Budapest, August 7, 2002

Matáv is changing its regulated tariffs as of September 1st. Decree No. 3/2002 (I. 21.) MeHVM of January 2002 (I. 21.) specifies the increase of regulated tariffs.

In the first half of the year only an increase in the monthly fees was allowed with the further stipulation that the wired telecom tariffs may be increased by 4% over the year. On February 1st the first increase envisaged in the Decree was implemented, and the second increase became possible from July 1st. Matáv is taking advantage of this latter opportunity, but has delayed implementation until September 1st. As it has done in the previous years, Matáv once again does not exploit the maximum extent of such increase as provided for in the Decree.

From September 1st the monthly subscription fees will increase by 2.99% on average. The residential main line will cost HUF 3,080 instead of the current HUF 2,998, while the fee for the business main line will increase from gross HUF 4,030 to HUF 4,150. The charge for a residential party line will be changed from gross HUF 1,008.75 to HUF 1,225, and for a business party line from HUF 1,362.50 to HUF 1,387.50. By increasing the monthly subscription fees we intend for the subscription fee to approach the actual cost of the line maintenance.

The per-minute charges of local calls will increase in peak time (7am-6pm) by 10%, and by 8.33% in off-peak time (daily 6pm to 7am, plus weekends and off days). The switching fee will be reduced by 10.53% (from a gross fee of HUF 4.75 to HUF 4.25).

Taking into consideration the decrease in the switching fees, the tariff for local calls will increase by on average 5.19%.

The per-minute charge for domestic long distance and con-urban (long distance II.) calls will not change within the network (i.e. in the case of numbers called within the Matáv service area).

The per-minute charge will change for calls terminating in the networks of Vivendi, HTCC, Monortel and Emitel, since the Communications Arbitration Committee has approved higher interconnection fees than those of Matáv in the Reference Interconnection Offer (RIO) of these service providers. Therefore the tariffs of calls made to wired networks other than those of Matáv will be increased from September 1st in the "Bázis"(Base), "Minimál" (Minimum) and "Csevegő" (chat) tariff packages.

Our customers using the "Kontroll" and "Ritmus" tariff packages can continue to call customers of the other wired service providers at unchanged per-minute charges. The per-minute charges for calls terminating in mobile connections, and for international calls also remain unaltered.