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We are pleased to announce that Telekom Malaysia Berhad ("TM") jointly with Secter Sdn Bhd ("Secter") and Mtel International Inc. ("Mtel"), the shareholders of Skytel Systems (Malaysia) Sdn Bhd ("Skytel"), [hereafter referred to as "the Vendors"], have entered into a Management Buy Out Agreement with Mr Tan Aik Choong and Mr Wah Sze Siang (hereinafter referred to as "the Purchasers"), to dispose and transfer the Vendors' shares in Skytel to the Purchasers for a nominal consideration of RM1.00 to each of the Vendors.

INFORMATION ON SKYTEL SYSTEMS (MALAYSIA) SDN BHD

Skytel was a joint venture company between TM (40%) , Secter (35%) and Mtel (25%) and its principal activity is the provision of local, national and international radio paging and messaging services in Malaysia.

It has an authorised and issued capital of RM10,000,000 comprising of 10,000,000 ordinary shares of RM1.00 each whilst its paid-up capital is RM6,000,000 divided into 6,000,000 ordinary shares of RM1.00 each. TM's 40% stake in the Company consisted of 2,400,000 ordinary shares of RM1.00 each.

CONSIDERATION

The nominal purchase consideration was arrived at on a willing buyer-willing seller basis.

RATIONALE FOR THE DISPOSAL OF SHARES IN SKYTEL BY TM

TM has decided to dispose its 40% stake in Skytel since the paging business is no longer in line with its strategic direction. With the said disposal, TM is able to consolidate its operations in the telecommunications industry and be more focused in its core business and principal activities.




FINANCIAL EFFECTS

The disposal of shares in Skytel is not expected to have any material impact on the consolidated earnings of TM for the current financial year ending 31 December 2000 and the consolidated net tangible assets per share in TM.

DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTEREST

In so far as the Directors of TM are aware, none of the Directors nor the substantial shareholders of TM have any interest, whether direct or indirect, in the said disposal of shares.