TEO LT, AB - Notification on material event

TEO will compensate for it's clients increase of VAT in Lithuania

TEO LT, AB (hereinafter TEO or “the Company”) will not increase prices for all
of its services for residential  and for most of services for business
customers despite the raise in the value-added tax (VAT) rate to 21% in
Lithuania from September. 

By compensating for the VAT rate difference, TEO will refuse part of its
revenue and by making this step will seek to justify the expectations of
customers under the current economic conditions. This compensation will cost
TEO almost LTL 3 million this year, and next year - more than LTL 9 million. 

For voice telephony, Internet and television service users, TEO is going to
compensate the part of the value-added tax rate that will be raised from the
1st of September by lower prices excluding VAT, so the final prices will remain
unchanged. For business customers of data communication solutions, IT services,
wholesale services as well as short and special numbers, prices excluding VAT
will remain the same. 

Person authorised to provide additional information about material event -
Antanas Bubnelis, Press Officer, tel. +370 5 236 75 37.