/raid1/www/Hosts/bankrupt/TCREUR_Public/020821.mbx             T R O U B L E D   C O M P A N Y   R E P O R T E R

                             E U R O P E

                 Wednesday, August 21, 2002, Vol. 3, No. 165


                              Headlines

* F I N L A N D *

SONERA CORPORATION: Reaches Settlement With Harri Vatanen

* F R A N C E *

AIR LIB: Withdraws Service to Antilles Due to Losses
NORTEL NETWORKS: Wins US$79MM Deal to Supply GSM to Centertel
VIVENDI UNIVERSAL: Issues Open Letter to Shareholders and Staff

* G E R M A N Y *

COMMERZBANK AG: COMSEC Names New Members to NY Derivatives Team
MOBILCOM AG: Schmid Wants Court to Examine BAFin Ruling

* I R E L A N D *

DATALEX PLC: Brings Page & Moy Bargain Flight Deals Online

* N E T H E R L A N D S *

COMPLETEL EUROPE: Urges NY Holders to Move Shares to Netherlands
GERNTRONICS NV: Signs EUR13 MM Outsourcing Deal With HBG
KPN NV: Records Net Loss of EUR9.2 BB in Second Quarter of 2002
KPN NV: Announces Plan to Terminate Operations in Belgium
KPN NV: Will Sell Software House for EUR29 MM

* P O L A N D *

ELEKTIRM SA: Extends Exclusivity for BRE Bank and Eastbridge
NETIA HOLDINGS: Meeting to Accept Composition Plan Opens

* S P A I N *

AVANZIT SA: Avanzit Ena Files for Temporary Receivership
CEAC: Files Request for Bankruptcy Protection

* S W E D E N *

LM ERICSSON: Will Close Grimstad Development Division

* U N I T E D   K I N G D O M *

CENES PHARMACEUTICALS: Passes Resolutions at AGM 2002
CORDIANT COMMUNICATIONS: Directors Set to Meet With Active Value
FRAMLINGTON SPLIT TRUST: Bank Appoints Trust's Receivers
FILTRONIC PLC: Notifies Regulator on 12.9% Interest of Prudential
FILTRONIC PLC: Notifies Regulator on 13.08% Interest of Fidelity
NORTH ATLANTIC: Issues Notice of Meetings of Scheme Creditors
NTL INCORPORATED: Committee Picks Fried Frank as Attorneys
SMG PLC: Announces Appointment of Non-executive Director


=============
F I N L A N D
=============


SONERA CORPORATION: Reaches Settlement With Harri Vatanen
---------------------------------------------------------
Sonera announces that a settlement has been reached  in the dispute
between Sonera Corporation and Harri Vatanen about the Sonera
SmartTrust technology and the termination of Vatanen's employment.

The parties have agreed to terminate all pending legal actions. Harri
Vatanen also accepts the agreement concluded with Sonera in 1998
regarding the assignment of certain inventions to Sonera.

Sonera Corporation is a leading provider of mobile and advanced
telecommunications services. Sonera is growing as an operator, as
well as a provider of transaction and content services in Finland
and in selected international markets.

The company also offers advanced data solutions to businesses,
and fixed network voice services in Finland and neighbouring
markets. In 2001, Sonera's revenues totaled EUR 2.2 billion, and
profit before extraordinary items and taxes was EUR 0.45 billion.
Sonera employs about 7,400 people. www.sonera.com

Contact Information:

Harri Koponen
President and CEO
Sonera Corporation
Telephone: + 358 2040 54110
Email: harri.koponen@sonera.com


===========
F R A N C E
===========


AIR LIB: Withdraws Service to Antilles Due to Losses
----------------------------------------------------
Beleaguered French airline Air Lib plans to take out its daily
flights from Roissy airport to the Anitlles and Reunion due
to losses, Les Echos reports.

Air Lib will keep only seven daily flights in the winter season
from Orly to Pointe-a-Pitre, Fort-de-France and Reunion, the
paper says.

The move generated concerns over Air Lib's code-sharing agreement
with French airline Air France. It is said that the national
airline could take this opportunity to do away with the agreement
altogether, the paper adds.

The paper also reports Air Lib's withdrawal of the service will
also directly threaten many jobs. The company however says it
will launch services to new destinations but this plan has not
been revealed in detail.


NORTEL NETWORKS: Wins US$79MM Deal to Supply GSM to Centertel
-------------------------------------------------------------
Nortel Networks will be the exclusive provider of GSM (Global
System for Mobile Communications) and GPRS (General Packet Radio
Service) access equipment for PTK Centertel in southern Poland
under a three-year supply agreement estimated at US$79 million
(80 million euro).

The agreement also includes installation and network support
services for Centertel, a France Telecom and Telekomunikacja
Polska SA affiliate and operator of the Idea network in Poland.

The network deployment will help Centertel to increase network
capacity to support a growing subscriber base. The dual band
network deployment is designed to ensure highly effective use of
radio spectrum through improved sensitivity and advanced radio
features.

Network enhancements will position Centertel to reduce capital
and operating costs and improve service quality for consumers in
the south of Poland.

"This month, Centertel reached a total of more than 3.6 million
subscribers on our Idea network," said Jean-Marc Vignolles, vice
president, PTK Centertel. "Our objectives are to fuel continued
rapid growth with the introduction of advanced data services, and
to become the second largest GSM operator in Poland by the end of
the year.

"We consider Nortel Networks to be one of our key suppliers,"
Vinolles said. "Their competencies and products provide us with
the necessary support to enable our rapid expansion in the
wireless data market."

"We are proud to be recognised by Centertel for our wireless and
data expertise," said Vivian Hudson, general manager, GSM/GPRS,
Nortel Networks. "This win further enhances our relationship with
France Telecom's mobile affiliate in Poland."

"Central and Eastern Europe are among the fastest growing markets
in the region, and offer tremendous potential," Hudson said. "We
believe our extensive expertise in data technologies and our
capability to drive wireless evolution, combined with our strong
positions in CDMA, GSM and UMTS, are helping our customers to
achieve a lower cost of network ownership."

Nortel Networks has deployed 80 GSM/GPRS networks with operators
in 41 countries.

Nortel Networks has been providing GSM and GPRS access equipment
and services to Centertel since 1997, and packet backbone
solutions for the company's wireless networks since 2001.
Centertel is the operator of two mobile phone networks in Poland
- digital Idea, which supports more the 3,600,000 users; and
NMT450i, an analogue network that can serve more than 250,000
customers.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Metro and Enterprise Networks,
Wireless Networks and Optical Networks.

As a global company, Nortel Networks does business in more than
150 countries. More information about Nortel Networks can be
found on the Web at www.nortelnetworks.com.

Nortel Networks, the Nortel Networks logo and the Globemark are
trademarks of Nortel Networks.


VIVENDI UNIVERSAL: Issues Open Letter to Shareholders and Staff
---------------------------------------------------------------
The following open letter to all Vivendi Universal shareholders
and employees was issued on Sunday, August 18, 2002, out of
Paris.

    "I am absolutely convinced that we will succeed."

    I owe it to all of you, employees and shareholders, to tell
    you the truth. This is our situation.

    The first half's net loss before non-recurring items, the
    very high amount of the goodwill impairment charge, the
    realization that our cash position is difficult, being
    downgraded two levels by Standard & Poor's after having been
    downgraded by Moody's at the beginning of July--all of these
    factors have led to a considerable fall in our share price.

    Contradictory information that is often wrong is circulating
    and feeding doubts.

    I want to reassure you: the company's situation is certainly
    tense, but I have identified the way out of this crisis and
    the way to be back on track:

    1. The analysis of all our businesses and assets has now been
       completed. It shows that their value remains well above
       that of our debt, and that strict management will even
       allow the value of the assets we keep to be significantly
       increased.

    2. We had a dramatic short-term cash crisis. When I arrived
       on July 3, it was to find a company facing major liquidity
       issues. We rapidly negotiated with seven banks to obtain 1
       billion euro cash facility. At the moment, this credit
       line is fully available, and the money will be used
       gradually.

       An additional 2 billion euros are, however, needed to meet
       our commitments and avoid having to sell off assets in a
       rush. The legal conditions and commitments required by the
       banks were accepted by Vivendi Universal's Board of
       Directors at its meeting on August 13, and signed by me on
       the Board's behalf. Everything should be in place for the
       end of September at the latest.

    3. I have committed to sell assets worth at least 10 billion
       euros over the coming two years, of which 5 billion euros
       of disposals will be completed in the next nine months.
       How have we arrived at this figure of 10 billion? This sum
       corresponds to our excess debt, based on comparing it with
       the level needed for all of our businesses to have a
       triple-B rating.

       The assets concerned have all been identified. The Board
       of Directors' meeting of August 13 gave its go-ahead for
       this plan to be put in place.

      The immediate disposal of Houghton Mifflin, which I regret,
      is a vital element of our plan. This disposal is relatively
      easy to carry out under satisfactory price conditions.
      Decisions have already been taken regarding all of the
      other assets included in the plan, either because they are
      part of the Canal+ Group restructuring plan, or because
      they are non-core activities for Vivendi Universal.

      To be more precise, the plan does not include our stakes in
      Vivendi Environnement and Cegetel, or our 49% in the future
      Canal+. Neither, other than Houghton Mifflin, does it
      involve any of the publishing businesses owned by Vivendi
      Universal Publishing, nor Universal Music Group, nor
      Vivendi Universal Entertainment.

     How is this possible? The reason is that, as I have already
     said, this extremely indebted company has, paradoxically,
     retained a considerable number of scattered assets that are
     of little or even no use to its core strategy.

