[May 03, 2012]

Magyar Telecom B.V. Announces the 2011 Financial Results and Investor Call

Magyar Telecom B.V. ("Matel B.V.") announced today its financial results for the year ended December 31, 2011.

2011 RESULTS

The results for the year ended December 31, 2011 reflect the consolidated financial results of Magyar Telecom B.V. and its subsidiaries (collectively, the "Company").

On February 28, 2011, Invitel, a wholly owned subsidiary of Matel B.V. acquired FiberNet Kft and its subsidiaries, FiberNet Zrt, Dunaweb Távközlési Kft and Donet-Info Kft (collectively "Fibernet"). The results of Fibernet are included from March 1, 2011 in the consolidated financial statements of Matel B.V. On September 30, 2011 Fibernet was merged into Invitel.

The reporting currency is the euro; however, the functional currency of continuing operations is the Hungarian forint, being the currency of the primary economic environment in which the Company operates.

When comparing the financial results for the year ended December 31, 2011 to the financial results for the year ended December 31, 2010, the reported results in euro have been affected by the difference between the average EUR/HUF exchange rates. The Hungarian forint depreciated against the euro by 1% with an average EUR/HUF exchange rate of 279.21 during the year ended December 31, 2011 compared to the average EUR/HUF exchange rate of 275.41 during the year ended December 31, 2010. This change in exchange rates had an impact on Hungarian forint denominated earnings when converted into euro.

The Company's revenue from continuing operations was EUR 195.1 million for the year ended December 31, 2011 which represents a 1% increase compared to the year ended December 31, 2010. Segment gross margin decreased by 1% from EUR 160.9 million for the year ended December 31, 2010 to EUR 159.7 million for the year ended December 31, 2011. Segment selling, general and administrative expenses increased by 2% from EUR 46.2 million for the year ended December 31, 2010 to EUR 47.0 million for the year ended December 31, 2011. Income from operations changed to a loss of EUR 42.0 million for the year ended December 31, 2011 from an income of EUR 29.3 million for the year ended December 31, 2010, mainly as a result of the increase in depreciation and amortization by EUR 61.6 million. Net income of continuing operations was a net loss of EUR 47.5 million for the year ended December 31, 2011 compared to a net loss of EUR 48.8 million for the year ended December 31, 2010, reflecting a decrease in net financial expenses of EUR 29.2 million, a decrease in tax charges of EUR 14.9 million and a gain of EUR 28.5 million accounted for in relation to the acquisition of Fibernet.

Residential Voice - Residential Voice segment gross margin was EUR 44.3 million for the year ended December 31, 2011, representing a decrease of 20% compared to the year ended December 31, 2010. The decrease was mainly due to a decrease in the number of subscribers and traffic inside our historical concession areas, as well as a decrease in the number of low margin carrier select customers and traffic outside our historical concession areas. In functional currency terms, Residential Voice segment gross margin decreased by 19% compared to the prior year.

Residential Internet - Residential Internet segment gross margin was EUR 27.3 million for the year ended December 31, 2011, representing an increase of 4% compared to the year ended December 31, 2010. The increase was primarily due to the increase in our IPTV (News - Alert) customer base and the decrease in out-of-concession ADSL wholesale prices. In functional currency terms, Residential Internet segment gross margin increased by 5% compared to the prior year.

Cable - Cable segment gross margin was EUR 13.1 million for the year ended December 31, 2011. The Cable segment was introduced as of March 1, 2011 and relates to the revenue generated by Fibernet.

Corporate - Corporate segment gross margin was EUR 48.5 million for the year ended December 31, 2011, representing a decrease of 5% compared to the year ended December 31, 2010. The decrease was mainly due to the reduction in the traditional voice business and price erosion due to competition. In functional currency terms, Corporate segment gross margin decreased by 4% compared to the prior year.

Wholesale - Wholesale segment gross margin was EUR 26.5 million for the year ended December 31, 2011, representing a decrease of 5% compared to the year ended December 31, 2010. The decrease is primarily attributable to a significant dark fiber sale of EUR 4.2 million in 2010.

Segment gross margin is a non-IFRS financial measure, which is used by management to evaluate the performance of the business segments. The following table represents the reconciliation of segment gross margin to income from operations:

Net cash provided by continuing operations, which includes interest paid but excludes capital expenditure and debt repayments, was EUR 28.2 million for the year ended December 31, 2011.

COMMENTS FROM DAVID McGOWAN

Commenting on the financial results, David McGowan, President and CEO, said, "The general economic and trading conditions in Hungary continue to be challenging with a highly competitive market. These economic conditions are reflected in the decline in the gross margin for most of our segments. In the Residential segment we still have significant decline in Voice, the rate of which we believe can be reduced over time. The Residential Internet segment provides some encouragement with the year on year segment gross margin increase. The Cable segment include the results of the Fibernet business, the integration of which is now completed. We have achieved stability in both the Corporate and Wholesale segments with new customer acquisitions and up-selling compensating for competitive pricing pressure. In the Corporate segment we saw stronger growth in data and a reduced level of decline in corporate voice. Our Wholesale business, which by its nature can be rather spiky, continues to perform well."

CONFERENCE CALL

On May 3, 2012 (at 14:00 UK time, 15:00 CET, 9:00 AM ET), the CEO and CFO of Matel B.V. will host a conference call to discuss the 2011 financial results.

You can participate in the conference call by dialing 800-4626-6666 (UK toll free), +1-201-689-8049 (International) or +1-877-407-9210 (U.S. toll free) and referencing "Matel B.V."

A webcast of the call and the presentation materials will be available on Invitel's website at http://english.invitel.hu/ under "Press/Investor Relations." The webcast will be available for replay until August 3, 2012. In addition, a replay of the call will be available until May 17, 2012 at 11:59 PM ET. To access the replay of the call, please dial +1-877-660-6853 (U.S. toll free) or internationally dial +1-201-612-7415 and enter account (286) followed by the replay access code (390261).

ABOUT MAGYAR TELECOM B.V.

Magyar Telecom B.V., through its subsidiaries, is the number one alternative and the second-largest fixed line telecommunications and broadband Internet Services Provider in the Republic of Hungary, delivering voice, data, cable TV and Internet services to residential and corporate customers.

Forward-Looking Statements and Legal Information

The information above includes forward-looking statements about Magyar Telecom B.V. and its subsidiaries. These and all forward-looking statements are only predictions of current plans that are constantly under review by Matel B.V. Such statements are qualified by important factors that may cause actual results to differ from those contemplated, including those risk factors detailed in Matel B.V.'s Annual Reports, which may not be exhaustive. For a discussion of such risk factors, see Matel B.V.'s Annual Reports. Matel B.V. operates in a continually changing business environment and new risk factors emerge from time to time. Matel B.V. cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on its business or events described in any forward-looking statements. Matel B.V. has no obligation to publicly update or revise any forward-looking statements to reflect the occurrence of future events or circumstances. In addition, because the Company has deregistered its common stock and is no longer subject to certain reporting obligations with the SEC (News - Alert), the Company no longer intends to file or furnish any updates with the SEC.

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