U.S.-based GTE to acquire Herold Business Data AG, Austria's largest telephone directory publisher; PTA to assume 26 percent stake in 1998.

DALLAS, Texas -- U.S.-based GTE, which provides telephone directory services in 16 countries, today announced it is acquiring Herold Business Data AG (HBD), Austria's largest telephone directory publisher.

In a related move, the Austrian telephone company, Post & Telekom Austria (PTA), has agreed to enter a joint venture with GTE to obtain a 26 percent stake in HBD on Jan. 1, 1998. The transaction with the PTA is contingent upon approval by the Austrian antitrust authorities and could take up to six weeks.

The amount of the acquisitions was not disclosed.

Herold is the leader in the Austrian directory market, and it is well-positioned to grow, said Doug LaVelle, president -- GTE Directories International. This acquisition provides us with tremendous opportunities in Austria, and it is a good strategic fit for GTE.

Ing. Dr. Josef Sindelka, general manager of the PTA, said he believes the acquisition will give both consumers and businesses the benefit of the two companies nearly 200 years combined experience in the communications and information industry.

About Herold and the Austrian Yellow Pages Market

Herold, formerly a wholly-owned subsidiary of Sweden-based Telia AB, is currently the official directory publisher for the PTA. It markets, sells and produces directory-related products and services to consumers in both print and electronic form. The company publishes 77 directory print titles with a distribution of 10 million. Founded in 1919, the company is based in Modling, Austria, near Vienna. GTE has served as a sales and marketing consultant for HBD since 1992, advising HBD on processes ranging from sales, management and territory control to market communications and research.

We are very pleased with the acquisition, said Klaus Steidl, former chief executive officer of Herold. Weve had an outstanding working relationship with both GTE and the PTA over the years, and this is a natural progression. GTEs experience and expertise will ensure that Herold remains the market leader in providing consumer information and directory advertising services. PTAs established presence and respected reputation as a premier provider of telecommunications services in Austria make this a perfect marriage.

Steidl, who has been with HBD 10 years, will become a member of the supervisory board. Other board members include LaVelle and Bill Brewer, GTE Directories vice president and general manager, Europe and Latin America. Jon Martinsen, formerly chief operating officer of HBD, will become managing director.

Research by GTE shows Austria as one of the most promising directory markets in Western Europe. The directory advertising industry is positioned well for development relative to other markets in Western Europe and the United States, giving GTE the opportunity to realize revenue growth beyond projected overall economic growth and advertising spending.

About the PTA

The Post and Telekom Austria Corporation (PTA) is Austrias largest service enterprise comprising the Post, Telecommunications and Coach Service business sectors. The corporation was formed as successor of the former PTV (Postal and Telegraph Administration) on May 1, 1996, and restructured its operations with, among others, the Mobilkom Austria AG Corp. and Datakom Austria AG subsidiaries, to handle its markets efficiently and actively. In its first business year (May 1 through Dec. 31) the group realized a profit of ATS 5 billion before interest and taxes (US $411 million) and a surplus of ATS 2.2 billion (US $181 million). Group sales amounted to ATS 40.7 billion (US $3.3 billion) for the incomplete business year 1996. The PTA group employed 58,326 people in 1996. The telephone network connects approximately 4 million lines and 900,000 mobile phones.

About GTE and GTE Directories

With revenues of more than $21 billion in 1996, GTE is one of the largest publicly held telecommunications companies in the world. In the United States, GTE offers local and wireless service in 29 states and long-distance service in all 50 states. GTE was the first among its peers to offer one-stop shopping for local, long distance and Internet access services. Outside the United States, where GTE has operated for more than 40 years, the company serves approximately 7 million customers. GTE is also a leader in government and defense communications systems and equipment, directories and telecommunications-based information services, and aircraft-passenger telecommunications.

The companys Directories unit, based in Dallas, is a leader in linking buyers and sellers through effective advertising and information media. It provides sales and other directory-related services for more than 2,400 directory titles in 17 countries, including Belgium, Hungary, Poland and Austria with a total circulation of 94 million. It develops and markets new media services such as GTEs SuperPages Interactive Service, a premier Internet-based advertising and information resource.