1 Magyar Telecom B.V. Investor Presentation for the year ended December 31, 2011 David McGowan, Chief Executive Officer Rob Bowker, Chief Financial Officer

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Magyar Telecom B.V. Investor Presentation

for the year ended December 31, 2011

David McGowan, Chief Executive OfficerRob Bowker, Chief Financial Officer

May 3, 2012

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This presentation of Magyar Telecom B.V. (”the Company”) contains “forward-looking statements”. These and all

forward-looking statements are only predictions or statements of current plans that are constantly under review by

the Company. Forward-looking statements by their nature address matters that are, to different degrees,

uncertain. These forward-looking statements are all based on currently available operating, financial, and

competitive information and are subject to various risks and uncertainties. Actual results could differ materially

from those expressed in the forward-looking statements for a variety of reasons, including but not limited to:

fluctuation in foreign exchange rates and interest rates; changes in Hungarian and Central and Eastern European

economic conditions and consumer and business spending; the amount that the Company invests in new

business opportunities and the timing of those investments; the mix of services sold; competition; management of

growth and expansion; future integration of acquired businesses; the performance of IT Systems; technological

changes; the Company's indebtedness; and government regulation. Additional information concerning factors that

could cause actual results to differ materially from those in the forward-looking statements is contained in the

Company's financial reports, which are available on the Company’s website, www.invitel.hu. Accordingly, investors

are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on

which they are made. The Company does not undertake to update such statements to reflect the impact of

circumstances or events that arise after the date the statements are made. Investors should, however, consult any

further disclosures the Company may make in its reports.

Safe Harbor Statement

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ROBERT BOWKER – Chief Financial OfficerROBERT BOWKER – Chief Financial OfficerDAVID MCGOWAN – Chief Executive OfficerDAVID MCGOWAN – Chief Executive Officer

GYÖRGY ZSEMBERY – Chief Operating Officer, Corporate and Wholesale

GYÖRGY ZSEMBERY – Chief Operating Officer, Corporate and Wholesale STEPHEN WRIGHT – Chief Operating OfficerSTEPHEN WRIGHT – Chief Operating Officer

ÁGNES JAGICZA – Chief HR OfficerÁGNES JAGICZA – Chief HR OfficerOLIVER WEISER – Chief Commercial OfficerOLIVER WEISER – Chief Commercial Officer

Chief Human Resources Officer since 2002Prior to Invitel, Chief Human Resources and Legal Officer at Lapker S.A.MSc in Economics, Corvinus University Budapest; MSc and LLB, ELTE Budapest; MSc in Coaching and Organisational Behaviour Change

Corporate and Wholesale Chief Operating Officer since September 2011Invitel Chief Marketing Officer from 2004, and Chief Sales & Marketing Officer from 2008 Prior to Invitel, head of Business Development at GE Capital Hungary & Head of Marketing at ARGOSZ InsuranceMSc in Economics, Corvinus University Budapest, Postgrad. in Law, ELTE Budapest

Chief Executive Officer since January 201225+ years experience in the media and telecoms sectorsPrior to Invitel, Managing Director at Arena GmbH, DTH Satellite subsidiary of Unity MediaSenior Management positions in Germany, Switzerland, and UKGraduate of Yale University

Chief Financial Officer of Invitel since May 200415 years experience in the telecom and finance sectors Prior to Invitel, CFO at Eurotel Praha, Eurotel Slovakia, and PWCChartered Accountant and Chartered Financial Analyst

Chief Operating Officer since January 2012Interim Chief Operating Officer – Cable from November 2010Prior to Invitel, CEO of Melita Group (cable operator) 2007 – 2010; Vice President UPC / Cablecom and Director of customer operations TDC SunriseB.Sc in International Management – FGCU, Florida Gulf Coast University, USA., Masters in Business Management – University of St Gallen, Switzerland

Chief Commercial Officer since February 2012Prior to Invitel, Director of Prod. Mgt. Unitymedia/UPC, Director at Arena, Head of PMO Cablecom/UPCMSc Economics, University of Regensburg Germany & University of Connecticut, USA

Executive Management Team

GERGŐ J. Budai – Chief Legal and Regulatory Officer

GERGŐ J. Budai – Chief Legal and Regulatory Officer

General Counsel and Chief Legal and Regulatory Officer since April 2012Prior to Invitel, Legal Director at Pfizer, Senior Associate at White & Case LLP and Clerk at the Constitutional Court of the Republic of Hungary Doctor of Law and Political Sciences, Péter Pázmány Catholic University, Budapest; International Law and Human Rights Course, University of Pretoria, South Africa

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Challenging Macro environment in a highly competitive market.

