PORTUGAL TELECOM COMPLETES PURCHASE OF 34% STAKE IN NAMIBIAN CELLCO

Mergers, Acquisitions and Financial Results

Namibian Post and Telecom Holdings Limited (NPTH) and Portugal Telecom concluded a share sale agreement and a shareholders' agreement, officially finalising the acquisition of 34 per cent of the share capital in Mobile Telecommunications Limited for N$1,02 billion. Earlier this year, Portugal Telecom had bought into Namibia's sole cellphone licence operator, MTC, which is wholly owned by NPTH.

Portugal Telecom emerged as MTC's strategic partner after 14 other bids were unsuccessful. Those bids came from companies from across the globe including South Africa, Mauritius and Europe.

In terms of the shareholders' agreement, Portugal Telecom is entitled to appoint the Managing Director and one non-executive board member to the new MTC board, as well as one of the General Managers at MTC. The new MD is likely to be selected from the Portugal Telecom group and would start work at MTC from September 1.

MTC was established in 1995, currently has around 507 000 subscribers and is expected to generate revenue of N$1,5 billion in the current financial year, an increase from N$866 million earned in the 2004-05 financial year. Besides being involved in South America and China, Portugal Telecom also operates in seven African countries, where it has more than five million subscribers.

The Namibian