Budapest, August 25, 2003 16:15

On August 21, 2003 Matáv and Hungarotel Communications Rt. signed an interconnection contract based on LRIC prices, which were approved by the Communications Arbitration Committee on May 19. This interconnection contract, which complies with the new regulations, replaced the network connection contract signed in 1995 providing for cooperation between the networks of the two concerned parties.

"We are pleased to announce that with this step Matáv has already signed interconnection contracts based on reference offers approved by the Arbitration Committee with all four concession-holder local operators - Vivendi, Emitel, Monortel, Hungarotel. Matáv has already entered into interconnection contracts with all alternative service providers, the latest contract were signed with PanTel on August 1, 2003 respectively. Matáv’s first interconnection contract with a mobile service provider was signed with Pannon GSM on July 25, 2003," said Mr. Zoltán Gálig, the manager responsible for the negotiations on behalf of Matáv. "With this Matáv is legally entitled to offer the option of carrier selection to customers located in the service area of these service providers. Matáv will offer carrier selection in the whole territory of Hungary subject to the results of profitability analyses still to be conducted."

Hungarotel Communications Rt. also welcomes the conclusion of the LRIC-based interconnection contract, because the carrier selection option enables the company to become a national service provider instead of being a local telecom operator. With this contract in place new markets will open up for Hungarotel to offer services on 80% of the Hungarian telecommunications market. Carrier selection will result intensification of the competition in the Hungarian telecommunications arena in the future. Hungarotel Communications Rt. is ready to become one of the competitors.

Neither party wishes to introduce carrier selection immediately at the date of contract signing.