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Disclaimer

This presentation contains "forward-looking statements", as the phrase is defined in Section 27A of the

Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to

the Company's strategy, development plans and anticipated performance. The forward-looking statements

are based on management's best assessment of the Company's strategic and financial position, and future

market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may

differ materially from these statements as a result of continued volatility in the economies in the markets

in which the Company operates, unforeseen developments from competition, governmental regulation of

the telecommunications industries and general political uncertainties in the markets in which the Company

operates and/or litigation with third parties. The actual outcome may also differ materially if the Company

is unable to obtain all necessary corporate approvals relating to its business, if the Company is unable to

successfully integrate newly-acquired businesses and other factors. There can be no assurance that these

risks and uncertainties will not have a material adverse effect on the Company, that the Company will be

able to grow or that it will be successful in executing its strategy and development plans. Certain factors

that could cause actual results to differ materially from those discussed in any forward-looking statements

include the risk factors described in the Company’s annual report on Form 20-F for the year ended

December 31, 2010 filed with the U.S. Securities and Exchange Commission (the “SEC”) and other public

filings made by the Company with the SEC, which risk factors are incorporated herein by reference.

VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly

any revision to any of the forward-looking statements contained herein, or to make corrections to reflect

future events or developments.

Telecom Market Expectations

•

VimpelCom has an attractive footprint:

Operating in high growth markets

Upside in expected addressable data

market

Poised to benefit from increasing

smartphone penetration

1 –

Excluding Data & Messaging

2 –

Including roaming

Source: Pyramid Research

Total telecom market dynamics

(Revenues in USD billion)

VimpelCom’s footprint market dynamics

(excl. Italy)

(Revenues in USD billion)

Fixed Data

Fixed Voice

Mobile Data

Mobile Voice

+ Messaging

13.9

16.1

18.0

19.8

15.1

18.2

21.3

24.5

22.5

22.0

21.1

20.3

43.4

43.9

44.7

45.4

2011

2012

2013

2014

CAGR

2011-2014

Italy’s market dynamics

(Revenues in EUR billion)

Fixed Data

Fixed Voice

Mobile Data

Mobile Voice

+ Messaging

6.1

6.3

6.5

6.7

3.0

3.2

3.3

3.5

7.8

7.2

6.8

6.4

16.3

15.0

13.9

13.0

2011

2012

2013

2014

CAGR

2011-2014

Fixed Data

Fixed Voice

Mobile Data

Mobile Voice

+ Messaging

CAGR

2011-2014

219

237

254

272

311

353

394

440

307

290

274

261

640

642

646

2011

2012

2013

2014

+0%

-5%

+12%

+7%

-7%

-6%

+6%

+3%

+2%

-3%

+18%

+12%

Strong Upside in Addressable Market

Pockets of Growth

CAGR*

2012 -

2014

VimpelCom’s share of the estimated cumulative market growth

2012

–

2014,

based

current

market

VimpelCom is set to benefit from the growing markets across its

geographic footprint

Mobile Data

13%

11%

Fixed Data

USD

~8 billion

~4 billion

USD

~4 billion

~1 billion

Mobile Voice

USD

~1 billion

USD

~0.1 billion

* Source: Pyramid Research & McKinsey ** 90% of VimpelCom revenues covered

Estimated cumulative market* increase

VimpelCom’s

footprint**2012

–

2014

Value Creation Strategy in Each Market

Russia

Italy

Increase Profit and Cash

Growth Engine

III

Develop New Business

Algeria

Kazakhstan, Kyrgyzstan

Armenia, Tajikistan, Georgia

Ukraine

Pakistan

Bangladesh

Uzbekistan

Canada

Vietnam

Laos

Cambodia

Burundi

CAR

Zimbabwe

Portfolio

Contribution

Analysis

Russia:

•

Achieving strong revenue growth in data

•

Converting revenue growth into EBITDA growth

•

Focus on profitable growth

Italy:

•

Focus on growth areas & maintain leadership in

key segments

•

Leadership in customer satisfaction

•

Untapped growth in mobile data

•

Large addressable markets with increasing

penetration

•

Cost optimization

Ukraine:

retain strong position; 3G license

CIS:

data growth sustainable CF

Explore alternative network structures

outsourcing activities

Pakistan

Bangladesh:

Mobile

internet,

Monetizing Growth in Data Traffic is Key

•

Tiered plans…

•

…

enriched with high-value-perceived features (e.g. free

Facebook)

•

Quality of Service & Speed-Based Propositions

•

Differentiated propositions to cover niche segments (e.g.

Messaging)

•

Time/geographical yield

•

Multi-device propositions

•

Bundling propositions

•

Fair usage policies

•

Wi-Fi offloading

•

P2P shaping

Our key measures to achieve smarter mobile data monetization

Smart move away from

unlimited

Rational traffic management

Sophisticated differentiation

VimpelCom will benefit from growing mobile data penetration

Cost and Capex

Traffic

dependent

Competitor

behavior

dependent

Scale

Opportunity

Operational Excellence and Cost Efficiency

(USD billion)

LTM Q3

Usage related costs

6.0

Commercial opex

2.3

Technical & IT opex

2.1

HR costs

1.7

Other SG&A

1.7

Capex

4.8

Total

18.6

Synergy

Categories

Roaming

Procurement

Consolidation

Group

Products

and

Services

New

Revenue

sources

leveraging

scale

Other

Shared

Services

Developing

Best

Practices

Knowledge

Sharing

Synergies

EBITDA to grow more than revenues

Reducing Capex to Revenues Potential

Russia

Ukraine

Capex / Revenue 3Q11 LTM by Business Units

Become more efficient with capital, benefiting from synergies from Wind Telecom merger

reducing capex to revenues over time

Capex / revenues versus peers

VimpelCom

10%

20%

30%

40%

50%

FY 08

FY 09

FY 10

1H 11 LTM

10%

15%

20%

25%

30%

FY 08

FY 09

FY 10

1H11 LTM

Asia

& Africa

CIS

Europe & North America

VimpelCom

Telenor

Teliasonera

Tele2

Telefonica

MTS

Millicom

France Telecom

Competitive Situation and Market Trends

Mobile*:

•

84 % pre-paid market

•

160% penetration

•

3 major players (Megafon, MTS and VimpelCom) with

comparable market shares

•

ARPU USD 10

Fixed*:

•

Rostelecom is still dominant incumbent (with 39 % subs market

share )

•

Voice traffic declining due to fixed-to-mobile substitution

Mobile market share*

(on Revenue), %

Rostelecom

MTS

Vimpelcom

Others

Er-Telecom

Other

Tele2

Vimpelcom

Megafon

MTS

Fixed broadband market share*

(on subs), %

Russian GDP Trend, %**

2012E

2011E

2010

2009

-7.9

2008

2007

2006

* Source: Informa

** Source: RosStat, Ministry of Economic Development of Russia, Prime Minister of Russia

8.2

5.2

4.0

4.1

3.7

8.5

12.5

10.4

10.1

9.9

9.6

3.9

4.6

5.5

6.1

6.2

27.8

28.4

26.4

25.8

26.0

26.1

26.4

26.2

26.6

27.9

29.6

30.3

31.7

31.6

30.2

2008

2009

2010

Q1 2011

Q2 2011

39.4

36.1

34.1

33.7

7.1

8.2

8.4

6.3

7.5

8.4

8.8

9.7

9.4

10.3

36.6

37.4

39.0

38.9

2008

2009

2010

Q1 2011

Q2 2011

Today’s Performance

Revenues

(RUR billion)

EBITDA

and EBITDA Margin

(RUR billion)

EBITDA

EBITDA Margin

Mobile

Fixed-line

Mobile subscribers

(million)

Broadband subscribers

(thousands)

Fixed BB subs

Mobile BB subs

47.9

51.8

53.8

50.1

54.4

58.1

9.5

9.9

10.5

10.7

10.3

10.8

11.5

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

27.2

29.1

30.2

28.0

25.4

27.1

27.9

47.5%

47.2%

47.0%

43.4%

42.1%

41.5%

40.0%

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

51.3

50.9

51.6

52.0

53.0

55.3

56.8

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

1,167

1,199

1,257

1,421

1,569

1,671

1,833

1,169

1,300

1,500

1,927

2,313

2,362

2,387

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

•

On net traffic stimulation

•

Active promotions in small screen data

segment

•

Improve customer loyalty and actively

manage churn

•

Optimized sales mix to improve

contribution margin in sales

•

At the beginning of 2011 VIP was premium priced vs

competitors

•

This caused VIP to reposition its focus on closing

price gap in 2011 accelerating revenue growth and

improved market share

•

However, resulting APPM decline caused gross

margin to fall

Revenues

Gross Margin

Technical

Commercial

Other

Opex

EBITDA

Addressing Current Issues

Issues

Actions

•

Operational excellence program aimed at

driving cost savings of at least RUR 5 billion

in 2012, including following projects:

Network sharing and outsourcing

initiatives to decrease network

maintenance costs

Optimized structure of dealer

commissions

Optimized cash collection

•

Acceleration in network construction drove higher

maintenance costs

•

High sales volumes ensure increase in active base

•

However, total cost of sales SAC is growing faster than

revenue

•

Changing tax legislation brought additional expenses

in S&B

•

EBITDA margin declined to 40%

Products

Approach

•

Mobile Voice +

messaging

•

Wholesale

•

Fixed voice B2C

•

Fixed voice B2B

•

Sustain revenue

•

Focus on margin and cash

flow

•

Use opportunity to capture

part of the Fixed voice B2C

market (where we are not

currently present) by

offering VoIP services to

FTTB internet subscribers

•

Mobile Data

•

Fixed data (FTTB)

IP VPN and IPTV

•

Mobile VAS

•

Focus on capturing market

growth, improving overall

margin with high-marginal

data revenue

•

Focus on 2 biggest pockets

of growth in mobile VAS:

