TELESYSTEM INTERNATIONAL WIRELESS INC.

TELESYSTEM INTERNATIONAL WIRELESS INC.

March 15, 2005 08:52 ET

TIW to Sell its Operations to Vodafone


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: TELESYSTEM INTERNATIONAL WIRELESS INC.

TSX SYMBOL: TIW
NASDAQ SYMBOL: TIWI

MARCH 15, 2005 - 08:52 ET

TIW to Sell its Operations to Vodafone

MONTREAL, CANADA--(CCNMatthews - March 15, 2005) - Telesystem
International Wireless Inc. ("TIW" or the "Company")
(TSX:TIW)(NASDAQ:TIWI) is pleased to announce that it has entered into
definitive agreements with Vodafone International Holdings B.V., a
wholly-owned subsidiary of Vodafone Group Plc, ("Vodafone") for the sale
of its interests in 79.0% of MobiFon S.A. ("MobiFon") and 100.0% of
Oskar Mobil a.s. ("Oskar") for a cash consideration of approximately
US$3.5 billion (subject to adjustments) and the assumption of
approximately US$950 million of net debt (as at December 31, 2004). The
consideration is payable in cash upon closing of the sale and is not
subject to financing. The sale of TIW's interests in MobiFon and Oskar
will be completed through the sale of its interests in ClearWave N.V.
("Clearwave"), an indirect 99.99% owned subsidiary. Vodafone already
owns 20.1% of MobiFon. At closing, net proceeds from the sale along
with net cash at TIW is expected to equate to US$16 per fully-diluted
share and is intended to be distributed to shareholders pursuant to a
plan of arrangement, as described more fully below.

The transaction value based on proportionate net debt represents a
multiple of 10.5x(1) TIW's proportionate Operating Income Before
Depreciation and Amortization ("OIBDA")(2) for 2004, pro forma for the
recently completed acquisition of a 72.9% interest in Oskar Holdings
N.V. US$16 per share would represent a premium of 21.3% to TIW's
three-month average share price and a premium of 43.0% to TIW's share
price on December 31, 2004.

Closing of the sale is subject to (i) Court approval pursuant to the
plan of arrangement (as more fully described below), (ii) shareholder
approval on a basis to be determined by the Court (expected to be 66
2/3% of the votes), and (iii) customary conditions, including the
receipt of all necessary regulatory approvals under relevant competition
legislation (EU and Romania). Closing of the sale will take place as
soon as practicable after receipt of such regulatory approvals, which is
expected to occur in the third quarter of 2005.

Certain shareholders of TIW (namely certain affiliates of J.P.Morgan
Partners, LLC, Capital d'Amérique CDPQ Inc., an affiliate of Caisse de
dépôt et placement du Québec, and certain affiliates of AIG Emerging
Europe Infrastructure Fund L.P.) representing in total approximately
33.6% of the outstanding share capital of TIW have agreed to support and
vote their shares in favor of the transaction and not to solicit any
competing transaction.

The Board of Directors of TIW has approved the sale transaction and has
recommended that the shareholders of the Company vote in favor of the
sale transaction, which will be included in the Arrangement referred to
below. The Board of TIW has received opinions from Lazard Frères & Co.
LLC (financial advisor to the Company) and Lehman Brothers Inc.
(financial advisor to the Board of Directors) as to the fairness, from a
financial point of view, to TIW's selling subsidiaries of the sale
consideration to be paid to such subsidiaries.

The agreements between TIW and Vodafone contain customary provisions
prohibiting TIW from soliciting any other acquisition proposal but
allowing termination in certain circumstances, including receipt by TIW
of an unsolicited proposal from a third party that TIW's Board of
Directors, in the exercise of its fiduciary duties, finds to be superior
to the proposed transaction, subject to a termination fee to Vodafone of
US$110 million, representing approximately 2.5% of the transaction
value. The shareholder undertakings referred to above would also
terminate in such circumstances. In addition, Vodafone has agreed to a
standstill provision.

The transaction is to be carried out by way of a statutory plan of
arrangement under the Canada Business Corporations Act (the
"Arrangement"). The Arrangement is intended to provide for a
shareholder vote, the distribution of the proceeds of the sale to TIW's
shareholders and the eventual liquidation of TIW. Upon shareholder
approval, TIW will as soon as practicable thereafter seek an order from
the Superior Court of Québec (the "Court") approving the Arrangement.
Concurrently with the approval of the Arrangement, TIW will seek Court
authorization to initiate a creditor claims process.

It is expected that, pursuant to the Arrangement, the distribution to
TIW's shareholders will be completed in stages up to a maximum amount of
US$16 per TIW share, plus investment income, if any, earned following
closing:

- upon closing of the sale, TIW intends to distribute the amount
permitted by the Court (the "First Distribution").

- upon completion of the creditor claims process, TIW intends to
distribute all remaining cash, except for appropriate reserves (the
"Second Distribution").

- upon liquidation of TIW, it is intended that shareholders will receive
any residual value to the extent of US$16 per share (plus investment
income), and any excess shall be returned to Vodafone as an adjustment
to the consideration.

