telegate announces sale of UK-subsidiary 11 88 66 Ltd

Focusing Resources on Emerging markets in Europe

Munich, 30 September 2004 – telegate AG, Europe’s leading independent directory and information services provider, has announced the sale of its wholly-owned British subsidiary 11 88 66 Ltd to the UK-based investment house Croftacre Holdings Ltd for an undisclosed sum. Under the terms of the agreement, which will complete with effect from 1st October, telegate’s Scottish call centre and all employment contracts of staff in Dumfries will be continued by 11 88 66 Ltd’s new shareholder. telegate AG is withdrawing from the British directory enquiries market and focuses resources on the growing opportunities presented by the forthcoming liberalisation of directory assistance services in other European markets.

Following this transaction and given the very positive course of business during the year so far, telegate has raised its EBITDA-guidance for 2004 from currently minimum EUR 25.0 million to now minimum EUR 29,0 million.

telegate is a profitable company with a focus on growth. The strategic alignment targets expansion in Europe, where the company is seeing further development potential. In the process an optimum positioning is to be taken in the opening directory enquiries markets. telegate’s aim is to establish itself as a sustained and profitable business in each market after a clear investment period.

The current market and business development in Great Britain was not in line with company expectations. With the sale of the British subsidiary and the withdrawal from the British directory enquiries market, telegate AG management demonstrates consistent response to changing market conditions. The company continues to focus resources on further development opportunities within Europe.

The countries where directory assistance liberalisation has made most progress are Italy and France. There the responsible regulatory authorities are currently working on introduction schedules and in designing the conditions for liberalisation expected for the year 2005.