REG-TEO LT, AB 1st Quarter Results

VILNIUS, Lithuania--(Business Wire)--

TEO LT, AB

INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE FIRST THREE MONTHS OF 2008

(PREPARED IN ACCORDANCE WITH THE RULES ON PREPARATION AND SUBMISSION OF PERIODIC
AND ADDITIONAL INFORMATION OF THE LITHUANIAN SECURITIES COMMISSION)

CONFIRMATION OF RESPONSIBLE PERSONS

Following the Article No. 22 of the Law on Securities of the Republic of
Lithuania and Rules on Preparation and Submission of Periodic and Additional
Information of the Lithuanian Securities Commission, we, Nerijus Ivanauskas,
Chief Marketing Officer and Deputy General Manager, and Acting General Manager
of TEO LT, AB, and Jan-Erik Elserius, Chief Financial Officer and Deputy General
Manager of TEO LT, AB, hereby confirm that, to the best of our knowledge, the
attached not audited TEO LT, AB Interim Consolidated Financial Statements for
the first three months of 2008, prepared in accordance with International
Financial Reporting Standards as adopted by the European Union, give a true and
fair view of the assets, liabilities, financial position and profit of TEO LT,
AB and the Group of undertakings.

Chief Marketing Officer and

Deputy General Manager,

and Acting General Manager Nerijus Ivanauskas

Chief Financial Officer and

Deputy General Manager Jan-Erik Elserius

TEO LT, AB (hereinafter - TEO or "the Company") Group is the largest Lithuanian
broadband Internet access and voice telephony services operator, providing
integrated telecommunication, IT and TV services to residents and business. TEO
Group is a part of TeliaSonera Group, the Nordic and Baltic telecommunications
leader.

The Communication Regulatory Authority (CRA) of Lithuania has designated TEO
together with its related legal entities as an operator with significant market
power (SMP) on 14 markets. TEO and UAB Omnitel as members of TeliaSonera Group
are regarded as related entities in Lithuania, therefore TEO is considered as
SMP on the market of voice call termination at public mobile network of UAB
Omnitel.

The consolidated financial statements of TEO Group have been prepared according
to International Financial Reporting Standards as adopted by the European Union.

TEO Group financial statements for the first three months of 2008 are not
audited. TEO Group financial statements for the year ended 31 December 2007 are
audited by external auditors.

CONSOLIDATED BALANCE SHEET OF TEO GROUP (LTL thousand)

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ASSETS 2008-03-31 2007-12-31
------------------------------------------------------------ ---------------- ----------------
Non-current assets
------------------------------------------------------------ ---------------- ----------------
Property, plant and equipment 635,532 657,962
------------------------------------------------------------ ---------------- ----------------
Intangible assets 44,812 29,643
------------------------------------------------------------ ---------------- ----------------
Trade and other receivables 2,578 3,166
------------------------------------------------------------ ---------------- ----------------
682,922 690,771
------------------------------------------------------------ ---------------- ----------------
Current assets
------------------------------------------------------------ ---------------- ----------------
Inventories 3,751 4,943
------------------------------------------------------------ ---------------- ----------------
Trade and other receivables 120,102 121,691
------------------------------------------------------------ ---------------- ----------------
Current income tax receivable 3,783 5,749
------------------------------------------------------------ ---------------- ----------------
Held-to-maturity investments 141,376 116,726
------------------------------------------------------------ ---------------- ----------------
Trading investments - 34,561
------------------------------------------------------------ ---------------- ----------------
Cash and cash equivalents 252,026 229,350
------------------------------------------------------------ ---------------- ----------------
Assets held for sale 1,765 1,851
------------------------------------------------------------ ---------------- ----------------
522,803 514,871
------------------------------------------------------------ ---------------- ----------------
TOTAL ASSETS 1,205,725 1,205,642
------------------------------------------------------------ ---------------- ----------------
EQUITY 2008-03-31 2007-12-31
------------------------------------------------------------ ---------------- ----------------
Shareholders' equity
------------------------------------------------------------ ---------------- ----------------
Share capital 814,913 814,913
------------------------------------------------------------ ---------------- ----------------
Treasury shares (120,000) (120,000)
------------------------------------------------------------ ---------------- ----------------
Legal reserve 81,499 81,499
------------------------------------------------------------ ---------------- ----------------
Retained earnings 339,400 294,167
------------------------------------------------------------ ---------------- ----------------
1,115,812 1,070,579
------------------------------------------------------------ ---------------- ----------------
Minority interest - -
------------------------------------------------------------ ---------------- ----------------
Total equity 1,115,812 1,070,579
------------------------------------------------------------ ---------------- ----------------
LIABILITIES
------------------------------------------------------------ ---------------- ----------------
Non-current liabilities
------------------------------------------------------------ ---------------- ----------------
Borrowings 6,603 6,809
------------------------------------------------------------ ---------------- ----------------
Deferred tax liabilities 7,883 9,530
------------------------------------------------------------ ---------------- ----------------
Grants 2,115 2,768
------------------------------------------------------------ ---------------- ----------------
Deferred revenue 1,837 1,900
------------------------------------------------------------ ---------------- ----------------
18,438 21,007
------------------------------------------------------------ ---------------- ----------------
Current liabilities
------------------------------------------------------------ ---------------- ----------------
Trade, other payables and accrued liabilities 69,258 112,047
------------------------------------------------------------ ---------------- ----------------
Current income tax liabilities 1,043 104
------------------------------------------------------------ ---------------- ----------------
Borrowings 812 805
------------------------------------------------------------ ---------------- ----------------
Provisions 362 1,100
------------------------------------------------------------ ---------------- ----------------
71,475 114,056
------------------------------------------------------------ ---------------- ----------------
Total liabilities 89,913 135,063
------------------------------------------------------------ ---------------- ----------------
TOTAL EQUITY AND LIABILITIES 1,205,725 1,205,642
------------------------------------------------------------ ---------------- ----------------
*T

