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We are pleased to announce that Telekom Malaysia Berhad ("TM") has entered into a Joint Venture Agreement ("JVA") with Prism Holdings Limited ("PHL") on 16 January 2001. PHL is a public company incorporated under the laws of the Republic of South Africa and is currently listed in the Johannesburg Stock Exchange. PHL specialises in secure electronic payment technology and services and is currently pursuing similar business opportunities in Europe. The joint venture is through acquisition of 30% equity by PHL in Telekom Applied Business Sdn Bhd ("TAB"), a wholly owned subsidiary of TM for a total consideration of RM15 Million.

CORPORATE INFORMATION ON TAB

TAB is a wholly owned subsidiary of TM with Multimedia Super Corridor status speciliasing in Information Communication Technology (ICT) solutions and Computer telephony related solutions. The authorised capital of TAB is RM5,000,000 divided into 5,000,000 ordinary shares of RM1.00 each of which 1,149,525 shares have been fully issued, paid and subscribed by TM.

With the abovesaid venture, the shareholding structure of TAB shall be restructured as follows:-

Shareholders Shareholdings

TM 70%
PHL 30%
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Total 100%
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The Board of Directors of TAB shall comprise of four (4) Directors ; of which three (3) shall be nominees of TM and one (1) nominee from PHL.

CONSIDERATION

The total consideration of RM15 Million for the venture was arrived at on a willing buyer-willing seller basis. The consideration will be paid for by PHL in kind primarily technology and software licence rights.

RATIONALE FOR THE JOINT VENTURE

The joint venture will provide broad range of e-solutions to support TM's efforts and repositioning itself in the e-solution industry. A broader market will be created in Malaysia and overseas and there will be wider product range available to the public.

With this joint venture, TAB's capability in the area of smart card development, e-commerce and mobile commerce technologies will be enhanced with the acquired expertise and technology provided by PHL. This will enable TAB to become the preferred global ICT solutions provider and the development and distribution of e-solutions and other businesses.

FINANCIAL EFFECTS

The abovesaid transaction is not expected to have any material impact on the consolidated earnings of TM for the current financial year ending 31 December 2001. However the said transaction is expected to improve TM's Group earnings in the long term.

APPROVALS REQUIRED

The joint venture is subject to approvals from the Foreign Investment Committee and other relevant authorities.

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 proposed joint venture.