Officer, who took over the position from the former Chief Executive Officer, Marc Beuls;Beuls, on March 2, 2009 and who2009. The Chief Executive Officer has overall responsibility for the business; he managesbusiness and coordinates the day-by-day operations.Millicom's strategy. Our Chief Financial Officer, Francois-Xavier Roger, looks afteroversees the financial, administrative and accounting areas. Our Chief Officer Operations, Osmar Coronel is responsible for the IT, technical, commercial and procurement areas; our Chief of Tigo people,People, Carel Maasland, oversees the development of our employees, compensation and benefits and the recruitment of new talent.

        We primarily operate in fourthree major geographic regions of the world: Central America, South America Africa and Asia.Africa. Mario Zanotti is theour Head of Latin America (Central and South America) and Regis Romero is theour Head of Africa, theyAfrica. They both report directly to our Chief Executive Officer. Judy Tan isOfficer and are responsible for the Head of Asia and reports to our Chief Officer Operations.day-by-day operations. We believe this structure allows us to maintain a high degree of coordination, cooperation and cross- sharing of information among the various cluster managers while providing a degree of regional responsibility that ensures quick and effective decision making.

The Industry

Mobile TelephoneTelecommunications Industry Overview

        Mobile TelephoneTelecommunications Technology.    Mobile telephonetelecommunication systems are capable of providing high quality, high capacity voice and data communications to and from mobile handsets and devices. Mobile telephonetelecommunications systems are capable of handling thousands of calls simultaneously and providing service to hundreds of thousands of subscriberscustomers in any particular area.

        Mobile telephonetelecommunications technology is based upon the division of a given geographical area into a number of cells and the simultaneous use of radio channels in non-contiguous cells within the system. Each cell contains a low power transmitter/receiver at a base station that communicates by radio signal

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with mobile telephones in that cell. Each cell is connected by microwave or optical fiber to a central switching point or Mobile Switching Center (MSC or "switch") that controls the routing of calls and which, in turn, is connected to the public switched telephone network, if one exists, or to other mobile operators. It is the switch's mobility management function that allows mobile telephone users to move freely from cell to cell while continuing their calls through a process called hand-off.

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        Mobile telephonetelecommunications systems generally offer subscriberscustomers the features offered by the most up-to-date fixed-line telephonetelecommunications services. Mobile telephonetelecommunications systems are interconnected with both the fixed-line telephonetelecommunications network and other mobile networks. As a result, subscriberscustomers can receive and originate local, long-distance and international calls from their mobile telephones. Mobile telephonetelecommunications system operators therefore require an interconnect arrangement with the local fixed-line telephonetelecommunications companies and/or other mobile network operators, and the terms of such arrangements are material to the economic viability of the system.

        A mobile telephonetelecommunications system's capacity can be increased in various ways. Increasing demand may be satisfied, in the first instance, by adding available channel capacity to cells through the addition of extra transmitters. When all available channels are used, further growth can be accomplished through a process known as cell splitting. Cell splitting entails dividing a single cell into a number of smaller cells, through the construction of additional base stations, thereby allowing for greater channel reuse and hence increasing the number of calls that can be handled in a given area.

        Millicom uses mainly GSM technology in its operations that are GPRS, EDGE and EDGEin some markets 3G enabled. GSM is a digital standard for mobile telephonetelecommunications systems that countries have adopted as a common standard. GSM offers increased value-added services and enables transmissions to be made in encrypted form so that conversations cannot easily be intercepted. The GSM system allows subscriberscustomers to use their mobile telephones in any country where the GSM system has been adopted and where appropriate roaming agreements are implemented, providing increased mobility and flexibility. GSM systems are the most ubiquitous worldwide.

        In the United States, a number of digital standards have been developed and are being deployed. One of them is Code Division Multiple Access (CDMA), which is also popular in some parts of South America and in the Asia-Pacific region. An enhanced version of CDMA is the technology used for the third generation mobile systems (3G) called W-CDMAWCDMA and CDMA2000 1X. What all third generation (3G) networks have in common is that they support high data bandwidth applications such as full motion video, video conferencing and full Internet access to mobile devices. Universal Mobile Telecommunications System (UMTS) is a type of 3G mobile technology which allows, besides voice and data, the delivery of audio and video to wireless devices anywhere through fixed, wireless and satellite systems.

        WiMAX stands for Worldwide Interoperability for Microwave Access and is a wireless industry coalition whose members organized to advance IEEE 802.16 standards for broadband wireless access (BWA) networks. WiMAX 802.16 technology is expected to enable multimedia applications with wireless connections.

        Competing Technologies.    Some niche technologies are available for certain services. One of these technologies consists of Trunking services that are also deployed using radio communications with a cell technology and allows mobility for the user, but do not provide full duplex communication among users. This limitation makes this service less desirable and this results in low competition as few operators use this technology. Another technology being deployed is "Push to talk" or "Push over Cellular" which utilizes the mobile telephony network capability of handling data to allow a service similar to Trunking but using more sophisticated mobile handsets. These services are complementary to mobile services and are usually deployed as an additional product within mobile services.

        Some other voice technologies, like VoIP (Voice over Internet Protocol), are becoming increasingly widespread. VoIP allows voice communication by sending data packages with voice encapsulated over data networks. These services are increasing their presence to compete with fixed-line services and international calls rather than with mobile telephony services.

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        New competing technologies are startinghave started to be deployed. The first one of them is 3G (W-CDMA)(WCDMA) using HSDPA since this provides a very spectrally efficient wireless solution. This technology is being deployed in Asia and Africa in the 2100MHz spectrum while in the Americas 3G is using the current existing 850 and 1900MHz spectrum.

        During 2008,the last two years, in theour Latin America markets operatorswe have introduced 3G networks based on W-CDMA/HSDPA (High-Speed Downlink Packet Access). WCDMA is a system based on the third generation (3G) of mobile phone standards and technology that allows the transmission of large volumes of data at high speeds. 3G technologies enable network operatorsus to offer our users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency. 3G enables operatorsus in Latin America, Mauritius and Rwanda to offer new Services to our corporate as well as prepaid customersusers like , video calls, mobile broadband data, full internetInternet experience with richer mobile content. The main reason to introduce 3G /HSDPA networks are:

        New market opportunities.    It allows us to enter new markets and provide new services, such as the wireless broadband market, which we believe has significant growth potential throughout Latin America.

        Increased data and voice capacity.    Our new 3G networks give us more capacity to provide data and voice services than our existing GSM network using our current spectrum.

        Cost effective deployment.    3G networks can be collocatedcolocated with existing infrastructure allowing faster and more cost effective network deployment.

        Other new technologies will starthave also started to appear. One of them isappear, such as Long Term Evolution (LTE), mobile WiMAX 802.16m and Ultra Mobile Broadband (UMB) and Long Term Evolution (LTE) based on a new OFDMA technology. This eventually will allow operators to have an all IP packet only connection. Most of the largest operators in the world are choosing the LTE evolution path.

        In the caseevent that future successful technologies are different from the onethose adopted by the company then thisCompany, the Company will forcebe forced to make additional investmentinvestments in network equipment replacement and training.