    4. All strategic options are therefore possible:

    --  We can continue to build an international media and
        communications company. With what strategy?
    --  We could take majority control of Cegetel. How?
    --  We could take back our majority control of Vivendi
        Environnement, the world leader in its activities. But,
        with what objectives?

     All of these strategic options are possible, but not at the
     same time. These various activities have nothing to do with
     one another. Some will have to be sold to find the financial
     flexibility needed for the others.

     The objective is to select the plan that will have the best
     chance of creating value for our shareholders.

     New management principles for the organization of the
     holding company are already in place, with the priority
     objective being to carry through our program of disposals
     while at the same time taking care of the future of each of
     our businesses and their employees.

    5. So we will get through this difficult period that is
       taking up all our energy today, but the price will be
       high: interest rates, constraints on the pledged assets,
       and the vital necessity to rapidly carry out the program
       of disposals that we are committed to.

       The freedom to implement our strategy and the recovery of
       our share price depend on this program being carried out
       successfully. But that's not the only factor: from now on,
       all of our businesses have to focus on their net income
       and cash flow. Substantial progress is possible over the
       next few months.

       There are still many obstacles in our way, but I am
       absolutely convinced that we will succeed. Despite these
       difficult circumstances, I am counting on the support and
       commitment of each and every one of you.


          Contact Information:
          Paris
          Laura Martin
          Investor Relations
          Telephone: 917.378.5705

          Laurence Daniel
          Investor Relations
          Telephone: +33 (1).71.71.1233

          New York
          Eileen McLaughlin
          Investor Relations
          Telephone: +(1) 212.572.8961


=============
G E R M A N Y
=============


COMMERZBANK AG: COMSEC Names New Members to NY Derivatives Team
---------------------------------------------------------------
Commerzbank Securities issues the following notification regarding
two senior appointments to its Derivatives Department in New York:

  Judith Erdman takes the position as head of Third Party
  Distribution in the Derivatives Department reporting to Sam
  Gottesman, head of Distribution for Derivatives, Americas.

  Ms. Erdman will be responsible for building the third party
  business using joint marketing with regional banks and
  securities firms. She will focus on a range of multi-asset
  class plain vanilla and structured products that will be of
  particular interest to high net worth individuals as well as a
  wider retail audience.

  She was previously with Merrill Lynch as a director, Corporate
  and Institutional Client Group. Other assignments have included
  Lehman Brothers, Executive Enterprises, 13D Research, and Daiwa
  Bank Ltd. She holds a degree in Business Administration from
  Muhlenberg College and a certificate in French Language and
  Literature from the Faculte des Lettres, Avignon, France.

   Michael Belbeck joins the Derivatives Department in New York
   as senior hedge fund salesman and product co-ordinator for
   equity derivatives. Reporting to Kumar Doraiswami, co-head of
   Global Hedge Fund Distribution, Derivatives Department, Mr.
   Belbeck will be responsible for co-ordinating the marketing of
   equity derivatives to institutional accounts.

   He will also spearhead sales efforts to the hedge fund
   community for equity derivatives. He was previously with CSFB
   in equity derivatives structuring and marketing and has held
   other assignments with Lehman Brothers, Merrill Lynch and
   Wellington Financial Group. He holds a degree in Economics
   from Harvard College.

   Sam Gottesman, head of Distribution for Derivatives, Americas,
   says, "Judith and Michael represent our continuing effort to
   secure the highest quality talent to help us meet the demands
   of the marketplace. Their appointments will help us expand our
   client coverage for interest rate and integrated capital
   structure cash and derivative products."

Commerzbank Securities (ComSec) is the investment banking
division of Commerzbank AG, integrating debt, equities, interest
rates and foreign exchange, with specific expertise in corporate
risk and capital restructuring.

As a division of one of Europe's leading financial institutions,
ComSec has the backing of a EUR487bn (US$480bn) balance sheet
(June 30, 2002) and A/A1/A credit ratings from S&P, Moody's and
Fitch IBCA. This enables it to provide value-added investment
solutions for corporate, institutional, hedge fund and retail
clients around the world.

In the United States, Commerzbank Securities transacts business
through Commerzbank Capital Markets Corporation, a wholly owned
registered broker-dealer of Commerzbank AG.

Commerzbank Capital Markets Corporation is a member of AMEX,
NYSE, NASD and SIPC. Commerzbank AG, headquartered in Frankfurt,
is today a true global player with over 39,000 professionals
employed in over 50 countries.

   Contact Information:

   Edgar K. Mitchell
   Commerzbank Securities
   Telephone: 212/703-4390
   Email: edgar_mitchell@cbcm.com


MOBILCOM AG: Schmid Wants Court to Examine BAFin Ruling
-------------------------------------------------------
Gerard Schmid, Mobilcom's former chairman and largest
shareholder, wants a court to determine if France Telecom is
obligated to make a full takeover offer to all shareholders, a
report from the news agency AFX News says.

Mr. Schmid said that he will take the decision of BAFin,
Germany's bourse regulator, to court once it decides to support
the July 31 ruling that the France Telecom is not required to
make a full offer, the news outfit says.

The former chairman maintained that France Telecom has been
compelled to make a full takeover offer since June 21-- the date
on which he was ousted as CEO -- because it has had operative
control of the German operator since that date, the news outfit
adds.

BAFin however, refused to acknowledge this and ruled on July 31
that a company only has control over another once it has more
than 30% stake. France Telecom presently holds 28.5% stake in
MobilCom, AFX says.

Mr. Schmid announced on August 1 that he is appealing against the
ruling.

BAFin disclosed a board is processing the appeal, consisting of
three people from BAFin and two volunteers. The regulator said
the board would come up with a decision soon, the news outfit
says.

France Telecom ousted Schmid after the two fell out over the
German company's 3G roll-out plans, and after Schmid broke German
securities laws in a transaction involving his wife, the news
outfit adds.

Mr. Schmid owns an estimated 49% stake of France Telecom together
with his wife. He has revealed that he is ready to sell his
stake, AFX says.

AFX says the French group is said to have reached a verbal
agreement with MobilCom's 17 creditor banks. Under the agreement,
the banks will swap most of their EUR4.7 billion in loans to
MobilCom for a security, convertible into France Telecom shares
at a later date. This will cover 90% of the loan (EUR4.2 billion)
and have a strike price of at least EUR45.

The deadline to refinance this debt was recently extended until
Sept 30.

MobilCom's main creditor banks are Deutsche Bank AG, Merrill
Lynch & Co Inc, ABN Amro NV and Societe Generale.


=============
I R E L A N D
=============


DATALEX PLC: Brings Page & Moy Bargain Flight Deals Online
----------------------------------------------------------
Page & Moy, a top U.K. travel supplier, is all set to take on the
U.K. online travel market, the largest online travel market in
Europe, with its award- winning travel site, go-nowtravel.com,
using state-of-the-art booking technology supplied by global
technology solutions provider, Datalex plc
(http://www.datalex.com/).

Using simple step-by-step booking screens, the online flight
facility offers travellers thousands of fare deals from a
combination of published fares and specially negotiated fares
from the world's airlines, all cross-checked for availability.

The system is fully integrated with Page & Moy's call centre
operation, which ensures that all fares available on the go-
nowtravel.com site are also available for telephone bookings.

"Page and Moy is achieving remarkable success in its dynamic and
innovative approach to marketing and selling travel," said Aidan
Brogan, VP International Sales, Datalex. "Travel companies are
increasingly investing in more sophisticated technology solutions
to cope with the hybrid nature of travel distribution and, in
adapting our technology to suit the business requirements of
travel suppliers such as Page and Moy, we are continually
advancing our solutions to provide faster response times, greater
options and a consistency of performance across all their market
outlets.

Page & Moy is the recent winner of the Travel Agent of the Year
award for the Central England region at the 2002 UK Agent
Achievement Awards.

Its Website, go-nowtravel.com, also won the Daily Telegraph, Best
Travel Website award in additional to being selected as a
finalist in the Best Website category for the 2002 UK Agent
Achievement Awards and the Best Travel Website in the Yell.Com
Awards, an event that allows UK internet users to vote for their
favourite Websites.

"We are delighted to be working with Datalex on this exciting
project. Not only will it provide our award winning Website with
an online flight booking engine, but will enable Page & Moy to
compete with the established players in this market sector," said
Neil Hardy, Head Of Commercial for Page & Moy.

BookIt! Matrix, Datalex's core integration platform for its suite
of products, seamlessly integrates Page & Moy's own storefront
interface with the BookIt! Fares negotiated fares database and
simultaneously provides access to the Galileo GDS. The same
platform also supports a graphical user interface for call centre
operations.

Datalex is a leading provider of technology solutions for the
global travel industry. Founded in 1985, the company is
headquartered in Dublin, Ireland, and maintains offices
throughout the world: Europe (Amsterdam, Frankfurt, Paris,
Manchester); USA (Atlanta, Petaluma. Minneapolis); and Asia-
Pacific (Melbourne, Singapore).

Leicester-based Page & Moy is one of the UK's most innovative and
wide-ranging travel specialists. The company has a 40-year
history of tour operating and is a market leader in motorracing
holidays, special interest and escorted tours, and destinations
including Hawaii and China. For more information please visit
http://www.page-moy.com.


=====================
N E T H E R L A N D S
=====================


COMPLETEL EUROPE: Urges NY Holders to Move Shares to Netherlands
----------------------------------------------------------------
Completel Europe N.V. announces that its New York Share program
will terminate effective 5:00 p.m. (New York City time) Friday,
August 23, 2002. As of that time, JPMorgan Chase Bank will cease
to act as U.S. transfer agent for the New York Shares.

