Eesti Telekom                 NEWS RELEASE                03/31/2004 14:00



ELTEL NETWORKS SIGNED A CONTRACT



Eltel  Networks AS (a 100% subsidiary of AS Connecto, with  who

Connecto  has  merging proceedings going on)  and  Distribution

Network of Eesti Energia AS, signed a contract on the scheduled

maintenance  and construction of the distribution  networks  of

Eesti Energia.



The contract was signed for a 2+1 year term and according to it

Eltel Networks AS will carry out the scheduled maintenance  and

construction of the distribution networks Eesti Energia in  the

regions  of Tallinn, Harju, Rapla, Järva and Pärnu and also  in

Saaremaa and Hiiumaa.

The  content of the first year of the contract is 37.6  million

kroons (2.4 mln euros).



According  to  Andres Alamaa, Chairman of the  Board  of  Eltel

Networks AS, the contract is a logical continuation in  merging

Connecto  and Eltel Networks, where the competence of  electric

and  telecommunications is added up. So far Eltel  Networks  AS

has  mainly  maintained and constructed  the  grids  of  Fortum

Elekter in Estonia. EMT and Eesti Energia are some other  major

customers.



Estonian Company Eltel Networks AS was founded in 1999, and its

main  area  of  business is the construction of electrical  and

telecommunication networks. Eltel Networks AS is  a  subsidiary

of  Eltel Networks Corporation (www.eltelnetworks.com) which is

the  leading  provider  of  services  to  networks'  owners  in

Northern  Europe.  The three strong fields of  operations  are:

Electrification   Projects,  Mobile   Networks,   and   Network

Services. Group’s net sales in 2003 was EUR 288 million, and it

employed  about  2300 people in the Nordic countries,  Baltics,

Russia and in South-East Asia.



AS  Connecto is a subsidiary of Elion Enterprises AS which owns

51%  of  its  shares. Elion Enterprises AS is a  subsidiary  of

Eesti  Telekom  AS,  which owns 100% of its shares.  A  Finnish

company  Eltel Networks Corporation owns 49% of  shares  of  AS

Connecto.



As for the turnover AS Connecto (www.connecto.ee) is one of the

largest  company in the Baltics, offering design, installation,

construction and maintenance services for telecommunication and

electrical  systems. The turnover of AS Connecto  totalled  315

million  kroons  (20,2 million euros) in 2003, and  its  profit

totalled  16,8  million kroons (1 million euros).  Company  was

established in 2001 and employs 445 people. The company  has  a

subsidiary in Estonia Reveko Telekom, in Latvia Connecto Latvia

and Lidivos Technologijos in Lithuania.



Beginning with June 2004, the joint venture will operate  under

the  name  of  Eltel Networks AS in Estonia and use  the  brand

Eltel Networks.





For more information:

Tuuli Mathisen

AS Connecto

Marketing Manager

Telefon 0606 3124

GSM 050 62839

e-mail: tuuli@connecto.ee





Hille Võrk

Financial Manager

6272460