Investor Releases

October 22, 1999

Following Deutsche Telekom's purchase of a package of East European wireless assets from MediaOne, MATAV (NYSE: MTA and BSE: MTAV.BU) is pleased to announce that it has entered into an agreement with Deutsche Telekom providing an option to acquire the 49% stakes in Westel 450 and Westel 900 (the "Westel Stakes"). These Westel Stakes are currently owned by MediaOne and form part of the package of assets that Deutsche Telekom will acquire. MATAV currently owns 51% of Westel 450 and Westel 900. Deutsche Telekom and Ameritech International jointly hold 59.53% of MATAV and Deutsche Telekom fully consolidates MATAV. The transaction is subject to appropriate regulatory approvals.

The key terms of the agreement are as follows:

• MATAV will have a call option against Deutsche Telekom over the Westel Stakes for a fixed price of US$ 885 Million. Under the terms of the agreement MATAV can purchase these stakes from 1 July 2000 over a period of 15 months at any time with a closing date at a latest of 31 December 2001
• MATAV will take operational, management and voting control of the Westel Stakes, under a proxy arrangement, once Deutsche Telekom completes its purchase of the Westel Stakes from MediaOne. This is expected to take place, subject to regulatory approvals, in early 2000 The proxy arrangements leave Deutsche Telekom with certain veto rights.

Elek Straub, Chairman and CEO of MATAV said "this is an excellent transaction for MATAV. Westels are of key strategic importance and this transaction allows us to take full control of the Westel companies almost immediately, whilst giving us the option to defer the payment of the fixed purchase price for over two years from now".

Morgan Stanley Dean Witter acted as financial advisor to MATAV.

Westel 900 is the largest mobile operator in Hungary with 737,000 subscribers and approximately 58% GSM market share as of September 1999

Westel 450 is the sole analogue mobile operator with 99,000 subscribers as of September 1999

MATÁV is the principal provider of telecom services in Hungary and provides a broad range of services including telephony, data transmission, value-added services, and through its subsidiaries is Hungary's largest mobile telecom provider. Key shareholders include MagyarCom, a consortium of Ameritech International, Inc. and Deutsche Telekom AG (59.53%), the Ministry for Transport, Communications and Water Management (holder of the Golden Share), while 40.47% is publicly traded.