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According to the notice of special meeting of shareholders just received, there will be, if approved, a cancellation of one in nine shares.

They said: Following the Yellow Pages sale and the recent acquisition of PowerTel Limited by Telecom's Australian subsidiary AAPT, Telecom considered that, in light of its capital management strategy, its capital structure needed to be adjusted to meet targeted financial metrics.

They also said that three other options were considered and rejected.
a)...Dividend: not favoured because of shareholder tax liability.
b)...Off-market share buyback: not favoured because of shareholder discretion as to whether to sell or not and the cost and time consumed with an off-market pro rata share buyback.
c)...On-market share buyback: not favoured for similar reasons as b)and the time required to buy back the volume of shares required to return the desired amount of capital to its shareholders.

Cash will be received for any fractional shares remaining.

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