The Council of State of the Republic of Finland supports the merger between Sonera and Telia

The merger will create the leading telecommunications group in the Nordic and Baltic region. In order to effect the merger Telia proposes to acquire all of the issued and outstanding shares of Sonera through an Exchange Offer to be made to all of the shareholders of Sonera. In order to facilitate the merger of Telia and Sonera and to agree on certain matters following the completion of the Exchange Offer, the Republic of Finland and the Kingdom of Sweden have entered into a shareholders’ agreement. A summary of the main terms of the Shareholders’ Agreement is enclosed with this press release.

The Council of State of the Republic of Finland has approved that the Finnish State will tender all its shares in the Exchange Offer on the basis of the proposed terms of the Exchange Offer and the strength of the combined company’s investment case. The Finnish State’s current shareholding in Sonera Corporation amounts to 52.8 percent. Assuming a 100 percent acceptance of the Exchange Offer, the Finnish State would hold 19 percent of the issued and outstanding shares in the combined company. According to the indicative timetable the Combination is estimated to be completed in June/July, but the Combination Agreement contemplates consummation of the Exchange Offer by December 31, 2002 at the latest. The Finnish and the Swedish governments have agreed not to dispose of any of their shareholdings before the Exchange Offer period expires except for those shares tendered for in connection with the Exchange Offer.

Deutsche Bank and Mandatum & Co Ltd have acted as financial advisers to the Finnish Ministry of Transport and Communications.

Any offer in the United States will only be made through a prospectus which is part of a registration statement on Form F-4 that will be filed with the U.S. Securities and Exchange Commission. Sonera shareholders who are U.S. persons or are located in the United States are urged to carefully review the registration statement on Form F-4, the prospectus, the Schedule TO and other documents relating to the offer that will be filed by Telia with the SEC because these documents will contain important information relating to the offer. You are also urged to read the related solicitation/recommendation statement on Schedule 14D-9 that will be filed with the SEC by Sonera relating to the offer. You may obtain a free copy of these documents after they are filed with the SEC and other documents filed by Telia and Sonera with the SEC at the SEC’s web site at www.sec.gov. Once such documents are filed with the SEC, you will also be able to inspect and copy the registration statement on Form F-4, as well as any documents incorporated by reference therein, the Schedule TO and the Schedule 14D-9 at the public reference room maintained by the SEC at 450 Fifth Street, NW, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. These documents may also be obtained free of charge by contacting Telia AB, Investor Relations, SE-12386 Farsta, Sweden Attention: External Communications and Investor Relations (tel: 46-8-7137143), or Sonera Corporation, Investor Relations, Teollisuuskatu 15, P.O. Box 106, FIN-00051 Sonera, Finland, Attention: Investor Relations (tel: 358 20401). YOU SHOULD READ THE PROSPECTUS AND THE SCHEDULE 14D-9 CAREFULLY BEFORE MAKING A DECISION CONCERNING THE OFFER.

ENCLOSURE: MAIN TERMS OF THE SHAREHOLDERS’ AGREEMENT BETWEEN THE REPUBLIC OF FINLAND AND THE KINGDOM OF SWEDEN

The main terms in the shareholders’ agreement between the Republic of Finland and the Kingdom of Sweden are the following:

1. The Finnish Government has irrevocably undertaken to tender all its shares into the exchange offer to be launched by Telia for Sonera (subject to the Combination Agreement not having been terminated by either party in accordance with its terms);

2. The Swedish Government has committed to vote in favour of the resolutions to be put to an Extraordinary General Meeting of Telia to enable the exchange offer;

3. The board of the combined company shall comprise nine non-executive members, including:

(i) Tapio Hintikka, the current Chairman of the Board of Directors of Sonera, until the AGM of 2005;
(ii) Lars-Eric Petersson, the current Chairman of the Board of Directors of Telia, until the AGM of 2005;
(iii) three members, each of whom is currently a member of the Board of Directors of Sonera, to be nominated by the current Nomination Committee of the Board of Directors of Sonera, who shall serve at least until the AGM of 2004, with one such member being replaced by a new independent director at the AGM of 2003 based upon a nomination of the existing Chairmen of Telia and Sonera;
(iv) three members, each of whom is currently a member of the Board of Directors of Telia, to be nominated by the current Nomination Committee of the shareholders of Telia, who shall serve at least until the AGM of 2004, with one such member being replaced by a new independent director at the AGM of 2003 based upon a nomination of the existing Chairman of Telia and Sonera; and
(v) one independent member, who is currently not a member of the Board of Directors of Sonera or the Board of Directors of Telia, to be nominated prior to the EGM approving the transaction by the current Chairmen of the Boards of Directors of Sonera and Telia and who shall serve at least until closing of the Annual General Meeting of shareholders of Telia to be held in 2004.

In addition, the Board shall have up to three employee representatives to be nominated according to Swedish law, with the Government Shareholders having recognized the desirability of representation of the Finnish employees.

4. The members of the Board of Directors referred to in sub-clauses 3 (iii), (iv) and (v) will be re-elected at the AGM of 2004 provided that they continue to fulfil the requirements for board members, as summarized in paragraph 5 below.

5. All members of the board shall be elected only based on their competence and ability. No civil servants nor politicians active in either Finland nor Sweden will be elected.

6. Tapio Hintikka shall serve as the Chairman of the Board and Lars-Eric Petersson as the Deputy Chairman until the AGM of the combined company to be held in 2005. Tapio Hintikka and Lars-Eric Petersson will continue to make up the nomination committee until the AGM of 2005. In the nomination process the largest shareholders of the combined company will be consulted.

7. Subject to 4 above, until the AGM of 2005, the Shareholders agree to vote all of their shares in favour of the recommendations of the nomination committee unless they decide jointly not to do so.

8. The Shareholders will use their votes to ensure the highest standards of international corporate governance principles based upon best international practice for public companies with global operations. The Shareholders will not intervene in nor make announcements upon operational matters concerning the combined company.

9. The Shareholders will act in the best interests of the combined company and its shareholders in order to maximize shareholder value, in the light of the prevailing market conditions and in accordance with sound business principles and not on the basis of national preference.

10. The Shareholders support the Company participating in future consolidation in the industry.

11. Subject to market conditions, each shareholder intends to reduce its shareholding over a five year period.

12. Arrangements have been entered into to establish orderly mechanisms for future disposals of shares by the Shareholders. Neither Shareholder will sell any shares during the period of the exchange offer, and will not at any time in the future (without the prior written consent of the other Shareholder) purchase any new shares or securities convertible into shares in the combined company (excluding rights offerings and similar transactions recommended by the board).

The shareholders’ agreement shall remain in force until the first of the following to occur: (i) the date on which the holding of shares of Telia by either party falls below 7.5 per cent of the aggregate voting rights in Telia; (ii) the date on which the aggregate holding of the combined company’s shares by the two Shareholders falls below 30 per cent; or (iii) 5 years from closing of the exchange offer.