TELEKOM MALAYSIA CLARIFIES ITS POSITION ON ITS INVESTMENT IN GUINEA

Telekom Malaysia Berhad (Telekom Malaysia) refers to the story by an international news agency, datelined Conakry 18 January 2005. This press statement has been prepared to clarify Telekom Malaysia’s position regarding its investment in Societe des Telecommunications de Guinee (Sotelgui).

Telekom Malaysia’s investment in Guinea commenced on 23 December 1995 with the signing of a Joint Venture Agreement (JVA) with the Government of Republic of Guinea (GoG). The JVA was for a 60 per cent stake in Sotelgui s.a. (or the Telecommunications Company of Guinea), with the remaining 40 per cent being held by GoG. Telekom Malaysia’s initial investment was for US$45 million, not “…close to one billion dollars” as mentioned in the article.

Telekom Malaysia has been involved in the development of Sotelgui’s fixed line and cellular infrastructure for over ten years, working with the people of Guinea to build a network that delivers reliable and affordable telecoms services. To date Sotelgui has over 150,600 active subscribers and continues to enjoy robust growth.

Recently, the Board of Telekom Malaysia decided to alter its international strategy to focus on geographic regions closer to home. The first part of that strategy was illustrated by the sale of our investment in Telkom South Africa (Telkom SA) in the second half of the 2004 calendar year and a subsequent decision was taken to divest all of its interests in Africa, including Guinea.

Accordingly, in early December 2004 Telekom Malaysia officially informed the relevant officials of GoG of its intention to exit in due course. Both parties have commenced discussions based on the common understanding that Telekom Malaysia’s decision to exit is a strategic one. Both parties are also desirous of amicable and speedy negotiations, as well as a smooth transition process that preserves the long and friendly diplomatic ties between both countries at all times.

As such, the comment attributed to a “source within the Guinean Mail and Telecom Ministry” that Telekom Malaysia “…would discontinue its investment effective Monday citing difficulties in getting the network operational from the get-go...” are incorrect. Similarly too, reference in the article, that Telekom Malaysia has “…suspended its contract citing difficulties on the ground in the west African state” are untrue.

Telekom Malaysia also wishes to explain that the “private” meetings alluded to in the article are in actual fact normal shareholder meetings comprising a Special Board Meeting and EGM held on Monday and Tuesday of this week respectively. These have been conducted in the normal course of business.

In conclusion, Telekom Malaysia wishes to underscore that negotiations with the Government of Guinea have just commenced and the spirit of negotiations is excellent. The Company wishes to distance itself from any reference in the article by the international news agency to difficulties in negotiations.

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