Eesti Telekom                 NEWS RELEASE                05/21/2003 11:00



SALE OF MINORITY INTEREST



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

Telekom, sells to ELTEL Networks Corporation 49% minority

interest in 100% owned AS Connecto, which offers  design,

installation, construction and maintenance  services  for

telecommunication and electrical systems.



Sale will enable Eesti Telefon to focus its core business

that  is  providing telecommunication and  IT  solutions.

Involving   a  strategic  partner  will  also  accelerate

expansion of AS Connecto into other Baltic states.



Transition  of the shares will take place after  approval

of  the Competition Board. After that the exact price  of

the  deal  will  also be determined,  which  will  be  58

million  kroons  (3.7 million euros)  minus  49%  of  net

interest-bearing debt of the Connecto as of  the  end  of

the month before the transition.



Eesti  Telefon will stay as an active owner of  Connecto,

but  ELTEL  Netwoks  has right to  acquire  100%  of  the

company shares after two years. The transition cannot  be

treated  as  a  transaction with related  party,  neither

Council  nor  Management Board of Eesti Telefon  have  no

other personal interest in the transaction.



As  for the turnover AS Connecto (www.connceto.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 260.8 million kroons (16.6  million

euros)  in  2002,  and its profit totalled  12.6  million

kroons  (0.8  million euros). Company was established  in

2001 and employs 445 people. The company has a subsidiary

in Latvia Connecto Latvia.



ELTEL   Networks  Corporation  (www.eltelnetworks.com   )

is   an  Infranet Company providing 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 was 208  million

euros   (3.255   billion   kroons)   in   2002   and   it

employs  about  2000  people  in  the  Nordic  countries,

Baltics and Russia and in South-East Asia.



AS   Eesti   Telefon  (http://www.et.ee),   the   largest

telecommunications  company in  Estonia  was  founded  in

1993. It is owned by AS Eesti Telekom which is listed  at

the    stock    exchanges   of   Tallinn    and    London

(TSE:ETL/LSE:EETD).  Eesti  Telefon  provides  innovative

client-centered  communication and  IT  solutions.  Eesti

Telefon’s consolidated net profit in 2002 was 286 million

kroons  (18 million euros) on net sales of 2.493  billion

kroons  (159  million  euros). The company  invested  334

million    kroons    (22   million   euros)    developing

telecommunications  throughout  the  year.  Total   group

assets,  according to IAS were worth 2.473  billion  (158

million  euros). The company had 1,999 employees at  end-

2002, 1,420 of whom worked for the parent firm.



Mr.  Tuomo  Rönkkö,  President & CEO  of  ELTEL  Networks

Corporation, Mr. Valdo Kalm, CEO of Eesti Telefon and Mr.

Jaanus  Paas,  CEO of Connecto will give online  briefing

about  the deal in Eesti Telefon´s web-based Press Center

at   <a href='http://www.et.ee/' target='_blank'>http://www.et.ee/</a>   ->   Uudised   ->   Pressikeskus

(http://www.et.ee/14822.html) today, on the 21st  of  May

at 1-2 pm.





Hille Võrk

Financial Manager

6272460