Eesti Telekom                 NEWS RELEASE                      06/19/2003



COMPETITION BOARD APPROVED SALE OF STAKE



Estonian Competition Board gave approval to AS Eesti 

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

sell a 49% minority stake in its 100% owned subsidiary 

AS Connecto, to ELTEL Networks Corporation.

 

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.

 

Yesterday, on June 18 contracting parties executed the 

closing of the transaction and confirmed the price of the 

deal, which is 68 million kroons (4.3 million euros) and 

the capital gain to be booked in Q2 03 will be 59,5 million 

kroons (3,8 million euros).  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 employed about 1600 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 company.



Ain Parmas

AS Eesti Telefon

Phone 639 7236





Kadri Lensment

Assistant manager

6311 212