Press Releases

Budapest, April 27, 2000

MATÁV (NYSE: MTA.N, BSE: MTAV.BU) held its Annual General Meeting on April 27th, 2000.

The AGM heard and approved the report of the Board of Directors on business policy, business management and trends in the financial status of both the Matáv Group and the Company in 1999. According to International Accounting Standards (IAS), net income surged 34.8% over 1998 and reached 78.6 billion forints. Revenues advanced 21.0% to 384.9 billion forints in 1999. Operating income grew 26.0% to 121.1 billion forints. Capital expenditures amounted to 127.7 billion forints.

The shareholders heard the evaluation of Chairman and CEO Elek Straub on Matáv's performance in 1999, stating among others:

"Convergence of telecommunications, information technology and media is having an increasing influence on everyday life and these changes generate additional user demands for new products and more up-to-date services. The standard of Matáv services can compete with that of telecommunications companies in Western Europe. MATÁV will continue to play a leading role in maintaining Hungary's growth rate, thus ensuring Hungary's success as a player in the evolving global information society and a future member of the European Union."

In 1999, MATÁV continued the previous years' unbroken growth powered by increasing line penetration and innovative product offerings. Last year 254,700 new lines were connected to reach 2.9 million telephone lines in operation. In our service area the number of fixed lines per 100 inhabitants rose to 39. The digitalization rate of exchanges reached 79%, enabling further improvement in service quality. In the area of data transmission and business communications services we maintained our leading position. Last year the number of managed leased lines grew by 36%, the number of ISDN channels rose by 81%, and the number of Internet dial-up subscribers increased by 59%.

In our other major business area, the mobile segment, we have achieved excellent results again. The aggregate number of subscribers of the two Westel companies exceeded 940,000 at the end of 1999. Outstanding growth was achieved in GSM subscribers: nearly 296,000 new subscribers chose Westel 900 services. The company now has more than one million subscribers. Westel 900 maintained its 55% GSM market share even after the entry of the third GSM carrier.

With a business policy of using more differential pricing MATÁV introduced with success various new tariff packages tailored to customers' demands. The second-based billing applied as of January 1, 1999 created the conditions for introducing more flexible tariffs and made billing more transparent and exact. Seeing favorable customer response, MATÁV introduced new tariff packages in 2000 and is planning to develop additional ones. In 2000, the Company took another key step to preparation for full liberalization of the Hungarian telecommunications market through a major shift towards cost-based pricing.

The shareholders approved a dividend of 9 forints per share, which means paying out more than 9.3 billion forints of 1999 earnings. Dividend payout will begin on June 1st 2000.

The shareholders approved certain amendments to the Company's Articles of Incorporation. These changes were prompted primarily by changes due to corporate restructuring.

Following that, the shareholders elected the members of the Board of Directors and the Supervisory Board.

Members of Matáv's Board of Directors:
Elek Straub, Timothy J. Cawley, Dr. Sándor Csányi, William J. Edwards, Moritz Gerke, Franz X. Hiergeist, Dr. Zsolt Lajer, Dr. Mark von Lillienskiold, Dr. Mihály Patai, Michael Payne, A. Vernon Weaver.

Members of Matáv's Supervisory Board:
Hans Albert Aukes, Larry Boyle, Dieter Cazzonelli, Dr. Csaba Csapodi, Dr. László Pap, József Szabó, Werner Vanderhaeghe, György Varju, Péter Vermes.

The General Meeting elected PricewaterhouseCoopers to be Matáv's auditor for a period of two years.