Telekom Austria Group: Continuing Solid Operating Performance in the First Quarter 2005 VIENNA, Austria, May 18 /PRNewswire-FirstCall/ -- Telekom Austria AG (VSE: TKA; NYSE: TKA) today announced its results for the first quarter 2005 ending March 31, 2005. During the first quarter 2005 total group revenues increased by 1.4% to EUR 1,003.5 million. Wireline revenues decreased slightly by 0.4% to EUR 533.1 million in 1Q 05, with results being supported by higher revenues from wholesale voice & Internet and rising ADSL lines. In the wireless business, the 2.5% increase in revenues to EUR 526.8 million was primarily driven by rising subscriber figures, a strong pick up in the data business and higher roaming revenues. Operating income rose by 27.7% to EUR 173.7 million during 1Q 05. The rise of operating income in the wireline segment was 107.1% to EUR 43.9 million, mainly driven by lower operating expenses and decreasing depreciation and amortisation charges. Operating income in the wireless segment grew by 7.5% to EUR 129.4 million primarily as a result of higher revenues. Operating income before depreciation, amortisation and impairment charges (adjusted EBITDA) rose by 4.7% to EUR 436.3 million during 1Q 05, with a 2.6% increase in the wireline segment to EUR 219.0 million and a 3.8% increase in the wireless segment to EUR 216.9 million. The wireless segment benefited from a one-time gain from retirement of long-lived assets in the amount of EUR 13.1 million. This compares to a positive one-time effect (reversal of provision for universal service) in the amount of EUR 5.6 million in 1Q 04. As a result of lower net interest and a decrease in the Austrian statutory tax rate to 25% as of January 1, 2005 consolidated net income of Telekom Austria rose by 63.6% to EUR 115.7 million. Earnings per share increased from EUR 0.14 to EUR 0.23. As a consequence of higher wireline investments in broadband access and in the core network as well as additional wireless investments to upgrade the Austrian network with the EDGE technology, capital expenditures for tangible and intangible assets increased by 67.9% to EUR 119.2 million during 1Q 05. Net debt continued to decline to EUR 1,896.8 million at the end of March 2005, compared to EUR 1,973.9 million at the end of December 2004 despite the payment of EUR 80.0 million as option price under the call option agreement concluded in December 2004 to purchase the Bulgarian mobile operator MobilTel AD. For more detailed information about the financial results for the first quarter 2005 please refer to the corresponding interim report on Telekom Austria's website at http://www.telekom.at/results-qu1-2005 Contacts: Martin Bredl Peter Zydek Head of Public Relations Head of Investor Relations Phone: +43(0)59059-1-11001 Phone: +43(0)59059-1-19000 E-Mail: E-Mail: DATASOURCE: Telekom Austria Group CONTACT: Martin Bredl, Head of Public Relations, Phone: +43(0)59059-1-11001, E-Mail: ; Peter Zydek, Head of Investor Relations, Phone: +43-(0)59059-1-19000, E-Mail:

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