•

M2M

•

M-commerce

Source: Internal analysis

Focus on ensuring sustainable revenue growth

Mature

revenue

streams

Growing

revenue

streams

Core strategic

objective is to achieve

sustainable growth by

finding the optimal

balance between

focusing on margins

and capturing market

Source: AC&M, iKS-consulting, internal analysis

•

Provide sufficient speed in

3G, enhance EDGE in

priority branches

•

Drive penetration of

smartphones in Active Base

•

Provide unlimited tariffs

(tailored for medium

screen) for excellent

user experience

•

Unlimited WiFi packages

•

Provide sufficient speed in 3G

•

Start offloading traffic to WiFi

•

Bundle with Fixed Broadband

Product

portfolio

approach

Market CAGR,

2011-14

•

Increase coverage of existing cities with

currently used FTTB technology

•

Investigate other technologies for possible

connection of low-storey houses

•

Improve network quality (Channel capacity &

reservation)

•

Addressable audience -

93% of total

FTTB Russia subs base

•

Offer best features and innovative

products (#1 IPTV in Functionality

ranking in Russia)

•

Protect Broadband ARPU by product

bundling

Leveraging fast-growing revenue streams

•

Enter e-payment market with RURU

project (in cooperation with one of

largest Russian banks Alfa Bank)

•

Cooperate with BIG 3 Mobile Operators

•

Pilot NFC based transport services

•

Enter Consumer Electronics market

•

Develop integrated M2M solutions in

strategic partnership with key system

integrators

New

pockets

of growth

Fixed

Broadband

Mobile

Broadband

+31%

+8%

+42%

Small screen

Medium screen

Large screen

Internet

IP TV

M-Commerce

M2M

Customer Experience

•

Increase level of Customer Satisfaction

•

Develop and implement strategic programs to

improve

Customer

Experience

for

both

fixed

and

mobile

•

Keep

strong

focus

customer

retention

decrease existing churn rate

•

Secure #1 position in Brand preference by building

clear Brand differentiation

•

Continue

the

build

“Beeline

community”

offline

and online

Brand and CRM

•

Build clear differentiation on the Core Brand

Values

across key touch points

•

Apply new segmentation to develop products

tailored to customer needs

•

Enhance

loyalty

program

for

“heavy

users”

segment

Ensuring profitable growth by being #1 in brand preference

Persistent Effort to Improve Customer Satisfaction and Secure #1

Position in Brand preference

New value-based Segmentation

Operational

Excellence

Scope

Focus on

•

Outsourcing

•

Transport network

•

RAN sharing

Focus on

•

B2B & B2C sales

commission

Focus on

•

Organizational

effectiveness

•

Supply chain optimization

•

Service office migration

Technical

improvement

Marketing

Enhancement

Process & Structure

Optimization

Strategic project

Operational Excellence

Improve margin

Key Areas

•

Transport Network Optimization

•

Interconnect cost optimization

•

CPA margin

Main projects

Direct Costs

ST&A

•

Dealer commissions

optimization

•

Payment commission

•

Outsourcing

Savings in 2012

At least

RUR 5 Billion

•

Plan to reach 95% population coverage in

2012-2013 with new sites development

•

Plan to roll-out 3G in regions by developing

new sites and extending capacities on existing

to capture mobile data growth (currently 11K

base stations)

•

We reached 62%* of direct population

coverage

in all major Russian cities (90

cities)

•

Traffic

compression

technologies

–

giving

10-

15% extra channel capacity

•

Efficient CAPEX investment in transport

network will decrease rental fees

•

Optimized costs by sharing fiber optic

backbone

with competition and negotiating

prices

•

Transport network reached 33 thousand km of

Domestic Long Distance (DLD)

Mobile network

National coverage

Fixed network

Backbone

* Source: RosStat (number of households as base for analysis)

Improving network efficiency

•

GSM

network: reach 90

% population

coverage

with 2G (29 K base satations)

1H 2011 VIP MS in Revenue divided by MS of the biggest competitor

Grow

Low Priority

215

2012 Market size estimate

2 high-priority branch clusters

There

are

major

types

branches

that

require

different

strategies:

1.Branches

should

grow

(Where we are not leaders on the market)

2.Branches

should

actively

maintain

(We are leaders on the market)

43 priority branches

We have identified 43 first-priority branches (out of 79) based

on 2 key criteria:

•Beeline market position and

•market potential in 2012

Competitive strength (e.g. own transport network) in these

regions will be also used as an additional filter to rank branches

Having mapped branches to clusters, we have:

•25 in GROW cluster

•18 in ACTIVELY MAINTAIN cluster

These branches account for 82% in Market size 2011

Actively

maintain

High-priority branches

Size

represents

branch

revenue

1H’

2011

Second priority branches

Increasing Capital Efficiency with segmented

approach

0.00

0.25

0.50

0.75

1.00

1.25

1.50

Source: Official reporting, internal estimates

MTS

VIP

Capital Efficiency

Capex to Revenue ratio

(Percentage %)

Procurement optimization

Common transport network

construction with competitors

Enhanced efficiency in the network

planning

Effective and efficient Capex spending

•

Capex to revenue ratio is a good proxy

for measuring Capex efficiency

•

Being an integrated operator should

allow us to realize synergies in

infrastructure

•

Maintaining Capex efficiency will be

addressed by Capex optimization

initiatives in 2012:

19%

17%

24%

25%

29%

26%

30%

20%

19%

2008

2009

2010

1HY11

Market and Competitive Scenario

Kazakhstan

•

3 international competitors in GSM

(Beeline – 2nd). Telia Sonera (K-Cell

1st, Tele2 3rd (newcomer)

•

2G penetration 119%, 3G services,

LTE test zone first in CIS

•

Beeline FTTB as 1st alternative,

China Transit project over main-line

Uzbekistan

•

3 GSM competitors, Beeline fights for

2nd with Telia Sonera (U-Cell), MTS

(Russian competitor subsidiary) is #1

•

2G penetration 79%, 3G operations,

LTE by competitors, Beeline LTE in

2012

•

Price wars, tough governance, state

monopoly for international

communication

Armenia

•

3 international competitors in GSM:

Beeline – 2nd, MTS (Russian

competitor subsidiary) is 1st, Orange

is 3rd

•

2G penetration 120%, 3G operations,

LTE license - MTS high data usage

•

Beeline fixed monopoly, stagnating

voice, ADSL as fixed BB, growing

competition urges for FTTx

Kyrgyzstan

•

3 GSM competitors (Beeline fights for

1st), penetration 86%, 3G developing

fast, EBITDA margin leader together

with growth

Tajikistan

•

4 GSM competitors (Beeline 3rd), 2G

penetration 70%,3G operations first in

CIS, low data usage, collaboration

with BU Russia for migrant Subs

Georgia

•

3 GSM competitors (Beeline – 3rd and

growing), 2G penetration 102%, 3G

operations by competitors, 80+%

coverage, liberal economy

Total Revenue

Growth LC

2009

2010

2011

Kazakhstan

7.9%

12.1%

11.5%

Tajikistan

16.5%

32.1%

27.5%

Uzbekistan

-2.4%

-0.7%

30.4%

Georgia

106.1%

55.5%

24.0%

Armenia

-7.2%

-6.4%

3.4%

Market Industry Trends CIS

Telecom market expected to grow 7% CAGR 2011-2014, mainly driven by Mobile Data

Total CIS telecom dynamics

(Revenues in USD million)

Fixed Data

Fixed Voice

Mobile Data

Mobile Voice

+ Messaging

-3%

+38%

+47%

CAGR, %

2011-2014

Source: Internal analysis

114

190

270

362

497

1,204

1,275

1,398

1,436

2011

2012

2013

2014

+6%

Addressing Current Situation

Revenues

Gross Margin

Technical

Commercial

Other

Opex

Current Situation

Actions

EBITDA

•

Growth in revenue is in line with the

market, but it is not fully translated into

margins as APPM reduction puts

pressure on gross margin

•

Acceleration and diversification in network

construction drives maintenance costs up

•

SAC growth along with the Subs base

growth

•

Customer retention becomes key on more

saturated markets

•

Increase revenue sharing in dealer

commissions to link acquisition cost with

the quality of new adds

•

Automated solutions for customer

support based on native languages

•

Driving market growth, targeting leadership

in data on most markets

•

Create customer experience through

developing localized infotainment content

and data applications supported with strong

push of branded devices

•

Focusing on convergent services in both

B2B and B2C segments in Kazakhstan,

Uzbekistan and Armenia

•

Cost effective 2G solutions to maintain

voice as the main revenue stream

•

Gross Margin is also impacted by

Interconnect rate variations and

customer device margin

•

Optimal balance between growth and

Opex efficiency

•

Balanced Device Strategy and GR policy

•

Running operational excellence program

aiming to bring cost savings and improve

free cash flow

Core strategic

objective is to

achieve

sustainable

growth together

with

Opex/Capex

efficiency

Matured

revenue

streams –

focus on

margin and

cash flow

Growing

revenue

streams –

capture

market share

Products

Approach

•

Mobile Voice +

messaging

•

Fixed voice

•

Wholesale

•

Sales and Distribution

–

New channels &

regional approach

•

Further growth of revenue and

usage through segmented

approach in B2C and B2B offers

•

Focus on margin and cash flow

•

Existing subs development &

retention through TM and Loyalty

programs

•

Fixed BB\Mobile BB\Voice bundles

to secure share of wallet

•

Mobile Data

•

Fixed data (FTTB) IP

VPN and IPTV

•

Mobile VAS

•

Driving market growth,

targeting leadership in data on

most markets

•

Create customer experience

through developing

infotainment content and

applications supported with

strong push of branded devices

•

Focusing on M2M products

(devices and services) in B2B

segment

Source: Internal analysis

CIS -

Growth Engine

•Large addressable market

•Growing penetration

•Untapped growth in mobile data

•High revenue growth

Profitable Growth

Mid and small

screen BB

revenue

Large-screen BB

subscriber

acquisition

Scope

•

Smart pricing through

micro-segmented offers

•

Data packs

•

Special Youth segment

offers

•

Default APN I.net

pricing

•

Driving revenue

through price

perception (limited try

and buy offers, “light”

FB version, etc.)

