Telekom Austria Group: Excellent Results for the Financial Year 2004 VIENNA, Austria, March 16 /PRNewswire-FirstCall/ -- Telekom Austria AG (VSE: TKA; NYSE: TKA) today announced its results for the Financial Year 2004 and the fourth quarter ending December 31, 2004. Year-on-year comparison: During 2004 total group revenues increased by 2.2% to EUR 4,056.3 million. Applying the change in the accounting for third-party value-added services, on October 1, 2003 retroactively to January 1, 2003, the increase in group revenues amounts to 3.4%. The 22.4 % rise in group operating income was driven by higher operating revenues in both segments as well as lower expenses in the wireline business segment. Group operating income before depreciation, amortization and impair-ment charges (adjusted EBITDA) rose by 3.9% to EUR 1,568.8 million during 2004. Consolidated net income of Telekom Austria rose by 69.4% to EUR 227.3 million. This was due to lower net interest and higher tax expenses which include a one-off charge as a result of the tax reform that was enacted in 2004 and became effective as of January 1, 2005. The decline in capital expenditures by 8.6% and the higher cash flow from operations allowed a reduction of net debt to below EUR 2 billion (EUR 1,973.9 mil-lion) at the end of December 2004 down from EUR 2,637.3 million at the end of 2003. Based on these results the management board of Telekom Austria will recommend to the annual general assembly the pay-ment of a dividend in the amount of EUR 0.24 per share, compared to EUR 0.13 last year. Quarterly comparison: Quarterly figures show an increase in group revenues by 0.6% to EUR 1,025.1 million. The 2.9% decline in wireline revenues to EUR 549.5 in 4Q 04 was expected due to the positive effect of the discontinuation of the minimum tariff as of October 1, 2003 on 4Q 03 voice revenues and one-off items included in other revenues during 4Q 03. The positive effect of the discontinuation of the minimum tariff in 4Q 03 was caused by the transfer of our existing customers to the standard tariff leading to an increase in the monthly rental, albeit at up to 6% lower traffic tariffs. Driven by higher traffic and equipment revenues as a result of the rising sub-scriber numbers, all operations of the wireless business segment contributed to an increase in revenues by 4.3% to EUR 542.3 million during 4Q 04. Operating income rose by 188.0% to EUR 40.9 million during 4Q 04 due to a slight decrease of 0.9% in the wireless segment and a decline in the operating loss of the wireline segment by 55.5%. Operating income before depreciation, amortization and impairment charges (adjusted EBITDA) rose by 3.5% to EUR 318.0 million. Lower employee and other operating expenses contributed to a rise in the wireline adjusted EBITDA by 7.2% to EUR 165.8 million. Although strong subscriber growth in the wireless segment towards year end is expected to benefit future revenues, higher SACs and SRCs first led to increased costs. Therefore, adjusted EBITDA in the wireless segment rose by 0.2% to EUR 152.2 million, a lower growth rate compared to revenues. Quarterly net income turned positive to EUR 25.0 million in 4Q 04 compared to a loss of EUR 15.6 million in 4Q 03. Capital expenditures fell by 6.6% to EUR 241.6 million during 4Q 04. A 18.7% decline in capital expendit-ures for tan-gible assets more than offset an increase in expenditures for intang-ible assets. All financial figures are based on U.S. GAAP. For more detailed information about the financial results for the financial year 2004 please refer to the corresponding interim report on Telekom Austria's website at http://www.telekom.at/results-2004 About Telekom Austria Telekom Austria is Austria's leading provider of telecommunications services. It was listed on the Vienna and New York stock exchanges in November 2000. The Group has two main business areas: the wireline segment encompasses fixed line telephony, data and Internet, and the wireless segment covers mobile communications. Telekom Austria has international operations in the Czech Republic, Croatia, Slovenia and Liechtenstein. http://www.telekom.at/ For further information please contact: Martin Bredl Head of Public Relations Phone: +43(0)59059-1-11001 E-Mail: Hans Fruhmann Head of Investor Relations Phone: +43(0)59059-1-20917 E-Mail: DATASOURCE: Telekom Austria AG CONTACT: For further information please contact: Martin Bredl, Head of Public Relations, Phone: +43(0)59059-1-11001, E-Mail: ; Hans Fruhmann, Head of Investor Relations, Phone: +43(0)59059-1-20917, E-Mail:

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