        Operating Characteristics.    The mobile telephonytelecommunications industry is typically characterized by high fixed costs and low variable costs. Until technological limitations on total capacity are approached, additional mobile telephonetelecommunications system capacity can usually be added in increments that closely match demand and at less than the proportionate cost of the initial capacity. The industry is also seeing declining equipment prices in real terms. Once revenues exceed fixed costs, incremental revenues are expected to yield an increasing operating profit, giving mobile operators an incentive to stimulate and satisfy demand for their services in the market. The amount of profit, if any, under such circumstances is dependent on,upon, among other things, prices and variable marketing costs, which, in turn, are affected by the amount and the extent of competition. As competition increases in markets, prices have fallen with the result that revenues and operating profits increase at a lower rate than subscribercustomer growth. In addition, as penetration rates increase, there is a tendency for a higher proportion of new subscriberscustomers to use prepaid services. Prepaid subscriberscustomers tend to have lower usage than credit subscribers,customers, but the operating margin on prepaid is generally higher than with credit subscriberscustomers as the risk of customer bad debt is eliminated and there generally is no subsidizing of handsets.

        As these services are using radio spectrum, which are generally monitored and regulated by governments, the utilization of frequencies generally requires that appropriate licenses are obtained from pertinent authorities. The granting of licenses may involve significant fees, either paid as fixed upfront amounts or as variable charges.

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Development of the Mobile TelephoneTelecommunications Industry

        Mobile TelephonyTelecommunications in Developed Countries.    The first mobile telephonetelecommunications networks were introduced in Scandinavia in the early 1980s and experienced modest growth for the first few years. Over the last 10 years, however, mobile telephony hastelecommunications have grown rapidly. All developed countries now have mobile telephonetelecommunication service and the levels of penetration have increased substantially in these countries.

        Given the rapid growth of mobile telephone subscriberstelecommunication traffic in developed countries and high levels of penetration, the industry is increasingly introducing new technologytechnologies that will expand capacity and improve service, including the introduction of digital mobile telephone networks and the ability to access the Internet from handsets.service. In industrialized nations, mobile operators are in the process of introducinghave implemented "third generation" mobile technology and have plans to introduce "fourth generation" mobile technology that will permit always-onallow faster access to the Internet and voice and data transmissions.Internet.

        Mobile TelephonyTelecommunications in Developing Countries.    While the mobile telephonetelecommunications industry is well-established in the developed world, the mobile telephonetelecommunications industry in the developing world is still in a relatively high growth phase. Millicom believes that mobile telephonytelecommunications will continue to grow rapidly in developing countries because of the poor quality of the existing fixed-line service, the unsatisfied demand for basic telephonetelecommunications service and the increasing demand from users who want the convenience of mobile telephones. In some countries the mobile telephonecommunications network provides significantly improved access to the local and international fixed-line network compared with the existing fixed-line service. In addition, developing countries are expectedservice, as well as access to benefit both from better technology and lower equipment costs than those at comparable stages of market development in developed countries.the Internet Penetration rates (the number of subscriberscustomers per 100 people) are lower in developing countries than in developed countries. Consequently, Millicom believes that its markets offer high growth potential.

        For developing countries, mobile telephonetelecommunications networks can represent a faster and more cost-effective method of expanding telecommunications infrastructure than traditional fixed-line networks. Fixed-line networks involve extensive outside infrastructure in the form of buried or overhead cable networks, while mobile telephonetelecommunications networks require less construction activities.activity.

Other Mobile industry trends

        Other MobileAnother trend in the mobile industry, trend and a new market opportunity, has been to integrateis the integration of mobile services with broadband, fixed line and fixedcable TV services to offer triplepackages known as "triple" and quadriple plays."quadruple" play services.

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Competitive Position in the Market

        The following table shows certain estimated information regarding the competitive position of Millicom's continuing operations' competitive positionoperations in each of its mobile telephony markets as at December 31, 2008.2009. This information was derived from active subscriberscustomers based on interconnect activity on our own networks. Millicom operates in developing economies and markets and believes that the data research available in these countries is not always accurate, consistent or verifiable. Therefore, the information provided here is given in ranges of market share to indicate the relative size and market position of Millicom's mobile telephony operations in comparison to its competitors.

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Operations

Description of operations

        Descriptions of each of our operations and other related businesses are provided below. The description of our operations is divided into the following regions and businesses:

Central AmericaAmerica——Millicom's mobile operations comprise El Salvador, Guatemala and Honduras.

South AmericaAmerica——Millicom's mobile operations comprise Bolivia, Colombia and Paraguay.

Africa        Africa——Millicom's mobile operations comprise Chad, Democratic Republic of Congo, Ghana, Mauritius, Rwanda, Senegal and Tanzania. Millicom's operation in Sierra Leone was classified as discontinued in 2008.2008 and sold on November 25, 2009 (see note 5).

Asia—Millicom's mobile operations comprise Cambodia, the Lao People's Democratic Republic and Sri Lanka.

Amnet—        Cable—Millicom's cable, broadband, television, fixed telephony and Corporatecorporate data business across Central America acquired by MillicomAmerica.

        Asia—Millicom's mobile operations comprise Laos. The entire Asia segment was classified as discontinued in 2009. Millicom's operations in Sri Lanka and Cambodia were sold respectively on October 2008.16 and November 26, 2009 (see note 5).

        The table below sets forth our revenue from continuing operations by geographicaloperating segment, in percent of total revenues, for the periods indicated.

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Subsidiaries and their Market Presence

        The following table shows certain information for each of Millicom's mobile operations as at December 31, 2008.2009.

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Selected Operating Data

        The following table presents, at the dates and for the periods indicated, selected operating data for each of Millicom's mobile continuing operations.

CENTRAL AMERICA

        Central America consists of Millicom's mobile telephonyoperations in El Salvador, Guatemala and Honduras. Millicom Central America's licenses covered approximately 28 million people as at December 31, 2008.2009.

El Salvador

        El Salvador's government system is a democratic republic. Following deterioration in the country's democratic institutions in the 1970s, a civil war took place between 1980 and 1992 and came to an end as the two opposing sides signed a peace accord. The former president, Elías Antonio Saca González of the right-wing Arena political party, was elected in 2004 for a five-year term ending on June 1, 2009. New presidential elections took place on March 16, 2009 and Mauricio Funes, of the left-wing FMLN political party was elected as new president.

