Eesti Telekom                     ANNOUNCEMENT                          30.12.2004



Eesti Telekom subsidiary purchases Internet service provider

 

Elion Enterprises Ltd, a  wholly  owned  subsidiary  of  AS  Eesti  Telekom,  will

purchase 100 per cent of the shares of Viru Net OÜ, a  leading  Estonian  regional

Internet service provider.

 

The aim of the acquisition of Viru Net OÜ is to reinforce the market  position  of

Elion in the County  of  Ida-Virumaa  (North-East  Estonia)  and  consolidate  the

Estonian Internet market. The transaction is valued at 5 million  kroons  (320,000

Euros approx.). This transaction cannot be considered  as  a  transaction  with  a

related party as no member of the Council nor of the  Management  Board  of  Elion

Enterprises Ltd. or Eesti Telekom have any personal interest in the transaction.

 

Viru Net OÜ (www.vnet.ee), which was established in 1997, is one  of  the  leading

Internet service providers to businesses in the County of  Ida-Virumaa  and  since

2001 Viru Net OÜ has also been providing its services  to  domestic  consumers  in

the towns of Jõhvi, Kohtla-Järve and Sillamäe. The turnover  of  Viru  Net  OÜ  in

2003 was 3 million kroons (190,000 Euros approx.) with  a  profit  of  0.4 million

kroons (26,000 Euros approx.). The company currently has 17 employees.

 

Elion  (www.elion.ee)  is  the  largest  telecommunications  and  IT  provider  in

Estonia. It is owned by AS Eesti Telekom which is listed on both the  Tallinn  and

London stock exchanges (TSE:ETL/LSE:EETD). In Estonia, Elion is the market  leader

in  fixed  network  calls,  in  Internet  subscriptions  and  data   communication

solutions and it has made a powerful  impact  on  the  IT  market.   In  2003  the

consolidated net sales of the Elion Group were 2.56 billion  kroons  (165  million

Euros), and the consolidated net profit was 318 million kroons 20 million  Euros).

Currently the Elion Group employs a staff of 2014.





Hille Võrk

Financial Manager

+372 6 272 460