In light of the foregoing, Completel urges holders of its
Ordinary Shares of New York registry to make arrangements to
transfer the registry of those shares to CompleTel's Dutch share
registry prior to the Termination Date in order to enable trading
of their shares on Euronext Paris, the primary trading market for
CompleTel's shares.

Holders of New York Shares who have not transferred the registry
of those shares to the Dutch registry before the close of
business on August 23, 2002 could experience significant delays
should they wish to trade or otherwise transfer those shares.

This transfer to CompleTel's Dutch share registry can be effected
by presenting a request for such transfer of registration to
JPMorgan.

As a courtesy to holders of Completel's New York Shares,
JPMorgan's fee for the transfer of New York Shares to Ordinary
Shares of Dutch registry will be paid by Completel.

In general, holding Ordinary Shares of Dutch registry would
require the shareholder to have a brokerage or other account with
a bank or broker that is a direct or indirect participant of
Euroclear France, the clearing and settlement house for trades on
Euronext Paris.

Holders of New York Shares seeking to make the transfer to Dutch
registry should inquire of their existing bank or broker whether
they are a direct or indirect participant.

Additional information regarding the transfer of New York Shares
to Ordinary Shares of Dutch registry can be obtained by
contacting JPMorgan at 1-781-575-4328.

Completel is a facilities-based provider of fiber optic local
access telecommunications and Internet services to business end-
users, carriers and ISPs in France.


GERNTRONICS NV: Signs EUR13 MM Outsourcing Deal With HBG
--------------------------------------------------------
Getronics and Hollandsche Beton Groep NV (HBG) has signed a
contract for Getronics to provide the outsourcing of HBG's
international ICT infrastructure.

Getronics will be responsible for areas such as the migration of
the infrastructure to a new technology platform and the
management of the new ICT infrastructure, which involves over
5,000 workstations in the Netherlands and Germany. The contract
has initially been signed for three years and is valued at EUR 13
million.

Ten employees from HBG's ICT department in the Netherlands and
Germany will transfer to Getronics. Participation of HBG's UK
operations, with its 2,500 workstations, is still under
negotiation.

"Thanks to the outsourcing of our ICT infrastructure to
Getronics, we can concentrate all of our energy on our key
activities. At the same time, we are assured of advanced
information and communications technology which provides us with
the necessary level of quality, continuity and flexibility at
lower costs," says Rob Nout, Director of Group Technology at HBG.

Oswald Coene, Vice President & Managing Director Getronics
Infrastructure Solutions: "Our aim is to provide HBG with a
modern, flexible infrastructure capable of supporting the
dynamics of its primary business processes. Economies of scale to
be achieved from, for example, our NetWorkPlace portfolio of
services, with a central multi-language help desk and remote
management from our Enterprise Service Centre in Amsterdam,
supported by local Getronics offices.
This contract confirms the position of Getronics in the market
for international outsourcing contracts."


KPN NV: Records Net Loss of EUR9.2 BB in Second Quarter of 2002
---------------------------------------------------------------
Highlights for the second quarter and first half of 2002

Results

Total operating revenues in the second quarter of 2002 amounted
to EUR 3,105 million (2001: EUR 3,202 million). Excluding
exceptional items, operating revenues amounted to EUR 3,083
million (2001: EUR 3,168 million).

Excluding the effects of changes in consolidation, total
operating revenues in our three core divisions increased. The
restructuring and cost reduction programs continue to show their
results: EBITDA in the second quarter of 2002 increased by EUR
230 million to EUR 1,164 million. Excluding exceptional items,
EBITDA increased by EUR 165 million, or 17.8%, from EUR 929
million in the second quarter of 2001 to EUR 1,094 million in
2002.

The EBITDA margin, excluding exceptional items, improved from
29.3% in the second quarter of 2001 to 35.5%, reflecting the
strong improvement in EBITDA in all of our three core divisions.
Operating results (EBIT) showed a significant decrease as a
result of the impairment charges that were recognized on the
goodwill and licenses of E-Plus and BASE totaling EUR 7,264
million.

EBIT in the second quarter of 2002 amounted to a loss of EUR
6,959 million (a profit of EUR 405 million excluding exceptional
items) compared to a loss of EUR 179 million (a loss of EUR 2
million excluding exceptional items) in the second quarter of
2001. Loss after taxes amounted to EUR 9,269 million (2001: a
loss of EUR 499 million). Excluding exceptional items, loss after
taxes amounted to EUR 79 million (2001: EUR 354 million).

In the first half of 2002, operating revenues increased to EUR
6,364 million (2001: EUR 6,163 million). Excluding exceptional
items, operating revenues decreased from EUR 6,129 million in the
first half of 2001 to EUR 6,007 million in the first half of
2002.

However, excluding consolidation effects, total operating
revenues in the first half of 2002 of our core divisions
increased. The turn around can also be seen in the first half of
2002: EBITDA, excluding exceptional items, increased by EUR 310
million compared with the first half of 2001.

The EBITDA margin, excluding exceptional items, improved from
28.1% in the first half of 2001 to 33.9% in the first half of
2002, showing the improvement in EBITDA in all of our core
divisions. Operating results (EBIT), excluding exceptional items,
increased from a loss of EUR 48 million in the first half of 2001
to an operating profit of EUR 677 million in the first half of
2002.

Loss after taxes, excluding exceptional items, amounted to EUR
304 million in the first half of 2002 (2001: a loss of EUR 754
million).

Cash flow

The improvement in our EBITDA and the focus on working capital
are the main contributors to the increase in our cash flow from
operating activities from EUR 608 million in the second quarter
of 2001 to EUR 637 million in 2002.

Our capex reduction program, which focuses on the efficient use
of existing capacity and a tight control on capital expenditure
without jeopardizing our competitive strength, resulted in a
further strong improvement in the free cash flow (defined as net
cash flow from operating activities after capex, interest, tax
and restructuring costs) of EUR 578 million compared to the
second quarter of 2001.

Capex amounted to EUR 225 million in the second quarter of 2002,
a decrease of EUR 549 million, or 70.9%, compared to the same
period in 2001 (EUR 774 million).

In the first half of 2002, our cash flow from operating
activities amounted to EUR 1,442 million, an increase of EUR 346
million compared to 2001.

Free cash flow improved by EUR 1.5 billion compared to the first
half of 2001: from a net cash outflow of EUR 535 million
to a net cash inflow of EUR 962 million. Capex in the first half
of 2002 amounted to EUR 480 million, compared to EUR 1,631
million in 2001.

Net debt

Our net debt improved significantly: from EUR 22.8 billion at the
end of the second quarter of 2001 to EUR 15.7 billion at December
31, 2001 to EUR 15.0 billion at the end of the second quarter of
2002.

Total interest bearing debt at the end of the second quarter of
2002 amounted to EUR 19.1 billion (EUR 23.1 billion at the end of
2001), of which EUR 2.8 billion is due within one year and
including an amount of EUR 631 million payable to Vision
Networks, a non-consolidated 100% subsidiary.

The Supervisory Board of Vision Networks recently announced that
it will cease its activities in the course of the year, after the
sale of practically all of its cable assets. This allows a
consolidation of Vision Networks and will lead to a further
reduction of debt by EUR 631 million.

Exceptional items

Exceptional items in the second quarter of 2002 amounted to a net
charge of EUR 9,190 million compared to a net charge of EUR 145
million in the second quarter of 2001.

General economic developments, and more specifically, recent
developments in the mobile markets, as well as the decisions of
some mobile operators were the trigger to have a critical look at
the existing business plans of our mobile activities.

This resulted in new business plans, in line with the present
situation and prospects. KPN and an independent appraiser carried
out impairment tests based upon those business plans. For the
purpose of the impairment tests, we used discounted cash flows
and compared the outcome to the carrying value of our
investments.

In total, this resulted in a non-cash impairment charge of
approximately EUR 9 billion, including the effects on deferred
tax assets.

For E-Plus, this leads to a total impairment charge of EUR 6.6
billion, which has been preliminary been allocated on a pro rata
basis to goodwill (EUR 2.7 billion) and the UMTS license (EUR 3.9
billion). The final allocation of this non-cash impairment charge
between goodwill and the UMTS license will take more time to be
precisely determined.

The final outcome of this allocation will be included in our
third quarter results, but will not have any additional effect on
the total impairment charge of EUR 6.6 billion.

The revised business plan of BASE, our Belgian mobile operator,
resulted in an impairment charge on goodwill of EUR 455 million
and an impairment charge on licenses of EUR 166 million.

There is no impairment concerning the carrying value of the
assets of KPN Mobile The Netherlands.

Hutchison 3G UK is no longer considered as a strategic
participation. As a result, Hutchison 3G UK is no longer valued
at net asset value, but at the expected net realizable value.
This resulted in a write-off of EUR 1.2 billion.

The impairment charges result in uncertainties regarding the
timing of the utilization of settlements of the tax losses
carried forward.

As a consequence, KPN recorded a valuation allowance for the full
amount of the deferred tax assets of E-Plus (EUR 275 million) and
BASE (EUR 331 million).

As a result of the bankruptcy of KPNQwest, KPN no longer has
commitments for Operations and Maintenance contracts concluded
with KPNQwest. Consequently, the provision for future losses on
these contracts of EUR 125 million that was recognized in the
first quarter of 2002 was released in the second quarter.

Additionally, a provision for the settlement of KPNQwest and
KPNQwest related issues of EUR 40 million was set up and certain
assets held for sale related to KPNQwest were written down for
the amount of EUR 25 million.