CONSOLIDATED INCOME STATEMENT OF TEO GROUP (LTL thousand)

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January - March 2008 January - March 2007
----------------------------------------------------- -------------------- --------------------
Revenue 206,803 185,805
----------------------------------------------------- -------------------- --------------------
Other income 2,108 1,130
----------------------------------------------------- -------------------- --------------------
Employee related expenses (40,910) (36,265)
----------------------------------------------------- -------------------- --------------------
Interconnection expenses (30,576) (25,896)
----------------------------------------------------- -------------------- --------------------
Other operating expenses (44,227) (38,990)
----------------------------------------------------- -------------------- --------------------
Depreciation, amortisation and impairment charge (43,406) (42,439)
----------------------------------------------------- -------------------- --------------------
Other gain (loss), net 1,226 401
----------------------------------------------------- -------------------- --------------------
Operating profit 51,018 43,746
----------------------------------------------------- -------------------- --------------------
Finance income 2,707 2,648
----------------------------------------------------- -------------------- --------------------
Finance costs (409) (144)
----------------------------------------------------- -------------------- --------------------
Finance income (costs), net 2,298 2,504
----------------------------------------------------- -------------------- --------------------
Profit before income tax 53,316 46,250
----------------------------------------------------- -------------------- --------------------
Income tax (8,083) (8,372)
----------------------------------------------------- -------------------- --------------------
Profit for the period from continuing operations 45,233 37,878
----------------------------------------------------- -------------------- --------------------

----------------------------------------------------- -------------------- --------------------
Discontinued operations:
----------------------------------------------------- -------------------- --------------------
Profit for the period from discontinued operations - 2
----------------------------------------------------- -------------------- --------------------
Profit for the period 45,233 37,880
----------------------------------------------------- -------------------- --------------------

----------------------------------------------------- -------------------- --------------------
Attributable to:
----------------------------------------------------- -------------------- --------------------
Equity holders of the Company 45,233 37,880
----------------------------------------------------- -------------------- --------------------
Minority interest - -
----------------------------------------------------- -------------------- --------------------
45,233 37,880
----------------------------------------------------- -------------------- --------------------
Earnings per share for profit attributable to the
equity holders of the Company (in litas) 0.06 0.05
----------------------------------------------------- -------------------- --------------------
*T

CONSOLIDATED CASH FLOW STATEMENT OF TEO GROUP (LTL thousand)

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January - March January - March
2008 2007
------------------------------------------------------------- ---------------- ----------------
Operating activities
------------------------------------------------------------- ---------------- ----------------
Profit for the period from continuing operations 45,233 37,878
------------------------------------------------------------- ---------------- ----------------
Adjustments for:
------------------------------------------------------------- ---------------- ----------------
Income tax 8,083 8,372
------------------------------------------------------------- ---------------- ----------------
Depreciation, amortisation and impairment charge 43,406 42,439
------------------------------------------------------------- ---------------- ----------------
Elimination of gain and losses (1,226) (401)
------------------------------------------------------------- ---------------- ----------------
Interest income (4,017) (3,549)
------------------------------------------------------------- ---------------- ----------------
Interest expenses 73 85
------------------------------------------------------------- ---------------- ----------------
Other non cash transactions 52 108
------------------------------------------------------------- ---------------- ----------------

