Stet Hellas Reports First Half 1998 Results

Stet Hellas Reports First Half 1998 Results

August 6, 1998

Athens, Greece, August 6, 1998 - Stet Hellas announced today that
its before tax earnings for the first six months of 1998 were Drs 6.9
billion compared to Drs 0.8 billion for the corresponding period of 1997.
For the first semester of 1998 net income was Drs 3.4 billion.

Total operating revenue increased by 30% to Drs 52.8 billion against
Drs 40.5 billion for the first half of 1997. Service revenues increased by
40% in the first six months of 1998 to Drs 47.9 billion compared with Drs
34.2 billion for the same period in 1997. The improvement was achieved
primarily through strong growth in the company's customer base, which
increased by 77% as of June 30, 1998, from 285,000 as at June 30, 1997.
The growth in the company's customer base primarily reflects increases in
customers of the company's B-free pre-paid services, which increased by
83,000 net new customers in the first six months of 1998 to 172,000 B-free
pre-paid customers at June 30, 1998. B-free customers represent
approximately 34% of Stet Hellas's total customerbase.

Total minutes of use increased by 60% in the first six months of 1998
to 295 million minutes, as compared to 184 million minutes in the same
period of 1997. Average usage per customer decreased in the six months
ended June 30, 1998 to 111 minutes compared with 126 minutes per customer
for the six months ended June 30, 1997. This expected decrease in average
usage per customer was due primarily to the increased number of
consumer-segment users of B-free pre-paid services.

Average monthly service revenues per user decreased in the first six
months of 1998 to Drs. 18,091 as compared to Drs. 23,445 for the same
period of 1997. This reflects lower traffic volume per customer and lower
average monthly fees from the increase in B-free customers.

Roaming
revenues rose in the first semester of 1998 by 33% to Drs. 3.8 billion as
compared with Drs. 2.9 billion for the first six months of 1997. Roaming
revenues are seasonal, with the majority of the revenues coming from
customers of international GSM operators travelling in Greece during the
summer period. In the first six months of 1998 the company negotiated 12
new roaming agreements. As at June 30,1998, the company had 89 roaming
partners in 55 countries.

The company's churn rate for the six months
ended June 30, 1998, was 11.0% as compared with 10.2% for the same period
of 1997. The churn rate for the six months ended June 30, 1998, includes
migrations from contract plans to pre-paid plans.

As a result of
increased service revenues and an increase in pre-paid customers, costs of
sales and services provided as a percentage of total operating revenues
have decreased compared with the first six months of 1997. Further, due to
increased efficien cy and economies-of-scale in sales, general and
administrative costs as a percentage of total operating revenues also
decreased. Accordingly, operating income as a proportion of service
revenues substantially improved moving to 25% for the first six month s of
1998 from 13.7% for the first six months of 1997.

Net cash provided by
operating activities totaled Drs. 14.7 billion for the six months ended
June 30, 1998, as compared to Drs. 3.8 billion for the six months ended
June 30, 1997.

Expenditure relating to tangible fixed assets totaled Drs. 8.7 billion in
the first six months of 1998. The continuing development of the company's
network accounted for Drs. 6.0 billion of fixed asset additions. Fixed
asset additions included development of the company's information systems.
In 1998 the company will fully migrate the contract customer base to BSCS
version 4, a new and very flexible billing and information system. BSCS
will allow not only the development of innovative products and services,
but also provides a year 2000 solution to the customer care and billing
operations. Additionally, it allows on-line and real-time resolution of
the most common customer queries, increasing customer satisfaction and
slowing the growth of customer service personnel.

In the first six months of 1998 the company opened another six
directly owned "Telestet Exclusive" retail stores and another 70 quality
points (points of sale that are expected to acquire between 60 and 80 new
customer additions per month).

In the first half of 1998, Stet Hellas continued to grow the business,
introducing innovative tariff plans. B-free Professional, launched in
January, offers pre-paid customers a lower peak airtime rate. Corporate
Billing, launched in February, offers corporate customers a variety of
billing options including consolidated bills customised to the client's
desired level of detail. Telestet Weekend, launched in April, offers
tariff plan customers a lower airtime rate during the weekend. And
CityLines, launched in May, gives customers lower airtime rates for calls
from a customer's mobile telephone to a fixed line telephone within the
five largest cities in Greece.

In September 1998, the company is scheduled to become the market's
first provider of Iridium service; the first global satellite-based mobile
telecommunications service.

"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995:

The matters discussed in this Press Release include forward looking
statements that are subject to risks and uncertainties including, but not
limited to, economic conditions, the continued maintenance of the capacity
of the Company's network, the ability of the Company to resolve certain
legal proceedings in a manner favorable to the Company, and other risks
indicated in filings with the U.S. Securities and Exchange Commission.

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