An impairment charge of EUR 70 million was recognized in respect
of IRU (Indefeasible Rights of Use) contracts with KPNQwest (of
which EUR 30 million in Business Solutions, EUR 34 million in
Fixed-network Services and EUR 6 million in Other activities).

In the wake of the bankruptcy of KPNQwest, and, as a result, the
deteriorated economic outlook of KPN Belgium (division Business
Solutions), KPN announced that it is currently re-assessing its
position in KPN Belgium.

KPN does not see any possibilities to turn KPN Belgium into a
profitable company. KPN is currently exploring the possibilities
of a co-operation with other parties in the Belgian market.
Therefore, an impairment charge of EUR 100 million on the assets
of KPN Belgium and a charge of EUR 7 million for related costs
were recognized.

In "Other activities", an additional loss of EUR 5 million
following the completion of the sale of Network Construction and
a book profit of EUR 22 million on the sale of real estate in the
non-core asset disposal program were recorded.

The sale of Cesky Telecom is reaching finalization. As a result,
KPN decided to value its stake in Cesky Telecom at the expected
net realizable value. This led to a downward adjustment of the
valuation of EUR 38 million.

Total tax relief on taxable exceptional items amounted to EUR 16
million in the second quarter of 2002.

In the first half of 2002, total exceptional items amounted to a
net charge of EUR 9,313 million, compared to a net charge of EUR
284 million in 2001. The exceptional items in the first half of
2002 included the book profit on the sale of our interest in
Pannon GSM of EUR 335 million and impairment charges on the net
asset value KPNQwest of EUR 270 million.

Total charges recognized in the first half of 2002 related to
KPNQwest amount to EUR 594 million.

Restructuring

At the end of 2001, KPN employed 29,377 FTEs (full time
equivalents) in The Netherlands that were subject to KPN's
collective labor agreement and 1,674 temporarily hired FTEs. At
the end of the second quarter of 2002, the total number of
employees subject to the collective labour agreement was reduced
to 23,071 FTEs and 729 temporarily hired FTEs, showing that the
pace of the restructuring program is well within expectations. Of
the total reduction, 2,629 FTEs was due to outsourcing of non-
core activities.

Miscellaneous

* KPNQwest filed for bankruptcy in the second quarter of 2002.
KPN helped to keep KPNQwest's network operational for some time,
but could eventually not prevent the network to be shut down. In
the second quarter and in July 2002, KPN succeeded to migrate its
customers to networks from other operators without significant
disruptions.

* KPN announced an increase to a maximum of 4.5% in its domestic
retail traffic, call set-up and subscription tariffs, as of
August 1, and September 1, 2002. On the other hand, wholesale
tariffs for originating and terminating traffic will decrease by
an average of 8% and 4% respectively in the third quarter of
2002.

* As from August 1, 2002, local Carrier PreSelect (for 6/7-digit
traffic) has been introduced, which allows customers to choose
their own carrier for local traffic.

* Quam (the consortium of Telef˘nica and Sonera) announced the
suspension of their UMTS activities in Germany. In 2001, E-Plus
concluded national roaming contracts and signed a memorandum of
understanding regarding 3G network sharing with Quam. The effect
of Quam's suspension is being evaluated.

* On August 5, 2002, Vision Networks, a non-consolidated 100%
subsidiary, announced that with the sale of the Czech cable
activities, it reaches completion of the disposal of almost all
of its cable activities, except for an immaterial interest in
Poland.

In conformity with the announcements made in 1997 when Vision
Networks was split off by means of an internal demerger, the
Supervisory Board of Vision Networks will dissolve because there
are no longer any substantial activities. As a result, KPN will
obtain full control over Vision Networks, which is currently
accounted for as a participating interest for an amount of EUR
18,151, and will consolidate the company (including its remaining
liabilities and guarantees issued) upon completion of the sale of
the Czech activities. The consolidation will lead to a direct
movement in shareholder's equity (an increase of approximately
EUR 700 million). Vision Networks issued a loan to KPN consisting
of the proceeds obtained from the sale of activities that will
cease to exist in the consolidation. Consequently, the external
debt on the balance sheet of KPN will decrease by EUR 631
million.

* After obtaining approval of the Dutch Competition Authority
(NMa) at the end of July 2002, the sale of the 55% share in
Network Construction to Koninklijke Volker Wessels Stevin (KVWS)
was completed, as a result of which Network Construction is no
longer consolidated. A full take over by KVWS is expected to
follow on January 1, 2005.

* KPN has an obligation to ascertain whether the assets of its
independent pension funds cover the pension liabilities at each
year-end. In case the coverage of the fund (i.e. the ratio
between the pension obligations and plan assets) is below the
currently agreed threshold, KPN has to equalize the gap in three
equal payments spread over three years. Should such a case occur
at year-end 2002, the first payment needs to be made in June
2003.

If the conditions with respect to the composition and the value
of the assets and liabilities at December 31, 2002 were to be as
they were on August 1, 2002, a gap of approximately EUR 375
million were the outcome.

Consequently, KPN would have to pay EUR 125 million to the
pension funds in 2003 and to record this as an extra charge to
the Statement of Income in the fourth quarter of 2002.

Financing

* In June 2002, KPN redeemed EUR 3.3 billion of its Floating Rate
Notes and EUR 0.1 billion of other loans due during the second
quarter out of its cash position. KPN's funding strategy focuses
primarily on further balancing of its debt redemption schedule by
repayment of various bonds and loans. To that end, KPN bought
back EUR 332 million of its Fixed Rate Notes due 2003 via a
public tender offer.

In addition, EUR 116 million notes due 2003, EUR 125 million
notes due 2004 and EUR 140 million of private placements
were bought back. KPN also repaid its EIB loan of which EUR 181
million was still outstanding.

* In the second half of 2002, KPN has to make a repayment of EUR
516 million of its subordinated loan facility with BellSouth,
which was drawn at the acquisition of BellSouth's stake in E-Plus
earlier this year.

This repayment will be made out of KPN's cash position, which
amounted to EUR 4.2 billion at the end of the second quarter of
2002.

Outlook

The KPN Board of Management expects the following outlook for the
full year of 2002 based on the developments during the first half
of 2002:

Operating results

Operating revenues
Total operating revenues in the second quarter of 2002 decreased
to EUR 3,105 million (2001: EUR 3,202 million). Excluding
exceptional items operating revenues decreased by EUR 85 million
to EUR 3,083 million (2001: EUR 3,168 million). The main
contributors to the change in operating revenues, excluding
exceptional items, in the second quarter were:

* Fixed-network Services' operating revenues increased by EUR 13
million. Increased revenues from ISPs and customer relations
services such as call centers more than offset lower traffic
revenues and volumes in the retail market.

* Operating revenues of Mobile Communication increased
significantly by EUR 108 million, reflecting higher revenues in
The Netherlands, Germany and Belgium and as a result of the full
consolidation of E-Plus as of March 13, 2002. This increase was
only partly offset by the effects of the disposal of Pannon GSM
in the first quarter of 2002.

* Operating revenues of the Business Solutions division decreased
by EUR 25 million, where a decline in operating revenues from
international bandwidth services could not be offset by the
increase in revenues in all other business lines. Total sales to
third parties, however, increased due to higher sales of
broadband (ADSL) and higher revenues at Integrated Solutions.

* Operating revenues of Other activities decreased by EUR 219
million, which reflects the sale of non-core assets, including
the deconsolidation of KPNQwest as of November 30, 2001, and
lower activities and sales of the other units within Other
activities.

* Intercompany sales decreased by EUR 38 million.

In the first half of 2002, total operating revenues increased by
EUR 201 million to EUR 6,364 million (2001: EUR 6,163 million).
Excluding exceptional items, operating revenues decreased by EUR
122 million, from EUR 6,129 million in the first half of 2001 to
EUR 6,007 million in the first half of 2002.

EBITDA

EBITDA increased by 24.6% to EUR 1,164 million in the second
quarter of 2002 (2001: EUR 934 million). Excluding exceptional
items, EBITDA increased from EUR 929 million in the second
quarter of 2001 to EUR 1,094 million in 2002, an increase of EUR
165 million or 17.8%. The EBITDA margin, excluding exceptional
items, increased from 29.3% in the second quarter of 2001 to
35.5% in the second quarter of 2002.

EBITDA in the first half of 2002 amounted to EUR 2,223 million
(2001: EUR 1,729 million). Excluding exceptional items, EBITDA
amounted to EUR 2,034 million in the first half of 2002 compared
to EUR 1,724 million in the first half of 2001. The EBITDA
margin, excluding exceptional items, increased from 28.1% in the
first half of 2001 to 33.9% in the first half of 2002.

The main drivers behind the increase in the EBITDA excluding
exceptional items in the second quarter of 2002 were:

* The rise in EBITDA and the EBITDA margin of the division
Fixed-network Services clearly shows the successful cost
reduction programs.

EBITDA increased by EUR 45 million, mainly the result of cost
savings following the reduction of the workforce and other cost-
cutting measures, lower rates for interconnection and purchase
costs of traffic, and the effect of the termination of Planet
Germany in 2001.

* EBITDA and the EBITDA margin of the division Mobile
Communications improved significantly, where the strategy of
profitable growth adopted in the second quarter of 2001 is
showing results: higher airtime revenues, lower customer
acquisition costs and marketing expenses were the main drivers
behind this improvement.

* Business Solutions' EBITDA improved by EUR 36 million,
demonstrating successful cost reduction programs.

