1. AIG New Europe Fund 1 Bundling the Local Loop Financing Doina Popescu AIG New Europe Fund June, 2004

2. AIG New Europe Fund 2 Committed capital:$320 million Focus region: Primary: Poland, Romania, Czech Republic, & Hungary Secondary:Bulgaria, Croatia, Macedonia, Moldova, Slovakia, Slovenia, Ukraine, & Yugoslavia Investment thesis:Dynamic investment environment created by shift to market economies & prospective integration with EU Opportunity: Shortage of long-term capital FDI increases stability Capital markets development facilitates liquidity Consolidation & regional platforms

3. AIG New Europe Fund 3 Portfolio Summary Country Diversification Sector Diversification

4. AIG New Europe Fund 4 Orange Romania S.A. Company: Leading GSM provider 48% market share Orange as operator Strategy: Participate in rapidly increasing wireless penetration Retain leading market position Strong 2003 performance: Revenues over $ 527 M EBITDA margin over 50% stable ARPU despite increased penetration Subscribers over 3.7 M Orange Romania Subscriber Base (000’s)

5. AIG New Europe Fund 5 Astral Telecom S.A. Company: Leading cable TV & Internet service provider in Romania 800,000 cable subscribers 40,000 Internet subscribers Strategy: Further consolidate market domestically and regionally Exploit economies of scale by upgrading service platforms Expand ISP/data transmission business Recent Developments: Launched IP telephony ISP division profitability ahead of plan; $20 million debt raised from EBRD to finance investments Astral Subscriber Base (000’s)

6. AIG New Europe Fund 6 Local Loop - Legislative Framework Legislative Framework –Law 304 / July 2003 re. Universal Service –Law 591/2002 General Framework for Communications –Law 527 /202 Access to telecom infrastructure and interconnection Can legislation be a driver force for communication development: –Differentiate between Service providers vs. Provider of infrastructure –Consumer Centric – short term view vs. medium/ long term –Incentives for investments in infrastructure Is the new legislation adapted for Romanian infrastructure?

7. AIG New Europe Fund 7 Telecom Market in Romania Penetration 2003 Revenues vs. Investment Investments in Backbone vs. Local Loop

8. AIG New Europe Fund 8 EU / US Local Loop Unbundling US –Mandatory in US since 1997: approval of Telecom Act –FCC focused on voice services (UNE-P) unbundled network element platform EU –EC Regulation – unbundled access to local loop Dec 2000 –L336/4 “in order to bring substantial reduction in costs of using Internet”

9. AIG New Europe Fund 9 Investors Drivers Investors: –Short Term vs. Long Term –Financial vs. Strategic Drivers –Attractive market - Return of Investment –Stable Legislative Framework – Incentives for Investments –Reasonable Competition Risks –Technological e.g. WiMAX –Legislative / Implementation