Press Releases

Budapest, April 27, 2001

Matáv held its Annual General Meeting in the corporate Headquarters in Budapest on April 27, 2001. The AGM heard and approved the report of the Board of Directors on the management, business policy and financial status of the Matáv Group and the consolidated reports on the performance of the Matáv Group and the Company in 2000. According to International Accounting Standards (IAS), in 2000 revenues rose 16% over 1999 and reached 445.9 billion forints. Net income amounted to 68.8 billion forints. With 15% growth total assets reached 745.5 billion forints. Capital expenditures for modernization and development amounted to 152.8 billion forints.

The shareholders heard the evaluation of Chairman and CEO Elek Straub on Matáv's performance in 2000, stating among others:

"We consider year 2000 the closing year of an important development phase in both the life of Matáv and Hungarian telecommunications. As a result of a decade's investments, by the turn of the millennium an advanced telecommunications infrastructure emerged in the country, with the majority of Hungarian households having telephone connections. Matáv is prepared for the full opening of the market in terms of both technology and organization. We have created the conditions for our services to hold a secure position in the Hungarian telecommunications market also in the long term. In view of the saturation of the fixed line market, from 2000 we are concentrating our resources on the more promising growth markets of mobile, data communications and Internet services. And with successful privatization of the Macedonian telecommunications company we have taken the first step in the direction of Matáv's international expansion."

Liberalized services are playing a growing role in the activities of Matáv from year to year. In 2000, 42% of our revenues came from services provided in competitive markets. Last year over two-thirds of Matáv revenue growth came from the three most dynamically growing areas - mobile and data communications and the Internet. As regards market position, we are market leaders in mobile and data services and the greatest number of residential Internet users link to the web through Matávnet.

The mobile business segment has become the number one engine of Matáv's growth. Westel is the leading provider in Hungary's mobile market in terms of both subscriber number and profits. By the end of the year it almost doubled its customers to nearly 1.6 million, securing a 53% share of the three-player Hungarian GSM market.

Another dynamically growing business of Matáv is data and business communications. In 2000, we increased the number of managed leased lines by 27% and doubled the capacity sold. We also more than doubled ISDN channels to 306,000, which is 10% of our fixed lines. We similarly doubled our cable television subscribers to 267,000 in 2000.

In Internet services too, we doubled our customer base: at the end of the year Matávnet had 95,000 dial-up subscribers. Accelerating the growth of Internet use and reaching a leading position in both the residential and the business Internet markets remain our priority objectives. We are enhancing the development of the information society in our country by offering various Internet fee packages.

The AGM approved 10 forints dividend per share, which means that 10.4 billion forints will be paid to the shareholders from the 2000 earnings. The retained earnings (the amount remaining after deduction of the dividends from the after-tax profit) of 30.2 billion forints will be put in reserve. The starting date of the payment of the dividend will be June 1, 2001. Matáv will release detailed information on the dividend payment procedure on May 15, 2001.

The AGM approved amendments to the Company's Articles of Association. The amendments were prompted primarily by changes due to organizational upgrade and stock market regulations.

The AGM approved the amended and restated rules of procedure of the Supervisory Board.

The shareholders elected the members of the Board of Directors and the Supervisory Board.

Members of Matáv's Board of Directors for the period ending with the Annual General Meeting closing the financial year 2001: Elek Straub, Christoph M. Baldus, Detlev Buchal, Dr. Sándor Csányi, Gyula Gansperger, Fridbert Gerlach, Dr. Klaus Hartmann, Franz X. Hiergeist, Dr. Mihály Patai.

Members of Matáv's Supervisory Board for the period ending with the Annual General Meeting closing the financial year 2001: Hans Albert Aukes, Dr. Manfred Balz, Dieter Cazzonelli, Dr. Gábor Germus, Joachim Kregel, Dr. László Pap, József Szabó, György Varju, Péter Vermes.