* Other activities' EBITDA decreased by EUR 30 million, resulting
from the sale of non-core assets and a drop in activities and
sales.

In the first half of 2002, all core divisions contributed to the
rise in EBITDA, mainly as a result of strict cost control
measures.

These increases were in part offset by the decrease in EBITDA of
Other activities.

EBIT

In the second quarter of 2002, EBIT amounted to a loss of EUR
6,959 million (2001: a loss EUR 179 million). Excluding
exceptional items, EBIT increased from a loss of EUR 2 million in
the second quarter of 2001 to a profit of EUR 405 million in
2002.

The increase in EBITDA described above was further strengthened
by lower depreciation and amortization expenses, primarily in the
division Mobile Communications following the impairment charge on
the goodwill of E-Plus in the fourth quarter of 2001.

In the first half of 2002, EBIT amounted to a loss of EUR 6,622
million (2001: a loss of EUR 225 million). Excluding exceptional
items, EBIT increased from a loss of EUR 48 million in the first
half of 2001 to a profit of EUR 677 million in 2002.

Financial income/(expenses)

Net financial expenses in the second quarter of 2002 amounted to
EUR 317 million (2001: EUR 316 million). Excluding exceptional
items, net financial expenses decreased from EUR 348 million in
the second quarter of 2001 to EUR 317 million in 2002, mainly
resulting from the cash proceeds from the public offering in
2001, leading to an increase in interest income, and the debt
redemption in the first and second quarter of 2002. This was in
part offset by the costs related to the executed buy back of
notes and the effect of the full consolidation of E-Plus.

In the first half of 2002, net financial expenses amounted to EUR
584 million (2001: EUR 770 million). Excluding exceptional items,
net financial expenses decreased from EUR 663 million in the
first half of 2001 to EUR 584 million in 2002.

Taxation

The tax charge in the second quarter and first half of 2002 was
affected by tax losses (resulting from the impairment charges) in
Germany for which no deferred tax assets were recognized, non-
deductible goodwill amortization and write-downs of certain
assets. Additionally, an exceptional item of EUR 606 million was
recognized in the second quarter of 2002 related to a full
valuation allowance set up for deferred tax assets that were
previously recognized in Belgium and Germany.

Income from participating interests

Income from participating interests decreased from a profit of
EUR 18 million in the second quarter of 2001 to a loss of EUR
1,203 million in 2002. Excluding exceptional items, income from
participating interests amounted to a profit of EUR 1 million
(2001: EUR 18 million).

In the first half of 2002, income from participating interests
amounted to a loss of EUR 1,595 million compared to a profit of
EUR 28 million in 2001. Excluding exceptional items, income from
participating interests amounted to a loss of EUR 121 million in
the first half of 2002 compared to a profit of EUR 28 million in
2001.

The inclusion of the operational losses of KPNQwest in the
first quarter of 2002, following the deconsolidation in 2001, was
the main reason for this decrease in income from participating
interests.

Profit/(loss) after taxes

In the second quarter of 2002, loss after taxes amounted to EUR
9,269 million (2001: a loss of EUR 499 million). Excluding
exceptional items, loss after taxes totaled EUR 79 million (2001:
a loss of EUR 354 million).

Total loss after taxes in the first half of 2002 amounted to EUR
9,617 million, compared to a loss of EUR 1,038 million in 2001.
Excluding exceptional items, total loss after taxes amounted to
EUR 304 million, compared to a loss of EUR 754 million in 2001.

Fixed-network Services
Total operating revenues from Fixed-network Services increased by
EUR 13 million compared to the second quarter of 2001. In the
first half of 2002, operating revenues increased by EUR 76
million to EUR 3,322 million.

As a result of the introduction of Internet-originating services
and the increasing penetration of broadband, Internet-related
volumes at Fixed Telephony decreased significantly in the first
half of 2002 by 2.0 billion minutes (15.3%). This downward trend
in volumes is however more than offset by volumes and (ADSL-)
subscribers at the unit Consumer Internet and Media Services
(CIMS, reported under Other units within Fixed-network Services)
and wholesale volumes (Internet-originating services), which
Carrier Services sells to ISPs. On a consolidated level, total
Internet related volumes still show an increase.

Fixed Telephony

Fixed Telephony's operating revenues decreased by 1.5% from EUR
980 million in the second quarter of 2001 to EUR 965 million in
the second quarter of 2002. Network airtime usage decreased by
EUR 29 million.

The major factors contributing to the decrease in traffic
revenues are: increased competition from (Pre)Select Carriers,
fixed-to-mobile substitution, increased broadband penetration
including cable Internet and the introduction of Internet-
originating services.

Total traffic of Fixed Telephony decreased from 14.8 billion
minutes in the second quarter of 2001 to 13.0 billion minutes in
the same quarter of 2002, mainly in domestic (voice) traffic,
stemming from the increased competition in this area, and
Internet-related traffic, stemming from the introduction of
Internet-originating services.

Total operating revenues of Fixed Telephony in the first half of
2002 amounted to EUR 1,929 million, a decrease of EUR 36 million,
or 1.8%, over the comparative period, as a result of lower
volumes in domestic and Internet-related traffic.

Carrier Services

Operating revenues of Carrier Services in the second quarter of
2002 decreased by 7.8% to EUR 674 million (2001: EUR 731
million).

The decrease was primarily the result of lower prices for
international traffic and lower revenues of local loop services
(which are mainly inter-company revenues). Total national and
international traffic volumes handled by Carrier Services
(transit, originating voice/Internet, terminating and
international) increased, mainly as a result of the introduction
of Internet-originating services in September 2001 (1.4 billion

Internet-originating minutes), as well as an increase in
originating voice services (Carrier (Pre)Select).
Operating revenues of Carrier Services decreased from EUR 1,383
million in the first half of 2001 to EUR 1,352 million in the
first half of 2002.

The main factor behind this decrease was local loop services,
despite higher revenues from national and international traffic
services. Total national and international traffic volumes
handled by Carrier Services increased, mainly as a result of the
introduction of Internet-originating services in the second half
of 2001.

Other units within Fixed-network Services

Operating revenues increased by EUR 40 million to EUR 396 million
in the second quarter of 2002 (2001: EUR 356 million). Both our
ISPs (CIMS) and customer relationship activities (SNT) reported
higher revenues, attributable to the introduction of the
Internet-originating services for ISPs, a higher level of
subscribers and SNT's acquisitions in 2001.

This increase was in part offset by a decrease in operating
revenues of the unit Fixed Network Operator, which generates
primarily internal revenues, as a result of cost savings
accomplished in 2002.

Operating revenues in the first half of 2002 amounted to EUR 788
million, compared with EUR 734 million in 2001. Higher revenues
resulting from the billing of Internet-traffic by ISPs, a higher
level of subscribers and acquisitions done by SNT contributed to
this increase.

EBITDA

EBITDA in the second quarter of 2002 amounted to EUR 498 million
(2001: EUR 431 million). Excluding exceptional items, EBITDA
increased from EUR 453 million in the second quarter of 2001 to
EUR 498 million in 2002. The major contributors to this increase
were: cost savings accomplished by the units Fixed Network
Operator and Carrier Services resulting from the reduction of the
workforce and other operating cost savings, lower interconnection
rates and purchase costs for traffic as well as lower marketing
expenditure following the termination of Planet Germany in 2001.

This decrease as in part offset by consolidation effects
resulting from acquisitions done by SNT in 2001 and a higher
level of write-offs of doubtful debts.

EBITDA in the first half of 2002 amounted to EUR 961 million, an
increase of EUR 96 million or EUR 74 million excluding
exceptional items. The modest growth in operating revenues was
further strengthened by cost savings, both internally and
externally and lower purchase costs of traffic.

EBIT

EBIT amounted to EUR 253 million in the second quarter of 2002
(2001: EUR 195 million). Excluding exceptional items, arising
from impairments on assets in 2002 and charges related to the
termination of Planet Germany in 2001, EBIT increased from EUR
217 million in the second quarter of 2001 to EUR 287 million in
2002.

In the first half of 2002, EBIT amounted to EUR 507 million
compared to EUR 412 million in 2001. Excluding exceptional items,
EBIT increased from EUR 434 million in the first half of 2001 to
EUR 541 million in 2002.

Mobile Communications

Operating revenues

E-Plus is fully consolidated as from March 13, 2002. Prior to
that date, E-Plus was proportionally consolidated for 77.49%.
BASE (previously named KPN Orange) is fully consolidated as from
February 7, 2001, following the acquisition of the remaining 50%
in BASE.

Pannon GSM is deconsolidated as from February 4, 2002, following
the sale of our interest in Pannon GSM. Operating revenues in the
second quarter of 2002 increased by EUR 108 million, or 9.9%,
from EUR 1,086 million in the first quarter of 2001 to EUR 1,194
million in 2002, reflecting higher revenues in The Netherlands,
Germany and Belgium and as a result of the full consolidation of
E-Plus as of March 13, 2002.

This increase was only partly offset by the effects of the
disposal of Pannon GSM in the first quarter of 2002. In our
maturing core markets, traffic revenues increased but were in
part offset by lower equipment sales.

In our core markets the total subscriber base increased up
to December 31, 2001 to 13.7 million customers, but decreased in
the first half of 2002 to 13.4 million customers. This is mainly
attributable to the change towards a profitable growth strategy
adopted in 2001, with a focus on high value customers, which led
to a decrease in pre-paid subscribers.

i-mode was launched in the first and second quarter of 2002 and
resulted in a total of 67,000 customers at the end of the second
quarter of 2002. On August 15, 2002, the total number of
i-mode customers in Germany and The Netherlands amounted to
100,000.

