THE FIRST INTEGRATED OPERATOR IN THE CZECH REPUBLIC: TELEFÓNICA O2 CZECH REPUBLIC

30.6.2006

Summer holidays this year will kick off with the start of the first integrated operator in the Czech Republic. Telefónica O2 Czech Republic a.s., which will arise from the convergence of the country’s most prominent fixed line operator, ČESKÝ TELECOM, a.s., and strongest mobile operator, Eurotel, spol. s.r.o., will be entered into the Commercial Registry from Saturday, July 1, 2006.

"As of July 1, 2006 the employees of Eurotel and Český Telecom become the employees of the new Company - Telefónica O2 Czech Republic. By putting this integration into effect, a unique company based on the convergence of fixed and mobile services will emerge. New opportunities are opening up, enabling us to take advantage of the best of O2’s experience and the strength of the Telefónica Group, and to provide better services together not only to our customers but also to our employees and shareholders."

Both ČESKÝ TELECOM and Eurotel announced their intention to join forces in March 2006. In April 2006, this was then approved by the General Meeting of ČESKÝ TELECOM’s shareholders. Upon completion of preliminary and legal steps, Telefónica O2 Czech Republic was able to be entered into the Commercial Registry. The day of this entry, and with it the birth of the new company, is July 1, 2006.

On July 1, 2006, three main changes will be entered into the Commercial Registry:

• the takeover of Eurotel by its sole proprietor, ČESKÝ TELECOM (Eurotel Praha is removed from the Commercial Registry and is dissolved without liquidation)
• a change in the composition of the statutory and supervisory organs of ČESKÝ TELECOM in accordance with what was approved by the General Meeting on April 27
• the company’s name change from ČESKÝ TELECOM, a.s., to Telefónica O2 Czech Republic, a.s.

From July 1, 2006, the old commercial names of Eurotel Praha, spol. s.r.o., and ČESKÝ TELECOM, a.s. will no longer be used.

For a certain period of time, the new company will continue to use former commercial brands for naming and identifying products, advertising objectives and the like.

In the future, Telefónica O2 Czech Republic will use the O2 brand supplemented by Telefónica in all communications. The new brand – specifically, its uses and forms in the Czech Republic – will be prepared and presented to the public over the course of 2006. It will primarily come out of the experience and best practices of O2 and Telefónica and from thorough analysis of the Czech environment and our market’s needs.

For further information, please contact:
MARTIN ŽABKA
Press Spokesman
Tel: +420 271 463 359
Fax: +420 271 469 896
e-mail: tiskovy.odbor@ct.cz

ČESKÝ TELECOM, a. s., member of the Telefónica Group is the leading telecommunications company in the Czech Republic. Through its subsidiary company Eurotel Praha, spol. s r.o., it also has a significant presence in the Czech mobile services market. Further information about the firm and the services it offers is available at www.telecom.cz, which was rated as BestWeb 2003 in the WebTop100 survey.

Signum Temporis has consistently awarded ČESKÝ TELECOM for being one of the domestic capital market's most transparent firms in terms of providing information. Based on an open vote of specialists, members of the press and a nine-member committee, ČESKÝ TELECOM placed first in 2003, just as it did in 2001.

ČESKÝ TELECOM ranks among the most prominent firms on the Czech capital market in terms of capitalization and trading volumes. Its shares are also traded on the London Stock Exchange in the form of GDRs. ČESKÝ TELECOM's credit rating is the highest a Czech corporation can receive from top international rating agencies.

About Telefónica

Telefónica is one of the largest telecommunications companies in the world in terms of market capitalisation. Its activities are centered mainly on the fixed and mobile telephony businesses with broadband as the key tool for the development of both.

The company has a significant presence in 19 countries and a customer base that amounts more than 180 million accesses around the world. Telefónica has a strong presence in Latin America, where the company focuses an important part of its growth strategy.

Telefónica is a 100% listed company, with more than 1.5 million direct shareholders. Its share capital currently comprises 4,921,130,397 ordinary shares traded on the Spanish Stock Market (Madrid, Barcelona, Bilbao and Valencia) and on those in London, Paris, Frankfurt, Tokyo, New York, Lima, Buenos Aires and São Paulo.