Source: Internal analysis

Focus on

•

Transport network

•

Aggressive subscriber

acquisition

•

Mirroring of I/net

resources

•

Local resource dev.

Focus on

•

Service quality and

availability

•

Transport network

•

Smart pricing to

avoid unplanned

traffic growth

Focus on

•

LTE pilots

•

Co-branding &

cooperation with HW

vendors

•

Data Traffic Management

through DPI technology

Broad Band

Expansion

3G Network

Development

New technology and

projects

Strategic project

Maximizing cash

flow

Device

penetration

New Customer

Experience

activities

•

Branded customized

devices

•

Focus on 3G enabled

devices

•

Delivering full range

of devices from basic,

through feature, to

smart-phones and

tablets

•

Partnership programs in

content, apps & services to

deliver local /nation based

content

•

Branded and Co-branded apps

(Opera, social networks)

•

Moving customer

service/inquires to internet

(CC through I-chat, I.net self

service)

Profitable Growth

Most important strategic streams development -

Internet & Data BB/Device strategies

Uzbekistan

•

CAPEX to revenue ratio is a good proxy for

measuring CAPEX efficiency on matured

markets

•

Underinvestment during 2008-2009 crisis

and rapid data development is a reason for

considerable investment activity in 2011-

2012 for CIS

•

Key areas for investment are

Accelerated 3G rollout to support demand

for mobile data

New roll-out and expansion to reach parity

with competitors on key markets

New data technology implementation and

piloting, IP TN deployment to win leadership

in perception and finally in data revenue

•

Cost effective 2G solutions to maintain

voice as the main revenue stream

•

Synergies in prices and technologies to

improve efficiency and returns

Source: Official reporting, internal estimates

CAPEX CIS by OpCo

(USD million)

Kazakhstan

Tajikistan

Armenia

Georgia

Kyrgyzstan

100

150

200

250

300

350

2009

2010

3Q 11 LTM

Capital Efficiency

Conclusions

•

CIS is still a growth market with penetration below 100% in most

of the countries

•

Relatively low data usage creates promising prospects

•

Attractive market for international competition

•

High level of interconnection between CIS countries creates

synergy

•

Optimal balance between capturing market share and maintain

margin to provide sustainable growth

•

Strategy focus on Capex and Opex efficiency and sustainable cash

flow

Africa and Asia Geographic Profile

Algeria

Pop: 35.0 M

Pen: 81%

GDP*:7,300

Central African

Republic

Pop: 4.9 M

Pen: 18%

GDP*:700

Burundi

Pop: 10.2 M

Pen: 23%

GDP*:300

Zimbabwe

Pop: 12.1 M

Pen: 58%

GDP*:400

Laos

Pop: 6.4 M

Pen: 79%

GDP*: 2,400

Vietnam

Pop: 88.7 M

Pen: 129%

GDP*: 3,100

Cambodia

Pop: 15.2 M

Pen: 42%

GDP*: 2,000

Pakistan

Pop: 187.3 M

Pen: 58%

GDP*:2,500

Bangladesh

Pop: 158.6 M

Pen: 53%

GDP*:1,700

* CIA – The World Factbook

Population

and

Penetration

figures

are

provided

Informa

Telecoms

Media

–

Market and Competitive Scenario

Pakistan:

•

Bangladesh:

•

Algeria

Mobile subscriber

developments VIP (million)

Revenue developments VIP

(USD million)

EBITDA and margin VIP

(USD million & percentage%)

Sub Saharan Africa:

•

South-East Asia:

•

Despite limitations,

Djezzy remains

a profitable market leader

with

tremendous data potential

In a large market with low

penetration levels,

banglalink is the

fastest growing operator

in a

rapidly-growing market with strong

focus on increasing value share

Highly competitive markets offering

growth potential

Mobilink leads the maturing

market,

and with a large customer

base has great potential for revenue

enhancement through data and VAS

uptake

Leading positions in markets

with low penetration levels,

healthy APPM, and high growth

potential. Internet is a mobile story

in Africa.

VAS & Data

Stream

•

Mobile Data / 3G

Launch

•

VAS

•

Mobile Financial

Services

•

Launched first App Store in Pakistan.

•

Enhance VAS offerings to maintain

leadership of diverse VAS services in

Bangladesh

•

Launched banglalink “m-wallet”

•

Rollout of “mobile money”

in Burundi

•

Expected to launch Mobilink in early 2012

•

Grow mobile broadband in Algeria & Pakistan by

bidding for 3G licenses

•

Launched services in Zimbabwe and Burundi

•

Expected launch in Laos before end of 2011

Areas

Approach

Products

Core strategic

objective is to

further capture

organic growth

through pursuing

3G data

opportunities, in

addition to

capturing market

Drive Profitable Growth

Focus on data growth, value driven pricing and further market penetration

Market

Stream

•

Mobile Voice &

Messaging

•

Further market penetration and

subscriber growth

•

Value driven pricing

•

Low cost model strategy

•

Rationalized competition

Operational Excellence

Cost Efficiency

Revenues

Gross Margin

Technology

Commercial

Opex

Current Situation

Actions

•

Maintain value-driven pricing

•

High subscriber growth potential in Africa, SEA and Bangladesh

•

Explore opportunities for revenue generation through international call center

outsourcing services

•

Leverage large subscriber base to grow voice and non-voice revenue in Pakistan and

Bangladesh

EBITDA

•

Low-cost rural solutions, Indoor/Outdoor swaps

•

Increase resource efficiency; IN free traffic offloading, power saving features, and

Hybrid solutions

•

Achieve higher CapEx/OpEx and enhance quality; Single RAN, All IP, HW

modernizations

•

Explore network outsourcing opportunities

•

Invest in network modernization to preserve and improve network quality in SEA

•

Define leaner site configurations through tighter design guidelines to manage CAPEX

demands in Algeria

•

Increase coverage footprint by deploying low CAPEX sites in SSA

•

Reduce technical OPEX

•

Enhance margin through capturing mobile data opportunities

•

Adopt a variable mix of outsourced and in-sourced activities

•

Increased bandwidth creation will lead to higher demand for mobile internet in Africa

•

Increase quality and control over the distribution channel

•

Apply a dual market strategy in Bangladesh: tailored services for high-end segments

and optimized services for lower-end segments

•

Potential for Mobile Financial Services in Pakistan and Bangladesh

•

Improve margins

•

Increase top line

•

Reduce commercial OPEX

•

Increase consumer awareness and brand loyalty

•

Brand facelifts in CAR and Zimbabwe

•

Consolidate Djezzy brand leadership and strengthen emotional bonding with

customers

•

Create a differentiated value position for consumers using Mobilink’s brand structure

and market position

•

Regional Beeline brand standardization, e.g. Rebranding in Laos from Tigo to Beeline

•

Increase electronic top-up penetration and use non-conventional advertising tools

Improve Capital Efficiency

Leverage Group size to realize CAPEX efficiencies within a cost-optimization strategy

CAPEX to Revenue ratio

(Percentage %)

Technology Levers

•

Infrastructure

sharing

•

Network

outsourcing

•

Network

modernization

•

Demand

management

•

Innovative

solutions to

achieve operational

efficiency

Procurement

Levers

•

Unitary price

alignments

•

Volume

aggregation

•

Market-share

redistribution

•

Scope and SLA

optimization

Capital Efficiency

10%

15%

20%

25%

30%

35%

40%

2007

2008

2009

2010

9M2011

•

Population: 35 M

•

GDP/capita: $7,300

Market Size: 28.25 M subs

Penetration*: 81%

Market Players:

•

Djezzy

•

Mobilis

•

Nedjma

Market Shares *

Djezzy

Macro-

Environment

Regulatory

Environment

•

GDP growth rate for 2010 stood at 3.3%

•

Young population with 24% of the population under 15 years of age

•

Country-wide political stability

•

Government, trade and agriculture sectors account for over 60% of

Algeria’s GDP

•

Hydrocarbons have long been the backbone of the economy, accounting

for roughly 60% of budget revenues, 30% of GDP, and over 95% of

export earnings

•

Penetration rate at end of Q3 2011 stood at approximately 81%

*Penetration figures are provided based on OTA Closing base and DWH figures for competition

** DWH Market Share

•

Regulated telecom environment under the ARPT

•

licensing

process

launched

September

2011

•

Ongoing ban on Djezzy’s foreign currency transfers preventing the

payment of essential suppliers, as well as the importing of equipment

critical to network maintenance and necessary expansion

Competitive

Landscape

Corporate

Social

Responsibility

•

Platform to identify and develop young Algerian talents

Djezzy is the market leader in a three-player market.

•

Djezzy:

launched its operations in 2002, market leader, has a population

coverage of 96%.

•

ATM:

1 entrant launched in 1999, rebranded their mobile business to

Mobilis. ATM is also the sole fixed line provider and owner of internet and

international gateways.

•

Qtel:

launched Nedjma in 2004. As challengers, Nedjma is a large

contributor to market growth.

Djezzy KPIs

Note: foreign exchange rate DZD 72.5542/ USD 1

*CAPEX

figures

excl.

