November 3rd, 2004

OTE and COSMOTE announce that their Boards of Directors approved today the signing of a Memorandum of Understanding for the commencement of the procedures for an increase of the share capital of COSMOTE through a contribution in kind by OTE of the shares of the Bulgarian mobile telecommunications company COSMOBULGARIA MOBILE EAD (Globul) and of the Dutch holding company MTS HOLDING BV (MTS), which owns 100% of the shares of the mobile telecommunications company COSMOFON MOBILE TELECOMMUNICATIONS SERVICES AD Skopje (COSMOFON).

More specifically, OTE and COSMOTE have agreed to assign to two independent Investment Banking firms, the one acting on behalf of OTE and the other on behalf of COSMOTE, the valuation of the above-mentioned companies in order to assist the respective Board of Directors of OTE and COSMOTE to determine the number of COSMOTE shares to be issued in exchange for the contribution in kind. Provided agreement on the number of shares to be issued is reached between the two entities, a valuation will be conducted by a three-member committee appointed by the Ministry of Development pursuant to applicable Greek law. Following such valuation, the transaction will be submitted to the General Assembly of COSMOTE's Shareholders for approval. The transaction also remains subject to obtaining the required administrative and regulatory approvals in Greece and abroad. The new shares that shall be issued following the transaction, shall be common registered shares and shall be listed on the Athens Stock Exchange.

COSMOTE assumed management of the mobile operations of Globul and COSMOFON in January 2003.

Globul is the owner of the second mobile license in Bulgaria, where the company operates since September of 2001. At the end of the first half of 2004 the company's customer base increased on a yearly basis by 97% to reach 1,286,590 customers and with an estimated market share of 35%. During the above mentioned period, total operating revenues increased by 86.6% amounting to ? 73.7 million while EBITDA margin improved by 15.2 percentage points to reach 19.8%.

COSMOFON is the owner of the second mobile license in the Former Yugoslav Republic of Macedonia (FYROM) where the company operates since June 2003. At the end of the first half of 2004 and after just 1 year of operation, the company had 154,695 customers with an estimated market share of 20%. During the above mentioned period, total operating revenues reached euro 9.6 million. OTE's Chairman and CEO and COSMOTE's Chairman, Panagis Vourloumis, commented: "Today's agreement is part of OTE Group's strategic decision to integrate operations relating to mobile telephony under COSMOTE, the OTE Group's mobile arm, hence taking advantage of COSMOTE's know-how and expertise in mobile telecommunications, in order to unlock hidden values and achieve the highest possible returns for both companies".

Mr. Vourloumis stated "with the increase of OTE's share in COSMOTE's capital, OTE achieves the increase of its exposure in the Greek mobile telephony market". COSMOTE's CEO, Evangelos Martigopoulos, commented: "Today's agreement is the natural sequence to the successful management of Globul and COSMOFON by COSMOTE since January 2003, and realizes a key strategic objective of OTE Group and the Company for regional geographical expansion in markets with significant growth potential. As a result, COSMOTE, taking into account its ownership of AMC in Albania, will own 3 successful mobile operators in the southeastern European region, thus further reinforcing its growth profile".