Contents :

• • a) Share Sale and Purchase Agreement; and
    b) Joint Venture Agreement (“JVA”),

    with Nihal Seneviratne Epa and Lasantha Joseph Milroy Pieries (collectively known as the “Vendors”) to acquire 90% of the issued and paid-up share capital of Asset Media (Pvt) Ltd from Nihal Seneviratne Epa and Lasantha Joseph Milroy Pieries (collectively known as the “Vendors”).

1. INTRODUCTION

Pursuant to Paragraph 9.19 (23), Part J of Chapter 9 of the Listing Requirements of Bursa Malaysia Securities Berhad, TM is pleased to announce that its subsidiary listed on the Colombo Stock Exchange, Dialog, had on 29 September 2006, entered into a:


2. DETAILS OF THE ACQUISITION

The acquisition of 90% of the total issued and paid-up capital of Asset Media (Pvt) Ltd involved the purchase by Dialog of 2 ordinary shares in Asset Media (Pvt) Ltd from the Vendors for United States Dollars (“USD”) 3.15 million and a subsequent increase in the issued and paid-up capital of Asset Media (Pvt) Ltd from LKR20 (comprising 2 ordinary shares of LKR 10 each) to LKR200 (comprising 20 ordinary shares of LKR 10 each) and the transfer of 2 ordinary shares to the Vendors. Dialog now holds 18 ordinary shares of LKR 10 each in Asset Media.

The acquisition was financed from Dialog’s internally generated funds and/or borrowings. The acquisition was completed on 29 September 2006.

3. SALIENT TERMS OF THE JVA

On 29 September 2006, Dialog also entered into a JVA with the Vendors. The JVA sets out the terms and conditions for the operations of Asset Media (Pvt) Ltd and the relationship as shareholders in Asset Media (Pvt) Ltd, including but not limited to matters such as transfer restrictions on the shareholdings of the parties, composition of the Board of Directors of Asset Media (Pvt) Ltd and the management of Asset Media (Pvt) Ltd.

The entry into the JVA is not subject to any approval of the shareholders of Dialog or of any regulatory authorities.

4. INFORMATION ON ASSET MEDIA (PVT) LTD

Asset Media (Pvt) Ltd was incorporated in Sri Lanka on 9 January 2004. The authorised share capital of Asset Media is Sri Lankan Rupees (“LKR”) 500 million, comprising 50 million ordinary shares of LKR 10 each. The issued and paid-up capital of Asset Media (Pvt) Ltd is 200, comprising 20 ordinary shares of LKR 10 each.

Asset Media possesses licenses from the Ministry of the Media and the Telecommunications Regulatory Commission of Sri Lanka requisite to carry out the business of Television Broadcasting, delivery of Pay Television Services and the operation of a Television broadcasting station.

5. RATIONALE FOR THE ACQUISITION

The acquisition by Dialog is an important milestone in the (Dialog) group’s strategy of achieving a quadruple play (Mobile, Fixed, Broadband, and Television Media) product proposition for Sri Lankan consumers. In keeping with global dynamics with respect to the rapid convergence of communications and media technologies, and the merging of content and infotainment services with core telecommunications services, Dialog will now attach convergent digital media and content delivery services to its portfolio of offerings to Sri Lankan consumers. The strategic diversification in to the Television broadcasting space will result in Dialog making transformational investments in Digital Broadcast infrastructure targeting Digital Terrestrial Broadcast, Direct to Home (DTH) and Mobile Television service provisioning.

6. EFFECTS OF THE ACQUISITION

6.1 Share capital and shareholdings of substantial shareholders

The Acquisition and entry into the JVA will not have any effect on TM's issued and paid-up share capital and shareholdings of substantial shareholders.

6.2 Net Asset

The Acquisition and entry into the JVA will not have any material effect on the Net Asset of the TM group.

6.3 Earnings

The Acquisition and entry into the JVA is not expected to have any material effect on the earnings of the TM group for the financial year ending 31 December 2006.

7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM

None of TM’s Directors or major shareholders or persons connected with them has any interest, direct or indirect, in the Acquisition or the JVA.

8. DOCUMENT AVAILABLE FOR INSPECTION

The Share Sale and Purchase Agreement and JVA are available for inspection at the registered office of TM at Level 51, North Wing, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur during normal business hours from Mondays to Fridays (except for public holidays) for a period of three (3) months from the date of this announcement.


This announcement is dated 2 October 2006