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We wish to inform the Exchange that Khazanah Nasional Berhad ("Khazanah"), NTT Communications Corporation and NTT DoCoMo, Inc. ("NTT Group") have mutually agreed not to proceed with negotiations for NTT Group to acquire a strategic stake in Telekom Malaysia Berhad ("TM").

Khazanah on 24 November 1999 had entered into a Memorandum of Understanding with NTT Group for a possible acquisition of a strategic stake in TM.

Whilst both parties believe that a strategic investment leveraging on the strengths of both TM and NTT Group would present a significant value enhancement opportunity, the negotiations could not proceed as a mutually satisfying agreement on certain key strategic issues could not be reached.

However, TM and NTT Group as leading telecommunications companies in Asia will continue their current business relationship, and will further develop the business collaboration.

In this increasingly global nature of the telecommunications industry, Khazanah and TM strongly believe in the immense value of having a strategic partner. The sharing of expertise, particularly in the areas of technology, international marketing, wireless, internet, data and multimedia, will enable TM and its strategic partner to offer their customers more competitive and global products as well as services. Towards this end, Khazanah and TM will evaluate alternative plans to seek a strategic partner in the near future.