Focus across business on operational improvement and efficiency.

Take advantage of the low Fibernet penetration. New digital products rolling out in Q2.

Deploy optical fiber tactically in specific locations where demographics and competitive landscape warrant.

Slow decline on copper network, particularly on internet product set by growing the customer base to try to offset declining prices.

Continue customer base growth amid declining prices and long-term voice decline.

Early indicators are positive for move into ICT services.

Overview

Residential

Corporate and Wholesale

Strategic Overview

5Telecom Taxes – I.

Old Telecom Sector Specific Tax (Crisis Tax)

• On July 1, 2010 a sector specific crisis tax was introduced to telecom service providers with retrospective effect to January 1, 2010. The tax period was determined until December 31, 2012.

• The basis of the crisis tax is the net income from the provision of telecom services. The amount of the tax is calculated as follows: 0% up to HUF 500 million (approximately EUR 1.7 million); 4.5% between HUF 500 million (approximately EUR 1.7 million) up to HUF 5 billion (approximately EUR 17 million); and 6.5% above HUF 5 billion (approximately EUR 17 million).

• For the year ended December 31, 2010 and 2011 Invitel paid EUR 11.2 million and EUR 10.9 million of crisis tax, respectively.

• The State expects an annual income of HUF 61 billion (approximately EUR 210 million), out of which Invitel’s payment obligation is HUF 2.85 billion (approximately EUR 9.8 million) for 2012.

• The crisis tax is currently being contested before the European Court of Justice.

6Telecom Taxes – II.

New Telecom Tax

• There is a draft bill before the Hungarian Parliament for a new telecom tax. This would be an indefinite consumption tax and would be introduced from July 1, 2012. Subjects of the tax would be the voice call users (for all forms including fixed line, mobile and cable) and the collectors of the tax would be the telecom service providers.

• According to the original proposal, the amount of tax is proposed to be as follows: • HUF 2/ minute (approximately EUR 0.006) on all voice based calls except for emergency calls and

donation lines; • HUF 40/minute (approximately EUR 0.13) on value added calls;• HUF 2/sms, HUF 2/mms;• 10 % of the amount in the case of prepaid cards.

• The State expects an annual income from the new telecom tax of HUF 52 billion (approximately EUR 179 million).

• According to current expectations, mobile customers would assume approximately 79% of the tax. There is an alternate proposal for flat access type fees prepared by mobile operators based on which mobile customers would only assume approximately 71% of the tax.

• Based on the Ministry’s estimates, the new tax would result in an approximately 13% decrease in traffic volume. This decrease anticipated is based on the original proposal.

7Macroeconomic Background

EUR/HUF Historical Movement

Real GDP

240

250

260

270

280

290

300

310

320

12-10 03-11 06-11 09-11 12-11

100.0101.0 101.6

95.2

96.4

98.1

92

94

96

98

100

102

104

2006A 2007A 2008A 2009A 2010A 2011A

GDP growth rate was 1.5% in the fourth quarter of

2011.

In the first eight months of 2011 the Hungarian forint

traded at around 270 HUF/EUR, however at the end

of the year it weakened to 315 HUF/EUR levels.

Currently it is trading in the 284-290 HUF/EUR range.

Inflation was 4.1% in December 2011 (Yr/Yr).

Inflation is forecasted to stay at this level or slightly

increase in the medium term.

Since January 2011 the National Bank has

maintained its policy rate at 6.0%. In November 2011

the rate was increased by 0.5% and in December

2011 by another 0.5%. Currently the policy rate is at

7.0%.

Unemployment remained unchanged during the

period and currently stands at 10.7%.

