Telekom Austria Group finalizes acquisition of velcom as agreed

Vienna-Minsk, October, 4, 2010 – In October 2007, the Telekom Austria Group (TAG) concluded an agreement for the acquisition of a 70% stake in SB Telecom, a sole owner of velcom, for a corresponding enterprise value of EUR 730 million. As per the agreement reached in October 2007 and exercised on October 4, 2010 put-option, TAG purchased the remaining 30% stake from SB Telecom for EUR 335.0 million, including interest, settlement will take place within 10 business days. With this transaction Telekom Austria Group finalizes the acquisition of velcom.

Telekom Austria Group will settle these obligations out of its existing cash-flow. All of the above payments are included in the Group’s current net debt position and will have no impact on the stated Group outlook for 2010. Complete acquisition of velcom underlines Telekom Austria Group’s strong commitment to the continuing emerging on the Eastern and Central European markets and the high importance of the Belarusian company of the whole Group.

- Currently velcom already benefits a lot from the acquisition by Telekom Austria Group. Thanks to this planned and logical step the continuation of the chosen strategy is guaranteed for velcom. The Management of the company and the Board of Directors of SB Telecom will remain the same after the acquisition, - commented on the transaction Helmut Duhs, Chief Executive Officer of SB Telecom Ltd. on issues of FE "VELCOM".

Positive estimation of velcom’s development despite the devaluation effect on asset value

According to the estimation of Telekom Austria Group, Belarusian market has grown significantly due to the penetration increase from 66% to 106% and continues its development towards liberalization. After joining TAG in 2007, velcom has been developing with the positive dynamics: subscriber base has increased from 2.7 million to 4.1 million as reported on June 30, 2010. In March 2010 velcom launched the commercial operation of mobile broadband based on HSPA/HSPA+.

In its press-release published ad hoc the transaction, Telekom Austria Group underlines that alongside with the operational success and positive results of the financial activity, indicated in Belarusian rubles, the value of the assets was primarily determined with the Belarusian ruble exchange rate, which in 2009 lost about 24% against euro in annual average values.

_{About Telekom Austria Group
The Telekom Austria Group is the leading telecommunications provider in Central and Eastern Europe. The Group has been listed on the Vienna Stock Exchange since November 2000 and is currently operating in eight countries: in Austria (A1 Telekom Austria), Slovenia (Si.mobil), Croatia (Vipnet), the Republics of Serbia (Vip mobile) and Macedonia (Vip operator), Bulgaria (Mobiltel), Belarus (Velcom) and Liechtenstein (mobilkom liechtenstein). The Telekom Austria Group serves roughly 21 million customers across its markets of operation. The Group’s revenues were EUR 4.8 billion as of year-end 2009. Telekom Austria Group’s portfolio encompasses voice telephony, data and IT solutions, Internet access, multimedia services, wholesale as well as m-payment solutions. More detailed information is available atwww.telekomaustria.com}