March 21, 2003

Matáv (NYSE: MTA.N and BSE: MTAV.BU), the Hungarian Telecommunications Company, today announced that the Matáv Board of Directors and the Supervisory Board have reviewed the 2002 annual report of Matáv Ltd. and Matáv Group, prepared in accordance with the Hungarian Accounting Rules (HAR), and propose them for approval to the Annual General Meeting.

In the medium term, Matáv's strategic priority further remains that of finding value-creating acquisitions. These potential future transactions require that balance sheet flexibility be maintained. According to Matáv's current estimation, this would be achievable with a net debt ratio (net debt to net debt plus equity plus minority interest) in the range of 30-40%. Matáv will aim to further increase the dividend payment in forint terms, while keeping within the aforementioned net debt ratio range.

Matáv emphasizes that this new dividend policy is not only dependent on the acquisition opportunities that May arise, but also on the future financial position of the Group as well as general market conditions.