euro adhoc: Telekom Austria AG / Mergers - Acquisitions - Takeovers / Telekom Austria Agrees Memorandum Of Understanding and Exclusivity with Mobiltel’s Shareholders to Acquire a Call Right for the Purchase of Mobiltel (E)

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Vienna, November 29, 2004: Telekom Austria (VSE: TKA, NYSE: TKA) announced, that the Company has agreed a Memorandum of Understanding and exclusivity with the shareholders of Mobiltel AD, the leading Bulgarian wireless operator, to acquire a call right with respect to the purchase of Mobiltel. The call right would give Telekom Austria, at its discretion, the unilateral right to acquire 100% of Mobiltel in late 2005 for a total enterprise value of approximately EUR 1.6 billion, part of which would be performance-related. If the call right is exercised, Telekom Austria intends to fund the acquisition mainly through its cash flow. Telekom Austria does not intend to raise equity in order to finance the potential acquisition and will continue its current share buyback programme.

As of 30 June 2004, Mobiltel had approximately 2.75 million subscribers, making it the largest mobile communications operator in Bulgaria with a subscriber market share of approximately 67%. For the 12 months ended 30 June 2004, Mobiltel had proforma revenues and EBITDA of approximately EUR 455 million and EUR 290 million, respectively. Mobiltel is owned by a consortium of Austrian and international financial investors.

With total managed revenues of EUR 3.9 billion and 13,900 employees in 2003 Telekom Austria is the largest telecommunications company in Austria and also one of the leading corporations in this country. Telekom Austria AG has been listed on both the Vienna and New York stock exchanges since November 2000.

Lehman Brothers and Raiffeisen Investment AG are advising Telekom Austria on this transaction.

Please find additional information on Bulgaria and on Mobiltel in the press release on our website

Further inquiry note:
Martin Bredl
Telekom Austria Public Relations
Phone: +43 (0) 59059 1 11001

Hans Fruhmann
Investor Relations Telekom Austria
Tel.: +43 (0) 59059 1-20917

emitter: Telekom Austria AG Lassallestrasse 9 A-1020 Wien mail: WWW: ISIN: AT0000720008

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sector: Telecommunications Equipment language: English