Operating revenues in the first half of 2002 amounted to EUR
2,578 million compared to EUR 2,114 million in 2001. Excluding
exceptional items, operating revenues increased from EUR 2,114
million in the first half of 2001 in EUR 2,243 million in 2002.

EBITDA

Mobile Communications' EBITDA, excluding exceptional items, for
the second quarter of 2002 increased from EUR 289 million in the
second quarter of 2001 to EUR 403 million in 2002. The main
factor behind this increase in EBITDA stemmed from the market
strategy adopted in the second quarter of 2001 for Germany and,
to a lesser extent, for The Netherlands; higher airtime revenues,
lower cost of handsets as a result of lower gross additions, a
decrease in bonuses and commissions paid to dealers and lower
marketing and other operating expenses.

EBITDA in the first half of 2002 increased from EUR 461 million
in 2001 to EUR 1,092 million. Excluding exceptional items related
to the sale of Pannon GSM in 2002, EBITDA in the first half of
2002 amounted to EUR 757 million (2001: EUR 461 million).

EBIT

In the second quarter of 2002, significant impairment charges
amounting to EUR 7,264 million on the goodwill and licenses of
E-Plus and BASE were recognized. Excluding these exceptional
charges, EBIT improved from a loss of EUR 144 million in the
second quarter of 2001 to a profit of EUR 102 million in 2002.

The increase of EUR 264 million resulted from decreases in
operating expenses and depreciation and amortization expenses.
The latter resulted from the impairment charge on the goodwill of
E-Plus at the end of 2001.

For the first half of 2002, EBIT, excluding exceptional items, in
the first half of 2002 amounted to EUR 183 million (2001: EUR 397
million).

The Netherlands
Operating revenues in The Netherlands in the second quarter of
2002 increased by EUR 20 million, from EUR 538 million in the
second quarter of 2001 to EUR 558 million. EBITDA increased from
EUR 225 million to EUR 240 million.

Operating revenues in the first half of 2002 increased to EUR
1,069 million, from EUR 1,016 million in 2001. EBITDA increased
from EUR 427 million to EUR 456 million. The following table
shows the operational results excluding exceptional items:

Traffic revenues in The Netherlands increased but were partially
offset by lower equipment sales. In the second half of 2001, the
Dutch market matured and from that time, our Dutch subscriber
base remained relatively stable at approximately 5.2 million. The
pre-paid/postpaid mix, however, improved. Total number of i-mode
subscribers in The Netherlands at June 30, 2002 amounted to
12,000.

The development of the customer base in The Netherlands is
provided in the table below:

Germany

Operating revenues in Germany in the second quarter of 2002
increased by EUR 136 million, or 32.2%, from EUR 423 million in
the second quarter of 2001 to EUR 559 million, as a result of the
full consolidation of E-Plus as from March 13, 2002. Excluding
this effect, operating revenues increased by EUR 10 million.
EBITDA increased from EUR 84 million to EUR 168 million and shows
the positive effect of the changed strategy and cost saving
programs.

Operating revenues in the first half of 2002 increased to EUR
1,000 million, from EUR 856 million in 2001. EBITDA in the first
half of 2002 increased from EUR 75 million to EUR 291 million.
The following table shows the operational results excluding
exceptional items:

In general, the increase in traffic revenues was partially offset
by lower equipment sales. The new strategy led to an increase in
the number of postpaid customers and a decrease in the number of
pre-paid customers. The customer base decreased to 7.1 million
customers at the end of the second quarter of 2002. Total i-mode
customers at the end of the second quarter of 2002 amounted to
55,000. The development of the customer base in Germany is
provided below:

Belgium

Operating revenues generated by BASE increased from EUR 70
million in the second quarter of 2001 to EUR 83 million in the
second quarter of 2002. The increase in operating revenues arose
from the combined effect of the increase in number of subscribers
from 813,000 customers at the end of the second quarter of 2001
to 1,115,000 customers at the end of the second quarter of 2002
and higher airtime usage (474 million minutes in the second
quarter of 2002 compared to 406 million minutes in 2001).

Business Solutions

Operating revenues

In the second quarter of 2002, operating revenues, consisting of
both third party sales and sales to other divisions, decreased
from EUR 522 million in the second quarter of 2001 to EUR 497
million in 2002.

Third party sales increased due to higher revenues from
MxStream (ADSL) and Integrated Solutions. This increase was
partly offset by a decline in sales from International Bandwidth
Services resulting from cost reduction programs of some of our
clients and by internal sales.

In the first half of 2002, operating revenues increased by EUR 1
million from EUR 1,007 million to EUR 1,008 million.

EBITDA

In the second quarter of 2002, EBITDA increased from EUR 146
million in the second quarter in 2001 to EUR 235 million in 2002.
Excluding exceptional items, EBITDA improved from EUR 146 million
to EUR 182 million. The operating revenues decreased but were
offset by lower operating expenses, mainly caused by cost
reduction programs resulting in lower intercompany charges and
other operating expenses.

In the first half of 2002, EBITDA decreased from EUR 295 million
in the first half of 2001 to EUR 248 million in 2002. Excluding
exceptional items the EBITDA increased by EUR 53 million, from
EUR 295 million in the first half of 2001 to EUR 348 million in
2002, caused by the decrease in the intercompany charges.

EBIT

In the second quarter of 2002, total EBIT amounted to a loss of
EUR 31 million compared to a loss of EUR 4 million in the second
quarter of 2001. Excluding exceptional items, EBIT increased from
a loss of EUR 4 million to a profit of EUR 46 million. Main
reasons are the lower intercompany charges and lower depreciation
and amortization charges.

In the first half of 2002, total EBIT amounted to a loss of EUR
179 million compared to a profit of EUR 34 million in the first
half of 2001. Excluding exceptional items, EBIT increased by
117.6% from EUR 34 million in the first half of 2001 to EUR 74
million in 2002.

This increase is due to the lower intercompany charges.

Other activities

Operating revenues

Operating revenues in the second quarter of 2002 decreased by EUR
231 million, or 38.5%, from EUR 600 million in the second quarter
of 2001 to EUR 369 million in 2002. Excluding exceptional items,
operating revenues decreased by EUR 219 million, or 38.7%, to EUR
347 million in the second quarter of 2002 (2001: EUR 566
million).

This decrease was primarily due to the effects of the
deconsolidation of KPNQwest, the sale of KPN Lease and
Datacenter, following the (partial) disposal of these assets, and
a lower level of activities and operating revenues of the other
activities.

Operating revenues in the first half of 2002 amounted to EUR 667
million (2001: EUR 1,060 million). Excluding exceptional items,
operating revenues decreased from EUR 1,026 million in the first
half of 2001 to EUR 645 million in 2002.

EBITDA

Other activities' EBITDA for the second quarter of 2002 decreased
from EUR 68 million in the second quarter of 2001 to EUR 28
million in 2002. Excluding exceptional items, Other activities'
EBITDA decreased by EUR 30 million, or 73.2%, to EUR 11 million
in the second quarter of 2002 (2001: EUR 41 million). The
deconsolidation of KPNQwest, and the sale of KPN Lease and
Datacenter, and a lower level of activities and operating
revenues of the other activities are the main reasons for the EUR
30 million lower EBITDA.

EBITDA in the first half of 2002 decreased from a profit of EUR
108 million in 2001 to a loss of EUR 78 million in 2002.
Excluding exceptional items, EBITDA in the first half of 2002
amounted to a loss of EUR 32 million (2001: a profit of EUR 81
million). This decrease was primarily due to the aforementioned
effects of deconsolidation.

EBIT

EBIT in the second quarter 2002 improved from an operating loss
of EUR 226 million to an operating loss of EUR 19 million.
Excluding exceptional items, EBIT improved by EUR 41 million,
from a loss of EUR 71 million in the second quarter of 2001 to
EUR 30 million in the second quarter of 2002. This improvement
mainly resulted from   the deconsolidation effects of KPNQwest
and the sale of KPN Lease and Datacenter.

For the first half of 2002, EBIT amounted to a loss of EUR 204
million (2001: a loss of EUR 274 million). Excluding exceptional
items, the loss in the first half of 2002 amounted to EUR 121
million (2001: a loss of EUR 119 million).

Balance Sheet and Cash Flow information

Debt position

Total interest bearing debt at the end of the second quarter of
2002 amounted to EUR 19.1 billion (EUR 23.1 billion at the end of
2001), which is included in long-term liabilities (EUR 16.3
billion) and current liabilities (EUR 2.8 billion).

Included in current liabilities is an amount of EUR 631 million
payable to Vision Networks, which will be eliminated after the
consolidation of Vision Networks, after the completion of the
sale of the Czech cable activities.

Total cash and cash equivalents at the end of the second quarter
of 2002 amounted to EUR 4.2 billion (EUR 7.3 billion at the end
of 2001). Total net debt at the end of the second quarter of 2002
amounted to EUR 15.0 billion (EUR 15.7 billion at the end of
2001).

In the first half of 2002, investments in intangible fixed assets
mainly related to the (non-cash) goodwill of EUR 1,253 million
arising on the acquisition of the remaining 22.51% stake in E-
Plus from BellSouth in exchange for 234.7 million KPN shares
(based on BellSouth's exchange right).

In the first half of 2001, KPN invested EUR 631 million in
intangible fixed assets, which was mainly due to goodwill
associated with the acquisition of the remaining 50% of BASE, and
the acquisition of a UMTS license in Belgium.

Net cash flow from operating activities

In the second quarter of 2002, cash flow from operating
activities amounted to EUR 637 million, compared to EUR 608
million in 2001.