GSM

licenses

and

may

differ

from

previously

released

figures

Profitable Growth

•

Balanced value pricing

strategy leading to stable

ARPU levels despite high

market growth

•

Focus on data opportunity

with internet penetration at

14% (est.2009)

Operational Excellence

•

Consolidate Djezzy brand

leadership and strengthen

emotional bonding with

customers

•

Increase quality and

control over the

distribution channel

Capital Efficiency

•

Define leaner site

configurations through

tighter design guidelines to

manage CAPEX demands

Strategic Direction

Mobile Subscribers

(million)

Revenues

(DZD billion)

EBITDA

(DZD billion & Percentage %)

CAPEX*

(DZD billion)

13.4

14.1

14.6

15.1

16.3

2007

2008

2009

2010

9M2011

125

135

136

129

102

2007

2008

2009

2010

9M 2011

2007

2008

2009

2010

9M 2011

22.5

11.5

19.1

6.7

1.4

2007

2008

2009

2010

9M 2011

•

GDP growth rate in 2010 stood at 4.8%

•

35% of the population is under 15 years of age

•

Power Shortages are widespread, but are countered by innovative technological

solutions

•

Slowing devaluation of the Pakistani Rupee against the US Dollar

•

Heavy floods had a large impact on the country’s population and infrastructure

Mobilink

Macro-

Environment

Regulatory

Environment

Corporate

Social

Responsibility

•

Mobilink in partnership with the UN’s Emergency Response Unit, committed about

Rs. 81 million for setting up a camp for Internally Displaced families who were

affected by the flood.

•

Mobilink in partnership with UNESCO and Bunyad (a local NGO) has

also

implemented a pilot project to test the use of mobile phones in facilitating literacy in

Pakistan.

•

Mobilink also has its own billboard skins recycling program, which uses outdated

billboard skins to manufacture school bags for underprivileged children, provide

scholarships and support local schools.

•

The regulator, PTA, introduced MNP several years ago, which is currently a high focus

for all operators in the Pakistani market

•

PTA introduced new measures concerning customer data verification, which is to be

adopted by all mobile operators, ensuring subscriber information

accuracy

•

PTA is planning to launch an auction for three 3G licenses in 2012

•

Population: 187 M

•

GDP/capita: $2,500

•

Market Size: 109 M s

•

Penetration: 58%

Market Players:

•

Telenor

•

Ufone

•

Warid

•

Zong

* Regulator Market Shares.

Mobilink is the market leader in a five-player market.

•

Telenor:

player

the

market,

value-driven

operator,

strong

market

share position

•

Ufone:

player

the

market,

positive

mass

market

perception

•

Warid:

Have

been

mostly

inactive

for

the

past

years,

however

their

level

activity

has been increasing lately

•

Zong:

China

Mobile’s

1st

venture

outside

China,

last

entrant

into

Pakistani

market,

offers cheap products and services, aggressive on pricing and market share gains

Competitive

Landscape

30.7%

18.9%

10.0%

24.5%

16.0%

Market Shares *

Mobilink

Ufone

Zong

Telenor

Warid

Mobilink KPIs

Profitable Growth

•

Leverage the large subscriber

base in order to unlock revenue

potential from non-voice services

•

Enhance margin through

capturing mobile data

opportunities with internet

penetration estimated at 11% in

2009

Operational Excellence

•

Increase EBITDA through

network OPEX reduction

initiatives

•

Revamp Mobilink’s positioning

in the market as well as its

brand structure with the

objective of creating a

differentiated value position in

consumers’

minds

Capital Efficiency

•

Adopt innovative technology

solutions

to use resources more efficiently

through IN traffic offloading, power

saving and site environmental

monitoring systems

•

Infrastructure sharing

•

Joint 3G roll-out

•

Network modernization

Strategic Direction

Mobile Subscribers

(million)

Revenues

(PKR billion)

EBITDA

(PKR billion & Percentage %)

CAPEX*

(PKR billion)

2007

2008

2009

2010

9M 2011

44%

40%

36%

40%

41%

2007

2008

2009

2010

9M 2011

32.4

37.7

12.8

12.2

13.0

2007

2008

2009

2010

9M 2011

30.6

28.5

30.8

31.8

33.4

2007

2008

2009

2010

9M 2011

Note: foreign exchange rate PKR 85.8751/ USD 1

*CAPEX figures excl. GSM licenses and may differ from previously released figures

banglalink

Macro-

Environment

Regulatory

Environment

Corporate

Social

Responsibility

banglalink has taken a number of initiatives such as:

•

Cox’s Bazaar Beach Cleaning Project and International Coastal Cleanup Day

•

Setting up computer labs in 270 underprivileged schools at different parts of the

country under the umbrella of Digital Bangladesh

•

Has the world’s highest population density

•

57% of population below 25 years of age

•

GDP growth rate was estimated at 6% in 2010

•

Government Type: Unitary state

and parliamentary democracy

•

Low Mobile penetration: less than 50%

•

Heavy existence of Multiple SIMs

•

Prior to Telecom Act 2010 the Bangladesh Telecommunication Regulatory Commission

(BTRC) was the sole telecom market legislator

•

Receipt of 2G license renewal guidelines, validity of license renewal is for 15 years

•

BTRC levies a SIM tax that has been reduced to BDT600 or USD8.5 from BDT800 in

2011

•

3G license awarding likely to happen in 2012

•

Banks are engaging in the already existing mobile financial services

•

Population: 158 mln.

•

GDP/capita: $1,700

•

Market Size: 81 M subs

•

Penetration: 53%

Market Players:

•

Grameenphone

•

Airtel

•

Robi

•

CityCell

•

TeleTalk

Competitive

Landscape

44%

27%

19%

Market Share

Banglalink

Robi

Airtel

Citycell

Teletalk

banglalink

places

6-player

market.

•

Grameenphone:

1st

player,

aggressive

tariff

moves targeting more acquisitions,

largest network

•

Robi:

Rebranded

from

AkTel,

started

offering

data

services (GPRS), consistently

subsidize SIM tax, aggressive on the VAS communication

•

Airtel:

Baharti

Airtel

acquired

70%

stake

2010,

re-launched with new logo and

corporate brand repositioning

•

CityCell:

CDMA

operator,

offers

data

services

with

handset

subsidies

•

TeleTalk:

Operated by national fixed incumbent BTCL, offers the lowest flat tariff in

the market

banglalink-

KPIs

Profitable Growth

•

Tap into mobile data

opportunities with internet

penetration rates extremely

low in the country

•

Explore opportunities for

revenue generation through

international call center

outsourcing services

•

Leverage large base by

unlocking mass-market value

potential

Operational Excellence

Capital Efficiency

•

Capture technology

synergies by introducing and

swapping into outdoor sites

and implementing innovative

hybrid solutions

•

Site sharing

Strategic Direction

Mobile Subscribers

(million)

Revenues

(BDT billion)

EBITDA

(BDT billion & Percentage %)

CAPEX*

(BDT billion)

•

Apply a dual market strategy

providing tailored services for

high-end segments, as well

as optimized services for

lower-end segments in the

market

2007

2008

2009

2010

9M 2011

-3

-22%

31%

28%

37%

2007

2008

2009

2010

9M 2011

24.0

28.6

8.7

16.4

6.7

2007

2008

2009

2010

9M 2011

2007

2008

2009

2010

9M 2011

Note: foreign exchange rate BDT 73.1028/ USD 1

*CAPEX figures excl. GSM licenses and may differ from previously released figures

Conclusion

•

Due to low penetration level, Markets of Asia & Africa BU have

largest potential of growth in Vimpelcom Group

•

Data is our key strategic focus

•

Strong Leadership positions in large markets provides a solid

platform for profitable growth

•

Managing for value strategy and implementing operational

efficiency-

gaining mechanisms

•

Leveraging Group size to realize CAPEX efficiencies within a cost-

optimization strategy

24,873

26,116

27,161

28,112

6,552

6,126

5,710

5,310

4,592

5,740

6,888

7,921

2,289

2,369

2,440

2,501

Market Industry Trends Ukraine

Telecom market expected to grow 5% CAGR 2011-2014,

mainly driven by Fixed Broadband

CAGR %

2011 -

2014

Source: State Statistics Committee of Ukraine, Kyivstar analysis

Mobile

Fixed Voice

Fixed

Broadband

Other

20%

-7%

Total Ukraine telecom market dynamics

(Revenues in UAH billion)

2011

2012

2013

2014

Market and Competitive Scenario

7.3%

7.9%

2.1%

-15.1%

4.2%

4.5%

4.0%

2006

2007

2008

2009

2010

2011E

2012E

Ukrainian GDP Trend**

(Percentage %)

Mobile Subscriber base

(million)

Total Revenue Market Share

(Percentage %)

EBITDA margin

(Percentage %)

* Sources: Kyivstar analysis

** Sources: State Statistics Committee of Ukraine, Economist IU forecasts, April 2011; Kyivstar analysis

BU Ukraine

Kyivstar

MTS

Life

Mobile*:

•

Major players: Kyivstar, MTS, Astelit (brand “Life”). Kyivstar

is the leading multiplay operator in Ukraine, with a #1

position in mobile and a #3 position in fixed.

•

Key consumer trends: high MOU due to proliferation of free

on-net pricing model, 30-40% growth in mobile data

•

Regulatory: pressure on MTR, delays in 3G license auction

•

Value chain: Minor progress in network sharing due to the

absence of massive roll-out, no consolidation in retail

Fixed*:

•

Major competitors: Ukrtelecom (incumbent), Vega, Volia,

Datagroup

•

Kyivstar is the 3rd (behind Ukrtelecom and Volia) but the

fastest growing operator in mass market broadband

•

In fixed voice Kyivstar is focused on the B2B segment where

we compete with Ukrtelecom and Datagroup

Today’s Performance

Revenues*

(USD million)

EBITDA

and EBITDA Margin*

(USD million)

EBITDA

EBITDA Margin

Mobile subscribers*

(million)

Broadband subscribers*

(thousands)

Fixed BB subs

Mobile BB subs

* Pro forma figures for 1Q 10 and 2Q 10

357

387

426

404

375

412

437

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

174

208

239

217

202

226

235

48.8%

53.6%

56.0%

53.7%

54.0%

54.8%

53.7%

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

23.9

24.1

25.1

24.4

24.7

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

107

149

200

235

293

324

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Addressing Current Situation

Revenues

Gross Margin

Technical

Commercial

Other

Opex

Current Situation

Actions

EBITDA

•

Macroeconomic growth does not drive recovery in

telecom

•

Mobile segment saturation with declining rate of revenue

growth requires us to launch / develop non-mobile

businesses putting pressure on margins and capex

•

Regulatory environment is challenging (delay in 3G

license, SMP and MTR regulation, increase in regulatory

charges)