The EC is likely to give the go-ahead to Hungary to

start the formal negotiations with the IMF to take out

a Precautionary Credit Line once the Hungarian

Government implements the legal changes

recommended by the EC / IMF.

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The functional currency of the Company is the Hungarian forint. The Hungarian forint depreciated

against the EUR by 1% during the year ended December 31, 2011 compared to the average Hungarian

forint/Euro exchange rate in the year ended December 31, 2010.

Our revenue in EUR increased by 1% for the year ended December 31, 2011 compared to the same

period of the prior year. In HUF terms, revenue increased by 2% for the year ended December 31, 2011

compared to the same period of the prior year.

Our segment gross margin in EUR decreased by 1% for the year ended December 31, 2011 compared

to the same period of the prior year. In HUF terms, segment gross margin increased by 1% for the year

ended December 31, 2011 compared to the same period of the prior year.

Our segment gross margin percentage was 82% and 83% for the year ended December 31, 2011 and

2010, respectively.

Highlights for the year ended December 31, 2011

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Our adjusted operating expenses* in EUR increased by 6% for the year ended December 31, 2011

compared to the same period of the prior year. In HUF terms, adjusted operating expenses increased by

8% for the year ended December 31, 2011 compared to the prior year.

Our adjusted EBITDA** in EUR decreased by 5% to EUR 94.0 million for the year ended December 31,

2011 compared to the same period of the prior year. Adjusted EBITDA* in HUF decreased by 4% to HUF

26.2 billion for the year ended December 31, 2011 compared to the same period of the prior year.

Our adjusted EBITDA* margin was 48% and 51% for the years ended December 31, 2011 and 2010,

respectively.

* Adjusted operating expenses are operating expenses adjusted for non-recurring items. See slide 8.

** Adjusted EBITDA is a non-IFRS financial measure. See the reconciliation on slides 7-9.

Highlights for the year ended December 31, 2011

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The average HUF/EUR exchange rates were 275.41 HUF/EUR in 2010 and 279.21 HUF/EUR in 2011.

Fibernet is consolidated from March 1, 2011 in our income statement for the year ended December 31, 2011. The International Business was classified as discontinued operations in our income statement for the year ended December 31, 2010.

(*) Adjusted Operating Expenses do not include the non-recurring items presented below Adjusted EBITDA. See slide 8. (**) EBITDA and Adjusted EBITDA are non-IFRS financial measures. See the reconciliation from EBITDA to Net Income on slide 9.(***) EBITDA Margin % and Adjusted EBITDA Margin % are EBITDA and Adjusted EBITDA as a percentage of Revenue.

Financial Information for the year ended December 31, 2011

Change Change Change Change2011 2010 % 2011 2010 %

Revenue 195 066 193 224 1 842 1% 54 464 53 216 1 248 2%

Segment Cost of Sales (35 352) (32 318) (3 034) (9%) (9 871) (8 901) (970) (11%)

Segment Gross Margin 159 714 160 906 (1 192) (1%) 44 593 44 315 278 1% Gross Margin % 82% 83% 82% 83%

(65 749) (61 821) (3 928) (6%) (18 358) (17 026) (1 332) (8%)

Adjusted EBITDA** 93 965 99 085 (5 120) (5%) 26 235 27 289 (1 054) (4%)Adjusted EBITDA Margin %*** 48% 51% 48% 51%

Non-recurring items (20 469) (15 948) (4 521) (28%) (5 715) (4 392) (1 323) (30%)

EBITDA** 73 496 83 137 (9 641) (12%) 20 520 22 897 (2 377) (10%)EBITDA Margin %*** 38% 43% 38% 43%

Adjusted Operating expenses*

(in thousands of EUR)

For the year ended December 31,


(in millions of HUF)

11Non recurring itemsfor the year ended December 31, 2011

a. Cost of restructuring is related to reorganizations and includes severance expenses. Cost of restructuring for the year ended December 31, 2011 is mainly related to the Fibernet reorganization.

b. Crisis tax was introduced by the Hungarian government in the fourth quarter of 2010 with retrospective effect to January 1, 2010.

c. Management fee includes costs charged by our trustee as well as management fees paid to Mid Europa from September 30, 2010.

d. Consulting expenses relating to strategic projects mainly include non-recurring financial and legal consulting expenses. In 2011, these expenses mainly related to due diligences of cable operators.

e. Legal penalty for the year ended December 31, 2011 is related to a legal case with the Competition Office in connection with a breach of the telecoms regulation in 2005 regarding carrier selection by Hungarotel (one of the predecessor companies of Invitel).

f. Other items for the year ended December 31, 2011 mainly include expenses related to the liquidation of Invitel Holdings A/S. Other items for the year ended December 31, 2010 mainly include tender offer expenses and a gain from the mark-to-market revaluation in connection with the termination of share options.


