Elcoteq - Company Announcement

ELCOTEQ DIVESTS ITS SUBSIDIARY IN OFFENBURG AND TARGETS TO SCALE DOWN OR DIVEST ITS SUBSIDIARY IN ST. PETERSBURG

Elcoteq SE              Stock Exchange Release        December 27, 2007 at 3.00
pm (EET) 

ELCOTEQ DIVESTS ITS SUBSIDIARY IN OFFENBURG AND TARGETS TO SCALE DOWN OR DIVEST
ITS SUBSIDIARY IN ST. PETERSBURG 

Elcoteq's production capacity will be rationalized in Germany and Russia as
part of the new action plan announced in October 2007. Elcoteq has signed an
agreement to divest its German subsidiary Elcoteq Communications Technology
GmbH to the German company BAVARIA Industriekapital AG. The sale is subject to
the German competition authorities' approval, which is expected in January
2008. Furthermore, Elcoteq targets to scale down or divest its subsidiary in
St. Petersburg, Russia during early 2008.  In addition to these actions,
Elcoteq will implement cost cuts in its other operations in Europe,
Asia-Pacific and Americas. These cost cuts combined with the above mentioned
actions to rationalize production capacity are expected to result in total
one-time costs of roughly 15 million euros. Most of these costs will be
recognized in the fourth quarter result of 2007. Cash-out effect from the
actions is expected to be insignificant. 

Elcoteq estimates that the annual savings from the actions mentioned above will
amount to 70 - 80 million euros, with savings coming into effect on a gradual
basis from the beginning of the year 2008. The actions are carried out in areas
that will not limit the company's service offering or its possibilities for
growth. 

With the new action plan announced in October 2007 Elcoteq aims at meeting its
financial targets by securing a competitive cost structure and by laying ground
for the implementation of the IEMS (Integrated Electronics Manufacturing
Services) strategy. 

Elcoteq's previous action plan that started in the first quarter of 2007 has
progressed according to the company's expectations. Furthermore, the company
continues to improve its operational efficiency especially in the areas of
materials management and asset utilization. Savings from these improvements are
not included in the 70 - 80 million euros mentioned above and are expected to
represent a significant contribution to the company's target of achieving the
two percent operating income level in 2008. 

Elcoteq made preparations for a substantial growth in 2007 production volumes
on the basis of forecasts from a single customer, with pricing also being based
on these higher volumes. However, the ordered volumes have been substantially
short of the forecasts throughout the year although being very accurate in the
past. Therefore, the big difference between forecasted and ordered volumes has
weakened the profitability of this particular business in year 2007.
Negotiations with this single customer continue, as informed already in October
2007, and clarification of the operating methods is proceeding. 

ELCOTEQ SE

Jouni Hartikainen
President and CEO

Further information:

Jouni Hartikainen, President and CEO, tel. +358 10 413 11 
Mikko Puolakka, CFO, mobile +41 79 618 0302
Tuula Hatakka, SVP, Treasury, Communications and IR, mobile +358 50 340 5478


About Elcoteq
Elcoteq SE is a leading electronics manufacturing services (EMS) company with
original design manufacturing (ODM) capabilities in the communications
technology field. Elcoteq provides global end-to-end solutions consisting of
product development, NPI, manufacturing, supply chain management, and
after-sales services for the whole lifecycle of its customers' products. These
products include terminal products such as mobile phones and set-top boxes as
well as communications network equipment such as base-stations, tower-top
amplifiers, and microwave systems. The company operates in 16 countries on four
continents and employs some 25,000 people. Elcoteq's consolidated net sales for
2006 totaled 4.3 billion euros. Elcoteq SE is listed on the Helsinki Stock
Exchange.  For more information visit the Elcoteq website at www.elcoteq.com.