•

Growth of mobile network to cater for growing traffic and

development of fixed businesses drive maintenance opex

•

Significant share of opex is not driven by volume but by

inflation and are very hard to control (electricity rate,

frequency fees, regulator charges, etc)

•

Implement organizational development and talent retention

programs to further improve integrated corporate culture,

employee productivity and motivation

•

Pricing excellence in mobile and transition to bundles to

defend subscriber and revenue market shares

•

Aggressive FTTB roll-out and leadership in net adds

•

Integrated mobile-fixed offers to B2B segment

•

Sale of user devices to stimulate data usage

•

Stimulate 3G license release and network roll-out

•

Consumers show preference for a bundle pricing model and

are significantly increasing usage of voice, data and

multimedia services, which needs to be monetized

•

Further develop a multichannel retail and distribution

model

•

Transformational projects currently under development:

network swap, network outsourcing, potential NW sharing

•

Local synergies delivery + Global synergies delivery

•

Frequency related synergies, if we are able to transfer URS

frequencies to Kyivstar and/or if refarming becomes

possible

•

Significant reduction of commissions for past two years

helped to compensate for NW opex growth, but resulted

in the

lowest

rates

competition

–

such

levels

are

not

sustainable in future

Overall ambition of EBITDA margin management is to achieve sustainable structural opex saving from mobile network

swap/outsourcing projects to compensate for margin decline from fixed businesses and finance commercial and

organizational priorities/challenges.

Deliver profitable

revenue growth in

segments where we

are the market leader

and improve market

share in segments

where we are in the

top 3, explore new

pockets of growth.

Consumer

Segment

Business

Segment

Products

Approach and key initiatives

•

Mobile Voice

•

Mobile Data

(EDGE)

•

FTTB

•

Multimedia & VAS

•

Devices

•

Implement Bundle Strategy with focus on

increasing voice and data consumption

•

Accelerate 3G license acquisition and

network roll-out

•

Build Djuice as a Virtual Arena for music,

video, games, and communities to become

•

Finalize roll-out of FTTB to addressable

market and become the #1 alternative

•

Maintain leadership in multimedia

•

Build a multichannel retail and distribution

model

•

Mobile Voice

•

Mobile Data

(EDGE)

•

Fixed Voice

•

Fixed Data

•

Wholesale

•

Data-center

•

Call-center

•

Focus on providing a wider portfolio of

services to existing customer base (cross-

sale synergies)

•

Explore new pockets of growth:

high-speed mobile data-based services

proactive fiber optics roll-out to

business customers

datacenters, cloud-based services,

contact centers and network security

•

Operational improvements in value

proposition management, sales

management and go-to-market processes to

increase revenue

Profitable Growth

Synergy /

Global Synergy

(ongoing)

Scope

Source: Internal analysis

Focus on

•

Up-

and Cross-sale

opportunities

•

Roaming

•

FTTB

Focus on

•

Site and equipment re-

use, core and transport

networks optimization

•

Global technical and

procurement synergies

Focus on

•

Corporate culture

integration

•

Process and IT integration

Marketing

Workstream

Technical

Workstream

Business Support

Functions

Strategic project

(scoping and

analysis)

Focus on

•

Product, service,

segment

profitability

management

•

Retail Strategy

•

Device Strategy

Focus on

•

Network SWAP

•

Network Outsourcing

Operational

Excellence 3+

(to start in 2012)

•

Focus on analysis of current run rate and new operational excellence opportunities

•

Increase organizational effectiveness in line with motivation system adaptations

•

Develop tools and methodologies to support continuous improvement and “lean”

processes

•

Optimize internal decision making process (reduce bureaucracy and time-to-

decision)

Focus on

•

Adopt motivation system to

reflect focus on long-term

sustainable growth and

efficiency

•

Operational improvements

Operational Excellence

Synergy + network transformation

Transformation

Capital Efficiency

•

Kyivstar has been the leader in capital

efficiency in the Ukrainian market, investing

more effectively than our competitors while

maintaining market leadership

•

Increase in capex in 2010-2011 is driven by

growing voice and data consumption, and

significant FTTB roll-out

•

Future capex needs are driven by the need to

increase network capacity and maintain quality

in mobile, development of FTTB and B2B Fixed

business, potential 3G license acquisition and

roll-out

•

Capex efficiency is to be maintained through:

Source: Official reporting, internal estimates

*2008 data for Kyivstar only

CAPEX to Revenue ratio

MTS

Life

UBU*

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

2008

2009

2010

1HY11

Rigorous investment portfolio management

process for capex approval, prioritization,

release and review

Global procurement synergies

Transformational projects currently under

development –

network swap, network

outsourcing, potential network sharing

Frequency related synergies, if we are able to

transfer URS frequencies to Kyivstar and/or if

competitors agree to refarming

Conclusions

Challenging

context:

macroeconomic

growth

does

not

drive

recovery

telecom,

mobile

segment

saturation, regulatory environment is challenging

Strong demand and usage:

consumers show preference for a bundle pricing model and are

significantly increasing usage of voice, data and multimedia services, which the operators need to

monetize

Broadband land-grabbing:

fixed broadband is in a period of “turf wars”, while development of

mobile broadband is hampered by the lack of 3G licenses

Balanced

strategy:

Kyivstar

continuing

implement

balanced

strategy

cash

flow

maximization with gradual transition to bundled mobile offers, development of non-mobile

businesses, coupled with lean cost management to deliver best possible cash flows at a cost of

minor loss in core mobile market share

Key priorities for 2012:

Pricing

excellence

and

move

bundles

mobile

license

and

network

roll-out

FTTB

roll-out

and

leadership

net

adds

Cost efficiencies

through local and global synergies and network transformation

Corporate

culture

integration

and

motivation

system

Expected Market Evolution in Italy

Telecom market expected to decline 3.6% CAGR 2011-2014,

mainly driven by Fixed and Mobile Voice reduction

Total Italian telecom market dynamics

(Revenues in EUR million)

Source: IDC View Forecast

2011

2012

2013

2014

Fixed Data

Fixed Voice

Mobile Data

Mobile Voice + Messaging

Wholesale

--%

-7%

-6%

+6%

+3%

Mobile:

•

Mobile Voice + Messaging declining over 2011–2014 (-7%).

Voice decline mainly due to MTR reduction. Excluding MTR

impact the 2011-14 CAGR for Mobile Voice would be -4%

•

The reduction in voice is partially compensated by increase

in Mobile Data (excl Messaging) which grows 6%.

CAGR, %

2011–2014

6.143

6.326

6.499

6.692

2.990

3.169

3.348

3.528

7.761

7.226

6.798

6.446

16.285

15.023

13.920

13.030

268

276

280

270

Fixed

Fixed Voice market is expected to decrease by -6.0% CAGR

2011–2014 partially offset by Increase of Fixed Data up 2.9%

Regulatory Environment and Expected Development

Termination rates

•

Mobile: AGCOM proposal for MTR glide path 2012–2015 under consultation

•

Fixed: 2011 values same as 2010, symmetry between OLOs and incumbent from

2012

EU commission proposal for harmonization of roaming charges under discussion

Public consultation on NGN currently ongoing, discussion tables under way at local and

national level

LLU wholesale prices for 2011 and 2012 defined in 2010, subject to quality checks on

wholesale performance

EU commission (Kroes) interested in pushing fibre investment through an approach

that would lower copper access prices unless incumbents invest in fibre networks and

switch-off the old copper networks

Market and Competitive Scenario

Mobile:

•

86% pre-paid market

•

Multiple SIM market

•

151% penetration

•

2 incumbents (Telecom Italia & Vodafone) with comparable market

Fixed:

•

Telecom

Italia

still

dominant

incumbent

(70%

of revenue

market

share )

•

Voice traffic declining due to fixed-to-mobile substitution

•

Low broadband/personal computer penetration vs. other European

countries

Italian GDP Trend

(1)

(%)

Mobile market share (on SIM)

(2)

Fixed broadband market share

(2)

(1)

Sources: Banca d'Italia, ISTAT, Confindustria, IMF, OECD, Italian Government’s Relazione previsionale e programmatica, Eurostat

(2)

Internal sources; Mobile market excluding MVNO

WIND Revenues value

share increase 2008 –

2011 (H1)

Others

38.6%

35.1%

34.2%

34.6%

33.3%

34.0%

33.8%

32.8%

9.4%

10.0%

9.9%

18.7%

20.9%

22.0%

22.7%

2008

2009

2010

Q3 2011

+3.5p.p.

