EESTI TELEKOM

ANNOUNCEMENT



TERMINATION OF THE CONCESSION AGREEMENT



On  December 29, 2000, representatives of the Republic of

Estonia and AS Eesti Telefon executed an agreement on the

termination  of the Concession Agreement.  The  agreement

terminates  the  Concession  Agreement  executed  by  the

Government  of  the  Republic of  Estonia  and  AS  Eesti

Telefon  on  December 16, 1992. The  new  agreement  will

regulate relationship between the Republic of Estonia and

AS  Eesti  Telefon, in addition to the Telecommunications

Act  adopted on February 9, 2000 and the respective legal

acts.



According to the agreement, AS Eesti Telefon shall:



  1.    provide  telephony, universal,  leased  line  and

     interconnection service within the whole territory of

     Estonia  and  permit access to its public  telephone

     network;

2.   guarantee a customer the number portability, if a

customer wishes to change the telephone operator, by

January1, 2004;

3.   ensure that 95% of the applications for telephone

submitted to AS Eesti Telefon after February 28, 2003

will be satisfied within two weeks from the payment of

the respective invoice;

4.   liquidate by February 28, 2003, at the latest, the

queue of subscribers resulting from the applications

received before the execution of this Agreement;

5.   provide the Republic of Estonia the right of first

refusal to acquire the buildings, erections and real

property that were in the ownership of AS Eesti Telefon

on January 1, 1993 if such objects will be diverted by AS

Eesti Telefon.



According to the agreement the Republic of Estonia  shall

apply  to AS Eesti Telefon only regulations that  are  in

compliance with the provisions of the treaties of the  EU

and  WTO and not require AS Eesti Telefon to operate  the

telecommunications  network or provide  services  in  the

manner that would lead the company to suffer economically

unreasonably  great expenses which AS Eesti  Telefon  may

not  be  able  to recover with reasonable profit  in  the

conditions  of the free competition within  a  reasonable

period  of time. Sanctions are enacted with the agreement

for  the  case  of non-fulfilment of the obligations.  In

case  of  infringement of its obligations by the Republic

of  Estonia,  sanctions  enacted for  AS  Eesti  Telefone

become invalid.



The  agreement becomes valid of the signing.  The  rights

and  obligations become effective from January  1,  2001.

The agreement will terminate on January 1, 2004.



Full text of the agreement is available on WEB-page of AS

Eesti Telekom at <a href='http://www.telekom.ee.' target='_blank'>http://www.telekom.ee.</a>



AS  Eesti Telefon is 100% subsidiary of AS Eesti Telecom.

It’s  core  business is providing local and international

fixed line telephony and data communication services.





Hille Võrk

Financial Manager

6 272 460