EANS-Adhoc: Telekom Austria Reaches Agreement for Voluntary Transfer of up to 500 Civil Servants to the Police Force (Ad hoc)

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ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
distribution. The issuer is solely responsible for the content of this
announcement.
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C.E.O. Interviews

26.11.2009

Vienna, November 26, 2009: The Telekom Austria Group (VSE: TKA, OTC
US: TKAGY) today signed an agreement with the Austrian government for
the voluntary transfer of up to 500 civil servants of its Fixed Net
division, who cannot be laid off due to their civil servant status
but have to be made redundant due to changes in technology, to the
Austrian police force. The agreement is effective immediately.

"This agreement is ground breaking as it is the first of its kind and
creates a win-win situation for all parties: It addresses one of the
key issues for a sustainable development of Telekom Austria Group and
offers our civil servants a positive perspective for their future
careers. Plus, it supports the Austrian police force to make Austria
more secure", says Hannes Ametsreiter, CEO Telekom Austria Group.

According to this agreement up to 500 out of 6,100 civil servants
employed by the Fixed Net division may apply to the police force to
take on administrative tasks. After six months and provided a
positive assessment the civil servants may apply for a permanent
transfer to the police force and cease the right to return to Telekom
Austria Group.

Telekom Austria Group will pay the salaries of the civil servants
transferred to the police force until June 30, 2014 and will
compensate the civil servants until retirement for a potential
shortfall of salary and pension contribution including an extra
allowance of EUR 6,000 per year for transferring to the police.

"This agreement constitutes a major milestone in the ongoing
restructuring of the Fixed Net in a socially responsible way. It will
have a positive impact on cash flow from mid 2014 on as each civil
servant transferred to the police force will lead to a significant
cash saving over his remaining average 17 years of work life," adds
Hans Tschuden, CFO Telekom Austria Group.

The agreement will not impact the financial results 2009 and the net
debt position of the company. The impact on the financial results of
Telekom Austria Group in 2010 and beyond depends on a number of
factors, including age, salary, time of transfer to the police, but
most importantly assignment to the Fixed Net operations or the idle
work force and can only be assessed upon the final transfer of the
civil servant.

Each civil servant assigned to the Fixed Net, who voluntarily
transfers to the police force, requires an accrual equivalent to the
net present value of the future expenses born by Telekom Austria.

Each civil servant assigned to the idle work force under last years
restructuring program, who voluntarily transfers to the police force,
will result in a release of part of the restructuring provision
accrued last year, however without recurring impact on EBITDA in
subsequent years.

Telekom Austria will provide an update on the uptake of the program
in due time.

end of announcement euro adhoc
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ots Originaltext: Telekom Austria AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Peter E. Zydek

Head of Investor Relations

Tel.: +43 (0) 59059 1-19001

mailto: peter.zydek@telekom.at

Elisabeth Mattes

Telekom Austria Group's Spokeswoman

Tel.: +43 (0) 664 331 2730

mailto: elisabeth.mattes@telekom.at

Branche: Telecommunications
ISIN: AT0000720008
WKN: 555750
Index: WBI, ATX Prime, ATX
Börsen: Wien / official dealing