The cash flow from operating activities in the first quarter of
2002 amounted to EUR 805 million due to the fact that the
interest payments on loans occurred in the second quarter of
2002. The major part of interest payments is due every second and
fourth quarter.

In the first half of 2002, cash flow from operating activities
amounted to EUR 1,442 million, compared to EUR 1,096 million in
2001. The increase in EBITDA was the main driver in the increase
of the operating cash flow.

Net cash flow from investing activities

The net cash flow used in investing activities amounted to EUR
198 million in the second quarter of 2002. Capital expenditure
amounted to EUR 225 million, whereas the sale of real estate
(buildings) led to a cash inflow of EUR 50 million.

Total cash flow from investing activities in the first half of
2002 amounted to EUR 198 million and reflected the sale of our
44.66% interest in Pannon GSM generating a cash inflow of EUR 603
million. Capital expenditure in the first half of 2002 amounted
to EUR 480 million.

Net cash flow from investing activities in the first half of 2001
amounted to a cash outflow of EUR 1,988 million. Capital
expenditure amounted to EUR 1,631 million, other investments
related to the acquisition of the remaining 50% of BASE of EUR
735 million, including a repayment of an original bank debt of
EUR 235 million, and the acquisition of a UMTS license in Belgium
for EUR 150 million.

Total cash inflow from divesting activities amounted to EUR 719
million, comprising EUR 572 million related to the sale of
Vodafone shares and EUR 147 million related to the sale of
tangible fixed assets.

Net cash flow from financing activities

In the second quarter of 2002, an amount of EUR 4.4 billion was
redeemed. In June, KPN redeemed EUR 3.3 billion of its Floating
Rate Notes and EUR 0.1 billion of other loans due during the
second quarter out of its cash position. KPN's funding strategy
focuses primarily on further balancing of its debt redemption
schedule by repayment of various bonds and loans. To that end,
KPN bought back EUR 332 million of Fixed Rate Notes due 2003 via
a public tender offer.

In addition, EUR 116 million notes due 2003, EUR 125 million
notes due 2004 and EUR 140 million of private placements were
bought back. KPN also repaid its EIB loan of which EUR 181
million was still outstanding.

In the first half of 2002, cash flow used in financing activities
amounted to EUR 4.8 billion. The main repayment in the first
quarter of 2002 related to the repayment of EUR 483 million under
the loan facility with BellSouth.

In the first half of 2001, net cash flow used in financing
activities amounted to EUR 435 million, consisting of repayments
of Floating Rate Notes of EUR 2 billion, private placements in
Japan of EUR 1 billion, and bank debt related to BASE of EUR 235
million.

Additionally, cash inflows included a Eurobond issued by KPN of
approximately EUR 2.3 billion and a bond issued by KPNQwest, of
which EUR 223 million was consolidated by KPN. Finally, E-Plus
refinanced its non-recourse project financing. This resulted in a
repayment of EUR 1.5 billion (100% share) and a new facility of
E-Plus of EUR 2.5 billion (100% share). E-Plus drew EUR 1.9
billion on this facility, of which EUR 1.5 billion was included
in KPN's figures.

    Contact Information:

    KPN Investor Relations
    G.L.H. Nijman
    P.O. Box 30000
    2500 GA The Hague
    The Netherlands

    Telephone: +31 70 446 09 86
    Facsimile: +31 70 446 05 93
    Email: ir@kpn.com
    Web Site: www.kpn.com

  Financial calendar:

  November 15, 2002
  Publication of results for the third quarter of 2002

  March 3, 2003
  Publication of results for the full year 2002

  May 12, 2003
  General Meeting of Shareholders
  Publication of results for the first quarter of 2003

  Dates may be subject to change.


KPN NV: Announces Plan to Terminate Operations in Belgium
----------------------------------------------------------
As explained in the report for the second-quarter 2002 financial
results, KPN sees no possibilities for making KPN Belgium
independently profitable.

KPN is currently holding talks with a number of parties to
examine the scope that exists for co-operation in the Belgian
market. The company's works council has already been informed of
this step.

KPN Belgium is a wholly-owned subsidiary of KPN. KPN Belgium
offers business users a wide range of telecommunications
services, including fixed telephony, data/IP, Internet services
and international services. The company - now Belgium's second
largest operator - has its own fibre-optic network.


KPN NV: Will Sell Software House for EUR29 MM
------------------------------------------------------
Royal KPN NV announces that the definitive agreement to sell its
Software House to European IT service provider Atos Origin is
tagged at EUR29 million, a report from AFX News says. The
companies announced a preliminary agreement in May.

Software House's 600 employees in Netherlands will join Atos
Origin Consultancy & System Integration, the paper says. Software
House provides software development and application management
services to KPN, the paper adds.

KPN and Atos Origin will together implement a "Total Cost of
Ownership" program, the report adds.


===========
P O L A N D
===========


ELEKTIRM SA: Extends Exclusivity for BRE Bank and Eastbridge
------------------------------------------------------------
The Management Board of Elektrim S.A. announces that on August
19, 2002, the agreement dated May 12, 2002 executed between
Elektrim S.A., BRE Bank S.A. and Eastbridge NV has been amended.

Pursuant to the above agreement, the consortium of BRE Bank S.A.
and Eastbridge NV were granted exclusivity right to negotiations
relating to the transfer by Elektrim S.A. of 49% of shares in
Elektrim Telekomunikacja Sp. z o.o. and 49% of shares in Carcom
Warszawa Sp. z o.o. and one share in Polska Telefonia Cyfrowa sp.
z o.o.

The Exclusivity Agreement has been further extended until August
26, 2002.

All other provisions of the agreement remain unchanged.

Previously, the Troubled Company Reporter - Europe on July 17
said that Elektrim S.A. had already extended the Exclusivity
Agreement until August 15, 2002.


NETIA HOLDINGS: Meeting to Accept Composition Plan Opens
--------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services, announces that the
creditors' meeting to accept the composition plans of its three
Dutch subsidiaries, Netia Holdings B.V., Netia Holdings II B.V.
and Netia Holdings III B.V., were opened Thursday.

In consideration of the timing of arrangement proceedings in
Poland and in order to obtain confirmation with respect to tax
matters relating to the restructuring, the court adjourned the
meeting and scheduled the creditors' vote on the composition
plans for the companies for August 30, 2002.

The verification hearings in the Netherlands have been
provisionally fixed by the court for September 11, 2002.


Contact Information:
Netia
Investor Relations
Anna Kuchnio
Telephone: +48-22-330-2061


=========
S P A I N
=========


AVANZIT SA: Avanzit Ena Files for Temporary Receivership
--------------------------------------------------------
Avanzit's Brazilian subsidiary, Avanzit Ena Sgt., will file for
temporary receivership, possibly resulting in 750 job losses and
the sale of the company Comelta, a report from Expansion
and the Financial Times says.

Avanzit explained that the decision to file for temporary
receivership of its Brazilian subsidiary aims to protect the
workers', creditors' and shareholders' interests. The company
adds that the move is an important step to restructuring
the subsidiary's activities, the papers say.


CEAC: Files Request for Bankruptcy Protection
---------------------------------------------
Telemarketing company Vega's parent company Catalan Grupo Ceac
recently filed for bankruptcy protection in the courts of
Barcelona, a report from Expansion and the Financial Times says.

The court's decision to grant the company's request or not will
not be made until the start of September since the courts will
not be in session during the month of August, the papers say.

Earlier in March, the group signed a refinancing deal with 14
financial companies for a plan to tackle debts of EUR70 million.
But the group's total liabilities could rise to EUR90 million as
a result of the ambitious expansion plan of Opening, the English
language academy subsidiary, the papers add.

Ceac filed the request for bankruptcy protection two days after
Spanish publishing group Planeta completed the purchase of Ceac's
three subsidiaries. A few weeks earlier, Planeta ruled out
purchasing the whole group and any involvement in any of the
language and IT academy activities of Ceac, the papers report.

Ceac had chosen to limit itself to buying Ceac's distance
learning companies Centro de Estudios Ceac and Home English, and
technical and children's publisher Grupo Editorial Ceac. Under
this agreement, Planeta will inherit EUR25 million of the
company's debts. It will also acquire a 75% stake through capital
increase while Ceac's retains 25%, the papers say.


===========
S W E D E N
===========


LM ERICSSON: Will Close Grimstad Development Division
----------------------------------- -----------------
Beleaguered Swedish telecom firm Ericsson is closing its GBPRS
development division in Grimstad, Norway, affecting 160 workers,
the Aftenposten says.

Training activities will be affected and another 15 jobs will be cut
once the division is phased out in the next six months, the paper reports.

Managing director of Ericsson Norge, Tor Frydenberg apologized
for the closure of Ericssonb's operations in Norway, but also
commented that the move is necessary for the company to survive
in a highly competitive market, the paper adds.

Mr. Frydenberg also stated that Ericsson would try to find
"new assignments" for as many as possible of the workers affected
by the shutdown, the paper says.

After the closure, Ericsson Norge will be reduced to its computer
communication division for mobile telephones in Grimstad, along
with defense technology in Halden and Asker. Its traffic-routing
division in Asker will also be retained, Aftenposten says.


===========================
U N I T E D   K I N G D O M
===========================


CENES PHARMACEUTICALS: Passes Resolutions at AGM 2002
-----------------------------------------------------
CeNeS Pharmaceuticals plc, London U.K. notified the Regulatory
News Service of the London Stock Exchange that during its Annual
General Meeting Monday, all its proposed resolutions at the
meeting were duly passed.