------------------------------------------------------------- ---------------- ----------------
Changes in working capital:
------------------------------------------------------------- ---------------- ----------------
Inventories 1,273 (47)
------------------------------------------------------------- ---------------- ----------------
Trade and other receivables (1,162) (3,191)
------------------------------------------------------------- ---------------- ----------------
Trade, other payables and accrued liabilities (10,781) (25,268)
------------------------------------------------------------- ---------------- ----------------
Cash generated from operations 80,934 56,426
------------------------------------------------------------- ---------------- ----------------
Interest paid (73) (96)
------------------------------------------------------------- ---------------- ----------------
Interest received 1,909 3,761
------------------------------------------------------------- ---------------- ----------------
Tax paid (6,825) (12,091)
------------------------------------------------------------- ---------------- ----------------

------------------------------------------------------------- ---------------- ----------------
Net cash from operating activities 75,945 48,000
------------------------------------------------------------- ---------------- ----------------
January - March January - March
Investing activities 2008 2007
------------------------------------------------------------- ---------------- ----------------
Purchase of property, plant and equipment (PPE) and
intangible assets (51,296) (24,975)
------------------------------------------------------------- ---------------- ----------------
Proceeds from disposal of PPE, intangible assets, assets held
for sale 719 2,106
------------------------------------------------------------- ---------------- ----------------
Acquisition/disposal of held-to-maturity investments, net (22,551) (49,507)
------------------------------------------------------------- ---------------- ----------------
Acquisition/disposal of trading investments, net 35,411 -
------------------------------------------------------------- ---------------- ----------------
Acquisition of subsidiaries (16,078) -
------------------------------------------------------------- ---------------- ----------------
Disposal of subsidiaries 725 989
------------------------------------------------------------- ---------------- ----------------
Loan repaid - 150,000
------------------------------------------------------------- ---------------- ----------------
Net cash from investing activities (53,070) 78,613
------------------------------------------------------------- ---------------- ----------------
Financing activities
------------------------------------------------------------- ---------------- ----------------
Repayment of borrowings (199) (203)
------------------------------------------------------------- ---------------- ----------------
Net cash from financing activities (199) (203)
------------------------------------------------------------- ---------------- ----------------
Increase (decrease) in cash and cash equivalents 22,676 126,410
------------------------------------------------------------- ---------------- ----------------
Movement in cash and cash equivalents
------------------------------------------------------------- ---------------- ----------------
At start of the period 229,350 232,581
------------------------------------------------------------- ---------------- ----------------
Increase (decrease) during the period 22,676 126,410
------------------------------------------------------------- ---------------- ----------------
At end of the period 252,026 358,991
------------------------------------------------------------- ---------------- ----------------
*T

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY OF TEO GROUP (LTL thousand)

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Attributable to equity holders of the Company
------------------------------------------------------------ Minority Total equity
Share Treasury Legal Translation Retained interest
Capital Shares reserves differences earnings
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Balance at
1 January 2007 814,913 (120,000) 81,499 (1) 333,301 - 1,109,712
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Net profit - - - - 37,880 - 37,880
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Currency
translation
differences - - - 9 - - 9
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Balance at
31 March 2007 814,913 (120,000) 81,499 8 371,181 - 1,147,601
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------

---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Balance at
1 January 2008 814,913 (120,000) 81,499 - 294,167 - 1,070,579
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Net profit - - - - 45,233 - 45,233
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Currency
translation
differences - - - - - - -
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
Balance at
31 March 2008 814,913 (120,000) 81,499 - 339,400 - 1,115,812
---------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------
*T

EXPLANATORY LETTER

TEO Group is the largest Lithuanian broadband Internet access and voice
telephony services operator, providing integrated telecommunication, IT and TV
services to residents and business.

The authorized share capital of TEO LT, AB is 814,912,760 litas. It consists of
814,912,760 ordinary registered shares with a nominal value of one litas each.

38,095,242 shares are treasury stocks that have no rights to exercise any
property and non-property rights provided by the Law of the Republic of
Lithuania on Companies. Therefore, the number of TEO LT, AB shares that provide
voting rights during the General Meeting of Shareholders is 776,817,518.

Shares of TEO LT, AB are listed on the Baltic Main List of the Vilnius Stock
Exchange (VSE) (trading code: TEO1L).

TEO LT, AB runs a Global Depository Receipt (GDR) programme. According to the
programme, one GDR represents 10 ordinary registered shares of the Company.
Shares are held by the depository bank, Deutsche Bank Trust Company Americas, 60
Street, New York, NY 10005, U.S.A.

As on 31 March 2008, 35,462,880 ordinary shares of the Company (4.35% of the
total share capital) were represented by 3,546,288 GDRs.

The Company's GDRs are traded on the London Stock Exchange (LSE) (trading code:
TEOL).

As on 31 March 2008, the total number of TEO LT, AB shareholders was 14,846. The
number of shareholders on the day of the last Annual General Meeting of
Shareholders, which was held on 26 April 2007, was 12,827.

