Contents :

INTRODUCTION

We refer to our announcement dated 15 June 2004 on the proposed partial disposal of Telekom Malaysia Berhad’s ("TM") stake in Telkom SA Limited ("Telkom") through a placement to institutional investors. We wish to announce the successful placement on 18 June 2004.

Details of the sale are as follows:

1. Thintana Communications LLC ("Thintana") disposed in total 82,997,741 ordinary shares of South African Rand ("ZAR")10 each representing approximately 14.9% of the issued and paid up capital of Telkom at ZAR73.0 per share to South African and international institutional investors. Total sale consideration was ZAR6,059 million (equivalent to US$932 million).
2. TM’s portion of the above sale was 33,199,096 ordinary shares (approximately 6%) of Telkom amounting to ZAR2,424 million (equivalent to US$373 million).
3. SBC Communications Inc’s ("SBC") corresponding portion of the sale was 49,798,645 ordinary shares (approximately 9%) of Telkom.
4. Settlement of the offering is expected to take place on June 25, 2004.
5. The sale price of ZAR73.0 per share represents a discount of 0.7% to the closing price of the Telkom shares on the JSE Securities Exchange ("JSE") on June 17, 2004. The price was based on a willing buyer and willing seller basis over a three day bookbuild process. The weighted average market price for Telkom for the 5 days prior to the partial disposal was ZAR79.9.

In connection with the sale, Thintana has entered into a lockup agreement, with customary terms, covering Thintana's remaining 15.1% holding in Telkom. The lockup agreement will terminate upon the release of Telkom's interim financial results for the period ending September 30, 2004, which is scheduled to take place on November 22, 2004.

INFORMATION ON THINTANA

In May 1997, SBC and TM acquired a 30% stake in Telkom through a joint-venture vehicle called Thintana, a Delaware incorporated limited liability company. SBC through SBC International Transatlantic LLC owns 60% of Thintana whilst the remaining 40% is owned by TM through its wholly owned subsidiary, TM International (L) Limited. Pursuant to its investment in Telkom, Thintana entered into a shareholders’ agreement with the Government of South Africa to become a strategic equity partner, which among others, gave Thintana the right to appoint five directors to the Telkom Board. In addition, Thintana also entered into a strategic services agreement ("SSA") with Telkom, whereby Thintana provides management services and personnel to Telkom till May 2007 or when its shareholding in Telkom falls below 15%, whichever is the earlier.

INFORMATION ON TELKOM SA

Telkom SA is South Africa’s leading integrated communications operator with over 4.8 million fixed lines, while Vodacom (50% owned by Telkom) has 9.7 million wireless subscribers. Telkom has also extended its wireless services to other African countries.

In March 2003, Telkom was listed on the JSE and the New York Stock Exchange through American Depository Receipts. Telkom’s present registered share capital is ZAR10,000 million consisting of 1,000,000,000 authorized of ZAR10 each, and its paid-up share capital is ZAR5,570 million consisting of 557,031,819 issued shares of ZAR10 each. Telkom has a market capitalization of ZAR40,936 million (approximately US$6,298 million).

For the year ended 31 March 2004, Telkom SA reported net profit of ZAR4,523 million whilst its shareholders funds stood at ZAR22,058 million.

RATIONALE FOR THE PROPOSED DIVESTMENT

The partial disposal is in line with TM’s move to consolidate its strategic investment overseas and focus on markets closer to Malaysia. The current market conditions in South Africa have provided TM with the opportunity to dispose of its investment in Telkom at a reasonable price.

FINANCIAL IMPACT

Based on the exchange rates of ZAR6.50 per USD and USD3.80 per RM, the partial disposal will result in TM generating an exceptional gain of approximately RM640 million for the current financial year ending 31 December 2004. TM’s initial cost of investment for the disposed stake was approximately RM641 million. This is expected to improve TM’s basic earnings per share by 19.5sen and net tangible assets per share by 19.2sen.

The gross proceeds of approximately RM1,417 million will be used, inter-alia, to reduce the group’s borrowings, for possible reinvestments and general financing requirements.

STATUS OF THINTANA’S INVESTMENT POST PARTIAL DISPOSAL

Post the partial disposal, Thintana will reduce its ownership of Telkom to 15.1 percent. Accordingly TM’s indirect interest will reduce from 12% to 6% and SBC from 18% to 9%. Thintana will continue to provide management services to Telkom through the SSA. In accordance with the terms of the SSA, this partial disposal will not affect any change to the management services arrangements where personnel are provided to Telkom through Thintana.

On the completion of this partial disposal, the number of directors Thintana is entitled to appoint to the Telkom board will be reduced from five to three, in respect of which one position will be appointed by 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 directly or indirectly in Telkom SA.

STATEMENT BY THE DIRECTORS

The Board is of the opinion that the proposed divestment of equity in Telkom is in the best interest of TM.