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        Despite being the smallest country geographically in Central America, El Salvador ishas the third largest economy on Central America, buteconomy. Economic growth has been modest in recent years The economy is divided principally on services (59.1%), industry (29.8%) and agriculture (11.1%). Economic growth is expectedcontracted by 2.6% in 2009. El Salvador leads the region in remittances per capita with inflows equivalent to decelerate in 2009 due to the global slowdownnearly all export income and to El Salvador's dependence on US economy (mainly for exports and remittances).about a third of all households receive these financial inflows. In 2006 El Salvador was the first country to ratify the Central America-Dominican Republic Free Trade Agreement (CAFTA)("CAFTA"). CAFTA has bolstered the exportexports of processed foods, sugar, and ethanol, and supported investment in the maquila sector.apparel sector, which faced Asian competition with the expiration of the Multi-Fiber Agreement in

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2005. In anticipation of the declines in the apparel sector's competitiveness, the previous administration sought to diversify the economy by promoting the country as a regional distribution and logistics hub, and by promoting tourism investment through tax incentives. El Salvador becamehas promoted an open trade and investment environment, and has embarked on a memberwave of privatizations extending to telecom, electricity distribution, banking, and pension funds. In late 2006, the World Trade Organizationgovernment and the Millennium Challenge Corporation signed a five-year, $461 million compact to stimulate economic growth and reduce poverty in 1995. As the country does not have control over its monetary policies followingcountry's northern region, the primary conflict zone during the civil war, through investments in education, public services, enterprise development, and transportation infrastructure. With the adoption of the U.S.US dollar as its currency in 2001, El Salvador lost control over monetary policy. Any counter-cyclical policy response to the governmentdownturn must be through fiscal policy, which is committedconstrained by legislative requirements for a two-thirds majority to maintaining tight fiscal policies.approve any international financing. El Salvador had a population of about 7 million in mid-2008.people at the end of 2009. The 20082009 GDP real growth rate was estimated at 3.2%a negative 2.3% and GDP per capita at about $6,400.$6,000.

        El Salvador's telecommunications market is among the most liberalized in Central America. In 1996, the government passed a telecommunications law designed to encourage competition in all areas of the sector and permitted foreign investment for the first time. The law governs all activities of the telecommunications sector, with particular emphasis on the regulation of the public telephony service, utilization of radio spectrum, access to essential resources and numbering plans. Since the sector privatization in 1998, foreign and local operators have made significant investments in infrastructure improvement. This has resulted in considerable growth in the number of mobile connections, partly as a result of the underdeveloped fixed-line network with waiting time for connections often running to several years. Mobile operators have capitalized on this by offering fast, high quality service with nationwide coverage.

        Millicom has a 100.0%100% equity interest in Telemóvil El Salvador, S.A. Millicom accounts for this operation as a subsidiary using the full consolidation accounting method.

        Telemóvil launched its operations in 1993 and was the only mobile services provider until 1999. Since its entry into the market, Telemóvil has expanded its coverage of the main cities rapidly and remains the market leader. The full coverage GSM network was launched in August 2004. Services offered also include broadband internet, fixed wireless telephony and public telephony. Tigo's 3G3G/HSDPA Network was launched in September 2008 offering services likesuch as video calls, mobile internet (datacards) and all the current telecommunication services using 3G network.

        In 20082009 there were 5 mobile services providers in the country. Telefónica and Telecom (initially owned by France Telecom) entered the market in 1999 as the second and third mobile operator, respectivelyrespectively. Digicel (privately owned) entered the market in 2001 with a GSM network as the fourth operator. Digicel was recently acquired by the Caribbean operator with the same name. América Móvil of Mexico acquired France Telecom's interest in Telecom in 2003. In October 2005, Intelfon (privately owned) entered the market as the fifth mobile operator, offering services based on the iDen push-to-talk technology. Intelfon has a negligible market share to date.

        Telemóvil was awarded a 15-year mobile license in September 1991 which was subsequently extended until 2018. Telemóvil acquired WiMAX spectrum in 1998.

        Telemóvil's strategy is based on offering a combination of high quality network coverage and services at low prices showing the customer the "Aquí estoy" (here we are) culture. Leveraging Telemóvil's distribution capabilities through e-PIN, internet and other electronic means further enhances this strategy. Telemóvil also expanded its value added services and strengthened its customer services operations (18 service centers for customer direct care). As at December 31, 2008, Telemóvil's2009, Millicom's network in El Salvador comprised a total of 820 base stations with the capacity to handle a maximum of 2.5 million concurrent subscribers,900 physical sites and covered 89%92% of the total population leading the market with a share of 45.2% and area coverage of 97%.

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Guatemala

        Guatemala's government system is a constitutional democratic republic. In 1996, peace accords were signed which brought an end to a 36-year civil war. Although Guatemala has completed a successful transition from military to civilian government, the military retains considerable political

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power. In November 2007, Mr. Alvaro Colom was elected President with 52.82% of votes. MrMr. Colom's Party is UNE, is of center-left tendency and does not control majority of seats in Congress.

        Guatemala is the largest and most populous of the Central American countries with a population of about 13 million in mid-2006.countries. The agricultural sector accounts for about one-quarterone-tenth of GDP two-fifths of exports, and half of the labor force. Ongoingforce; key agricultural exports include coffee, sugar, and bananas. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and Guatemala since then has pursued important reforms and macroeconomic stabilization. The Central American Free Trade Agreement (CAFTA) entered into force in July 2006 spurring increased investment and diversification of exports, with the largest increases in ethanol and non-traditional agricultural exports. While CAFTA has helped improve the investment climate, concerns over security, the lack of skilled workers and poor infrastructure continue to hamper foreign participation. The distribution of income remains highly unequal with more than half of the population below the national poverty line and 15% in extreme poverty. Guatemala has one of the highest malnutrition rates in the world. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking fighting corruption,and rampant crime, and narrowing the trade deficit. Remittances fromPresident Colom entered into office with the promise to increase education, healthcare, and rural development, and in April 2008 he inaugurated a large expatriate communityconditional financial transfer program modeled after programs in Brazil and Mexico that movedprovide financial incentives for poor families to the United States during the civil war have become an important source of foreign exchange.keep their children in school. Given Guatemala's large expatriate community in the United States, it is the top remittance recipient in Central America, with inflows serving as a primary source of foreign income equivalent to nearly two-thirds of exports. Economic growth is expected to slowturned negative in 2009 as export demand from US and other Central American markets drop, remittances from the United States come under pressurecontracted and foreign investment slowsslowed amid the global slowdown.

recession and economic recovery will probably be negligible in 2010. Guatemala had a population of about 13 million people at the end of 2009. The extension of the European Union's generalized system of preferences, under which Guatemalan exports enjoy preferential access to EU markets, is expected to have a positive impact on the economy going forward. Guatemala joined the GATT in 1991 and became member of the World Trade Organisation in 1995. The distribution of income in Guatemala remains very unequal with 75% of the population living under the poverty line, mostly in rural areas. The 20082009 GDP real growth rate iswas estimated to be 3.9%at a negative 0.5% and GDP per capita wasat about $5,400.$5,200.

        Between 1996 and 1998, Guatemala implemented a liberalization and privatization program. The General Telecommunications Law was passed in 1996 and opened the sector to competition with immediate effect, including the removal of all regulatory restrictions on prices and quality of service, and also prepared the ground for privatization of the incumbent operator Guatel, re-named Telgua, which took place in 1998. The law also created a regulatory authority, the Superintendencia de Telecomunicaciones (SIT), which is primarily responsible for the allocation of radio spectrum, resolving access disputes and administering the national numbering plan.

        Millicom has a 55% equity interest in Comunicaciones Celulares, S.A. (Comcel). The remaining 45% of the company is owned by Miffin Associates Corp., a PanamianPanamanian company controlled by our local partner Mr. Mario David Lopez Estrada. Millicom accounts for this operation as a joint venture using the proportionate consolidation accounting method.

