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Telekom Malaysia Berhad (“TM”) wishes to announce that its wholly owned subsidiary, GITN Sdn Berhad (“GITN”) has on 25 February 2004, entered into an Agreement with The Government of Malaysia (“the Government”) for the implementation of the SchoolNet Project (the “Project”) for 10,000 schools in Malaysia with a contract value of RM374.2 million for a contract period of five (5) years commencing 25 February 2004.

The Project will be implemented in collaboration with the Ministry of Energy, Communications and Multimedia and the Ministry of Education, Malaysia.

2. INFORMATION ABOUT GITN

GITN is a wholly owned subsidiary of TM with an authorized capital of RM50.0 million and an issued and paid up capital of RM20.0 million comprising 20 million ordinary shares of RM1.00 each. The principal activity of GITN is to construct, establish, maintain and operate an integrated telecommunications network infrastructure for the Government.

3. INFORMATION ABOUT SCHOOLNET PROJECT

Implementation of SchoolNet Project will benefit all schools throughout the country regardless of their location in the urban, rural or remote areas in the country, in line with the Government’s objective of bridging the digital divide between the urban and rural areas.

As the Network Manager and Integrator for the Project, GITN is responsible for integrating the use of the three different technologies namely wireless, Asymmetric Digital Subscriber Line (ADSL) and Very Small Aperture Terminal (VSAT) where applicable in enabling the 10,000 schools to be broadband internet ready.

4. RATIONALE

Further entry into the government market through GITN is expected to generate increased revenue for TM Group from the value propositions to be derived from the said project.

5. FINANCIAL EFFECT OF THE TRANSACTION

The transaction has no immediate material impact to the consolidated earnings of TM for the year ending 31 December 2004.

6. APPROVALS REQUIRED

Approval from authorities are not required for the abovesaid transaction.

7. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST

• In so far as the Directors of TM are aware, none of the Directors nor the major shareholders of TM and/or persons connected to them have any interest, whether direct or indirect, in the above said transaction save for Dato’ Dr. Abdul Rahim bin Haji Daud, Datuk Dr. Halim bin Shafie, YB Dato’ Ir. Haji Mohd Zin bin Mohamed and Dato’ Suriah bt Abd Rahman, who are the common directors of TM and GITN.