Budapest, July 12, 2000

In the current regulated environment, MATÁV deals with its interconnection partners (mobile carriers, local telephone operators (LTOs), paging carriers, premium rate (Audiotext) carriers) on the basis of inter-carrier settlement. Due to the high volume of financial turnover, MATÁV has decided to implement a reliable, state-of-the-art inter-carrier billing system. This new system, known as the Inter Carrier Billing System, was developed by Compaq and is used for the accounting of traffic charges for Matáv's wholesale and interconnection products and services.

The concession right, which is in force until the complete liberalization of the telecommunications market, entitles MATÁV to act as the exclusive provider of domestic and international long distance call services to its inter-carrier partners. In addition to this, non-MATÁV customers also use Matáv's network for long distance calls. Usage charges in this network are settled using the inter-carrier billing system. The existing system currently performs the accounting of an annual volume of HUF 40-50 billion.

Liberalization of the telecommunications market will result in the development of a new market environment. Of course, this means that regulation by the authorities will change, and new market players and types of services are also expected. As the present accounting system would be unable to meet the new market requirements, MATÁV has decided to change over to a system which has proven itself on the liberalized markets of Western European for several years.

On May 11, 2000, MATÁV concluded an agreement with Compaq on the delivery of this new billing system. In accordance with this agreement, Compaq Computer Hungary will conduct the full integration of the system (InterconnectT), developed by the British company Intec, into Matáv's own system. The new Inter Carrier Billing System will perform the accounting of traffic charges for wholesale and interconnection products, as well as Matáv's interconnection services. This project was started at the end of May 2000, and will be completed at the end of February 2001 - thus, even if the telecommunications market is liberalized sooner than expected, settlement between MATÁV and inter-carriers will be possible using the new system.

One significant advantage of this system is that MATÁV will switch over from the previous monthly aggregated (statistics based) traffic accounting to itemized call-by-call (Call Data Record based) accounting, so that variance in data cross-checking between MATÁV and inter-carriers can be reduced to less than one percent. Naturally, this enhances the reliability of revenues from inter-carrier settlements and facilitates payment controlling. Another benefit of ICBS is that it streamlines work procedures and, despite the expected increase in the number of inter-carriers, billing can be conducted without increasing the number of accounting staff.

MATÁVcom - Compaq Cooperation Agreement >>