Pursuant to provisions of the Ljubljana Stock Exchange Rules and applicable legislation, Telekom Slovenije, d.d. herewith publishes the following notification:

At its regular 49th meeting held on Wednesday, 7 December 2016, Telekom Slovenije Supervisory Board discussed and approved the Strategic Business Plan of the Telekom Slovenije Group for the period 2017 to 2021 and Telekom Slovenije Group's Annual Business Plan for 2017.

The Slovenian telecommunications market is comparable to the developed markets of Western Europe, where analysts are predicting a decline in incumbent operators’ revenue and market share from the core telecommunications business. Telekom Slovenije will counter these trends by continuing with the successful implementation of the strategy set out in the company’s 2016–2020 Strategic Business Plan that is being implemented in three steps. Telekom Slovenije will thus continue with accelerated digitalisation of the company, strengthen its core business, and also further extend its sales range outside its core communications business. In this way the company will on the one hand increase the revenues from the ICT services and solutions, while at the same time increase its share in the household and enterprise spending budgets by offering all the most cutting edge services in one place. Telekom Slovenije will also continue spreading its fibre-optic network, providing its users with high speed internet access, the most advanced broadband contents, and a superior user experience in terms of broadband content. Therefore Telekom Slovenije Group’s plans for 2017 are to reach the operating revenues of EUR 717.8 million, EBITDA of EUR 206.8 million, and a net profit of EUR 41.3 million.

The network expansion will be carried out where the highest penetration and accordingly the highest revenues are expected per investment. Through accelerated fibre-optic network expansion, converged price plan offer, enhanced sales range, and particularly by offering the best user experience, the company will achieve growth in the number of broadband and IPTV connections. Through the optimisation of its operations processes and IT infrastructure along with HR restructuring, Telekom Slovenije will transform itself into a lean and agile company that will dynamically adapt to the demands of its users with simple, easy-to-understand, and easy-to-use solutions.

Among the Telekom Slovenije Group's strategic guidelines in the 2017–2021 period are also the maintenance of financial stability and consolidation on the markets where the group is present. The telecommunications markets of South-Eastern Europe on which Telekom Slovenije Group operates as an alternative operator are also reaching maturity, which will be seen in the coming years as a decline in revenue generated on the market as a whole. Therefore, the group will carry out an accelerated consolidation in these markets, either in the form of expanding its operations or by selling its participating interests. The Telekom Slovenije Group's comparative advantage is and will remain the excellent quality of services, and its further development will continue to be based on high standards of social responsibility and sustainable development.

The announcement will also be available at Telekom Slovenije’s website (www.telekom.si) for a period of at least 5 years.