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We forward herewith a press statement released by Telekom Malaysia Berhad today on the above matter:-

Telekom Malaysia Berhad (TM) announced today that its Indian affiliate, Spice Communications Private Limited (Spice), will adopt an aggressive expansion plan, premised on a Pan-Indian footprint strategy.

Spice has applied for Unified Access Service (UAS) licenses for all of the 21 circles in India on 1 September 2006. Currently Spice operates out of 2 circles in the Indian states of Punjab and Karnataka, which are recognised as the economic hubs of India. Spice had originally said that it would apply for six circles - Jammu-Kashmir, Haryana, Rajasthan, Himaphal Pradesh, Uttar Pradesh (East and West).

In line with its Pan-Indian strategy, Spice had also applied for National License Distance (NLD) and International Long Distance (ILD) licenses at the end of August 2006. These decisions reflect a liberalised regulatory environment in India, characterised by recent policy and regulatory changes. The recent changes include the introduction of the technology-neutral UAS licensing regime, the enhancement of the foreign direct investment ceiling from 49 percent to 74 percent in the telecom sector, and the liberalisation of NLD and ILD licenses.

Earlier this year, TM secured a critical piece in its regional footprint, with the acquisition a 49 per cent stake in Spice for a consideration of USD178.85 million. The successful acquisition was completed on 10 May 2006.

Yusof Annuar Yaacob, Chief Executive Officer of TM’s international investments holding arm TM International (TMI) which is headquartered in Kuala Lumpur, says this aggressive growth plan is a result of the restructuring of Spice and a clear determination on the part of TM and its Indian partner MCorp Global, to position Spice as a dynamic wireless communications provider in India. MCorp Global holds the remaining equity stake of 51-percent in Spice.

“By combining the strengths of TM, an emerging leader in Asian communications, with an up-and-coming Indian communications player, I am confident these proposed expansion plans for India will eventually result in good returns for all our stakeholders” Yusof said.

Indian government statistics indicate that India, one of the fastest growing telecom markets in the world, is among the top 10 countries in the world in terms of the size of its telecommunications network and ranks second to China in Asia. The mobile subscriber base alone increased from 6.5 million in 2002 to around 111 million in July 2006, a CAGR of 103 percent.

Commenting on news reports out of New Delhi that the Pan-Indian strategy is estimated initially to cost the company USD2 billion for the new circles and an addition USD500 million for its existing operations over the next three years, Yusof said that the funding for this could come from a variety of internal and external financing options, including a possible tapping into the capital market.

“However, a decision on an early listing of Spice is one of the options being considered, and is subject to shareholder decision, including that of TM,” Yusof added.

Spice customers today join TM’s global mobile subscriber base of over 24 million. Apart from TM’s operational and management experience both in Malaysia and key Asian regional markets, Spice customers stand to benefit from through the creation and innovation of new products and services, sharing of technological experience and implementation, and the leveraging of group synergies such as in global procurement.

In terms of cellular subscribers, TM’s international investments have seen exponential growth - with just over 500,000 cellular subscribers as late as 2001, TM now has more than 15 million subscribers in nine Asian countries – Indonesia, Singapore, Thailand, Cambodia, Sri Lanka, Pakistan, Bangladesh, India and Iran. This brings its total regional subscriber base, including its domestic operations, to some 24 million.

TM also has substantial equity control over several key Asian mobile operators such as Sri Lanka’s Dialog Telekom Limited (87.7 percent), TM International (Bangladesh) Limited (70 percent), Cambodia’s Hello (100 percent) and Indonesia’s PT Excelcomindo Pratama Tbk (59.7 percent).

About Telekom Malaysia Berhad (TM)

TM, an emerging leader in Asian communications, offers a comprehensive range of communication services and solutions in fixed-line, mobile, data and broadband. As one of the largest listed companies in Malaysia with a market capitalisation of USD8.38 billion, TM delivers value to its stakeholders in a highly competitive home environment.

The Group places emphasis on continuing customer service quality enhancements and innovations. Currently, with investments and operations in 13 countries around Asia and globally, TM is focused on achieving sustainable growth in both the local and international markets.

TM has interests in nine key markets within Asia – Indonesia, Singapore, Cambodia, Thailand, Bangladesh, Pakistan, India, Sri Lanka and Iran. TM has an impeccable track record of adding value to its investments, working closely with its subsidiaries to achieve strong market positions and profitability.

For further information on TM, visit www.tm.com.my

About Spice Telecom

Spice Telecom the brand name of Spice Communications Private Limited is presently operating Cellular Phone Services in the states of Punjab and Karnataka. Considered as one of the best service providers of mobile telephony in India, Spice Telecom is a flagship company of MCorp Global (www.mcorpglobal.com) a pioneer in introducing cellular mobile telephone services in India and has interests in the fields of Information, Communication and Entertainment (ICE). Launched over nine years ago, Spice’s cellular services have a strong customer base of over 2 million as at June 2006 in the challenging and lucrative Punjab and Karnataka markets.