Eesti Telekom                 NEWS RELEASE                01/13/2004 09:00



NEW SUBSIDIARY



On  12  January  2004 Jaanus Paas, CEO  of  AS  Connecto,

signed  an  agreement for the purchase  of  100%  of  the

shares of Lithuanian company UAB Lidivos Technologijos



AS  Connecto  is a 51 percent owned subsidiary  of  Elion

Ettevõtted  Ltd. Elion Ettevõtted Ltd is  a  100  percent

owned  subsidiary  of  AS Eesti Telekom.  Eltel  Networks

Corporation,  based  in Finland,  is  the  owner  of  the

remaining  49%  of  the  shares  of  AS  Connecto.   This

transaction  is  not  treated as  a  transaction  with  a

connected  person. Neither the members of the Supervisory

Board  or Management Board of Telekom or its subsidiaries

possess a personal interest in the transaction.



The  volume of the transaction concluded is 300  thousand

EUR  (4.7  million EEK). The estimated  turnover  of  UAB

Lidivos  Technologijos in 2003 is 927 thousand EUR  (14.5

million  EEK or 3.2  mln LTL), and profits are  estimated

to  be 63 thousand EUR (1.0 million EEK or 0.22 mln LTL).

The  primary  activity of the company being purchased  is

the  installation  and  maintenance  of  low-current  and

security systems. The concluded transaction will  support

the expansion of the activities of Connecto in the Baltic

region.



AS   Connecto  (www.connecto.ee)  possesses  one  of  the

highest  turnovers  of  companies in  the  Baltic  States

specialised  in  the  construction  and  maintenance   of

telecommunications and electrical networks. In  2002  the

turnover  of  AS Connecto was 260.8 million kroons  (16.6

million  Euros),  and profits amounted  to  12.6  million

kroons  (0.8 million Euros). The company was  created  at

the  beginning of 2001, and presently employs 445 people.

The  subsidiaries  of AS Connecto are Reveko  Telekom  in

Estonia  and Connecto Latvia (in Latvia). Since  December

2003, the company has been in the process of merging with

Eltel  Networks AS, which is also a 100% owned subsidiary

of AS Connecto.





For additional information:

Tuuli Mathisen

AS Connecto

Marketing manager

Tel. 0606 3124

GSM 050 62839

E-mail: tuuli@connecto.ee





Hille Võrk

Financial Manager

6272460