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CORPORATE SUMMARY

SOTELGUI AS A JOINT VENTURE COMPANY ( SINCE DECEMBER 1995)

1 BACKGROUND

On December 23rd 1995, a Joint Venture agreement was signed between the Government of Guinea (GOG) and Telecom Malaysia Berhad (TMB), a Malaysian Telecommunication operator, incorporated under Malaysian Laws with headquarters in Kuala-Lumpur. TMB holds 60 % of SOTELGUI's shares, representing USD Forty five million and the Government of Guinea has 40 %, for an amount of USD thirty million.

2 THE TECHNICAL COLLABORATION AGREEMENT WITH TMB

The Technical collaboration Agreement between Sotelgui and TMB is illustrated to a large extent through the services to be provided by TMB, which are as follows :

* To provide technical know-how, based on the requirements.
* To advise, and assist in the preparation and evaluation of tenders for equipment with Suppliers.
* To provide if necessary, assistance in the preparation of installation procedures of the equipment.
* To assist in the preparation of manuals and maintenance procedures for maintenance staffs.
* To conduct quality audits on periodical basis through site visits, testing and file analysis.
* To provide training in the operation and maintenance of networks for the executives and technicians in accordance with training requirements.
* To introduce the concept of total quality.

2.1 THE OBJECTIVES OF THE AGREEMENT

As part of the Provisions of the Joint Venture Agreement, the duration of the monopoly given to Sotelgui for basic services is ten (10) years. This duration takes into account the targets for improving quality service indicators and increasing subscriber base as well as collection performance.

2.2 SOTELGUI'S STRUCTURE

Breakdown of the Capital.

40 % (USD 30 million) for the ''GOG'' representing its share in kind as at 31/12/94 further to the audit works carried out by the Auditor confirmed by the Audit Firm ''Deloitte and Touche.''

60 % ( USD 45 million) for TMB, representing its share in cash.

Partner.

Telekom Malaysia Berhad (TMB) a Malaysian Telecommunication Operator, governed by Malaysian laws and having its headquarters in Kuala-Lumpur.
The Joint Venture Agreement with TMB was signed on December 23rd 1995.

Right of monopoly.

Sotelgui has monopoly on the basic services. The duration of this monopoly is 10 years and it is ending on December 23rd 2005.

The other services, called value added services are open to competition. To date, there are three cellular operators and 4 Internet service Providers .

Obligation towards the Competitors

* Provide the necessary interconnections to the public switched network
* To maintain a good Cooperation Spirit

Capacity expansion plan

There are current and future projects for the network capacity expansion in accordance with the vision and the Mission of Sotelgui. These expansions are provided for in the Business plan and concerns the following main sectors :

- National Transmission : integral digitalization and capacity increase ;
- International Transmission : increase of the number of International circuits (satellite, sub marine cable) ;
- Switching ; Integral digitalization and capacity increase ;
- Cellular phone (GSM) : capacity increase ;
- Payphones : Capacity increase ;
- Internet : capacity increase ;
- Data circuits : capacity increase.

3. THE OUTCOME OF PARTNERSHIP WITH MALAYSIA

This partnership could be described as a simple working contract between two companies in real fact, this needs to be interpreted as beginning of a cooperation between two countries of the south : Guinea and Malaysia.

This even resulted to other forms of cooperation in other fields with Malaysia.

One of the particularities of this Joint Venture Agreement is that it was the first in the sub-region and that it contributed to break the myth of north- south cooperation in the field of telecommunications which was finally a sort of paradigm.

The first finding in terms of physical achievements that could be drawn up from 7 years operation is as follows :

Switching :

- Installation of digital exchanges for a total capacity of 33,560 ELC in Conakry, Labée, Fria, Kindia, N'Zérékoré, Kissidougou, Guéckédou, Macenta, Pita, Dalaba.

Local Network

- Actions of rehabilitation extension and creation in the above listed towns. A project for Conakry local network extension is in process (15,000 additionnal ECP)

National Transmission

- Domestic Satellite network with the deployment of
· VSAT station in Labé and N'Zérékoré with 30 circuits each
· VSAT/DAMA stations in Kissidougou, Macenta, Gueckedou and Kankan with a capacity of 8 circuits each
- Digital terrestrial microwaves routes :

· Implementation of the 140 Mb (1920 circuits) capacity Northern microwaves transmission route : Conakry-Fria-Kamsar-Boké
· 34 Mb Capacity (480 circuits) mini-links in Conakry : Almamya-Ratoma, Almamya-Boussoura, Almamya-Wonkifong