59.8%

56.4%

53.9%

52.6%

7.0%

9.7%

11.9%

12.8%

13.1%

13.2%

12.9%

8.1%

7.5%

6.9%

6.4%

12.0%

13.2%

14.4%

15.2%

2008

2009

2010

Q3 2011

2.0

1.5

1.3

-5.2

1.3

0.8

0.6

2006

2007

2008

2009

2010

2011E

2012E

645

122

173

501

308

789

725

16.3%

15.5%

9.5%

15.5%

9.8%

14.0%

10.0%

WIND

(Italy)

Base

(Belgium)

Cosmote

(Greece)

E-plus

(Germany)

Orange

(Spain)

Bouygues

(France)

(UK)

European Third Entrant Mobile Operator

Comparison

Source: Bank of America Merrill Lynch

WIND mobile CAPEX + allocation of Common CAPEX in proportion with revenues

Revenues –

FY 2010

(EUR million)

EBITDA

and EBITDA Margin –

FY 2010

(EUR million)

Capex –

FY 2010 Capex/Revenues

(EUR million)

Mobile Customer Base –

FY 2010

(thousands)

Only

Mobile

Capex

11.4%

3,963

785

1,812

3,241

3,158

5,636

7,279

WIND

(Italy)

Base

(Belgium)

Cosmote

(Greece)

E-plus

(Germany)

Orange

(Spain)

Bouygues

(France)

(UK)

1,834

271

668

1,374

764

1,315

1,851

46.3%

34.5%

36.8%

42.4%

24.2%

23.3%

25.4%

WIND

(Italy)

Base

(Belgium)

Cosmote

(Greece)

E-plus

(Germany)

Orange

(Spain)

Bouygues

(France)

(UK)

19,928

2,982

7,990

20,427

11,940

11,084

WIND

(Italy)

Base

(Belgium)

Cosmote

(Greece)

E-plus

(Germany)

Orange

(Spain)

Bouygues

(France)

(UK)

450

Operating and Financial Highlights

Revenues

(EUR million)

EBITDA

and EBITDA Margin

(EUR million)

EBITDA

EBITDA Margin

Mobile

Fixed-line

Mobile subscribers

(million)

Fixed

Broadband subscribers

(thousands)

937

1,046

1,021

1,038

982

1,029

1,026

357

366

341

408

369

370

371

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

18.8

19.3

19.6

19.9

20.3

20.6

20.8

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

1,700

1,800

1,900

2,000

2,100

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

483

556

534

496

565

37.3%

39.4%

40.9%

37.0%

36.8%

37.6%

40.5%

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Addressing Current Situation

Revenues

Gross Margin

Technical

Commercial

Other

Opex

Current Situation

Actions

•

Maintaining rational behavior; limit use of promotions

•

Target new areas of growth

•

Focus on all-inclusive bundles

•

Continue to pursue on-net strategy to minimize MTR impact

•

Focus on data growth, not impacted by MTR

EBITDA

•

Vendor consolidation

•

Site sharing

•

Opportunistic review of media presence

•

Maintain current headcount

•

Increase productivity

•

Improve collection effectiveness

•

Maintain rational pricing behavior

•

Competitive pressure in mobile

•

Regulatory pressure on MTR

•

Increase in OPEX tied to expansion of network

infrastructure

•

Increase in commercial OPEX tied to competitive

environment and larger distribution footprint

•

Higher costs of personnel mainly driven by renewal of the

collective agreement which led to a new contractual

installment increase

•

Increase in collection times on fixed line SME/SOHO

•

Slowdown of top line coupled with costs associated to

competitive dynamics

•

Increase of monthly access fees in relation to higher

LLU/WLR monthly fees

•

Retail prices increased in Jan. 2010

Profitable Growth

Focus on high value customers and up-selling to existing customers

•

CB reached 522K in Sep ‘11

•

Four ‘All Inclusive’

bundle offerings including

Voice, SMS, Internet browsing and Smartphone

•

Strong performance for SIM only version

•

Bundle offerings are part of convergent offering

from Wind and Infostrada

•

Loyalty program providing benefits for all

customers

•

A clear, simple and transparent approach to

the market based on “option plans concept”

•

Leverage on off-net options (Noi Tutti family)

to attract new customers from competitors

•

Push on-net portfolio offer (Noi Wind family) to

extend Wind community

•

75% of customer base has at least one option

plan

•

Maintaining leadership position in the ethnic

segment

Post-paid

Core Offer Pre-paid

Post-paid customer base

(in Thousands)

Noi “community”

(Million SIM)

9.1

9.7

10.4

10.9

2008

2009

2010

Q3 2011

110

303

522

2008

2009

2010

Q3 2011

•

New organizational structure in place to offer

convergent proposition for consumer and corporate

segments

•

Infostrada products and services increasingly sold in

the WIND shops

•

Harmonization of look and feel between WIND and

Infostrada brands

•

Launched in 2010 a commercial bundle, Super Tutto

Incluso, which combines the Tutto Incluso dual-play

offering with a postpaid mobile offering in one

monthly bill.

Absolute ADSL

Happy Italy

Tutto Incluso

Happy NoLimit

Low

High

Calling usage

Low

High

•

Unlimited F2F calls

•

ADSL pay per use

•

Unlimited F2F calls

•

ADSL unlimited

•

Calls pay per use

•

ADSL pay per use

•

Calls pay per use

•

ADSL unlimited

Infostrada product portfolio-Only Fixed

Convergent Offer

Infostrada Offer Driver

Net acquisition consumer + micro.

(thousands)

•

Simple

and complete

product portfolio positioned

as best in value for money

•

Focus on 2P offers to leverage ADSL growing

demand

•

Same offer nationwide (LLU/WLR) to exploit ADV

synergies

•

Net acquisition

consumer +

microbusiness on Pull

sales channels (Shops

mainly

inbound

telesales + web)

•

18% of fixed-line sales

are through WIND’s

shops

Profitable Growth

Focus on high value customers and up-selling to existing customers

H1 2010

H1 2011

+66%

WIND’s market share in Corporate segment is below

its share in Consumer segment representing a very

interesting growth opportunity

4,756

(41%)

Enterprise

SME

Microbusiness

Coporate Market Value

Total TLC Revenues

(in EUR million)

6,772

(59%)

•

Convergence

•

Quality of Service

(i.e., dedicated

support structures and

SLAs)

•

Managed services

(e.g., unified

communication,

security, energy

management)

•

ICT Applications

•

Mobile app store

•

Collaborative

CRM

•

Cloud Services:

Iaas/Saas

Strategic Drivers

Business Results

Enterprise Revenue Growth

2011 vs. 2010

Micro & SME Revenue Growth

2011 vs. 2010

Profitable Growth

Focus on high value customers and up-selling to existing customers

8.0%

0.1%

WIND

Market

9.0%

0.8%

WIND

Market

Broadband revenues

(EUR million)

CAGR: +52%

•

Smart choice for Mobile Internet

navigation

•

Simple portfolio mainly based

on “Unlimited”

offers with fair

usage policy and no extra cap

(first mover in the market)

•

Strong focus on customer experience

improvement

•

26% of Wind calling customers browse on

Mobile Internet

Mobile

Broadband customers *

(thousand)

Internet

Broadband revenues

(EUR million)

CAGR: +21%

Fixed

Broadband customers

(thousand)

Unbundled sites

* Consumer customers that have performed at least one mobile Internet event in the previous month on 2.5G/3G/3.5G network

technology

Profitable Growth

Surf the Broadband wave

•

Maintain leadership in customer satisfaction

•

Continue relentless improvement of Customer

Care effectiveness both for mobile and fixed

•

Keep a strong focus on customer retention and

maintain a lower than market churn rate

•

Continue the build up of “WIND community”

•

Defend leadership acquired in geographic and

market segments (e.g. Centre/South market

leadership and ethnic markets)

CRM

•

Push on cross selling and up

selling to migrate customers

on option plans with higher

value in terms of ARPU and

margin.

•

Strong effort to defend High

Value Customers from

increasing MNP pressure

Customer satisfaction index

(Fixed)

Customer satisfaction index

(Mobile)

Operational Excellence

Relentless Effort to Improve Customer Satisfaction

81.8

82.9

82.3

81.7

81.8

76.8

78.2

78.3

79.8

80.0

76.2

77.7

78.2

76.2

76.5

81.4

80.5

81.3

81.0

77.7

79.0

81.8

81.5

79.7

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

82.4

82.3

81.8

81.4

82.6

78.3

76.7

77.4

79.0

78.3

80.0

79.3

78.1

79.2

79.4

73.9

72.7

75.8

78.2

78.7

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

•

WIND continues to invest in its distribution through owned

shops and franchises which have gone through a

comprehensive restyling

•

A concept store was opened in top location in Milan in 2010

and in Rome in 2011

•

Institutional campaign “Più

vicini”

(Closer to you) to enhance

the brand values of customer intimacy and being part of a

community recently renewed to push on the concept of being

clear, comprehensible, transparent

* Point of sales

•

WIND has a nationwide sales and distribution footprint

comprised of over 2,300 sales points

•

Selected initiatives launched to improve Wind’s brand image

and distribution platform include:

Acquisition of 126 Wind-owned shops mainly located in

shopping malls during 2009

Provision of one-shop experience and staff training to

realize cross-selling opportunities

Improved and enlarged agent sales force

•

Acquisition in June 2011 of a minority stake in SPAL TLC (its

main distributor)

•

WIND plans to continue investment in areas where it has

limited presence and high growth opportunities

Sales and distribution network

Strengthening distribution

Brand and Advertising

Operational Excellence

Strengthen Distribution

Wind image differentiation compared to competitors

Dealer

Franchising +

Own shops

Large Retail

POS *

1,996

2,092

2,200

2,434

2,690

14%

16%

24%

23%

22%

49%

58%

54%

50%

37%

26%

18%

23%

28%

2007

2008

2009

2010

Q3 2011

Key transformation projects

Mobile

network

•

GSM

network

completed:

reached

99.7%

population

coverage

with

GPRS/EDGE

nationwide

coverage

•

HSDPA

network

developed:

88.9%

population

coverage,

with

plans

expand

further,

14.4

Mbps

available

all

major

Italian

cities

Fixed

network

•

1,239

LLU

sites:

54%

direct

population

coverage

all

major

alian

cities

with

plans

further

expand

the

coverage

•

Nationwide

WLR

utilization

order

cover

areas

with

LLU

cover

age

Fixed

network

•

than

21,000

solid

fiber

optic

backbone

supporting

fixed

and

mobile

businesses

Network structure*

* As of September 30, 2011

Target

Year End

2011 91%

Operational Excellence

Investments to Support Growth

51.1%

57.9%

66.0%

81.5%

88.9%

2007

2008

2009

2010

Q3 2011

Site Sharing

•

First phase completed in Q1 2011, involving over 1,000 sites

•

Average 50% saving on rental costs for shared sites

•

Now in second phase of implementation, with additional 1000 sites,

to be completed by mid 2012

IT Strategic Sourcing of Application

Development/Management

•

Vendor consolidation, 5 year engagements, leveraging off-shoring

•

Time-to-Market reduction through new operating model

•

Significant productivity improvement over the 5 years in the

Application Development activities

•

Over 25% saving against the 5 years TCO baseline, now running in

first year of operation

Phoenix (new CRM platform)

•

Program to completely renew the CRM platform by consolidating

3 legacy systems, providing more efficient development, enhanced

features and flexible management of the customer base

•

Deployment completed, currently in final stage of consumer

customer migration

Expected Market Evolution

23%

25%

32%

21%

26%

42%

53%

45%

21%

Basic

phone

Data card/tablet

Corporate

2015E

2011E

2010

“Data”

relevant

•

By 2020 mobile

data service will be

key decision driver

for the majority of

the market

•

4G will be key for

operators

Italian market revenues split by device

Includes Wholesale and other TLC revenues

SOURCE: team analysis on IDC (Q1 2011); Yankee Group (Q1 2011); Strategy Analytics (Q1 2011); Pyramid (Q2 2011); Cisco

(Feb 2011); Merrill Lynch Wireless Matrix (Q1 2011); Deutsche Bank - Overview of the Italian Telecoms market (Q1 2011)

Smart-

phone

4G/LTE Auction Final Outcome

•

The acquired frequency cost a total

of EUR 1,120 million of which EUR

682 million paid at the beginning of

November; the remaining

outstanding amount will be payable

over five yearly installments

starting from end of 2012

•

The first spectrum payment was

funded by €182 million of cash on

hand and a €500 million loan from

WAF.