        Comcel was the first mobile operator in Guatemala when it launched commercial operations in 1990. The company enjoyed a monopoly position until 1999 when Telefónica and Telgua (owned by América Móvil) entered the market as the second and third operators. In 2001, BellSouth of the U.S. entered the market as the fourth operator but Telefónica of Spain acquired BellSouth's operations in 2004. América Móvil offers an integrated telecommunications solution including fixed and mobile telephony, cable TV and internet services. América Móvil and Telefónica are Comcel's most challenging competitors. In March 2003 two additional mobile licenses were granted. One license was granted to Electrónica Industrial, S.A., which sold the usufruct of the spectrum to Comcel in November 2006. The other license was granted to Digicel Guatemala S.A., which as of March 30, 2009 had not launched commercial operations.

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        Comcel operates a GSM/GPRS/EDGE and a 3G3G/HSDPA networks. The GSM/GPRS/EDGE network was launched in August 2004 and the 3G3G/HSDPA network was launched in August 2008. Comcel also

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provides international long-distance services, roaming service, internet services and local telephony services.

        In January 1990, Comcel was awarded its initial 20-year license to operate a nationwide 800MHz network. In March 2003, Comcel was awarded a revised license to operate 10MHz of frequency for a period of 15 years until 2018. In August 1998, as validated in October 2001, the license to operate another 4MHz spectrum was awarded for the period until 2013. This license can then be extended for a further 15 years. Comcel acquired 25Mhz25 MHz in the 2.5Ghz2.5 GHz spectrum to operate WiMAX in July 2006.

        AtAs at December 31, 2008 the GSM2009, Millicom's network in Guatemala comprised 1,844 radio base stations serving approximately 4.4 million subscribers,2,194 physical sites and the network covers approximately 86%covered 98% of the total population.

Honduras

        Honduras' government system is a democratic constitutional republic. Since the regional peace process that took place in the late 1980s, democracy in Honduras has been strengthened. The last presidentialPresidential elections took place in November 2005, with the opposition candidate Manuel Zelaya Rosales of the Partido Liberal party being elected. The new government tookelected and taking office in January 2006. The nextMr. Rosales left power in June 2009 and an intermediary government took his place to run the country until the new elections, are planned forwhich were held in November 2009 with the same political parties leading the polls; with candidates:the win of the candidate Porfirio Lobo Sosa running for the National Party and Elvin Santos for the Liberal Party.

        Although GDP per capita in Honduras is one of the lowest in Latin America, it has increased since the 1990s and overall economic growth This new government has been higherlargely accepted by the international community.

        Honduras, the second poorest country in recent years than in many other countries in the region. Real GDP growth dropped to 2.3% in 2008 asCentral America, has a result of smaller remittances from the U.S. and the general economic climate. GDP per capita was estimated at $3,700 in 2008. Honduras continues to focus on pursuing the economic and reform program agreed with the International Monetary Fund (IMF) under the poverty reduction and growth facility in February 2004. Although no recent figures are available, it is estimated that between half and two-thirds of Hondurans lived below the poverty line in 2006. Honduras suffers from a veryhighly unequal distribution of income and massive unemployment As the country has met most of its macroeconomic targets, it has achieved debt relief under the IMF-World Bank's heavily indebted poor countries initiative. The United States is Honduras' largest trading partner. Honduras became a member of the US-Central America Free Trade Agreement in May 2004.high un- and underemployment. The economy relies heavily on a narrow range of exports, notably apparel, bananas, and coffee, making it vulnerable to natural disasters and shifts in commodity prices,prices; however, investments in the maquila and non-traditional export sectors are slowly diversifying the economy. Nearly half of Honduras's economic activity is directly tied to the United States, with exports to the United States equivalent to 30% of GDP and remittances for another 22%. CAFTA came into force in 2006 and has helped foster investment, but physical and political insecurity may deter potential investors. The economy is expected to register marginally positive economic growth in recent years has experienced a rapid rise in exports of light manufacturers. Growth remains dependent on2010, insufficient to improve living standards for the economynearly 60% of the U.S.,population in poverty. Despite improvements in tax collections, the government's fiscal deficit is growing due to increases in current expenditures from increasing public wages. Tegucigalpa lacks an IMF agreement; its largest trading partner,Stand-By Agreement expired in April 2009 and on reducing the high crimeformer President Zelaya's commitment to a fixed exchange rate asundermined a means of attracting and maintaining investment.follow-on. Honduras had a population of about 8 million in mid-2008.people at the end of 2009. The 2009 GDP real growth rate was estimated at a negative 3.1% and GDP per capita at about $4,200.

        The Comisión Nacional de Telecomunicaciones (Conatel) was created in October 1995 as the national regulatory authority and reports directly to the Ministry of Telecommunications. It operates a licensing system for all telecommunication services in Honduras and is in charge of promoting the modernization and development of the sector by encouraging private investment, free competition and improved quality of service. Although Empresa Hondureña de Telecomunicaciones (Hondutel), the state owned national incumbent operator, has a monopoly over local and long-distance telephony services, the government has opened value added services and mobile telephony to competition. Mobile operators (Millicom's Celtel, the market leader; Megatel, owned by América Móvil and most recently Digicel) have the right to carry international traffic for their own customer base.

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        Millicom has a 66.67% equity interest in Celtel. The remaining 33.33% of Celtel is owned by Proempres Panama S.A., a privately-held company controlled by our local partners, Mr. Roberto Isaias Dassun and other members of his family. Millicom and Proempres entered into a revised shareholdersshareholders' agreement following the buy-out of a third shareholder, Motorola Inc. of the United States, in 2005, under which the two shareholders exercise joint control of Celtel. Millicom accounts for this operation as a joint venture using the proportionate consolidation accounting method.

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        Celtel launched commercial operations in 1996 as the first mobile operator in Honduras and today operates a GSM and a 3G networks.network. Until late 2003, Celtel enjoyed a monopoly status in the mobile market, when Megatel entered the market with a GSM network as the second operator, and inoperator. In the first quarter of 2008, theyMegatel launched theirits 3G Network. The third mobile license was issued to Hondutel (the State-owned fixed line incumbent) but theirits operations have only limited coverage in the 5 main cities of the country. A fourth license was issued to Digicel Honduras S.A., who launched operations on November 2008 with a GSM network.

        Celtel operates a GSM/GPRS/EDGE network and a 3G/HSDPA network. The 3G/HSDPA network was launched in August 2008. Celtel also provides international long-distance services and local telephony services.

        In June 1996, Celtel was awarded a 10-year license to operate a nationwide mobile network for a price of US$5.1 million. The license was transformed into a 25-year license in March 2005 with an expiry date of June 2021 at a cost of US$4.8 million. Celtel has already aquiredacquired a WiMAX license but have not yet performed a commercial launch.

        As at December 31, 2008 the GSM2009, Millicom's network in Honduras comprised 1,326 radio base stations with the capacity to handle a maximum of 5 million concurrent subscribers1,419 physical sites and covered 98%93% of urban population and 82% of ruralthe total population.

SOUTH AMERICA

        Millicom's mobile operations in South America are located in Bolivia, Colombia and Paraguay. Our South American licenses covered approximately 6163 million people as at December 31, 2008.2009.