Shareholders of TEO LT, AB as on 31 March 2008:

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Name of the shareholder Number of Share of the Share of votes Share of votes
(name of the enterprise, ordinary share capital given by the held together
type and registered office registered (%) shares owned by with persons
address, code in the shares owned by the right of acting in
Register of Enterprises) the shareholder ownership (%) concert (%)
--------------------------- ---------------- ---------------- ---------------- ----------------
Amber Teleholding A/S (a),
c/o ,,TeliaSonera Danmark
A/S",
Holmbladsgade 139, DK-2300
Copenhagen S, Denmark,
code 20758694 488,947,656 60.00 62.94 -
--------------------------- ---------------- ---------------- ---------------- ----------------
TEO LT, AB, Savanoriu pr.
28, LT-03501 Vilnius,
Lithuania, code 121215434
(Treasury stocks) 38,095,242 (b) 4.67 - -
--------------------------- ---------------- ---------------- ---------------- ----------------
State of Lithuania (d) 11,741,143 (c) 1.44 1.51 -
--------------------------- ---------------- ---------------- ---------------- ----------------
Other shareholders 276,128,719 33.89 35.55 -
--------------------------- ---------------- ---------------- ---------------- ----------------
Total: 814 912 760 100.00 100.00 -
--------------------------- ---------------- ---------------- ---------------- ----------------
*T

NOTE: (a) Amber Teleholding A/S is a fully owned subsidiary of Swedish
TeliaSonera AB. (b) 12,698,412 ordinary registered shares and 2,539,683 Global
Depository Receipts. (c) The State Property Fund (11,378,513 shares) and the
State Tax Authorities (362,630 shares).

TEO together with its related legal entities is designated as an operator with
significant market power (SMP) in Lithuania on the following markets of:

- access to the public telephone network at a fixed location for residential
customers;

- access to the public telephone network at a fixed location for non-residential
customers;

- publicly available local and/or national telephone services provided at a
fixed location for residential customers;

- publicly available international telephone services provided at a fixed
location for residential customers;

- publicly available local and/or national telephone services provided at a
fixed location for non-residential customers;

- publicly available international telephone services provided at a fixed
location for non-residential customers;

- minimum set of leased lines;

- calls origination on public telephone network provided at a fixed location;

- calls termination on public telephone network provided at a fixed location;

- national transit in fixed public telephone network;

- international transit in fixed public telephone network;

- wholesale broadband access;

- wholesale unbundled access (including shared access) to metallic loops and
sub-loops for the purpose of providing broadband and voice services;

- wholesale terminating segments and trunk segments of leased lines.

As TeliaSonera AB through Amber Mobile Teleholding AB owns a 100 per cent stake
in the largest mobile operator in Lithuania UAB Omnitel, TEO is regarded as an
entity related to UAB Omnitel, therefore TEO is considered as SMP on the market
of voice call termination on the mobile network of Omnitel.

As on 31 March 2008, TEO Group consisted of the parent company, TEO LT, AB,
(Savanoriu ave. 28, LT-03501 Vilnius, www.teo.lt) and its daughter companies:

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Name of the Activities of the Legal address TEO part in the Part of TEO votes
company company share capital of (%)
the company (%)
------------------ ------------------ ------------------ ------------------ ------------------
UAB Lintel Information, J. Galvydzio str.
telemarketing and 7/Zygio str. 97,
remote customer LT-08222 Vilnius,
care services www.lintel.lt 100 100
------------------ ------------------ ------------------ ------------------ ------------------
UAB Baltic Data Data center and Zirmunu str. 141,
Center information LT-09128 Vilnius,
system management www.bdc.lt
services 100 100
------------------ ------------------ ------------------ ------------------ ------------------
UAB Nacionaline Re-broadcasting of Savanoriu pr. 125,
Skaitmenine TV channels LT-44146 Kaunas
Televizija through DVB-T
networks 100 100
------------------ ------------------ ------------------ ------------------ ------------------
UAB Kompetencijos Training and Palangos str. 4,
Ugdymo Centras consultancy LT-01117 Vilnius,
www.kuc.lt 100 100
------------------ ------------------ ------------------ ------------------ ------------------
UAB Voicecom NMT-450 network Savanoriu ave. 28,
LT-03501 Vilnius 100 100
------------------ ------------------ ------------------ ------------------ ------------------
VsI TEO Sportas Women's basketball Savanoriu ave. 28,
team LT-03116 Vilnius,
www.teobasket.lt --(a) 100
------------------ ------------------ ------------------ ------------------ ------------------
*T

NOTE: (a) TEO is the sole founder and owner of a non-profit organisation VsI TEO
Sportas.