Cost of restructuring(a) (6 067) (1 216) (4 851) (399%) (1 694) (335) (1 359) (406%)

Crisis tax(b) (10 880) (11 198) 318 n/a (3 038) (3 084) 46 n/a

Management fee(c) (1 053) (572) (481) n/a (294) (157) (137) n/a

Consulting expenses relating to strategic projects (d) (910) (2 705) 1 795 n/a (254) (745) 491 n/a

Legal penalty(e) (716) - (716) n/a (200) - (200) n/a

Other items(f ) (843) (257) (586) (228%) (235) (71) (164) (231%)

Total non-recurring items (20 469) (15 948) (4 521) (28%) (5 715) (4 392) (1 323) (30%)





12EBITDA reconciliation to Net Incomefor the year ended December 31, 2011

g. Depreciation and amortization increase is mainly the result of impairment of assets of EUR 58.6 million recognized in 2011.

h. Financing expenses, net include interest income, interest expense, amortization of bond discount, amortization of deferred borrowing costs and other, net financial expenses. Financing expenses decreased mainly due to the lower interest expense as a result of decrease in our outstanding debts.

i. Foreign exchange gains (losses), net mainly include unrealized losses of the revaluation of our EUR denominated assets and liabilities.

j. Gains (losses) on derivatives include realized gains due to the mainly the gains on interest rate swaps and forward deals closed.

k. Gain on acquisition (negative goodwill) represents the difference between the fair value of the acquired net assets of Fibernet and the purchase price paid.

l. Taxes on net income include current and deferred income taxes and local business tax. Taxes on net income for the year ended December 31, 2010 included the write down of our deferred tax assets in the amount of EUR 14 701 thousand, which was written down with a view to the impact of the crisis tax on our taxable profits and the uncertainty as to its ultimate date of repeal.


EBITDA* 73 496 83 137 (9 641) (12%) 20 520 22 897 (2 377) (10%)EBITDA Margin %** 38% 43% 38% 43%

Depreciation and amortization(g) (115 485) (53 885) (61 600) (114%) (32 244) (14 840) (17 404) (117%)

Financing expenses, net(h) (29 440) (45 603) 16 163 35% (8 220) (12 560) 4 340 35%

Foreign exchange gains (losses), net(i) (1 924) (7 116) 5 192 73% (537) (1 960) 1 423 73%

Gains (losses) on derivatives(j) 781 (6 939) 7 720 111% 218 (1 911) 2 129 111%

Gain on acquisition(k) 28 540 - 28 540 n/a 7 969 - 7 969 n/a

Taxes on net income(l) (3 506) (18 355) 14 849 81% (979) (5 055) 4 076 81%

Net profit / (loss) for the period (47 538) (48 761) 1 223 3% (13 273) (13 429) 156 1% Net profit / (loss) for the year in % n/a n/a n/a n/a

Headcount 1 287 1 102 185 17%





(*) EBITDA is a non-IFRS financial measure. (**) EBITDA Margin % is EBITDA as a percentage of Revenue.

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Residential Voice In: decrease in gross margin is due to 8% line churn, customers migrating to lower cost packages and a shift towards lower cost off-peak minutes.

Residential Voice Out: decrease in gross margin is due to 12% reduction in CS/CPS customers, and a 28% reduction in traffic driven in part by reduced strategic focus on low value / low margin out of concession CS/CPS voice customers and mainly very aggressive T-Com pricing.

Residential Internet: increase in gross margin is due to our stable ADSL customer base, increasing IPTV customer base (14% Yr/Yr) and the decreasing out-of-concession ADSL wholesale prices from T-Com.