The agreements with Vodafone provide for adjustments in certain
circumstances but do not guarantee a minimum distribution to the
shareholders of TIW. Pursuant to the agreements with Vodafone and the
Arrangement, TIW shareholders will receive a maximum of US$16 per share
(plus investment income). To the extent that assumptions as to the
amount of inter alia (i) transaction and liquidation costs, (ii) net
cash position at closing, and (iii) the absence of unidentified claims
are different than expected, the shareholders may receive less than
US$16 per share. Accordingly, TIW can give no assurances as to the
total amount and timing of distributions to TIW's shareholders.

The Company anticipates mailing a proxy circular relating to the
transaction to shareholders as soon as practicable convening the
shareholders' meeting to approve the transaction and the Arrangement.

Forward-looking Statements

This news release contains certain forward-looking statements concerning
our future operations, economic performances, financial conditions and
financing plans. These statements are based on certain assumptions and
analyses made by us in light of our experience and our perception of
historical trends, current conditions and expected future developments
as well as other factors we believe are appropriate in the
circumstances. However, whether actual results and developments will
conform with our expectations and predictions is subject to a number of
risks, uncertainties and assumptions. Consequently, all of the
forward-looking statements made in news release are qualified by these
cautionary statements, and there can be no assurance that the results or
developments anticipated by us will be realized or, even if
substantially realized, that they will have the expected consequences to
or effects on us and our subsidiaries or their businesses or operations.

We undertake no obligation and do not intend to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable
law. For all of these forward-looking statements, we claim the
protection of the safe harbour for forward-looking statements contained
in the U.S. Private Securities Litigation Reform Act of 1995.

Conference Call

TIW will hold an analyst call to discuss the transaction which will be
made available via an audio web cast from TIW's Internet site. The web
cast is scheduled to begin at 10:00 a.m. EST on Tuesday, March 15, 2005
(at http://www.tiw.ca). A replay of the conference call can also be
heard between 2:00 p.m. on March 15 and 11:59 p.m. on April 12. To
access the replay facility, dial +1 (416) 695-5800 and you will be
instructed to enter the access code: 3146061#.

About TIW

TIW is a leading provider of wireless voice, data and short messaging
services in Central and Eastern Europe with over 6.7 million subscribers
as at December 31, 2004. TIW operates in Romania through MobiFon S.A.
under the brand name Connex and in the Czech Republic through Oskar
Mobil a.s. under the brand name Oskar. TIW's shares are listed on NASDAQ
("TIWI") and on the Toronto Stock Exchange ("TIW").

About MobiFon

MobiFon is a leader of mobile telecommunication market and one of the
strongest companies in Romania. MobiFon, which operates under the
registered trademark Connex, launched the first GSM network in Romania,
on April 15, 1997. MobiFon registered 4.9 million subscribers as at
December 31, 2004.

About Oskar

Oskar is the brand name for mobile services offered by Oskar Mobil a.s.
Oskar is the newest mobile operator in the Czech Republic. Since its
commercial launch in March 2000, Oskar has already attracted more than
1.8 million subscribers, becoming one of the fastest growing 3rd
operators in Europe.

About Vodafone

Vodafone is the world's leading mobile telecommunications company with
operations in 26 countries across 5 continents with 416 million
customers and 152 million proportionate customers worldwide as at
December 31, 2004. For further information please visit
www.vodafone.com.

About Vodafone International Holdings B.V.

Vodafone International Holdings B.V. is an indirectly wholly-owned
subsidiary of Vodafone, incorporated in the Netherlands. It acts as a
holding company within the Vodafone Group and currently holds interests
in a number of Vodafone subsidiaries.

(1) Based on fully diluted number of shares, adjusted for option
proceeds, assuming a share price of US$16.

(2) We use the term operating income before depreciation and
amortization ("OIBDA") which may not be comparable to similarly titled
measures reported by other companies. We believe that OIBDA, referred to
by some other telecommunication operators as EBITDA, provides useful
information to investors because it is an indicator of the strength and
performance for our ongoing business operations, including our ability
to fund discretionary spending such as capital expenditures and other
investments and our ability to incur and service debt. While
depreciation and amortization are considered operating costs under
generally accepted accounting principles, these expenses primarily
represent the non-cash current period allocation of costs associated
with long-lived assets acquired or constructed in prior periods. Our
OIBDA calculation is commonly used as one of the bases for investors,
analysts and credit rating agencies to evaluate and compare the periodic
and future operating performance and value of companies within the
wireless telecommunications industry. OIBDA should not be considered in
isolation or as an alternative measure of performance under generally
accepted accounting principles ("GAAP"). For the reconciliation of OIBDA
to net income refer to the non GAAP measures and operating data section
of our quarterly release.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Telesystem International Wireless Inc.
    INVESTORS:
    JACQUES LACROIX
    (514) 673-8466
    jlacroix@tiw.ca
    Our web site address is: www.tiw.ca