Bolivia

        Bolivia's system of government is a Unitary Democratic Republic. The government has pursued an economic and social reform agenda since the early 1990s. Democratic civilian rule was established in 1982, but leaders have faced difficult problems of deep-seated poverty, social unrest and illegal drug production. In December 2005 Bolivians elected Movement Toward Socialism leader Evo Morales as president by the widest margin of any leader since the restoration of civilian rule in 1982, after he ran on a promise to change the country's traditional political class and empower the nation's poor majority. However, since taking office, his controversial strategies have exacerbated racial and economic tensions between the Amerindian populations of the Andean west and the non-indigenous communities of the eastern lowlands.

        One of these strategies was the "recuperation of the natural resources to the hands of the state": nationalization of the entire hydrocarbon sector (gas, production, transportation, refining, and storage companies), the main mining companies, and also Entel, the main telecom operator previously privatized in 1997. This nationalization process has been confirmed under the new constitution approved in January 2009. During 2009, all the new laws should be drafted andNew elections will bewere held in December 2009.

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        The new constitution guarantees the "concession previous rights". In this sense,As a result, our Concession Contract rights willwere not be affected. One of the most relevant changes resultresulting from the new constitution iswas the elimination of the Sirese system, an autonomous government agency responsible for regulating the five basic utility sectors: telecommunications, electricity, transport, oil and gas and water. These functions will bewere taken over by a Government Ministry.

        Bolivia's GDP per capita was estimated to be $4,700 in 2008. The GDP real growth rate in 2008 was estimated to be 4.8%. Oil and gas, mining, smelting, food and beverages, tobacco and clothing are the most important industries in Bolivia. The country became memberBolivia is one of the World Trade Organizationpoorest and least developed countries in 1995Latin America. Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and iscut poverty rates in the 1990s. The period between 2003 and 2005 was characterized by political instability, racial tensions, and violent protests against plans—subsequently abandoned—to export Bolivia's newly discovered natural gas reserves to large northern hemisphere

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markets. In 2005, the government passed a member of Mercosur (the Southern Common Market with Argentina, Brazil, Paraguaycontroversial hydrocarbons law that imposed significantly higher royalties and Uruguay). In early 2008,required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee. After higher earningsprices for mining and hydrocarbons exports pushed the current account surplus to 9.4% of GDP and the government's higher tax take produced a fiscal surplus after years of large deficits. Private investment as a share of GDP remains amongin 2008, the lowestglobal recession in Latin America, and inflation was at double-digit levels in 2008. The2009 slowed growth. A decline in commodity prices that began in late 2008, thea lack of foreign investment in the mining and hydrocarbon sectors, a poor infrastructure, and the suspension of trade benefits with the United States will likely pose challenges for the Bolivian economy in 2009. Bolivia's2010. Bolivia had a population of about 10 million people at the end of 20082009. The 2009 GDP real growth rate was of 9 million.estimated at 2.8% and GDP per capita at about $4,600.

        Millicom has a 100% equity interest in Telecel. In addition to offering mobile services (GSM and 3G) on a nationwide basis, Telecel offers national and international long-distance services and data transmissions (Wimaxtransmission (WiMAX and 3G). Millicom accounts for this operation as a subsidiary i.e. using the full consolidation accounting method.

        Telecel launched commercial operations in 1991 through an offering of analogue mobile services in Bolivia's three main cities of La Paz, Santa Cruz and Cochabamba. Telecel introduced the first prepaid mobile telephony offering in Bolivia at the end of 1996 and launched digital services through its TDMA network in 1997. Telecel started offering nationwide GSM services in December 2005 and is the first and only operator in Bolivia to offer 3G services since 2008.

        From 1991 to 1996, Telecel was the only mobile operator in Bolivia. Móvil de Entel, the mobile subsidiary of incumbent operator Entel, launched its mobile services in 1996. In 1997, the government of Bolivia privatized Entel by selling a 50.9% stake to Telecom Italia. Entel was recently renationalized. Then, inIn 2001 NuevaTel (a joint venture, now 72% owned by Trilogy International Partners of the U.S.,United States, and 28% by Cooperative of Telecommunications Cochabamba, one of Bolivia's largest telecommunication co-operatives) entered the market with a GSM network. By 2002, Móvil de Entel also started offering heavily subsidized GSM services. Consequently, Móvil de Entel became the leading operator in terms of subscribercustomer numbers. In December 2005, Telecel introduced tigo® with its new GSM network and at the end of 2006 Telecel had consolidated its position as the second largest operator in the Bolivian mobile market.

        Telecel was awarded a 20-year license in 1990 to operate a mobile network in Bolivia's three main cities (La Paz, Santa Cruz and Cochabamba). The license was extended in 1995 and will expire in November 2015. Telecel's license was extended in 1997 to cover the rest of the country for a period of 20 years. In December 2002, Telecel was also awarded a 40-year license to provide long-distance telecommunication services in Bolivia. This license is mainly used to carry Telecel's mobile traffic. In May 2006, Telecel was awarded a 40-year data concession to provide services in Bolivia.

        At December 31, 2008, 591 base stations were in place, compared to 367As at December 31, 2007. Telecel's customer base reached 1,399,048 subscribers at2009, Millicom's network in Bolivia comprised 777 physical sites and covered 51% of the end of 2008. The number of Telecel subscribers grew 33% covering 54% of Bolivia'stotal population.

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Colombia

        Colombia's system of government is a constitutional republic. The president of the Republic of Colombia is Mr. Alvaro Uribe who has been in office since August 2002 and was re-elected for another 4-year term in May 2006. A 40-year conflict between government forces and anti-government insurgent groups and illegal paramilitary groups, both heavily funded by the drug trade, escalated during the 1990s. The insurgents lack the military or popular support necessary to overthrow the government and violence has been decreasing since about 2002 but insurgents continue attacks against civilians and large parts of the countryside are under guerrilla influence. Most paramilitary members have demobilized since 2002 in an ongoing peace process, although their commitment to ceasing illicit activity is unclear. President Alvaro Uribe has stepped up efforts to reassert government control throughout the country. However, neighboring countries worry about the violence spilling over their borders.

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        Colombia experienced accelerating growth between 2002 and 2007, chiefly due to advancements in domestic security, to rising commodity prices, and to President Uribe's promarket economic policies. Colombia's GDP per capita was estimatedsustained growth helped reduce poverty by 20% and cut unemployment by 25% since 2002. Additionally, investor friendly reforms to be $9,000 in 2008. Colombia's population was estimated at 45 million in mid-2008. Colombia's economy has experienced positive growth over the past four years despite a serious armed conflicthydrocarbon sector and the GDP realUS-Colombia Trade Promotion Agreement (CTPA) negotiations attracted record levels of foreign investment. Inequality, underemployment, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires significant updating in order to sustain expansion. Economic growth rate was estimated at 3.8%slipped in 2008. The economy slowed down2008, and turned negative in 20082009, as a result of the global financial crisis reducing theand weakening demand for Colombia's exports, and weakening of internal demand.despite aggressive measures by the Central Bank to lower interest rates. In response, the governmentUribe's administration has quickly adopted measures to maintain investor confidence and to keep credit lines to the private sector. These actions have included the cut of capital controls, arranged for emergency credit lines from multilateral institutions, and putting liquidity into the financial markets through the reduction of the interest ratepromoted investment incentives such as Colombia's modernized free trade zone mechanism, legal stability contracts and new bilateral investment treaties and trade agreements. The government has also encouraged exporters to diversify their customer base away from the central bank. TheUnited States and Venezuela, Colombia's largest trading partners, although China surpassed Venezuela as Colombia's number two export destination in late 2009. Nevertheless, the business sector iscontinues to be concerned about the impact of thea global recession overon Colombia's exports,economy, an appreciating domestic currency, as well as the approval of the FTA,CTPA, which is installedstalled in the US Congress. Colombia had a population of about 46 million people at the end of 2009. The 2009 GDP real growth rate was estimated at a negative 0.1% and GDP per capita at about $9,200.

