Investor Releases

Budapest, October 20, 2010 08:30

Magyar Telekom (Company, Reuters: NYSE: MTA.N, BÉT: MTEL.BU and Bloomberg: NYSE: MTA US, BÉT: MTELEKOM HB), the leading Hungarian telecommunications service provider, today announces that on October 18, 2010 the Parliament of the Republic of Hungary approved an act (Bill of 2010 T/1374) imposing a special tax on a number of sectors including retail sales, energy and telecommunications. According to the act, the estimated total special tax amount payable by Magyar Telekom Group for the full year of 2010 is HUF 27.5bn.

On October 18, 2010 the Parliament of the Republic of Hungary approved an act (Bill of 2010 T/1374) imposing a special tax on a number of sectors including retail sales, energy and telecommunications. The tax will be levied on annual net sales based on electronic telecommunications services, and will apply until the end of 2012.  

According to the act, the estimated total special tax amount payable by Magyar Telekom Group for the full year of 2010 is HUF 27.5bn. It is expected that the tax will be accounted as other expense thus will lower profit before tax. As a consequence, the Company expects that it reduces the corporate tax payment by ca. HUF 1bn in 2010.  

The special tax, although expected to be reported as other expense will be treated as a one-off item and will therefore not have an impact on Magyar Telekom’s guidance for an underlying EBITDA decline of 7-9% for 2010.

 

This investor news contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Report on Form 20-F for the year ended December 31, 2009 filed with the U.S. Securities and Exchange Commission.