EESTI TELEKOM

ANNOUNCEMENT



ADMINISTRATIVE COURT DECIDED IN FAVOUR OF EESTI TELEFON



On 17 January 2002 Tallinn Administrative Court decided in favour

of AS Eesti Telefon, a 100%-owned subsidiary of AS Eesti Telekom,

to  cancel  the  Competition  Board’s complaint  regarding  Eesti

Telefon to implement a per-minute price.



On  24  April 2001 the Competition Board issued, on the basis  of

the  Competition Act, a complaint that Eesti Telefon  should  not

implement  within its network a per-minute price of 34  sents  at

peak  time, 28 sents at off-peak time and 14 sents at  night  for

voice calls in its network. The Competition Board requested Eesti

Telefon   to  implement  a  per-minute  price  lower  than   that

established  on 1 April 2001. In accordance with the  Competition

Act,  a  fine  of  up to 5% on annual net sales could  have  been

imposed  for  abuse of the position of having a  dominant  market

position.



Eesti  Telefon is of the opinion that a price between 14  and  34

sents   for   a  call  within  the  network  is  cost-based.   In

implementing   the  rates,  Eesti  Telefon  has   fulfilled   the

requirements   of  the  Telecommunications  Act,  which   require

companies  with significant market power to establish  cost-based

prices   for  services  and  not  to  cross-subsidise   services.

International auditing companies KPMG and Deloitte & Touche  have

audited  the  correctness  of  Eesti  Telefon’s  cost  accounting

system.



Eesti  Telefon  did not accept the complaint by  the  Competition

Board  and on 23 May 2001 took the case to Tallinn Administrative

Court.  On January 17, 2002 Tallinn Administrative Court  decided

in  favour of Eesti Telefon and cancelled the Competition Board’s

complaint.





Kadri Lensment

Management Assistant

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