•

The 2,600MHz spectrum will be

available by the end of 2012

whereas the 800MHz spectrum will

be available for use by the

awardees at the beginning of 2013

and both will have a validity until

2029.

Player

1,800 MHz

2,100MHz

2,600 MHz

800 MHz

900 MHz

FDD/TDD slots

Auctioned

FDD slots won in

Sept 2011 auction

The combination of the acquired

contiguous

2,600

MHz

blocks

will

allow WIND to exploit the LTE

technology to the maximum

performance

Available

in 2013

Option available

in 2011

The 4G/LTE Opportunity for WIND

•

MTRs

expected

decline

over

the

coming

years

reducing

incoming

voice

revenues

•

Voice tariffs will continue to be under pressure

•

Data will grow both in terms of consumer demand and in terms of corporate demand, including M2M

applications –

volumes of data expected to grow 26x over 2010-20

Mobile

Data

will

increasingly

become

the

key

decision

driver

for

the

majority

the market:

•

More content downloaded in same amount of time; relevant for data intense services such as music or

video

•

“Always-on”

service experience

•

Better response time between sending and receiving data, making real-time applications possible (e.g.,

VoIP, gaming)

•

Lower cost/Gbyte

•

Ability to capture mobile broadband revenue upside

•

That main competitors do not have a structural advantage

•

Ability to bundle voice with data and avoid revenue loss

4G allows to step-change customer experience in mobile data :

For WIND 4G is critical to ensure:

Conclusions

•

Focus on new growth areas

•

Defending critical and traditional success factors

•

Maintaining leadership positioning in key segments

Profitable growth

Continue to outperform in a highly competitive and declining market

•

Maintain leadership in customer satisfaction

•

Leverage extensive network to serve fixed, mobile and

convergent strategies

•

Unleash value through outsourcing of non-core network

services and explore tower/NTW sharing

Operational excellence

•

Benefit from synergies within the larger VimpelCom group

•

Explore alternative network structures

Capital efficiency

•

WIND has outperformed the Italian

market for the last 6 years

•

Opportunity for growth in low market

share segments for WIND, mobile

data and corporate, allowing for

substantial upside

•

Experience and expertise in mobile

data monetization

•

Free cash flow generating machine

with potential for dividend to

VimpelCom

•

An important element of the overall

VimpelCom portfolio of assets

III Portfolio strategy

•

Value growth

•

Market leadership

•

Disposals

•

Mergers

Portfolio Mix

Selective

In market

Consolidation

•

Optimize leverage

organic growth

and net debt

•

Free Cash flow

allocation

Financial Structure

•

Aim at least

dividend per

share of

USD 0.80

Dividend

Listing

•

Exploring all

index inclusion

options

•

European listing

I Operational strategy

•

Cost leadership

•

Synergies

•

Distribution

Operational

Excellence

II Financial strategy

•

EBITDA –

Capex

•

Working Capital

FCF Growth

Capital

Efficiency

CFROI/ROIC

•

Capex /

Revenue

•

Return

management

•

License

•

Build out

•

Marketing

•

Corporate

•

Consumer

•

Pricing

•

VAS

•

Content

•

IPTV

Mobile + Fixed

Broadband

Data 3G / 4G

Segment Focus

New Services

Profitable Growth

Value Agenda Building Blocks

VimpelCom Revenue Development 2009 to Q3 11

Revenues Actual

(USD billion)

Revenues Pro forma

(USD billion)

Constant FX

2009

Actual

Constant FX

2009

2-3%

Average Constant FX

2009

RUR / USD

31.72

EUR / USD

1.39

UAH / USD

7.79

EGP / USD

5.58

* Pro-forma; for reconciliation of non-GAAP financial measures, please refer to the

Investor Relations part of our website

8.7

10.2

16.4

8.7

10.5

17.2

2009

2010

LTM Q3 11

21.3

22.0

22.4

2009

2010

LTM Q3 11

Financial Performance Q3 11 YOY Pro forma

Q3 YoY FX and Other movements explained

•FX movement of USD 320 million on net debt

Appreciation of EGP towards CAD leading to an unrealized forex loss of USD 108 million on the CAD

denominated receivable

Depreciation of EUR towards USD leading to an unrealized forex loss of USD 178 million on the USD

denominated loans in Italy and Euro denominated balances in USD functional currency countries.

Depreciation of RUR towards USD leading to a forex loss of USD 36 million on the USD denominated loans in

Russia

•Movement in Other losses of USD 87 million mainly consist of

Decrease of the value of embedded call option on Wind Italy bonds which impacted USD 108 million, due to

decrease in price of underlying bonds and unfavorable interest and FX changes

Revenue

growth

EBITDA growth

Business Units

Organic

Russia

-8%

Ukraine

-1%

Europe

/ NAM

CIS

19%

24%

Africa

/ Asia

13%

Total

-1%

Pro forma

(USD million

)

Q3 11

Q3 10

Revenue

6,093

5,519

10%

EBITDA

2,535

2,435

Depreciation/

Amortization/Other

(1,269)

(1,138)

12%

EBIT

1,266

1,297

-2%

Tax

(250)

(316)

-21%

Financial

income

expenses

(481)

(493)

-2%

FX and Other

(444)

(24)

Net

result

104

460

Revenues

USD 23,214

million

EBITDA

USD 9,429

million

Basic

figures

FX sensitivities**

RUB vs USD

+/-10%

EUR vs USD

+/-10%

Total

Revenue (USD

million)

23,214

Average

LTM

+/-

890

+/-

780

+/-

2,270

EBITDA (USD

million)

9,429

+/-

370

+/-

270

+/-

940

Gross Debt* (USD

billion)

26.0

Ultimo

+/-

0.4

+/-

1.3

+/-

1.8

Net Debt* (USD

billion)

22.3

+/-

0.4

+/-

1.2

+/-

1.5

VimpelCom LTM Q3 11; Currency sensitivities

Net of VIP Amsterdam derivatives MTM change as of 30 September 2011

* Pro forma ** RUR vs USD +10% = 10% appreciation of the RUR compared to USD

38%

34%

Russian RUR

Euro

Algerian DZD

Ukrainian UAH

Pakistan Rupee

Bangladeshi Taka

Kazakhstan Tenge

USD

39%

29%

12%

VimpelCom LTM Q3 11; Currency sensitivities

(continued)

•

Further foreign currency sensitivities with respect to non-

functional currency denominated loans

and receivables

•

Major exposure relates to USD loans and the CAD receivable

in Egypt

•

Additional volatility of financial income and expense caused by mark-to-

market revaluation of embedded derivatives on bonds in Wind Italy

Mark-to-market driven by price on bonds, interest rate and foreign

exchange movements

USD loans

CAD

receivable

FX sensitivities

+/-

10%

compared

functional

currency

RUR

-/-

700

-/+ 70

EUR

-/-

750

-/+ 75

EGP

-/-

2,600

-/+ 260

EGP

1,330

+/-

140

Simplified legal / financing structure per 30 September

2011

Ring fenced

Legal structure

External Debt

Significant intercompany financing

Note: rounded figures

* including

bank

deposits

and

MTM

derivatives

VIP

VimpelCom Finance

(Bermuda) Ltd.

OJSC VimpelCom

Total OJSC Group

USD 8.8 bn

VimpelCom Ltd.

VimpelCom

Amsterdam B.V.

VimpelCom Holdings

B.V.

PJSC Kyivstar

Total VIP

USD 2.2 bn

USD 2.7 bn

shareholder

loan

EUR 0.4bn

USD 2.7bn

VimpelCom Amsterdam

Finance B.V.

Total gross debt

VimpelCom Group

VIP

USD 2.2 bn

OJSC Group

USD 8.8 bn

WIND Group

USD 13.7 bn

OTH Group

USD 1.1 bn

Other

USD 0.2 bn

USD 26.0 bn

Total cash*

USD 3.7 bn

(incl. bank deposit)

PIK notes

USD 1.3 bn

Senior bank loan

USD 4.7 bn

Annuity loan

USD 0.3 bn

HY notes 2017

USD 3.7 bn

SSN 2018

USD 3.7 bn

Weather Capital

S.a.r.l.

Weather Capital

Special Purpose I

S.A.

Orascom Telecom

Holding S.A.E.

Total OTH Group

USD 1.1 bn

WIND Telecom

S.p.A.

Wind Acquisition

Holdings Finance

S.p.A.

WIND Acquisition

Holdings Finance SA

WIND

Telecomunicazioni

S.p.A.