On 15 February 2007, TEO LT, AB sold its 100 per cent stake in OOO
Comliet-Kaliningrad (ul. Pugachiova 14а, RUS-236000 Kaliningrad, Kaliningrad
Region, Russian Federation). The company was acquired from the then subsidiary
UAB Comliet (held 95 per cent stake in OOO Comliet-Kaliningrad) and UAB Comliet
Sprendimai (5 per cent stake) on 31 January 2006.

On 3 January 2008, TEO acquired 100 per cent stake in UAB Nacionaline
Skaitmenine Televizija, which has two licenses for re-broadcasting of television
channels through digital terrestrial television (DVB-T) networks. TEO Group
started provision of digital terrestrial television services in March 2008.

TEO LT, AB, the parent company of the Group, offers to residential and business
customers in Lithuania voice telephony, Internet, digital television, IT, data
communication and telecommunications networks interconnection services. TEO also
operates an Internet portal www.zebra.lt.

UAB Lintel is the largest, in terms of business volumes, and the most modern, in
terms of technologies and management, Call Center service provider in Lithuania.
It handles around 16 million contacts per year. For residential customers Lintel
provides Directory Inquiry Service 118 and consultations to computer users by
phone 1518 as well as telemarketing and remote customer care services to
business customers. Till September 2007 UAB Lintel held 4.67 per cent of
treasury stocks of the Company.

UAB Baltic Data Center is a leading provider of data center and information
system management services in the Baltic States. Baltic Data Center provides
professional data centre, computer workstation and business management system
support and development services. UAB Baltic Data Center also has its subsidiary
in Latvia - Baltic Data Center SIA, which is a dormant company.

UAB Voicecom has the permission to use the national network of mobile analogue
cellular radio communication of the NMT-450 standard. Permission is prolonged
until 31 October 2008.

UAB Kompetencijos Ugdymo Centras provides training and consultancy services,
organises certified trainings. Kompetencijos Ugdymo Centras is one of the
largest employees' development institutions in Lithuania.

VsI TEO Sportas supports TEO women basketball team, a multiple champion of
Lithuania and the Baltic States. In 2007 TEO Sportas handed over operations of
fitness center ZEBRA SPORT at P. Luksio str. 34 in Vilnius to UAB Griunvaldas.

TEO Group accounting

Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than one half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, irrespective of the extent of any minority
interest. The excess of the cost of acquisition over the fair value of the
Group's share of the identifiable net assets acquired is recorded as goodwill.
If the cost of acquisition is less than the fair value of the net assets of the
subsidiary acquired, the difference is recognised directly in the income
statement

Inter-company transactions, balances and unrealised gains on transactions
between group companies are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.

The Group applies a policy of treating transactions with minority interests as
transactions with parties external to the Group. Disposals to minority interests
result in gains and losses for the Group that are recorded in the income
statement. Purchases from minority interests result in goodwill, being the
difference between any consideration paid and the relevant share acquired of the
carrying value of net assets of the subsidiary.

Associates are all entities over which the Group has significant influence but
not control, generally accompanying a shareholding of between 20% and 50% of the
voting rights. Investments in associates are accounted for using the equity
method of accounting and are initially recognised at cost. The Group's
investment in associates includes goodwill identified on acquisition, net of any
accumulated impairment loss.

The Group's share of its associates' post-acquisition profits or losses is
recognised in the income statement, and its share of post-acquisition movements
in reserves is recognised in reserves. The cumulative post-acquisition movements
are adjusted against the carrying amount of the investment. When the Group's
share of losses in an associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the
associate.

Unrealised gains on transactions between the Group and its associates are
eliminated to the extent of the Group's interest in the associates. Unrealised
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of associates have been
changed where necessary to ensure consistency with the policies adopted by the
Group.

