Press Releases

Budapest, June 20, 2001

The Competition Office (GVH) has approved the acquisition of a 50 % ownership stake in Emitel.
GVH has not made the issuing of the license subject to any conditions, so with this approval MATÁV will become 100 % owner of Emitel. MATÁV envisages enlarging the service portfolio offered by Emitel.

MATÁV, as 50 % owner of Emitel Telecommunications Ltd., signed an agreement on December 31, 2000 with its joint venture partner, Aphrodite BV, on purchasing the remaining 50 % ownership stake in Emitel. Matáv's gaining full control over Emitel was a consistent move since under the original agreement it concluded with its Israeli partner MATÁV has exercised joint control rights in the company.

Gábor Nagy, head of Matáv's Domestic Business Development Department said about the company's plans for the future: "The acquisition of 100 % ownership by MATÁV will allow Emitel to integrate into Matáv's present service systems - according to our plans within a timeframe of 2 years - so that customers living in Emitel's current service area can also benefit from the advantages and efficiency increasing impacts of these service systems. In the short term Emitel's organizational structure and headcount will not change and, in the medium term, the company will grow. The number of customer care offices will not decrease but their scope of activities will be extended in an ongoing manner along with the enlargement of Emitel's service portfolio."

MATÁV will offer its well-established R&D base and its professional support in product development for Emitel, and MATÁV will also place its broad market information base at the disposal of Emitel. As a result, Emitel's residential and business subscribers will be able to choose from a wider service range. Emitel, as part of the Matáv Group, will spread Internet usage and introduce further subscription packages for its residential customers, while for its business subscribers it will offer a wider range of ISDN services and the launching of broadband data transmission services.

Emitel is the local telecommunications operator in three primary areas in Hungary's South Alföld region (Baja, Kiskőrös and Kiskunhalas). On May 31, 2001 the company had more than 80,000 connected lines. The owners of Aphrodite BV selling the 50 % stake are Bezeq, Israel's largest telecommunications operator (66.7 %) and Poalim Investment, an Israeli investment and holding company (33.3 %).