        In October 2006, Millicom acquired 50% plus one share of the share capital of Colombia Móvil S.A. ESP for a price of $124 million. Millicom accounts for this operation as a subsidiary, using the full consolidation accounting method.

        UNE Telecomunicaciones S.A. ESP, a company owned and controlled by the municipality of Medellín, and Empresa de Telecomunicaciones de Bogotà ETB S.A. ESP, a company owned and controlled by the municipality of Bogotà, each own 24.99% of the share capital of Colombia Móvil. Emtelco (a subsidiary of EPM), Colvatel (a subsidiary of ETB) and Empresa Aguas del Oriente Antioqueño (a subsidiary of EPM) each own one share in Colombia Móvil in order to comply with the minimum legal requirement of five shareholders.

        Mobile telephony was introduced in Colombia in 1993. The country was divided into three zones, with two licenses per zone, in band A and B in the 850 Mhz frequency band. Millicom operated in the northern zone of Colombia through a subsidiary called Celcaribe S.A. from 1993 to 2001 when it sold the business to América Móvil. After an initial period with six regional mobile players, the industry went through a consolidation process and today there are four mobile companies: Movistar, belonging toa subsidiary of the Telefónica group, Comcel, belonging toa subsidiary of América Móvil, Avantel, a digital trunking operator (privately owned) and Colombia Móvil, majority owned by Millicom.

        Colombia Móvil S.A. ESP was awarded three licenses in February 2003 to offer Personal Communications System (PCS) services in the three zones, covering all of Colombia. The PCS licenses each have a term of 10 years and allow Colombia Móvil to offer voice, data and video services without additional license requirement for value added services. Additionally, Colombia Móvil has one license for offering carrier services, with a term of 10ten years, extendable for 10 morean additional ten years. Colombia Móvil S.A. ESP is operating in Colombia with GSM/GPRS technology, on the 1900 MHz band, with 40Mhz40MHz of spectrum in the 1900MHz band composed of 30 MHz awarded with the PCS license in 2003 with a 10yrs duration of ten years and 10MHz awarded in August 2008 for the same validity period as the PCS license.

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        In addition to the PCS license, Colombia Movil has another license that permits it to offer several telecommunication services, named "Título Habilitante Convergente" which was awarded in April 2008 and it has a term of 10 years renewable. Through this license, Colombia Movil is offering value added services, has offered international gateway services since July 2003 and is able to offer bearer services.

        Colombia Movil launched a 3G trial service in key cities on the last quarterTable of 2008.Contents

        Colombia is a "calling party pays" country. Interconnection is mandatory and it cannot be interrupted without previous permission from the regulator. Colombia Móvil has fully operational interconnection agreements for voice and SMS services with the other mobile operators and is considering the interconnection conditions for other data services, such as MMS.

        The Communications Ministry manages the radio electric spectrum and in addition there is a regulatory entity known as the Telecommunications Regulatory Commission (CRT), which is in charge of issuing and controlling the regulatory framework applicable to the industry.

        The Colombian telecommunications market is very competitive with about 30 fixed local operators, two mobile operators, one mobile PCS, one digital trunking and around thirty five long distance operators, which are owned by private and public shareholders. Colombia Móvil has interconnection with all fixed operators through direct or indirect agreements. Interconnection charges have been commercially agreed or imposed by regulation on December 2007 important reductions in interconnection charges were issued. Mobile operators mutually pay interconnection charges for call termination. As of December 31, 20082009 Colombia Móvil had a market share of approximately 8,4%less than 10%.

        Colombia Móvil rebranded and redesigned its services using tigo® in the last quarter of 2006. According to the Superintendencia de Industria y Comercio, the country has an estimate of 40 million active mobile subscribers reaching a penetration of 90%, most of which are using prepaid.

        As at December 31, 2008,2009, Millicom's network in Colombia Móvil's network comprised 2,680 radio base stations with the capacity to handle a maximum of 3.5 million concurrent subscribers. The network2,816 physical sites and covered 78%75% of the total population at the end of 2008. The network is GSM/GPRS, EDGE and 3.5G enabled.population.

Paraguay

        Paraguay's governmental system is a Constitutional Republic. The 35-year military dictatorship of Alfredo Stroessner was overthrown in 1989 and, despite a marked increase in political infighting in recent years, relatively free and regular presidential elections have been held since then. President Nicanor Duarte Frutos of the Partido Colorado political party oversaw a period of economic recovery and greater stability of public finances after taking office in 2003. Presidential elections which took place last yearin 2008 resulted in the election of Fernando Lugo (a former Roman Catholic bishop in allianceallied with the main opposition party, the Liberal party).

        Landlocked Paraguay has a market economy characterizedmarked by a large informal sector. Soya and other agricultural productssector, featuring reexport of imported consumer goods to neighboring countries, as well as meat are being exported to Mercosur, Europethe activities of thousands of microenterprises and other countries, (66% of economic growth was due to exports of agricultural products) this, together with royalties from Itaipu (the largest hydro electric power plant worldwide) and remittances from Paraguayans living abroad, represent the main income sources.urban street vendors. A large proportionpercentage of the population, especially in rural areas, derives theirits living from agricultural activity, often on a subsistence basis. It is estimated that about 35%Because of the population continuedimportance of the informal sector, accurate economic measures are difficult to live below the poverty line in 2008. During the 1990s, the average annual growth rate in GDPobtain. On a per capita was negative with growth of only 0.5% between 1990 and 1995.basis, real income has stagnated at 1980 levels. Most observers attribute Paraguay's relatively poor economic performance to political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure. The economy rebounded between 2003 and 2008, however, as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion. Paraguay is the sixth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.5% in 2009, as lower world demand and commodity prices caused exports to contract. The government reacted by introducing fiscal and monetary stimulus packages. Paraguay had a population of about 7 million people at the end of 2009. The 2009 GDP real GDP growth rate was estimated at 4.7% in 2008. Paraguay had a population estimatednegative 3.5% and GDP per capita at 7 million in 2008.

Table of Contentsabout $4,100.

        The Telecommunications Law of 1995 was aimed at liberalizing the sector through the creation of the Comisión Nacional de Telecomunicaciones (Conatel), the regulatory authority of the telecommunications sector. Although the law succeeded in opening up the mobile and value added sectors, including the internet service provider market, state owned incumbent Copaco has retained its monopoly position in the fixed-line and international calls market. This monopoly remains despite Conatel'sConatel?s decision to enforce regulation which will allow international connectivity to Internet Fiber

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Optic networks in the border with Argentina or Brazil, as VoIP services, though this is rejected by Copaco workers'Workers Union.