WIND Acquisition

Finance SA

Composition

Debt Structure Elements per Ultimo Q3 11

Maturity schedule

(USD million)

Ratios

Other

VimpelCom /

OJSC

WIND

Debt and Interest composition

Interest charge

Gross Debt

50%

30%

17%

52%

28%

17%

EUR

USD

RUR

Other

EUR

RUR

USD

Other

Total

Bonds

7.9

1.3

7.2

0.1

16.5

Term loan

4.7

3.0

0.3

0.6

8.6

Other

0.3

0.2

0.4

0.0

0.9

Gross

Total

12.9

4.5

7.9

0.7

26.0

Weigthed

interest

9.0%

9.3%

7.2%

13.0%

8.6%

557

1,243

2,239

1,586

1,696

2,066

9,111

4,913

1,000

1,500

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Currency

ultimo

Q3 11

VimpelCom

Ltd

(excl. Italy)

Wind

Italy

Total

Gross Debt/ LTM Q3

EBITDA

1.95

4.77

2.78

Gross Debt/ LTM Q3

EBITDA at USD +10%

1.99

5.08

2.90

Gross Debt/ LTM Q3

EBITDAat USD -10%

1.91

4.45

2.66

Percentage of

Service

revenue

Elements

Development

YOY

Service

Revenue

100%

Revenues excluding Sales of equipment and

Other Income

Usage related

costs

26%

Interconnection, Roaming, Termination, Leased

Lines, Content, Access fees

Commercial

opex

10%

Customer acquisition, Customer Retention,

Advertising

Technical & IT

opex

Site rent, Maintenance, License Fees, Utilities, IT

Other SG&A

opex

Third party and outsourcing, Non income taxes,

Other rent, Other

HR Costs

Salaries & benefits own employees

22%

Depreciation, Amortization

EBIT

19%

Operating income

Cost Structure Group 2011

LTM Q3 USD 23.2 billion Revenue

VimpelCom (VIP) Listing and Index Inclusion

•

Current situation

Headquarters in Amsterdam

Incorporation in Bermuda

18% free float

15 years NYSE listing

VimpelCom (VIP) is in 10 indexes

•

Actions

Examining all index inclusion options

Switch to IFRS reporting

Explore further possibilities for European

listing

Aiming for H1 of 2012 conclusion

VIP included in the following Indexes

S&P/IFC Investable Russia Price Index

S&P/IFC Investable Eastern Europe Price

Index

S&P/IFC Investable Europe Price Index

S&P/IFC Investable Mid East & Africa Price

Index

S&P/IFC Investable Composite

DJ Emerging Telecom 30 Index

DJ Emerging Sector 100 Index

S&P Emerging BMI BRIC

S&P Global BMI

S&P Emerging BMI

Contribution areas of finance function

Clear strategy, delivering value to customers

and shareholders

•

Dynamic reviews and updates

Value creation

•

CFROI: Cash, Funding, Returns, Operations, Investments

Risk management & Compliance

•

RICIC: Risk, Internal Control, Integrity, Compliance

Talent / Career development

•

Top competences

Financial standing

•

Credit rating; ratios, access to funding

Operate within Cash Flow

III

Taxes paid, Net Interest paid

Cash from operations

Dividend paid

Cash

VII

Operating

cash

Minus

Interest

(Net) Debt

Ratios

Debt redemption

/ M&A

Cash Capex Disposal proceeds

(USD billion)

LTM Q3

Revenue

23.2

EBITDA

9.4

Interest paid

-2.0

Taxes paid

-0.9

Trade WC / Others

0.1

Net cash from

operating activities

6.7

Capex (18% of

revenue)

-4.2

Dividend

-1.4

Free Cash

1.0

Cash “normalized”

today

Cash model

New

selection and

terms policy

Process

aim

Ensure purchasing

power is leveraged

and policies in

place

Trigger date for due

date is later of invoice

date, invoice receipt

date and goods receipt

date

Optimize

(maximize) terms

of trade

Ensure payments

made in line with

contractual

obligation and

policy

Key

process

date

Order

Date

Goods Receipt

Date

Due Date

Invoice (receipt) date

Procurement

Order to

invoice control

Terms of trade

Payment

processing

Cash paid

Working Capital Focus

Average working capital focus, pro forma

(in millions of USD)

Q2 11

% of Rev. LTM

Q3 11

% of Rev LTM

Inventory

316

251

Accounts receivable

2,726

12%

2,608

11%

Accounts payable other

(3,302)

-15%

(2,915)

-13%

Other current assets *

1,098

1,034

Other current liabilities **

(3,325)

-15%

(3,620)

-16%

Taxes receivable

1,122

1,147

Accounts payable for

Long Lived Assets

(848)

-4%

(874)

-4%

(2,213)

-10%

(2,368)

-10%

Composition

Review payment terms –

purchase to pay (“PTP”) process

Note: Working Capital defined as current assets minus current liabilities excluding assets held for sale and liabilities associated to

assets held for sale

* excl. cash, deposits, assets held for sale and aqcuisition related receivables

** excl. liabilities held for sale and short-term debt

Working Capital

Tax optimisation

Old VIP

YTD Sept

2010

New VIP

YTD Sept

2011

New VIP

Q2 & Q3

2011

Statutory Rate

20%

25%

Above Statutory

11%

31%

Unrecognized losses

11%

18%

Provision for Dividend

WHT

15%

Provisions and other

-7%

-2%

Effective Tax Rate

31%

36%

56%

ETR normalized PBT

(excl non-tax FX-results)

31%

29%

34%

Focus in ETR on:

•

Unrecognized losses

•

Dividend withholding tax on dividends from

Russia, Ukraine (US GAAP)

•

Non-deductible interest in Russia and Italy

ETR + Cash tax down:

•

Intercompany

restructuring to

mitigate withholding

taxes optimize

repatriation of funds

•

Restructuring of (inter-

company) financing

•

Increase interest

deductibility

Financial Standing

Maintain BB rating shortterm

Stabilize operating performance

Secure cash flow generation

Gross debt to be around 3 times

EBITDA maximum

Grow to BB+ / BBB-

Optimize operating performance

Increase cash flow generation

Deleveraging strategy

•

Secure Flexible access to capital

markets

•

Lower cost of funding accelerates cash

flow generation and faster deleverage

Moving towards

< 2 times Net Debt to EBITDA by end 2014

Investment Grade

Financial Standing (continued)

•

Cost of debt optimization opportunities

Optimize interest tax deductibility

Restructuring expensive debt

Financial synergies

Local funding as natural currencies hedge

•

Additional Free Cash Flows upstreaming from Subsidiaries other than

OJSC and Kyivstar

•

Further lower cost of funding by improving long/short term,

senior/junior, fixed/floating debt mix

•

Capital allocation principles

Stay within cash flows generated

Capex to support organic growth

Dividends pay-out

Debt redemption opportunities

Selected in Market M&A

USD 350 –

500 mln

Cost and Capex

Traffic

dependent

Competitor

behavior

dependent

Scale

Opportunity

Operational Excellence 2012 -

2014

(USD billion)

LTM Q3

Usage related

costs

6.0

Total Opex

7.8

Commercial opex

2.3

Technical & TT

opex

2.1

Other SG&A

1.7

HR costs

1.7

Capex

4.8

Total Cash

18.6

Synergies

Preliminary perspective

•

Usage

> >

USD 200 million savings

•

Opex

> >

USD 400 million savings

•

Capex

15% on Revenu by end 2014 (excl. licenses)

Synergy



By:		/s/ Jeffrey David McGhie
Name:		Jeffrey David McGhie
Title:		General Counsel


USD mln
	1Q 10			2Q 10			3Q 10			4Q 10			1Q 11			2Q 11			3Q11			3Q11 LTM*
Unaudited pro forma

EBITDA		2,215			2,368			2,435			2,266			2,257			2,371			2,535			9,429

Adjustment for certain non-operating items		2			3			19			4			2			8			5			19
Depreciation		(751	)		(722	)		(742	)		(917	)		(839	)		(892	)		(930	)		(3,579	)
Amortization		(386	)		(379	)		(387	)		(366	)		(358	)		(342	)		(339	)		(1,405	)
Impairment loss		(6	)		(9	)		(9	)		(112	)		23			—			—			(88	)

Operating income		1,073			1,260			1,316			875			1,085			1,145			1,271			4,376

Adjustment for certain non-operating items		(2	)		(3	)		(19	)		(4	)		(2	)		(8	)		(5	)		(19	)

EBIT		1,072			1,257			1,297			871			1,083			1,137			1,266			4,357

Financial income and expenses		(580	)		(448	)		(493	)		(470	)		(485	)		(486	)		(481	)		(1,921	)
- including interest income		29			66			22			12			36			38			37			124
- including interest expense		(609	)		(514	)		(516	)		(482	)		(520	)		(524	)		(518	)		(2,045	)
Net foreign exchange (loss)/gain and others		77			(493	)		(24	)		(188	)		197			(120	)		(444	)		(554	)
- including net foreign exchange (loss)/gain		100			(299	)		121			(11	)		209			1			(200	)		(1	)
- including equity in net (loss)/gain of associates		(38	)		(22	)		(16	)		(11	)		27			(14	)		(16	)		(15	)
- including other (expense)/income, net		12			(175	)		(149	)		(170	)		(41	)		(114	)		(232	)		(557	)
- Including adjustment for certain non-operating items		2			3			19			4			2			8			5			19

EBT		568			316			779			214			795			531			341			1,882

Income tax expense		(255	)		(170	)		(316	)		(309	)		(191	)		(226	)		(250	)		(977	)

Profit (loss) from discontinued operations		—			—			—			—			—			—			12			12

Net income		312			146			463			(95	)		604			305			104			917

Net (loss)/income attributable to the noncontrolling interest		31			(73	)		3			(43	)		40			(7	)		(1	)		(10	)

Net Income attributable to VimpelCom Ltd.		283			219			460			(52	)		564			312			104			927


USD mln	3Q11
Net debt		22,261
Cash and cash equivalents		3,443
Long - term and short-term deposits		153
Fair value hedge		147

Total debt,		26,004
incl. Long - term debt		24,404

incl. Short-term debt		1,600