EANS-Adhoc: Telekom Austria Group Announces Expectations for 2010 and Reiterates 75 Cents DPS Floor for 2009-2012 (Ad-hoc)

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09.12.2009

Vienna, December 9, 2009: Following today´s approval of the budget by the
Supervisory Board, the Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announced
its expectations for the financial year 2010. The forecast is based on the
assumption of constant currencies.

As published earlier on, the Telekom Austria Group expects the difficult
environment which has dominated the current financial year to prevail also in
2010. This environment is characterized by the coincidence of several negative
external effects with the impact of weak economies. The negative external
effects mainly encompass ongoing fixed-to-mobile substitution in Austria,
continued price pressure in Telekom Austria´s major markets and the effect from
regulatory-induced lower roaming prices as well as mobile termination rates in
Austria, Bulgaria, Croatia and Slovenia. Furthermore, the introduction of taxes
levied on selected mobile communication services in Croatia and the Republic of
Serbia poses an additional burden.

Revenues for the financial year 2010 are expected to amount to roughly EUR
4.7bn. The company has already initiated significant cost reduction programs in
both segments addressing both staff and non-staff related expenses to mitigate
the impact from lower revenues. Including the expected cost savings, EBITDA
should reach about EUR 1.6bn. Depending on the extent of investments for the
migration to an All-IP based voice network in the Fixed Net segment, capital
expenditures of the Telekom Austria Group are forecasted to reach up to EUR
800mn. This amount does not reflect a material roll out of glass fiber, which is
not expected to start in 2010.

Operating Free Cash Flow remains the primary focus of the management and is
expected to come out at about EUR 800mn. The Telekom Austria Group reiterates
its intention to distribute until 2012 the higher of 65% of the annual net
income or at least 75 cents per share as dividend. The management board remains
committed to its capital allocation policy including returning excess cash to
shareholders via share buy-backs within the 1.8x-2.0x net debt/EBITDA target
balance sheet structure and provided stability in its main foreign currencies
and operations. Nevertheless, in light of the ongoing challenging operating
environment the share buyback is not expected to start in 2010.

Telekom Austria Group on constant currency basis          2010
Revenues

EUR 4.7bn
EBITDA

EUR 1.6bn
Capex                                            up to EUR 800mn
Operating Free Cash Flow (EBITDA less Capex)

EUR 800mn
Dividend 2009-2012 65% of net income or
at least 75 cents per share

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