        Telecel Paraguay is 100% owned by Millicom and started operations in 1992. It primarily operates a GSM network which is GPRS / GPRS/EDGE enabled. Telecel also operates the largest broadband wireless network with WiMAX in Paraguay and was the market leader in the Paraguayan broadband market in 2007. In 2008, Telecel launced 3Glaunched 3G/HSDPA services.

        Until 1998, Telecel enjoyed a monopoly position in the mobile market when Personal (owned by Telecom Italia) entered the market as the second operator. In 1999, Vox (a joint venture between KDDI Corporation of Japan and Mr. Toyotoshi, a local businessman) entered the market with a GSM network as the third operator. Hutchison Whampoa ownedWhampoa-owned Porthable entered the market as the fourth mobile operator in 2001, followed in 2005 by América Móvil, whowhich acquired Porthable, re-named CTI, from Hutchison Whampoa, currently operating under the brand name Claro.

        Telecel was awarded a 10-year license for an 800MHz network in 1991, which was renewed in October 2001 until October 2006, when the license was again renewed until 2011. In 1997, The 1900MHz PCS license that expired in November 2007 was renewed for an additional 5 yearsyear period (until November 2012). This license is renewable for successive five-year periods. The ISP services and data transmission licenses were awarded in 1999, renewed in 2005 and 2004 and will expire in 2010 and 2009, respectively.

        Tigo Paraguay subscribers grew 33% in 2008. By the end of 2008, Tigo had 2,747,872 subscribers. At December 31, 2008, 737 radio base stations were in place.

In August 2008 Tigo launched the Fiber to the Home services (FTTH), with an initial phase of 25 Central Offices and an initial capacity of 2,0002000 ports, covering the metropolitan area of Asuncion, Ciudad del Este and Encarnación.

        As at December 31, 2009, Millicom's network in Paraguay comprised 815 physical sites and covered 91% of the total population.

AFRICA

        Millicom's Africa cluster consists of its mobile operations in Chad, the Democratic Republic of Congo, Ghana, Mauritius, Rwanda, Senegal and Tanzania. Our African licenses covered approximately 153169 million people as at December 31, 2008.2009.

Chad

        Chad's government system is a unitary republic based on the amended constitution of June 2005. The country endured three decades of civil war as well as an invasion by Libya before peace was restored in 1990. The government finally drafted a democratic constitution and held flawed presidential elections in 1996 and 2001. In 1998, a rebellion broke out in northern Chad, which continues to sporadically flare up despite several peace agreements between the government and the rebels. In 2005, new rebel groups emerged in western Sudan (Darfur) and have made probing attacks into eastern Chad. Power remains in the hands of an ethnic minority. In June 2005, President Idriss Déby held a referendum successfully removing constitutional term limits. In April 2006, an attempted coup against Mr. Déby's government was defeated. In May 2006, Mr. Déby was re-elected president for a five-year term. At the time of the election, the country was facing a growing conflict with Sudan, high unemployment and a growing insurgency fueled by deserting members of the Chadian military and the United Front for Democratic Change rebel group. During the first two weeks of February 2008, rebel groups opposing the Government of Mr. Deby made attacks on cities along the Sudanese border and into N'Djamena. By order of the Government, all networks were shut down in N'Djamena and along the Sudanese border.

        Chad's primarily agricultural economy will continue to be boosted by major foreign direct investment projects in the oil sector that began in 2000. At least 80% of Chad's population relies on

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        Chad's primarily agricultural economy continues to be supported by major oil and gas projects which started in 2000. Over 80% of the country's population relies on subsistence farming and raising livestock for its livelihood. Chad's economy has long been handicapped by its landlocked position, high energy costs, and a history of instability. Chad relies on foreign assistance and foreign capital for most public and private sector investment projects. A consortium led by two U.S. companies has been investinginvested $3.7 billion to develop oil reserves, reserves—estimated at 1 billion barrels, barrels—in southern Chad. Chinese companies are also expanding exploration efforts and are currently building a 300-km pipeline and the country's first refinery. The nation's total oil reserves has beenare estimated to be 2at 1.5 billion barrels. Oil production came on stream in late 2003 and2003. Chad began to export oil in 2004. Although cotton,Cotton, cattle, and gum arabic are important commodities produced forprovide the bulk of Chad's non-oil export in Chad, around 97% of the country's exports are derived from the oil and gas industry. Following the resumption of IMF assistance in early 2005, a new poverty reduction and strategy paper has begun to broadly shape future economic policy. Poverty remains a key issue in Chad with approximately 80% of the population living below the poverty line in 2006, and a 2008 GDP per capita estimated at $1,600. Real GDP growth in 2008 was estimated at 1.7%. Chad became a member of the World Trade Organization in 1996.earnings. Chad had a population of about 10 million in mid-2008people at the end of 2009. The 2009 GDP real growth rate was estimated at a negative 1% and hadGDP per capita at about 400,000 refugees from Sudan (Darfur) and Central Africa on its soil.$1,500.

        The Ministry of Posts & Telecommunications was responsible for regulation of the telecoms sector until the Telecommunications Act was passed in 1998. The enactment of the law paved the way for the creation of a new regulatory authority, the Office Tchadien de Régulation des Télécommunications (OTRT), in 2000. In the same year, the Société des Télécommunications du Tchad (Sotel Tchad) was established to operate basic fixed-line telephony services in the country during a five-year exclusivity period. The amount of fixed telephone lines installed was estimated at 13,000 in 2004. The government is considering a partial privatization of Sotel Tchad although no timetable has yet been set.

        Millicom has an 87.5%100% equity interest in Millicom Tchad. The remaining 12.5% of the company is owned by a local business man, Mr. David Abtour. MillicomTchad and accounts for this operation as a subsidiary, i.e. using the full consolidation accounting method.

        Celtel Tchad, in which Kuwait based Zain (formerly MTC) is the 100% majority shareholder, is the only other major mobile operator in Chad.

        Millicom Tchad launched commercial operations in the capital city, N'Djamena, in October 2005. The company offers tigo® branded prepaid services over its GSM network and services include GPRS, EDGE, MMS and e-PIN and has an international gateway. In November 2004, Millicom Tchad was awarded a 10-year license to operate a nationwide GSM network in Chad. The company's license was amended in July 2005 to allow for international gateway operations and in January 2007 for GPRS/Edge.EDGE. Millicom Tchad does not have a WiMAX license because no such licenses have yet been issued in Chad.

        As at December 31, 2008 Millicom Tchad's GSM2009, Millicom's network in Chad comprised 216 radio base stations with the capacity to handle a maximum of 850,000 concurrent subscribers312 physical sites and the network covered 54%70% of the total population.

