Accomplishments of
Jordan Telecom Group in 2005

Jordan's economy continued its positive performance during 2005; the Gross Domestic Product (GDP) increased by 7.5% by the end of the third quarter and the telecommunication sector also grew by 8.1% during the same period, contributing a 1.3% to the GDP. Jordan Telecom Group took advantage of the positive climate in the national economy and achieved a 3% growth in consolidated revenues, increasing revenues to JD 352.5 million, and an increase in operating earnings before interest, taxes, depreciation and amortization (EBITDA) by 10.9% in 2005 as opposed to the previous year.

2005 was a significant year for Jordan Telecom Group. It was a year characterized by strong competition in the market, both on the fixed and mobile line levels, due to the market liberalization policy. Jordan adopted making the Jordanian market more competitive on the regional level as a whole.

The direct impact of liberalizing the fixed-line market did not become visible until the second half of 2005, because other fixed-line service providers were late in making use of the individual and class licenses offered by the Telecommunications Regulatory Commission. Nevertheless, fixed-line revenues dropped slightly by 2.1% despite the fact that these revenues make up the greater part of consolidated revenues.

Despite that, Jordan Telecom Group ended the year with positive financial outcomes, thus proving the Group's companies preparedness over the past few years to keep up with market competition, and was able to attract 300,000 new subscribers in 2005.
 
Market liberalization was exemplified with the number of licenses offered by the Telecommunications Regulatory Commission (TRC) in 2005 for fixed and mobile services. The TRC approved nine class licenses and one individual license. Some licensed companies started to establish their own international portals to facilitate offering the international calls service, thereby increasing competition in the market of international calls. Before 2005, the international calls service was made only through Jordan Telecom's efficient and high-quality network. In spite of the individual license granted to a competitor, thus making it qualified to provide all of Jordan Telecom's services in the fixed-line category, Jordan Telecom was able to maintain the number of subscribers it achieved in 2004 and in fact affected an increase in the number of ADSL subscribers.

As for the mobile telecommunication sector, the fourth mobile service provider, which targets a specific category of customers, was launched in June 2005. However, MobileCom, Jordan Telecom Group's mobile service arm, was able to increase the number of its subscribers by 64.8%, raising their number to 750,000, thus exceeding for the first time the number of fixed-line subscribers. This increase raised MobileCom's mobile service revenues by 16%.

Revenues for Internet and data services offered by Wanadoo increased by 50% in 2005, and the number of Wanadoo subscribers grew by more than 40% compared to 2004, as a result of the offers the company made sure to put at the public's disposal with the aim of expanding its subscriber base. Consequently, Wanadoo continued to enjoy a large share of Jordan's Internet market.

In the spirit of the ongoing cooperation that began in 2000 and to enhance the spectacular success Jordan Telecom Group achieved in the past five years, Jordan Telecom renewed its business assistance agreement with its strategic partner, France Telecom, in order to provide the administrative and technical support necessary for keeping up with the huge technological developments in the telecommunication sector, and to benefit from France Telecom's expertise in developing and launching new services in a short period of time. Furthermore, France Telecom subsidiaries benefit from the joint agreements signed with several international telecommunication service providers and suppliers.

Another significant achievement was that the margin of Jordan Telecom Group's operating profits reached 48% because fixed-line and data services no longer pay the fees of the government's share in revenues, and the management fees Jordan Telecom pays to France Telecom have gone down. Additionally, Jordan Telecom Group's strong financial situation meant that by the end of 2005 there was a cash increase reaching JD 217 million.

Investing in Jordan Telecom stocks is a wise investment decision. This becomes evident if we follow the direction of the stock market's value during the year. The stock leaped from JD 3.64 at the beginning of 2005 to JD 5.50 at the end of the year as a result of the exceptional financial results the Group achieved.

Finally, studies show that Jordan is moving towards a stronger competitive scene, which will create more challenges for Jordan Telecom Group. Nevertheless, we are confident that the Group will be able to surmount those challenges with the efforts of its management, the trust of its shareholders, and the dedication of its employees.