News Release

STET HELLAS REPORTS 31% REVENUE GROWTH FOR FIRST HALF OF 1999

August 25, 1999

Media Relations:
Deppie Tzimea-Houliarakis
Ph: 00.301.618.6160

Investor Relations:
George Rallis
Ph: 00.301.618.6585

ATHENS — Stet Hellas Telecommunications S. A. (NASDAQ: STHLY; Amsterdam: STHLS) today announced six month revenue growth of 31% with total revenues of Drs. 69.4 billion for the first six months of 1999 compared to Drs. 52.8 billion for the corresponding period of the previous year.

The 1999 revenue growth was achieved primarily through an 84% year on year increase in the customer base, driving total customers as of June 30, 1999, to 928,034. The company's earnings before taxes were Drs. 3.2 billion, compared to Drs. 6.9 billion in the first six months of 1998, a decrease of 53%.

Net income for the first half of 1999 was Drs. 1.0 billion compared to Drs. 3.4 billion for the first half of 1998. The company said 1999 net income reflected greater than anticipated growth in its customer base offset by significantly increased customer acquisition costs due to increased competition.

The results are based on US Generally Accepted Accounting Principles (GAAP) and include the financial results of Telepolis, a subsidiary of Stet Hellas S.A., that is developing a chain of franchise shops that exclusively offer the company's Telestet brand of products and services.

"Our first six months is the result of the fierce three-way competition faced by Telestet in the dynamic, high-growth market," said Managing Director Roberto Rovera. "Our goal has been and will be to create a balance between the economics and the battle for market share in this environment. We intend to stick with our plans to create a market condition that provides benefits for both our customers and our shareholders."

The company launched a series of new tariff plans under its Telestet brand in 1999 that advanced its strategy of addressing distinct business and consumer customer segments. Customer base growth in 1999 primarily reflects increases in the company's B Free prepaid services, up by 160,693 net customers since the beginning of the year. During this period, the company created new distribution channels for its prepaid product, including the country's network of street-corner kiosks and Kodak photo shops. The popular prepaid products require no service contracts or monthly bills. B-Free customers represent approximately 49% of the total customer base.

Total minutes of use increased by 41.7% in the first six months of 1999 to 418 million minutes, as compared to 295 million minutes for the corresponding period of 1998. Average traffic per customer decreased during the first half of 1999 to 86 minutes per customer, compared with 111 minutes per customer for the first half of 1998. This decrease in average traffic per customer was due primarily to the increased number of customers of the company's B-free prepaid services, who are generally lower volume customers.

Average monthly service revenues per user decreased in the first half of 1999 to Drs. 13,375 as compared to Drs. 18,091 for the same period of 1998. This reflects lower traffic volume per customer and lower average monthly fees mainly due to the increase in B-free customers, and a price reduction that took place in the beginning of 1999 with the introduction of new tariff plans.

The company's churn rate for the first half of 1999 was 11.6%, as compared to 11.0% for the same period of the previous year. The contract churn rate for the first half of 1999 has increased to 21% from 16% for the same period of last year. The churn rate includes customers who migrated from tariff plans to B-free and people who recycled in the network in order to take advantage of high subsidies.

Total acquisition cost, including the cost of our upgrade program for the first six months, was increased by 120% compared to the same period last year and reached Drs. 22 billion. This increase was mainly due to the higher number of new customer additions in 1999 (+107%), as the average acquisition cost was at a similar level as in the last year at Drs. 67,000 for every new customer.

Costs of sales and services provided as a percentage of total revenues were at the same level as in the first half of 1998, at 32%. Selling, general and administrative costs as a percentage of total revenues increased to 56% as compared to 44% for the first six months of 1998.

EBITDA (operating profit before depreciation & amortization) dropped for the first half of 1999 by 13% to Drs. 15.7 billion while the EBITDA margin (EBITDA over service revenues) decreased, moving to 24% from 38% for the same period of 1999. Consequently, operating income as a proportion of service revenues declined for the first half of 1999 to 12% from 25% in the corresponding period of 1998.

Bad debt for the first six months of 1999 was at Drs. 900 million as compared with Drs. 750 million for the same period of 1998. Bad debt was at 1.3% of total revenues as compared with 1.4% for the same period of the previous year.

Gross financial debt increased in the first six months of 1999 to Drs. 82.4 billion from Drs. 65.0 billion at the end of 1998. Net financial cost was for the first six months of 1999 at Drs. 4.4 billion compared to Drs. 5.1 billion for the same period of last year. Annualized average financial cost decreased to 11.8% for the first six months of 1999 as compared with 16.6% for the same period of last year.

During the first half of 1999, the company negotiated 26 new roaming agreements and by the end of June had 120 roaming agreements in 71 countries.

Expenditures relating to fixed assets totaled Drs. 17 billion in the first half of 1999. The continuing development of the company's network accounted for Drs. 14.2 billion of fixed asset additions. Fixed asset additions included development of the company's information systems, which for 1999 were Drs. 2.5 billion.

Stet Hellas finds itself in a changing and increasingly competitive market where any projection should be regarded with caution. However, the company believes that by the end of the year it can reach around 1,100,000 customers, ARPU levels between Drs. 12,500 - 13,500, and consolidated EBITDA of more than Drs. 40 billion.

"We are building for the future by investing in the Telestet brand. We will continue to do this by creating more value-added services, improving the quality of our retail distribution network, enhancing our call coverage and investing in our people," said Mr.Rovera. To view the financial table associated with this release, click on www.telestet.gr/eng/index.htm., and find the August 26 news release on the Stet Hellas Web site.

Stet Hellas Telecommunications S.A. is at the forefront of the mobile communications industry in Europe. To its growing base of more than 928,000 customers in Greece, the company's Telestet brand stands for innovative services and the latest in communications technology. The company's shareholders include Stet Mobile Holdings NV, Bell Atlantic and the Interamerican Group. Its stock is publicly traded on the NASDAQ (STHY) and Amsterdam (STHS) exchanges. Internet users: For more information, visit the Stet Hellas web site at www.telestet.gr.

####