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Democratic Republic of Congo (DRC)

        The DRC's government system is a unitary republic. Following the withdrawal of Rwandan forces from eastern DRC in 2002, the Pretoria Accord was signed by all relevant parties to end four years of regional war involving Angola, Chad, Namibia, Sudan and Zimbabwe supporting the Congolese regime being challenged by Rwanda and Uganda. A transitional government was set up in July 2003 with Joseph Kabila. He was joined by four vice-presidents representing the former government, former rebel groups and the political opposition. New elections had been due by June 2005 after a transition period of two years. The transitional government held a successful constitutional referendum in December 2005 and elections considered generally free and fair for the presidency, National Assembly, and provincial legislatures in 2006. These were the first democratic elections in aboutapproximately 40 years, since the election of Patrice Lumumba, Congo's first ever elected head of state. President Kabila was inaugurated president in December 2006. Provincial assemblies were constituted in early 2007, and elected governors and national senators in January 2007. In 2008, saw again the war in the East startingstarted again, with one million refugees displaced, and the international community and UNthe United Nations fully involved intoin the humanitarian crisis.

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        The economy of the DRC, Democratic Republic of the Congo—a nation endowed with vast potential wealth, has declined drastically since the mid-1980s. The war, whichwealth—is slowly recovering from two decades of decline. Conflict that began in August 1998 has dramatically reduced national output and government revenue, increased external debt, and resulted in the deaths of about 3.5more than 5 million people from violence, famine, and disease. Foreign businesses curtailed operations due to uncertainty about the outcome of the conflict, lack of infrastructure and the difficult operating environment. Conditions improvedbegan to improve in late 2002 with the withdrawal of a large portion of the invading foreign troops. The transitional government has reopened relations with international financial institutions and international donors, and President Kabila began implementing reforms, although progress has begun implementing reforms.been slow and the International Monetary Fund curtailed their program for the DRC at the end of March 2006 because of fiscal overruns. Much economic activity lies outsidestill occurs in the informal sector, and is not reflected in GDP data. Economic stability improved in 2003 - 7, although an uncertain legal framework, corruption, and a lack of openness in government policy continues to hamper growth. In 2005 - 07, renewedRenewed activity in the mining sector, the source of most exports,export income, boosted the government'sKinshasa's fiscal position and GDP growth. Businessgrowth from 2006-2008, however, the government's review of mining contracts that began in 2006, combined with a fall in world market prices for the DRC's key mineral exports inflicted major damage on the sector. An uncertain legal framework, corruption and economic prospectsa lack of transparency in government policy are expected to improvelong-term problems for the mining sector and the economy as a resultwhole. The global recession cut economic growth in 2009 to half of its 2008 level, but donor assistance and diligence on the part of the announcementcentral bank have brought foreign exchange reserves to their highest levels in February 200725 years after the financial crisis caused reserves to fall to less than one day's worth of imports in early 2009. The DRC signed a new Poverty Reduction and Growth Facility with the new government. Economic growth as measured by real GDP growth in DRC was estimated at over 7% in 2007, largely driven by the country's main industries such as mining, mineral processing and textiles. The country continues to suffer from severe lack of infrastructure and continued instability and attacks by rebels in the eastern parts of the country (Ituri region). DRC became a member of the World Trade Organization in 1997.IMF this year. DRC had a population of about 69 million people at the end of 2009. The 2009 GDP real growth rate was estimated at about 66 million in 2007.3% and GDP per capita was estimated at $300 in 2007. The percentage of persons living below the poverty line is not available but is clearly very large.about $300.

        AsAt the end of 2008, ends, the international financial crisis is now hittinghit DRC severly with all commodities (wood, minerals) exports dropping by more than 50% compared to previous quarter.heavily. Consequently, 50% of the mining companies already closed down and laid off more than 300 Kthousand employees, and resulting in a deep recession in the Katanga region. According to the Governor of Central Bank of Congo, theThis crisis will resultresulted in the Franc Congolese franc dropping against US dollar in coming months.dollar.

        DRC's incumbent fixed line operator is the "Office Congolais des Postes et des Télécommunications" (OCPT). It operates an outdated, poorly managed analogue fixed-line network of approximately 10,000 lines mainly concentrated in the capital city of Kinshasa. The Autorité de Régulation de la Poste et des Télécommunications du Congo (ARPTC) is in charge of regulating the telecommunications sector. Legislation has been prepared but not yet implemented which will formally end the OCPT's monopoly and allow for market liberalization. To date, the government has nonot developed a telecommunications policy. As the DRC lacks the funds to invest in a modern fixed-line infrastructure, the country's mobile sector has been facing high demand in recent years.

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        Millicom has a 100% equity interest in Oasis S.P.R.L. and accounts for this operation as a subsidiary i.e., using the full consolidation accounting method.

        Millicom acquired Oasis from Orascom Telecom on September 13, 2005 for a total consideration of US$35$35 million and promptly engaged in the process of rebuilding the company's network coverage, product and service offering, marketing strategy and distribution network. This turnaround was completed during 2006 together with an accelerated network build-out and the building of a regional organization to support direct distribution effectively. Oasis also has an international gateway.

        Discussions have continued with the relevant authorities about whether, as a result of the acquisition of Oasis by Millicom, a license transfer fee of $14,8$15 million may be due under a ministerial decree dated July 29, 2005. Millicom's position is that no transfer fee is due because the wording of the law in question does not apply to the specific transaction structure by which Millicom acquired Oasis. However, there is a risk that Oasis may not be able to avoid the payment of the transfer fee in 2009.

        Three operators (Starcel, Comcel and Afritel) were offering limited analogue and CDMA mobile services in DRC when Oasis entered the market with its GSM offering. These operators had ceased to exist by the end of 2003. Initially Celtel Congo, owned by Kuwait based Zain (formerly MTC), was the

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only other GSM operator in the market, becoming the leading provider of mobile services in DRC with coverage in almost 100 cities. In 2001, Congolese Wireless Networks (CWN) entered into a joint venture with South African mobile operator Vodacom, creating a new operator, Vodacom Congo, which launched GSM services in DRC in April 2002 and extended its coverage to a large number of cities. The fourth operator, CCT, jointly owned by Chinese telecomstelecom equipment provider ZTE (51%) and the DRC government (49%), launched its GSM network in January 2002.

        After several years of underinvestment, Oasis' market position had declined to a number four position in terms of subscriberscustomers when it was acquired by Millicom in mid-September 2005. Since then, Millicom has built up and re-launched the operation by introducing tigo® in January 2007 by offering a combination of improved coverage and quality of mobile voice services, innovative products and services, a direct distribution network, and a new pricing strategy. Starting with 50K subs50 thousand customers in January 2007, tigo DRC ended 2008 with more than 1 million subscribers (1,048K)..customers.

        In November 1997 Oasis was awarded a 20-year license to operate a fixed-line network in DRC. An amendment to the license was signed in October 1999 which allows the company to construct a nationwide GSM network. Oasis does not have a WiMAX license. However WimaxWiMAX operators already exist in DRC, positioned mainly in Kinshasa.

        Other GSM licenses were granted in 2008 to the following operators: Niletel (already present(present in Sierra Leone), Hits Telecom (present in Tanzania and Equatorial Guinea) and MTN.

        According to the Ministry of Telecommunications, which is charged with the organization of 3G licenses, 3G licenses should be auctioned in 2010 according to the Ministry of Telecommunications in charge to organize the auction.2010.

        As at December 31, 2009, Millicom's network in DRC comprised 742 physical sites, of end of 2008, Oasis' GSM network comprises 607 base stations with the capacity to handle a maximum of 2 million concurrent subscribers. The network covers 30%which 198 are off, and covered 24% of the total population, so 20 million people.