Conclusion of the privatisation of Tanzania Telecommunications Company

Celtel International (previously known as MSI Cellular) and the Government of Tanzania have concluded the privatisation of the Tanzania Telecommunications Company (TTCL).

Celtel International, in partnership with Detecon of Germany, invested an initial $60 million in TTCL in February 2001 for a 35% shareholding in TTCL. A second payment was dependent on the financial performance of TTCL for the year 2000. After disagreeing on the year-end 2000 accounts, both the Government and Celtel International agreed to be bound by independent "Expert Determination".

Mr John Ellison, a Partner in KPMG LLP of London, was appointed by both parties in 2003 as the independent expert to determine issues where the Government and Celtel International differed insofar as TTCL's year 2000 accounts were concerned. His report was sent to both parties on 29 January 2004 and is the basis of the agreement reached today.

Based on this “Expert Determination”, it has been agreed that Celtel International will make an additional $4.96 million payment. In addition, Celtel International will pay accrued interest of $321,000.

Speaking at a press conference in Dar es Salaam, Tanzania, The Chief Secretary in the President's Office, Mr Marten Lumbanga said now that the second tranche issue had been resolved, it was time for both parties to work together in rebuilding TTCL and recover the time lost in addressing the year 2000 accounts dispute.

Sir Alan Rudge, Celtel International's President and Chairperson of the TTCL board of directors, said in Dar es Salaam:

"We welcome the resolution of this matter and look forward to working together in building TTCL into an institution that will be a model for the region and a source of national pride."

For more details, please contact: Martin de Koning, Celtel Corporate Communications Director, +31 23 554 2671 or +31 6558 22409, deKoning.M@celtel.com