Budapest, July 3, 2000

On July 3, 2000, a strategic cooperation agreement was signed by dr. László Bartha, the mayor of Szeged, and dr. Tamás Pásztory, Matáv's Chief Human Resources and Legal Officer. According to the agreement, MATÁV will purchase the Szeged Local Government's ownership interest in Szeged Kábeltelevízió Rt. (Szeged Cable Television Ltd.) for HUF 1.25 billion and MATÁV will start construction of an up-to-date telecommunications network in the future.

Within the framework of the "Intelligent City - Intelligent Region" program, MATÁV started construction of an up-to-date, fiber-optic-based telecommunications network in Szeged and the surrounding area, on the basis of which MATÁV is planning to establish a wide range of services at affordable prices.

In order to harmonize network development and create a wider range of services, MATÁV purchased the Szeged Local Government's ownership interest in Szegedi Kábeltelevízió Rt. The Company agreed with the Szeged Local Government that the Local Government would control the price and composition of the lowest-price (so-called social) service package to be distributed by Szegedi Kábeltelevízió Rt for the next four years.

In addition to this, MATÁV has promised to develop the existing network and begin to introduce cable TV in those parts of Szeged that have not previously had it. According to the Company's plans, cable TV will also be available in Petőfitelep, Tápe, Gyulatelep, Dél-Újszeged and Gyálarét by the end of 2000.

MATÁV and the Local Government also agreed that MATÁV would provide the Local Government and its institutions with subscription and traffic charge discounts on public telecommunications services. In addition, Szegedi Kábeltelevízió Rt. is guaranteeing that Szeged City Television programs will be distributed without charge in social packages.

The agreement between the Szeged Local Government and MATÁV also includes construction of a playground, which MATÁV will hand over by September 30, 2000. MATÁV will contribute an additional HUF 50 million to the Local Government's playground construction program.