Corporate Voice: gross margin is mainly impacted by a reduction in the traditional voice business (impact of HUF 735 million) and price erosion due to competition.

Corporate Data: Corporate Data business remains stable.

Wholesale: gross margin decrease is due to a large dark fiber sale realized in 2010 generating EUR 4.5 million (HUF 1.2 billion) revenue and EUR 4.2 million (HUF 1.14 billion) gross margin.

Cable: Cable segment was included from March 1, 2011 and relates to the gross margin generated by Fibernet.

Segment Gross Margin for the year ended December 31, 2011


Residential Voice In 37 193 44 692 (7 499) (17%) 10 385 12 309 (1 924) (16%)

Residential Voice Out 7 102 10 834 (3 732) (34%) 1 983 2 984 (1 001) (34%)

Residential Internet 27 293 26 247 1 046 4% 7 620 7 229 391 5%

Corporate Voice 18 943 21 873 (2 930) (13%) 5 289 6 024 (735) (12%)

Corporate Data 29 596 29 397 199 1% 8 263 8 096 167 2%

Wholesale 26 481 27 863 (1 382) (5%) 7 394 7 673 (279) (4%)

Cable 13 106 - 13 106 n/a 3 659 - 3 659 n/a

Total Segment Gross Margin 159 714 160 906 (1 192) (1%) 44 593 44 315 278 1%



(in thousands of EUR) (in millions of HUF)

14Capital Expenditure for the year ended December 31, 2011


Variable Telco Capex 18 451 18 762 (311) (2%) 5 152 5 167 (15) (0%)Fixed Telco Capex 4 685 4 172 513 12% 1 308 1 149 159 14%

Telco Capex 23 136 22 934 202 1% 6 460 6 316 144 2%

IT Capex 2 503 2 413 90 4% 699 664 35 5% Miscapex 347 394 (47) (12%) 97 109 (12) (11%)Capitalised OPEX 4 022 3 990 32 1% 1 122 1 099 23 2%

Total Core CAPEX 30 008 29 731 277 1% 8 378 8 188 190 2%

ADSL BOOST 3 599 - 3 599 n/a 1 005 - 1 005 n/aFibernet Integration 1 023 - 1 023 n/a 286 - 286 n/aData center hosting equipments 4 014 - 4 014 n/a 1 121 - 1 121 n/aFTTx Phase 2 2 546 - 2 546 n/a 711 - 711 n/aOther 1 460 - 1 460 n/a 407 - 407 n/aOther projects 12 642 - 12 642 n/a 3 530 - 3 530 n/a

TOTAL CAPEX without Fibernet 42 650 29 731 12 919 43% 11 908 8 188 3 720 45%

Fibernet 4 818 - 4 818 n/a 1 345 - 1 345 n/a

TOTAL CAPEX 47 468 29 731 17 737 60% 13 253 8 188 5 065 62%

Capex to Revenue % 24% 15% 24% 15%

(in thousands of EUR) (in millions of HUF)



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Financial Information

(1) Cash-pay third party debt includes long term debt from the 2009 Notes and liabilities relating to finance leases, but excludes bond discount and liabilities relating to derivative financial instruments.

(2) See slides 10-12 for a reconciliation of Adjusted EBITDA to Net Income.

(3) Net cash-pay third party debt equals cash-pay third party debt less cash and cash equivalents.

Financial Information as of and for the year ended December 31, 2011

(in thousands of EUR)As of and for the period

ended December 31, 2011

Balance Sheet Data (at period end): Cash and cash equivalents 35 676 Cash-pay third party debt (1) 329 646

Other Pro-forma Financial Data: Adjusted EBITDA (2) 93 965 Net cash-pay third party debt (3) 293 970

Ratio of Net cash-pay third party debt to Adjusted EBITDA 3.1x

16Balance Sheet as of December 31, 2011

Consolidated Balance Sheet

(in thousands of EUR) 2011 2010

Non-Current AssetsIntangible Assets 32 281 42 822 Property, Plant and Equipment 257 169 303 039 Other Non-Current Assets 109 69

