Contact: Milan Kotacka, MICOS, Ltd., Vapenice 17, 796 01 Prostejov, Czech Republic, Phone: 011 420 508 330 155, Fax: 011 420 508 330 159.

B -- LOCAL TELEPHONE PROJECT IN THE CZECH REPUBLIC POC Evangela Kunene, USTDA, 1621 N. Kent Street, Suite 300, Arlington, VA 22209-2131, Tel: (703) 875-4357, Fax: (703) 875-4009 Local Telephone Project in the Czech Republic. The Grantee invites submission of qualifications and proposal data (collectively referred to as the "Proposal") from interested U.S. firms which are qualified on the basis of experience and capability to develop a feasibility study for establishing regional local telephone service in the Czech Republic. MICOS was founded in 1990 and currently has over 400 employees and revenues exceeding $30 million. The company is active in designing and building private telecommunications networks, cable television and providing information technology services, including equipment procurement. A subsidiary of MICOS, Kabelova Televize Jesenik, Ltd., has obtained a license to offer local telephone service in the Jesenik and Zabreh regions, where KT Jesenik currently offers cable TV services. The combined population of the two regions is approximately 100,000. The current licensing regime in the Czech Republic allows companies to offer local telephone services in a limitednumber of regions. Interconnection regulations requiring the national telecommunications operator SPT Telecom to allow the new local operators network access are already in place. An expansion of an operating area even on a country-wide basis will be possible when a new telecommunications law is enacted. It is expected that a new law will be enacted at either the end of 1998 or early in 1999. On the basis of this law also current exclusivity rights of SPT Telecom regarding long distance and international calls (granted until the end of 2000) could be shortened. MICOS hopes to grow into a national competitor to SPT Telecom by working with a strategic partner initially in the Jesenik and Zabreh regions. MICOS estimates that they will install over 15,000 lines over the first three years of the project. The company plans to do this in two ways, by connecting fixed line subscribers over the existing cable TV network, and by utilizing wireless local loop technology. Using these two technologies will allow MICOS tooffer service to a large number of customers very rapidly. After establishing service in the areas covered under its current license, MICOS plans to extend service as much as possible according to the latest rules and conditions resulting from the process of liberalization (new telecommunications law). In the longer term, MICOS hopes to compete directly with SPT Telecom in long-distance, international, and value-added services when the market is fully liberalized in 2001. In order to be successfully completed the feasibility study will address issues concerning the partnering arrangement, the technical proposal, the financial projections, and the overall market environment. The feasibility study will also offer recommendations necessary in order for MICOS to establish a wireless local loop system which can compete with SPT Telecom for local voice services. Further descriptions of the activities involved and to be addressed are set forth below: 1. Partnership Arrangement -- The feasibility study will identify potential American investors to participate in this business opportunity with MICOS. The study will also address the proposed partnership arrangement between MICOS and the prospective investor on the basis of current rules and license conditions. In case that the relationship will be based on the relation between the owner of the network and the network operator the study will also profile these mutual relations, including the management capabilities of the network operator and the duties and obligations between the two. These duties and obligations include the following: -- operation of the network and provision of service, -- responsibility for maintaining license, -- responsibility for conforming with all applicable regulations, -- generating sales revenue, -- payments to the owner of the network. 2. Network Proposal -- The feasibility study will analyze the proposed network architecture to ensure that the proposed wireless local loop system is capable of meeting the projected capacity and services requirements. Furthermore, the study will identify American equipment manufacturers that can become vendors to the new network and operations. 3. Financial Projections -- The feasibility study will analyze the business plan prepared by MICOS in support of its proposal and showing the financial viability of the proposed project. The feasibility study will assess the assumptions used to derive the financial projections, including sensitivity analysis regarding the following assumptions: -- subscribers and market share, -- capital expenditures, -- network operating expenses, -- tariff prices and revenues, -- interconnection costs. 4. Telecommunications Environment. The feasibility study will address the existing telecommunications and regulatory environment. Specifically, the study shall address the percentage of under-served customers, the potential to expand into national and international voice services, and the potential to expand into other regions. In addition, the feasibility study will examine the licensing requirements including any frequency allocation requirements and any other duties and obligations contained in the operating license. The U.S. firm selected will be paid in U.S. dollars from a $72,000 grant to the Grantee from the U.S. Trade and Development Agency (TDA). A detailed Request for Proposals (RFP), which includes requirements for the Proposal, the Terms of Reference, and a background definitional mission/desk study report are available from TDA, at 1621 N. Kent Street, Suite 300, Arlington, VA 22209-2131. Requests for the RFP should be faxed to the IRC, TDA at 703-875-4009. In the fax, please include your firm's name, contact person, address, and telephone number. Some firms have found that RFP materials sent by U.S. mail do not reach them in time for preparation of an adequate response. Firms that want TDA to use an overnight delivery service should include the name of the delivery service and your firm's account number in the request for the RFP. Firms that want to send a courier to TDA to retrieve the RFP should allow one hour after faxing the request to TDA before scheduling a pick-up. Please note that no telephone requests for the RFP will be honored. Please check your internal fax verification receipt. Because of the large number of RFP requests, TDA cannot respond to requests for fax verification. Requests for RFPs received before 4:00 PM will be mailed the same day. Requests received after 4:00 PM will be mailed the following day. Please check with your courier and/or mail room before calling TDA. Only U.S. firms and individuals may bid on this TDA financed activity. Interested firms, their subcontractors and employees of all participants must qualify under TDA's nationality requirements as of the due date for submission of qualifications and proposals and, if selected to carry out the TDA-financed activity, must continue to meet such requirements throughout the duration of the TDA-financed activity. All goods and services to be provided by the selected firm shall have their nationality, source and origin in the U.S. or host country. The U.S. firm may use subcontractors from the host country for up to 20 percent of the TDA grant amount. Details of TDA's nationality requirements and mandatory contract clauses are also included in the RFP. Interested U.S. firms should submit their Proposal in English directly to the Grantee by 4:00 pm, June 24, 1998 at the above address. Evaluation criteria for the Proposal are included in the RFP. Price will not be a factor in contractor selection, and therefore, cost proposals should NOT be submitted. The Grantee reserves the right to reject any and/or all Proposals. The Grantee also reserves the right to contract with the selected firm for subsequent work related to the project. The Grantee is not bound to pay for any costs associated with the preparation and submission of Proposals. (0127)

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