Key figures of TEO Group

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January - March January - March
Financial figures 2008 2007 Change (%)
------------------------------------------- ----------------- ----------------- -----------------
Revenue (LTL thousand) 206,803 185,805 11.3
------------------------------------------- ----------------- ----------------- -----------------
EBITDA (LTL thousand) 94,424 86,185 9.6
------------------------------------------- ----------------- ----------------- -----------------
EBITDA margin (%) 45.7 46.4
------------------------------------------- ----------------- ----------------- -----------------
Operating profit (LTL thousand) 51,018 43,746 16.6
------------------------------------------- ----------------- ----------------- -----------------
Operating profit margin (%) 24.7 23.5
------------------------------------------- ----------------- ----------------- -----------------
Profit before income tax (LTL thousand) 53,316 46,250 15.3
------------------------------------------- ----------------- ----------------- -----------------
Profit for the period (LTL thousand) 45,233 37,880 19.4
------------------------------------------- ----------------- ----------------- -----------------
Profit for the period margin (%) 21.9 20.4
------------------------------------------- ----------------- ----------------- -----------------
Earnings per share (LTL) 0.06 0.05 19.4
------------------------------------------- ----------------- ----------------- -----------------
Number of shares excluding treasury stocks
(thousand) 776,818 776,818 -
------------------------------------------- ----------------- ----------------- -----------------
Financial ratios 2008-03-31 2007-03-31
------------------------------------------- ----------------- ----------------- -----------------
Return on capital employed (a) (%) 18.8 15.2
------------------------------------------- ----------------- ----------------- -----------------
Return on average assets (a) (%) 16.2 13.3
------------------------------------------- ----------------- ----------------- -----------------
Return on shareholders' equity (a) (%) 15.9 12.5
------------------------------------------- ----------------- ----------------- -----------------
Gearing ratio (%) -34.6 -41.4
------------------------------------------- ----------------- ----------------- -----------------
Debt to equity ratio (%) 0.7 0.7
------------------------------------------- ----------------- ----------------- -----------------
Current ratio (%) 731.5 739.2
------------------------------------------- ----------------- ----------------- -----------------
Rate of turnover of assets (a) (%) 68.6 60.7
------------------------------------------- ----------------- ----------------- -----------------
Equity to assets ratio (%) 92.5 91.3
------------------------------------------- ----------------- ----------------- -----------------
*T

NOTE: calculated for 12 months period on roll-up bases.

Revenue

The total consolidated TEO Group's revenue in January-March of 2008 was LTL 207
million, an increase by 11.3 per cent over the total revenue of LTL 186 million
in the first three months of 2007.

During the first three months of 2008, share of revenue from traditional voice
telephony services in the total amount of revenue continued to shrink and
amounted to 63.4 per cent of total revenue, while share of Internet and data
communications revenue continued to grow and amounted to 29.3 per cent. Revenue
from IT services amounted to 3.1 per cent, television services - 1.5 per cent
and other services - 2.7 per cent of total revenue.

Breakdown of TEO Group revenue (LTL thousand)

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January - March January - March
2008 2007 Change (%)
------------------------------------------- ---------------- ---------------- ----------------
Voice telephony services 131,115 129,615 1.2
------------------------------------------- ---------------- ---------------- ----------------
Internet and data communication services 60,670 48,597 24.8
------------------------------------------- ---------------- ---------------- ----------------
IT services 6,430 2,755 133.4
------------------------------------------- ---------------- ---------------- ----------------
TV services 3,074 1,073 186.5
------------------------------------------- ---------------- ---------------- ----------------
Other services 5,514 3,765 46.5
------------------------------------------- ---------------- ---------------- ----------------
Total 206,803 185,805 11.3
------------------------------------------- ---------------- ---------------- ----------------
*T

Increase in revenue from voice telephony during January-March of 2008 compared
with revenue for the same period in 2007, was due to increase in revenue from
subscription fees by 4.2 per cent, value-added services - by 8 per cent and
network interconnection services - by 14.9 per cent. And that increase fully
off-set a decline in revenue from traffic charges and wholesales services by
10.7 and 18.5 per cent, respectively.

During January-March 2008, the total number of main telephone lines in service
decreased by 10.3 thousand lines because from February 2008 the Company
terminated provision of temporary disconnected telephone line with incoming
calls service. Therefore the number of active lines increased by almost 42
thousand. In total, during the first three months of 2008 there were installed
13.2 thousand new telephone lines while 23.5 thousand lines were disconnected.

The main indicators of TEO Group activities

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2008-03-31 2007-03-31 Change (%)
------------------------------------------- ----------------- ----------------- -----------------
Number of fixed lines in service 778,634 788,266 (1.2)
------------------------------------------- ----------------- ----------------- -----------------
Digitalisation rate (%) 93.9 93.9 -
------------------------------------------- ----------------- ----------------- -----------------
Number of broadband Internet connections
(DSL, LAN, FTTH, WiFi) 270,112 201,526 34.0
------------------------------------------- ----------------- ----------------- -----------------
Number of wireless Internet (WiFi) access
points 3,425 842 306.8
------------------------------------------- ----------------- ----------------- -----------------
Number of IP TV customers 23,067 9,083 154.0
------------------------------------------- ----------------- ----------------- -----------------
Number of DVB-T customers 1,612 -
------------------------------------------- ----------------- ----------------- -----------------
Number of IT services to small and medium-
size business customers 717 110 551.8
------------------------------------------- ----------------- ----------------- -----------------
Number of personnel at the end of period 3,212 3,192 0.6
------------------------------------------- ----------------- ----------------- -----------------
*T

Total call traffic in the first three months of 2008, compared to the first
three months of 2007, declined by 2.8 per cent, but compared to the last three
months of 2007, it increased by 4.2 per cent. This was caused by an increase in
residential customers' traffic due to marketing campaigns in February and public
holidays in March. Traffic generated by business customers continued to go down
due to competition with other operators.

