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We are pleased to announce that Telekom Malaysia Berhad ("TM") will enter into a Joint Venture Agreement ("JVA") with Prism Holdings Limited ("PHL"). PHL is a public company incorporated under the laws of the Republic of South Africa and listed on the Johannesburg Stock Exchange. PHL specialises in secure electronic payment technology and services. The joint venture is through acquisition of 30% equity by PHL in Telekom Technology Sdn Bhd ("TTSB").

This Joint venture is established subsequent to the joint venture between TM and PHL on PHL's acquisition of 30% equity in TM's wholly owned subsidiary, Telekom Applied Business Sdn Bhd, an announcement of which has been transmitted to the Exchange on 31 January 2001.

CORPORATE INFORMATION ON TTSB

TTSB is a subsidiary of TM with an initial authorised share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each of which 2 ordinary shares have been fully issued, paid and subscribed by TM.

With the abovesaid venture, the shareholding of TTSB shall be structured as follows :-

Shareholders Shareholdings No of Shares

TM 70% 70,000
PHL 30% 30,000
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Total 100,000
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The total number of Directors shall consists of four (4) of which three (3) shall be representatives from TM and one (1) from PHL.

RATIONALE FOR THE JOINT VENTURE

Pursuant to Sections 335, 341 and 393 of the Main Board Listing Requirements and Practice Note 1/2000 on disclosure in relation to internet-related business or e-commerce activities, we wish to inform the Exchange that :-

1. The joint venture will be an important step in TM's pursuit to diversify its business and to provide value added services to Malaysian businesses in view of the current competitive environment and also help TM to redress its e-commerce/payment opportunity for the transaction services. It will enable TM to offer a value-added payment services to TM's fixed line and wireless customers and the public at large throughout Malaysia.
2. The venture will leverage on the telecommunication infrastructure provided by TM.
3. PHL principal activity is in the business of secure electronic transaction technologies and services. PHL's businesses are focused in the design, development, deployment and support of payment, pre-payment, smart card, internet and mobile phone-based commerce and also security technologies, products, solutions and services. PHL's role in this venture is to provide technology and expertise on secure electronic payments and commerce across the physical and virtual world. The mission can be achieved through a partnership in retail, banking, e-commerce and m-commerce markets by providing value-added and world class solutions that enable customers to transact securely and competitively.
4. By this joint venture, TTSB will provide secure electronic transaction and e-commerce services to the public and businesses, to identify the type of services to the market and to provide the interconnect between methods of payment, device of payment and banking facilities for all transactions. It will provide the Malaysian public with a one-stop center providing multiple financial services from a single point of contact.
5. The business model is a flexible arrangement that caters for growth, apart from business from partnership with industrial users such as banking, merchants and retailers.
6. The venture is in its start up operation and is targeted to be operation in middle 2001.
7. TTSB is projected to have a healthy return and the payback period of this project is 4 years and its internal rate of return is expected to be 50%.
8. Revenue will be generated based on fees and commissions from the services rendered.
9. TTSB will enter into a market that is relatively new and subject to intense competition from both local and multinational businesses. Another risk that TTSB will possibly encounter is on the slow market acceptance of its products and services.