289 559 345 930 Current AssetsCash and Cash Equivalents 35 676 109 010 Trade and Other Receivables 30 386 28 303 Other Current Assets 1 873 2 675

67 935 139 988

Total Assets 357 494 485 918

EquityShare Capital 92 201 92 201 Reserves 239 354 239 354 Cumulative Translation Reserve (87 114) (42 146)Accumulated Losses (258 830) (211 290)Non-Controlling Interest 13 11

(14 376) 78 130 Non-Current LiabilitiesBorrowings 313 494 351 006 Other Non-Current Liabilities 13 967 17 038

327 461 368 044 Current LiabilitiesTrade and Other Payables 25 423 20 840 Other Current Liabilities 18 986 18 904

44 409 39 744

Total Equity and Liabilities 357 494 485 918

As of December 31,

17Cash Flow Statement for continued operations* for the year ended December 31, 2011

Cash Flow Statement for Continued Operations*

(in thousands of EUR) 2011 2010

Net cash provided by operating activities exluding interest paid 67 379 75 243

Purchase of tangible and intangible assets (44 520) (41 552)Proceeds from Sale of Property, Plant and Equipment 3 335 7 384 Sale of subsidiaries - 190 981 Purchase of subsidiaries (17 604) - Net cash used in investing activities (58 789) 156 813

Cash flow available for debt service 8 590 232 056

Proceeds from Issuance of Additional 2009 Notes 79 200 - Repurchase of the 2009 Notes (17 583) (75 003)Repurchase of the 2007 Notes (75 634) (47 593)Repurchase of the 2006 Notes (20 313) - Refinancing cost (5 557) - Interest paid (36 107) (37 753)Settlement of derivative financial instruments (598) (24 834)Payments under Capital Lease Obligations - (2 535)

Net cash used in financing activities (76 592) (187 718)

Effect of Exchange Rate Changes on Cash and Cash Equivalents (5 332) (420)

Cash flow after debt service (73 334) 43 918

Cash and cash equivalents at beginning of period 109 010 65 092 Cash and cash equivalents at end of period 35 676 109 010 Net increase in cash and cash equivalents (73 334) 43 918

For the period ended December 31,

(*) The International Business was classified as discontinued operations in our income statement for the year ended December 31, 2010.

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Non-IFRS Financial Measures

Magyar Telecom B.V. (”the Company”) has included certain non-IFRS financial measures in this presentation, including EBITDA and Adjusted EBITDA. Reconciliations of the differences between EBITDA and Adjusted EBITDA and the most directly comparable financial measure calculated and presented in accordance with IFRS is included

in this presentation. The non-IFRS financial measures presented are by definition not a measure of financial performance or financial condition under IFRS and are not alternatives to operating income or net income/loss

reflected in the income statement and statement of comprehensive income (loss) and are not necessarily indicative of cash available to fund all cash flow needs. These non-IFRS financial measures used may not be comparable to

similarly titled measures of other companies. Management uses these non-IFRS financial measures for various purposes including: measuring and evaluating the Company’s financial and operational performance and its

financial condition; making compensation decisions; planning and budgeting decisions; and financial planning purposes. Magyar Telecom B.V. believes that presentation of these non-IFRS financial measures is useful to investors because it (i) reflects management’s view of core operations and cash flow generation and financial condition upon which management bases financial, operational, compensation and planning decisions and (ii) presents a measurement that equity and debt investors and lending banks have indicated to management is

important in assessing the Company's financial performance and financial condition. While Magyar Telecom B.V. utilizes these non-IFRS financial measures in managing its business and believes that they are useful to

management and to investors for the reasons described above, these non-IFRS financial measures have certain shortcomings. In particular, these EBITDA and Adjusted EBITDA measurements do not take into account changes

in working capital and financial statement items below income from operations, and the resultant effect of these items on the Company’s cash flows. Management compensates for the shortcomings of these measures by utilizing them in conjunction with their comparable IFRS financial measures. The information in this presentation should be

read in conjunction with the financial statements and footnotes contained in the Company's financial reports.

Appendix

Documents

1 Magyar Telecom B.V. Investor Presentation for the year ended December 31, 2011 David McGowan, Chief Executive Officer Rob Bowker, Chief Financial Officer