In March the Company improved its Universalusis (Universal) payment plan for
residential customers. For the monthly fee of 50 litas, residential customers
could make unlimited calls within TEO network all over Lithuania at any time of
the day. For retired persons and persons belonging to certain groups of socially
disadvantaged people, the monthly fee for the Universalusis payment plan is 35
litas. Previously, subscribers to this payment plan were given 4 hours of free
calls during the peak time and 30 hours during off-peak time within TEO network.

According to the Report of the Communications Regulatory Authority (CRA) for the
fourth quarter of 2007, TEO market share of the fixed-line telephony market in
terms of customers amounted to 93.8 per cent and in terms of revenue - to 95.3
per cent. In terms of revenue TEO had 19.5 per cent of the networks'
interconnection market.

During January-March of 2008, the number of broadband Internet access users
increased by more than 11 thousand. Out of total 270 thousand broadband
connections, 237 thousand are DSL connections sold to retail customers, 20.3
thousand are wireless connections via the WiFi network, 6.6 thousand - via local
area networks (LAN), 3.8 thousand - via the new-generation fiber-optic network
(FTTH) and 2.3 thousand DSL connections are the connections sold to wholesales
customers.

Compared with the first three months of 2007, revenue from Internet broadband
access services for the first three months of 2008 went up by 26.9 per cent,
while revenue from dial-up Internet services went down by 48.3 per cent as the
number of dial-up Internet service users over the year decreased almost two
times from 8.3 thousand to 4.4 thousand. Revenue from data communication and
network capacity sale services increased by 22.7 and 33.9 per cent,
respectively.

According to the CRA Report, the Company's market share of the total Internet
providers market in terms of revenue during the fourth quarter of 2007 amounted
to 43 per cent while share on broadband Internet access market was 50.5 per
cent. On 31 March 2007 Internet broadband penetration per 100 residents of
Lithuania was 15.1 per cent. In terms of revenue TEO had 54.9 per cent of leased
lines and 51.7 per cent of data communications markets.

In March 2008, TEO Group started provision of digital terrestrial television
service Skaitmenine GALA (Digital GALA), which will enable using the
highest-quality television services almost in the whole of Lithuania. The new
service's users will have the possibility to watch 33 popular TV channels
broadcasted through digital terrestrial (DVB-T) television transmitters. At the
end of 2007 DVB-T transmitter networks were installed in the five biggest cities
of Lithuania and digital terrestrial television channels were available to 76
per cent of residents. The monthly fee for Digital GALA is 29 litas, but TEO
customers who order service till the end of May, will use it for free for one
year.

At the end of March 2008 there were 1,612 subscribers of digital terrestrial
television service Digital GALA. During January-March 2008, the number of IP TV
service Interaktyvioji GALA (Interactive GALA), previously called just GALA,
increased by 5.6 thousand and at the end of March amounted to 23 thousand.

During the first three months of 2008 the Company implemented a few special
telecommunications projects by order of governmental institutions and increased
its revenue from other services by LTL 1.3 million. Revenue from other services
consists also of the following non-telecommunication services: lease of
premises, Contact Center services of UAB Lintel, consultancy and training
services of UAB Kompetencijos Ugdymo Centras, fitness center services operated
by TEO Sportas till June 2007.

Other income, that consist of interest income from bonds acquired, for
January-March of 2007 increased by 86.5 per cent over the other income a year
ago. Other gain (loss) from sale of property, investments and etc. increased by
205.7 per cent.

Operating expenses

Total operating expenses of the Group for the first three months of 2007 were by
14.4 per cent higher than total operating expenses a year ago. All major groups
of expenses increased: employee related expenses increased by 12.8 per cent,
interconnection expenses by 18.1 per cent and other expenses by 13.4 per cent.

During January-March 2008 the total number of employees (headcount) in TEO Group
went up from 3,177 to 3,212: in Lintel and Baltic Data Center the number of
employees increased by 43 and 28 respectively, in Kompetencijos Ugdymo Centras -
by 2, but in the parent company, TEO, the number of employees decreased by 38.

Earnings

In spite of a higher increase in total operating expenses than in total revenue,
EBITDA for the first three months of 2007 went up by 9.6 per cent to LTL 94
million over LTL 86 million in the first three months of 2007. But EBITDA margin
went down to 45.7 per cent from 46.4 per cent in 2007.

Due to higher investments in 2007, depreciation and amortisation charges stopped
to go down and even increased by 2.3 per cent and in January-March of 2008
amounted to 21 per cent of total revenue (22.8 a year ago). Nevertheless,
operating profit was 16.6 per cent higher than a year ago and operating profit
margin was 24.7 per cent (23.5 per cent a year ago).