Mr Alan Goodman said:

'The CeNeS Board have completed a major restructuring of the
business in the last twelve months. The key targets have been
achieved and the Company now has a clear, focussed strategy.
Whilst the Board are continuing to look at several options going
forward, these options do not include the possible sale or merger
of CeNeS and the Board has ceased all discussions regarding the
same'.

Contact Information:

Mr Alan Goodman
Chairman
Mr Neil Clark
Chief Operating Officer and Finance Director
CeNeS Pharmaceuticals plc
Telephone No: + 44 (0)1223 266 466


CORDIANT COMMUNICATIONS: Directors Set to Meet With Active Value
----------------------------------------------------------------
Cordiant Communications' directors Julian Treger and Brian
Myerson are set to convene with Active Value fund managers amid
increasing concerns on the advertising agency's long-term plans,
a report from the Financial Times says.

The directors' move follows Cordiant's announcement last week
that Active Value had generated a 9.06% stake in the group.
Active Value is Cordiant's second largest shareholder, the paper
says.

Mr. Treger and Myerson are seen to call for management changes at
Cordiant, which has been suffering from financial woes in the
past years, the paper adds.

Active Value is believed to may have found supporters in
Cordiant's large shareholders. Aviva's subsidiary Morley Fund
Management recently upped its stake to 6.87%. Millgate Capital
owns 4.02%, the paper reports.

Cordiant's woes culminated with Wendy's International's decision
to change advertising agencies last week. The account, which was
managed by Bates in the U.S., was worth USD200 million in annual
media billings and responsible for a memorable campaign featuring
Dave Thomas, Wendy's avuncular founder who died in January, the
paper says.

Despite the fact that Wendy's only generated less than 2% of
Cordiant's revenues, the move drove UBS Warburg to decrease pre-
tax profit forecast to GBP32.4 million in 2003 compared to its
earlier estimate of GBP37.8 million, the paper reports.

Cordiant announced in March that they had sealed an agreement
from creditors to restructure its debts, temporarily putting to
rest concerns about its finances, Financial Times says.


FRAMLINGTON SPLIT TRUST: Bank Appoints Trust's Receivers
--------------------------------------------------------
The Bank of Scotland has appointed J Reid and J Smith from
Deloitte & Touche as administrative receivers of Framlington
Split Income Trust Plc, a report from AFX News says.

The recently appointed receivers are currently reviewing the
financial status of the Framlington, the news outfit reports.

It is expected that the prospects of a distribution to unsecured
creditors or to the shareholders will be announced soon, AFX
adds.

Framlington's shares were suspended on Aug 9 following
substantial falls in the value of the company's investments,
which meant its liabilities to its creditors exceeded its assets,
AFX reports.


FILTRONIC PLC: Notifies Regulator on 12.9% Interest of Prudential
-----------------------------------------------------------------
Filtronic PLC reports to the Regulatory News Service of the
London Stock Exchange that Filtronic received a notice from
Prudential plc that on August 15, 2002, Prudential plc has
interest in 9,561,246 ordinary shares or 12.90% of the issued
share capital of Filtronic.

Filtronic PLC designs and manufactures microwave products and
compound semi-conductors for cellular and broadband
telecommunications systems and military applications.

In 2002, the West Yorkshire-based company recorded GBP25.5
million in pre-tax loss.  It reflected GBP251.8 million in assets
and GBP146.4 million in liabilities in the same period.


FILTRONIC PLC: Notifies Regulator on 13.08% Interest of Fidelity
----------------------------------------------------------------
Filtronic plc reports to the London Stock Exchange's Regulatory
News Service that the company received a notice from Fidelity
International Limited that Fidelity International Limited and
certain of its subsidiary companies, also comprising the
notifiable interest of Mr Edmond C Johnstone 3rd, principal
shareholder of Fidelity International Limited, as of August 14,
2002, has 9,691,433 interest in the ordinary shares of the
company or 13.08% of the issued share capital of Filtronic.


NORTH ATLANTIC: Issues Notice of Meetings of Scheme Creditors
-------------------------------------------------------------
NOTICE OF MEETINGS OF SCHEME CREDITORS
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
No. 001448 of 2002

IN THE MATTER OF

NORTH ATLANTIC INSURANCE COMPANY LIMITED
(Provisional Liquidators Appointed)

AND IN THE MATTER OF THE COMPANIES ACT 1985

Notice is hereby given that by an Order dated: August 2002 made
in the above matter, the court has directed that meetings of the
Company's Scheme Creditors of North Atlantic Insurance Company
Limited be held together on October 3, 2002, at the Chartered
Insurance Institute, The Insurance Hall, 20 Aldermanbury, London
EC2V 7HY, United kingdom commencing at 11 am. All Scheme
Creditors are requested to attend at such place and time either
in person or by proxy.

The purpose of the Scheme Meetings will be to consider and, if
thought fit, to approve (with or without modification) a scheme
of arrangement proposed to be made between the Company and the
Scheme Creditors pursuant to s425 of the Companies Act 1985.

A downloadable file of the proposed Scheme Explanatory Statement
and Appendices are available on the North Atlantic Web site at
http://www.northatlanticinsurance.co.uk.Should an email or a
printed copy be required, please send request to the Joint
Provisional Liquidators at the address below, and one will be
sent accordingly.

Copies of the notice of the meetings, forms of proxy, voting
forms, short-form Explanatory Statement can be obtained from the
registered office of the Company or from the Joint Provisional
Liquidators of their Solicitors.

The Scheme Creditors may vote in person at the Scheme Meetings or
they may appoint another person, whether a Scheme Creditor or
not, as their proxy to attend and vote in their place.

It is requested that voting forms be lodged with the Joint
Provisional Liquidators, North Atlantic Insurance Company
Limited, PO Box 137, Harlands Road, Haywards Heath, West Sussex
RH16 1YG, United Kingdom, fax number +44 (0)1444 450 458 not less
than three working days before the time appointed for the Scheme
Meetings. A faxed copy of the voting form will beaccepted if
legible.

By the same Order, the Court   ha sappointed Paul Anthony
Brereton Ev an sof Plumtree Court, London EC4A 4HT, United
Kingdom or, failing him, Mark Charles Batten of Plumtree Court,
LondonEC4A 4HT United Kingdom to act as Chairman of the Scheme
Meetings and has directed the Chairman to report the result of
the Scheme Meetings to the Court.

The Scheme of Arrangement will be subject to the subsequent
approval of the Court.

Date: August 15, 2002

Richards Butler
Beafort House, 15 St. Botolph Street
London EC3A 7EE,UK


NTL INCORPORATED: Committee Picks Fried Frank as Attorneys
----------------------------------------------------------
The Official Committee of Unsecured Creditors of NTL Incorporated
and its debtor-affiliates sought and obtained authority from the
U.S. Bankruptcy Court for the Southern District of New York to
retain and employ Fried, Frank, Harris, Shriver & Jacobson as
attorneys.

Fried Frank, as the Committee's counsel, is expected to:

     a) provide legal advice with respect to the Committee's
        rights and interests in the review and negotiation of
        any plan of reorganization and related corporate
        documents;

     b) respond on behalf of the Committee to any and all
        applications, motions, answers, orders, reports and
        other pleadings in connection with the administration of
        the estates in this case; and

     c) perform any other legal services requested by the
        Committee in connection with this chapter 11 case and
        the confirmation and implementation of a plan of
        reorganization, in the Debtors' chapter 11 case.

Fried Fran's hourly rates are:

          Partners             $535 - $885 per hour
          Of Counsel           $495 - $685 per hour
          Special Counsel      $480 - $515 per hour
          Associates           $255 - $440 per hour
          Legal Assistants     $130 - $195 per hour

NTL is the largest cable television operator and a leading
provider of business and broadcast services in the UK, and the
owner of 100% of Cablecom in Switzerland and Cablelink in
Ireland. Kayalyn A. Marafioti, Esq., Jay M. Goffman, Esq., and
Lawrence V. Gelber, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP represent the Debtors in their U.S. Bankruptcy proceedings
and Jeremy M. Walsh, Esq. at Travers Smith Braithwaite serves as
U.K. Counsel. At December 31, 2001, the Company's books and
records reflected, on a GAAP basis, $16,834,200,000 in total
assets and $23,377,600,000 in liabilities.


SMG PLC: Announces Appointment of Non-executive Director
--------------------------------------------------------
The Board of Directors of SMG plc announces that it has appointed
Mr Adam Singer as an independent non-executive director.

Mr Singer had been one of the two nominated directors of Telewest
Communications plc, a shareholder in SMG. However, Telewest has
informed SMG that, following his resignation as chief executive
of Telewest, they no longer regard Mr Singer as a nominated
director and that, whilst Mr Stephen Cook will remain as their
representative on SMG's board, they have no current plans to
appoint a replacement for Mr Singer.

As an independent non-executive director, Mr Singer will be
eligible for appropriate directors' fees and it is SMG's
intention that he will be put forward for election at the Group's
next Annual General Meeting.

Commenting on the Board's decision, which was reached following a
full nomination process, Don Cruickshank, Chairman of SMG, said:

'Adam's an experienced and far-sighted director, whose knowledge
of the communications industry has been of great value to SMG
over the years. I'm delighted that he has agreed to stay on the
Board and that the Group will continue to benefit from his
knowledge and judgement.'

Contact Information:

Callum Spreng
Corporate Affairs Director
SMG plc
Telephone: 0141 300 3640

                                    ************

        S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
Larri-Nil Veloso, Maria Lourdes Reyes and Jean Claire Dy,
Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.


                  * * * End of Transmission * * *