"COMSTAR - United TeleSystems" today announced that it has reached an agreement with Intracom Holdings  to subscribe to a 51% stake in Hellas On Line SA's (HoL) for a cash consideration of EUR 47.9 million. The closing of the transaction, subject to certain conditions precedent including approval of Greek regulatory authorities, is expected during the first quarter of 2007.

Founded in 1993, Hellas On Line (HoL), is the first Internet service provider in Greece, and has been a member of the Intracom Holdings Group since January 2006. HoL is one of the largest alternative fixed-line operators in Greece and the third largest broadband provider with approximately 12% market share. HoL provides ADSL and dial up services to consumers, as well as VOIP, VPN and hosting services to corporate clients. The company has already deployed more than 90 km of fiber in Athens, and plans to further build out its infrastructure in the capital as well as other large cities. HoL's residential client base includes approximately 35,000 broadband and 70,000 dial-up subscribers. The company's revenues in 2005 amounted to EUR 25.6 million, 40% of which were derived from services to residential customers.

Broadband penetration in Greece is still relatively low and does not currently exceed 6% of households, while the average penetration level for Western Europe is approximately 36%.

Eric Franke, Chief Executive Officer of Comstar - United TeleSystems, commented: "We are very pleased to announce this deal and have high hopes for this project, taking into account the benefits of the partnership with such a strong regional player as Intracom Holdings, and the positive conditions in the Greek market. The fixed-line market and broadband segment have significant growth potential in Greece. The acquisition of Hellas on Line will allow us to create a basis for the development of broadband services in the market, which is characterised by the lowest penetration in Europe. Due to the similarity of HoL's business model to our own, we are planning to integrate HoL into Comstar-UTS's structure and rebrand its services and product offerings to increase its operating efficiency."