Net financial income in January-March of 2007 was by 8.2 per cent lower than
year ago due to lower market rates in 2008.

Profit before income tax in the first three months of 2008 was up by 15.3 per
cent and amounted to LTL 53 million (LTL 46 million a year ago). Profit for the
period amounted to LTL 45 million, an increase by 19.4 per cent over LTL 38
million a year ago. Over the year, the profit margin went up from 20.4 per cent
to 21.9 per cent.

The result of discontinued operations - LTL 2 thousand - implies the result of
OOO Comliet-Kaliningrad activities from the beginning of 2007 till the company
was sold in February 2007.

Balance sheet and cash flow

During January-March 2008 the total assets of TEO Group remained unchanged. Due
to depreciation, non-current tangible assets decreased by 3.4 per cent, while
non-current intangible assets increased by 51.2 per cent due to acquisition of
TV channels re-broadcasting licences (acquisition of UAB Nacionaline Skaitmenine
Televizija). Total non-current assets amounted to 56.6 per cent of the total
assets. Current assets increased by 1.5 per cent and amounted to 43.4 per cent
of the total assets, whereof cash and held-to-maturity investments alone
represented 32.6 per cent of the total assets.

Shareholders' equity increased by 4.2 per cent and amounted to 92.5 per cent of
the total assets. The Board of the Company proposed to the Annual General
Meeting of Shareholders that will be held on 29 April 2008 to pay dividend of
LTL 0.25 per share (in total LTL 194 million) for the year 2007. Dividend per
share for the year 2006 amounted to LTL 0.26.

At the end of March 2008 the total amount of borrowings included only financial
liabilities related to financial leasing of premises and amounted to LTL 7.4
million. Net debt was negative and amounted to LTL 386 million. The net debt to
equity ratio was negative and amounted to 34.6 per cent.

Net cash flow from operating activities in the first three months of 2008 was by
58.2 per cent higher than net cash from operating activities a year ago. The
major portion (LTL 33.4 million) of cash spent during January-March of 2008 for
capital investments was payments for investments made in 2007. During the first
three months of 2008 an amount of LTL 17.9 million was allocated for capital
investments. Majority of cash was invested into the network (73.8 per cent),
13.9 per cent - into upgrading of buildings (namely, renovation of customer care
centers), 11.7 per cent - into IT, and 0.6 per cent were other investments.

Cash and cash equivalents during the first three months of 2008 increased by LTL
23 million.

In February 2007, TEO sold its 100 per cent stake in its dormant subsidiary OOO
Comliet-Kaliningrad which was acquired in January 2006 from the then subsidiary
UAB Comliet (95 per cent) and UAB Comliet Sprendimai (5 per cent).

On 3 January 2008, TEO LT, AB completed transaction on acquisition of 100 per
cent stake in UAB Nacionaline Skaitmenine Televizija. UAB Nacionaline
Skaitmenine Televizija, a company that was spun off during reorganization from
UAB Mikrovisatos TV, has two licenses for re-broadcasting of television channels
through digital terrestrial television (DVB-T) networks. A share sales-purchase
agreement on acquisition of UAB Nacionaline Skaitmenine Televizija was signed on
29 October 2007. TEO got the permissions from the Competition Council and the
Radio and Television Commission of Lithuania for acquisition of UAB Nacionaline
Skaitmenine Televizija.

Other material information

Gert Tiivas, a member of the Board and Audit Committee, will resign from the
Board as of 28 April 2008.

On 13 March 2008 the TEO Board decided to convoke the Annual General Meeting of
TEO LT, AB shareholders on 29 April 2008 and proposed to pay a dividend of LTL
0.25 per share.

In 2007, due to unforeseen legal problems, i.e. due to temporary suspension by
the court of the detailed plan approved by the Municipality of Vilnius City of a
land plot at Lvovo str. 21A, the construction of TEO building was not started in
planned time and due to such delay, the damage likely to be incurred by TEO is
LTL 12 million (i.e. due to an increase in construction prices, additional costs
for lease of the current premises, and etc.). In order to claim compensation for
this damage, TEO started a civil action against the person, who initiated the
suspension of the detailed plan, and the court applied temporary measures to
ensure an injunction - arrested the property of the above mentioned person.

Following the order of the Communications Regulatory Authority of the Republic
of Lithuania of 31 January 2008 on prices for calls initiation, calls
termination, national and international transit services on the public telephone
network of TEO LT, AB at a fixed location that had to come into force on 1 April
2008, the Company would have had to revise its interconnection prices and that
might have had a negative impact on the Company's revenue from voice telephony
services. The Company made an appeal to the court regarding this order and the
order's coming into effect was suspended.

TEO LT, AB

Copyright Business Wire 2008