Investor Releases

June 20, 2001

Matáv (NYSE: MTA.N and BSE: MTAV.BU) today announced that the agreement to buy the remaining 50% stake of Emitel - signed on December 31, 2000 between Matáv, the 50% owner of Emitel Telecommunication Co Ltd. and its joint venture partner Aphrodite BV - has been approved by the Competition Office.

Emitel is the local telephony operator in three concession areas in the Southern part of Hungary (Baja, Kiskőrös, Kiskunhalas). The company had over 80,000 connected lines as of May 31, 2001 and had revenues of HUF 6.7 billion, EBITDA of HUF 3.5 billion and net income of HUF 1.7 billion according to IAS in 2000

Matáv has been a 50% owner of Emitel since its establishment and treated Emitel as an associated company in its consolidated financial statements. The price will be determined immediately prior to the closing date of the transaction and will be partially dependent on the operations of Emitel, but it will not be less than USD 46.5 million. Closing is expected to take place in aprroximately two to three weeks. Matáv will fully consolidate Emitel in its accounts from the closing date of the transaction.

Aphrodite BV is 66.7% owned by Bezeq, Israel's principle telecommunications provider and 33.3% by Poalim Investment, an Israeli investment and holding company.

Matáv is the principal provider of telecom services in Hungary and holds the national concession for national and international long distance telephony. Matáv provides a broad range of services including telephony, data transmission, value-added services, and through its subsidiaries is Hungary's largest mobile telecom provider. Matáv also holds a majority stake in Stonebridge Communications AD controlling MakTel, the sole fixed line and mobile operator in Macedonia Key shareholders of Matáv as of December March 31, 2001 include the Hungarian State (holder of the Golden Share), MagyarCom, owned by Deutsche Telekom AG (59.49%), while 40.51% is publicly traded.