Hellenic Telecommunications Organization SA(ASE: HTO, NYSE: OTE), the Greek full-service telecommunications provider, announces that Cosmorom S.A. (Cosmorom), the wholly owns consolidated mobile telephony subsidiary of RomTelecom S.A. and an indirect non-material subsidiary of OTE, has not reached agreement to date with its principal equipment supplier on the payment of outstanding trade liabilities claimed by the supplier to be owed by Cosmorom in the amount of approximately ?100 million, plus interest.

Negotiations are continuing. OTE is not willing at this time to provide additional funds by way of shareholders' contributions or loan finance to enable Cosmorom to discharge such liabilities in full as it has no legal obligation to do so. OTE International, together with the other shareholder in RomTelecom, the Romanian State, are examining options in respect of the status of Cosmorom.

The failure by Cosmorom to make payment of outstanding trade liabilities owed to its equipment supplier caused a non-payment default by OTE under the ?1.1 billion 6.125% guaranteed notes due 2007 (issued by its subsidiary OTE PLC and guaranteed by OTE) and OTE's US$1.0 billion senior loan facility, as OTE has become RomTelecom's majority shareholder in March 2003. OTE is addressing such non-payment defaults by, among other measures, seeking appropriate waivers from noteholders and the syndicate of financial institutions participating in the loan facility.