Contents :

1. Introduction

TM wishes to announce that it has today entered into a sale and purchase agreement with MEASAT Global Network Systems Sdn. Bhd. (“MGNS”) pursuant to which, TM has agreed to acquire from MGNS 60,024,010 ordinary shares of RM0.78 each in MGB for a total purchase price of RM250,000,000 (“Proposed Acquisition”). It represents approximately 15% of the equity interest in MGB.

2. Details of the Proposed Acquisition

• The proposed investment has no immediate material impact to the consolidated earnings of TM for the year ending 31 December 2003.

3. Information on MGB

3.1 MGB (formerly known as Malaysian Tobacco Company Berhad, listed on the Main Board of the Kuala Lumpur Stock Exchange) has an authorized capital of RM313,950,000 divided into 402,500,000 ordinary shares of RM0.78 each and issued and paid-up capital of RM304,147,860.90 divided into 389,933,155 ordinary shares of RM0.78 each.

3.2 In November 1999, MGB divested its entire tobacco manufacturing business and its marketing and distribution operations to subsidiaries of British American Tobacco (M) Bhd. In May 2002, MGB completed the acquisition of 100% Binariang Satellite Systems Sdn Bhd (BSS) from MGNS. Following the injection of BSS into MGB, MGNS shares in MGB increased to 76.47%. MGNS undertook a Mandatory General Offer (MGO) in respect of the remaining shares of MGB it did not own.

3.3 Upon completion of MGO on 17 July 2002, MGNS’s shareholding in MGB exceeded 90% and trading in the shares of MGB was suspended by the KLSE. Following the completion of the said acquisition, MGB assumed the role of an investment holding company, with its main income-generating asset being the commercial satellite operations of BSS.

3.4 BSS is the owner of the MEASAT satellite system and a licensed commercial satellite operator in Malaysia. BSS currently operates two satellites, namely, MEASAT-1 and MEASAT-2 and is planning to launch a third satellite (MEASAT-3) in the second quarter of 2005. MEASAT – 1 and MEASAT – 2 was launched on 13 January 1996 and 14 November 1996. Both have a life span of 12 years.

3.5 MEASAT – 1 have twelve C-band and four Ku-band transponders. The C-band covers Japan through South East Asia, China, Hawai and Australia while the Ku band covers Malaysia, Philippines, East Australia and India. MEASAT – 2 have six C – band cover South East Asia and nine Ku-band which cover Indonesia, Philippines, Taiwan, Vietnam and East Australia.

3.6 MEASAT – 3 which will be launched in May 2005 have twenty four C – band to cover Middle East - Eastern Europe, Asia, Australia and Africa and twenty four Ku band to cover Malaysia, Indonesia, India and China.

4. Rationale for the Proposed Acquisition

4.1 TM traditionally has been a major user of satellite capacity in both its core and support telecommunications network infrastructure. Satellite services are fast turning into an important component of national, regional and global infrastructure. The Proposed Acquisition would provide the opportunity for TM to participate in satellite systems, a project of strategic importance to our future businesses. TM believes that such opportunity would be synergistic to its existing communications infrastructure and help achieve its goal of creating a fully integrated network capable of providing communications and multimedia packages to customers and markets throughout Malaysia and regions where we are operating and intend to operate.

4.2 Broadband and multimedia services are prime TM growth initiatives, both domestically and regionally. In order to capitalize on future demand, TM is continuously looking to enhance its capabilities to deliver new and innovative offerings in these businesses, utilizing multiple platforms. Satellite technology has potential in delivering broadband internet access and multimedia services to the mass market not only in Malaysia but in the ASEAN region, given our high TV penetration. Satellite technology has proven effective in serving remote areas in Malaysia, given the topology of the country and could do so in other similar countries.

4.3 TM has always prided itself on having a vast and widely diversified network, which provides seamless and transparent provisioning of its services. This is instrumental to TM increasing its service level guarantee to its customers. A highly diversified network is also critical in driving the cost of delivery down and is part of TM's continuous efforts to become a low cost service provider.

4.4 TM believes that this strategic investment provides an opportunity to become a significant player not only in the satellite industry but also strengthens its position as the leading fully integrated communications service provider in Malaysia and in the region. TM’s role as a strategic investor in MGB will be enhanced through the allocation of one (1) Board seat and management participation.

5. Financial Effects of the Proposed Acquisition

6. Approvals Required

6.1 No relevant authorities approval is required other than the Foreign Investment Committee (FIC).

7. Directors’ Statement

7.1 The directors, substantial shareholders and/or persons connected with them have no interests, direct or indirect, in the Proposed Acquisition.

The announcement is dated 4th December 2003.