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122/2010 Agreement between TPSA and TVN - Orange Polska

Pursuant to article 56(1.1) of the Law of 29 July 2005 on public offering and the conditions for introducing financial instruments to the organised trading system and on public companies (Journal of Laws of 2005, No. 184, item 1539, as amended), the Management Board of Telekomunikacja Polska S.A. (“TP S.A.”, “the Company”) hereby informs that on 14 October 2010 TP Group and TVN Group entered into a long-term co-operation agreement.

Telekomunikacja Polska S.A. (TP Group) and TVN S.A. (TVN Group), the two leading Polish telecommunications and media groups, have signed today a long-term framework cooperation agreement (Framework Agreement) for a reciprocal exchange of their respective offerings and services and for the joint creation of new offerings and services. In particular, the Parties have agreed to co-operate in the areas of content supply, post-paid DTH Pay-TV and prepaid satellite TV, Video-On-Demand, Broadband distribution, as well as in the fields of TV-technology and marketing.

The Framework Agreement should allow both parties to expand and strengthen their product offering, while capitalizing on up sell potential and cost synergies from the ongoing convergence of TV, broadband access and other communications services.

Upon implementation of the co-operation program under the Framework Agreement, TP Group will provide broadband and other communications services to the current and future customers of the ‘n’ satellite platform, while TVN Group will become the main content delivery partner for TP Group. TP Group will enhance its basic TV offering with content provided by TVN and by ‘n’ for the Pay TV packages. As a part of the above cooperation, Pay-TV offerings will be harmonized over time to reflect ‘n’ content packaging structure. Ultimately, both companies will benefit from enhanced attractiveness of the multi-play offering, up-selling potential on each others customer bases, as well as from cost synergies from joint technical, marketing and sales activities.

On the basis of the Framework Agreement, TP Group and TVN Group have also agreed to enter into a long-term TV-related technology co-operation. Upon it’s implementation, current technologies will be harmonized over time, providing a uniform customer service offering. The Management of the Company also believes that co-operation in this area will generate savings in both operating costs and investments, resulting from joint usage and development of technologies.

The Framework Agreement is an important step in strengthening TP Group’s multi-play offering. Upon implementation of the agreed co-operation, the Company will be able to supply its customers with superior content from TVN Group, both its own channels and a selection of 3rd party productions. While leveraging on a reliable content partner is in line with TP Group’s strategy, the Management believes that the above-mentioned co-operation will also deliver TP Group with an estimated EBITDA benefit totalling approximately PLN 100 million over the next 5 years, due to greater attractiveness of the joint multi-play bundles, cost savings and better sales force utilization. In addition, co-operation of the Parties under the Framework Agreement will give an opportunity to provide ‘n’ subscribers with TP Group’s signature broadband and communications services.

On the basis of the Framework Agreement, the Parties have agreed to continue further efforts necessary to work-out specific terms and conditions for their co-operation in each of the agreed fields. The Parties have agreed to enter into a series of specific agreements, detailing the conditions in respect of each field of co-operation, including but not limited to content supply and distribution agreements, DTH co-operation agreement, Broadband resale agreement and others. The Parties have agreed a detailed timetable for execution of such specific agreements and realization of specific tasks under the Framework Agreement, with the last such specific agreement to be entered into by 31.03.2011. Under certain circumstances, failure to enter the specific agreement or to complete some of the pre-defined specific tasks may lead to Framework Agreement termination. As part of the Framework Agreement, the Parties have also agreed that neither of the Parties, nor its direct or indirect subsidiaries or affiliates shall enter into a similar co-operation agreement with their competitors.

The Agreement has been signed for a period of up to ten years, with a possibility of early termination by any of the Parties after three-year period with the effect of such termination after additional two years.


Forward-looking statement

This press release contains forward-looking statements, including, but not limited to, statements regarding anticipated future events and financial performance with respect to our operations. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like 'believe', 'expect', 'anticipate', 'estimated', 'project', 'plan', 'pro forma' and 'intend' or future or conditional verbs such as 'will,' 'would,' or 'may.' Factors that could cause actual results to differ materially from expected results include, but are not limited to, those set forth in our Registration Statement, as filed with the Polish securities and exchange commission, the competitive environment in which we operate, changes in general economic conditions and changes in the Polish and/or global financial and/or capital markets. Forward-looking statements represent management’s views as of the date they are made, and we assume no obligation to update any forward-looking statements for actual events occurring after that date. You are cautioned not to place undue reliance on our forward-looking statements.

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