1. 1 Financial Strength & Market Leadership June 2002

2. 2 Q1 2002 Financial highlights Q1 2001 Q1 2002 128,549 140,983 9.7% Revenues 13,292 19,946 Net Income 50.1% 53,581 58,850 9.8% EBITDA (in HUF million) EBITDA growth driven by Westel Net income boosted by Westel and the strong HUF Q1 2001 Q1 2002 Revenue growth due to mobile and international segment

3. 3  Infrastructure based competition  RIO based interconnection fees are provided only if there are at least 3 points of interconnection out of the 10 secondary switches  Price cap regime  The overall price cap is 4% in 2002 and CPI minus 3% in 2003 and 2004  Specific price caps for subscription fee and local tariffs  Matáv is a universal telecom service provider  Universal Telecom Fund to provide compensation for uneconomical services such as low-usage package and public payphone service  RUO approved in February  RIO expected to be approved by the end of June  Matáv signed IC agreement with Pantel, Vivendi, GTS-Datanet and eTel Predictable and transparent regulatory environment

4. 4 Fixed line: Focus on innovative solutions, strong cash generator  Stabilised number of lines  Provide higher value services  Shift to ISDN (up by 34%, representing more than 16% of total lines)  Respond to emerging competitive environment  Advanced tariff re-balancing  Increasing popularity of the wide range of tariff packages  13.6% average headcount reduction at parent company  322 lines per employee in Q1 2002 Number of Access Lines and Penetration in Matáv’s Local Service Areas 2,404 2,672 2,900 2,966 2,936 31.7 35.4 38.6 39.5 39.1 39.2 2,939

5. 5 Mobile: Continued delivery of excellent profit growth & efficiency  Mobile penetration in Hungary reached 53% in Q1 2002  Actively maintained leadership position (50.6% market share)  EBITDA margin increased to 35.6% in Q1 2002  Westel: ARPU (HUF 6,030) and MOU (121)  Revenues from enhanced services up by 63%  The world premier of MMS Subscribers in '000 842 547363 1,599 GSM Penetration 16.2 10.6 7.0 30.8 Penetration 48.7 2,493 Westel Subscriber Growth and Mobile Penetration in Hungary 2,711 53.0

6. 6 International: Unchanged expectations, dynamic subscriber growth  Strong revenue growth but temporary slowdown in profitability  Fixed-line tariff rebalancing in line with industry norms  Mobile and Internet customer base more than doubled  Penetration: 27% fixed line, 13% mobile, 1% Internet Unchanged set of conditions for MakTel Substantial volume growth potential in all market segments Drivers of Q1 2002 results

7. 7 Matáv Group: strong financial position Net Debt to Total Capital  Controlled leverage after the Westel acquisition  Strong operational cash flow provides some balance sheet flexibility for the future  Rating:  S&PBBB+  Moody’sBaa1  Q1 2002 debt structure: 71% EUR, 24% HUF, 5% USD *MakTel and Westel acquisition were financed from debt

8. 8 Matáv Outlook  Focus on growth businesses (mobile, data)  Solid cash generation and efficiency improvement in fixed line  Transparent environment in key businesses  Targets for 2002: High single-digit revenue growth Over 40% EBITDA margin Approximately HUF 105 billion capex