TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEPTEMBER 2010

TELESTE CORPORATION INTERIM REPORT 27.10.2010 AT 09:00

TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEPTEMBER 2010

Third quarter of 2010

- Net sales amounted to EUR 38.6 (41.7) million, a fall of 7.4 % over the period
of comparison.
- Operating profit grew by 23.4 % equalling EUR 2.0 (1.6) million.
- Undiluted result per share equalled EUR 0.07 (EUR 0.03).
- Orders received amounted to EUR 39.9 (48.6) million, a year-on-year decrease
of 18.0 %.
- Orders received by Video and Broadband Solutions amounted to EUR 21.1 (22.5)
million.
- Orders received by Network Services stood at EUR 18.7 (26.1) million.
- Operating cash flow stood at EUR 0.8 (-0.8) million.

Outlook for 2010

Due to increased net sales and adaptation of costs we estimate the operating
profit for 2010 to improve clearly over 2009.

Comments on Q3 by CEO Jukka Rinnevaara

Market for our Video and Broadband Solutions remained at the early year's level.
The EUR 16 million frame agreement on upgrading of cable networks over the next
four years signed in July with the Israeli HOT Telecom provides a tangible
positive sign of the gradual recovery in the market. Deliveries under this frame
agreement will start in the last quarter of the current year. The acquisition of
Satlan in August strengthened the market position of Video and Broadband
Solutions in Poland. Satlan supplies IP video and broadband solutions to Polish
cable operators and media service providers.

In Q3, in Germany - Network Services' main market area - the customer demand
still involved low-price deliveries. Unit prices clearly below those of the
comparative year weakened the net sales and thereby the year-on-year
profitability. In our main market, we have started activities designed to widen
our clientele and to increase flexibility in our capacity utilisation.
Streamlining of operations will also be continued. Towards the end of this
review period, the German demand for services was on the increase.

We have maintained our strong market position in Europe and our competitiveness
remains good.

Teleste will press on determinedly with the implementation of our growth
strategy, which consists of R&D solutions ensuring profitable growth,
strengthening of our distribution channels and expansion of our services
offering. In the current market situation, our careful cost management and
adaptation measures will also be continued. In Q3, reorganisation of the German
services business was delayed since more resources than estimated were required
for the technical clarification items related to the delivery of services. In
Q4, we estimate the demand for services in Germany to pick up due to the extra
marketing efforts carried out by the main client to promote television and
broadband services. Furthermore, handover of a few sizeable deliveries will have
a positive impact on net sales and profitability. As for Network Services, we
estimate the profitability of Q4 to improve over Q3 but fall below that of the
comparative year, which is caused by the fact that a larger number of delivered
services involved simpler services in the lower price bracket. The three-year
services contract signed with Kabel Deutschland after the period under review
ensures our leading position in the German services market enabling a long-term
development of business. We will provide the necessary requirements for
profitable growth in the German services market by developing our services
processes, quality and ERP systems. As for Video and Broadband Solutions, we
particularly expect the growth in deliveries of optical network solutions and
the Luminato headend to continue.

We confirm our estimation of profitable growth for 2010.

The generally difficult financial situation in Europe and the ownership
arrangements among the cable operators are likely to continue and these may have
an effect on the timing of investments. The prolonged delivery times for some
materials may erode our ability to deliver in the latter part of the year.

Group Operations in the Third Quarter

Year-on-year orders received in Q3 declined by 18.0 % standing at EUR 39.9
(48.6) million. For Network Services the year of comparison included project
orders of approximately EUR 5 million. The Group's order backlog totalled EUR
13.3 (30.3) million. The order backlog for the period of comparison included a
headend order of EUR 12 million, which was written off from the backlog in Q2 of
2010, and one-off orders of EUR 8.0 million delivered in the current year. The
EUR 16 million frame agreement signed with the Israeli HOT Telecom in July is
not included in the order backlog.

The Q3 2010 net sales for the business equalled EUR 38.6 (41.7) million, which
is 7.4 % below the figure for the period of comparison. The drop in net sales
was caused by increased number of lower price range deliveries in the German
services of Network Services and the growth in incomplete deliveries.

Operating profit stood at EUR 2.0 (1.6) million making 5.1 % (3.9 %) of the net
sales. Undiluted result per share for Q3 was EUR 0.07 (0.03).

Group Operations January to September

Year-on-year orders received improved by 11.7 % standing at EUR 116.4 (104.2)
million. Orders increased over the previous year since part of the German
acquisitions were carried out in H2 of 2009. Order backlog totalled EUR 13.3
(30.3) million. The order backlog for the period of comparison included a
headend order of EUR 12 million, which was written off from the backlog in Q2 of
2010, and one-off orders of EUR 8.0 million delivered in the current year.

Net sales grew by 23.8 % over the year of comparison amounting to EUR 121.2
(97.9) million. The increase in net sales was mainly due to acquisitions carried
out in the second half of 2009.

Operating profit stood at EUR 4.5 (0.8) million making 3.7 % (0.8 %) of the net
sales. Year-on-year growth in the operating profit was due to an increase of 7 %
in Video and Broadband Solutions' net sales, reduced material costs and cost
adaptation. Operating profit for the period of comparison included EUR 2.6
million of other operating income, whereas in the period under review these
amounted to EUR 1.0 million. Undiluted result per share was EUR 0.15 (-0.03).

Video and Broadband Solutions

This business area focuses on broadband subscriber networks, video services
platforms and CCTV applications. Major clientele of the business area consists
of cable operators but includes also resellers and public sector organizations.
The main market of the business area is Europe.

Video and Broadband Solutions in Q3

In the period under review we strengthened our presence in the Polish market by
acquiring Satlan S.P. z.o.o. This acquisition has no significant impact on net
sales nor profitability in Q3.

Orders received totalled EUR 21.2 (22.5) million. A frame agreement on upgrading
of cable networks was signed with the Israeli HOT Telecom. In our estimation the
scope of deliveries will amount to approximately EUR 16 million over the next
four years. Orders received for the review period include an order placed by HOT
Telecom of approximately EUR one million. Order backlog totalled EUR 13.3 (25.3)
million.

Net sales in Q3 amounted to EUR 19.9 (18.3) million. Operating profit stood at
EUR 2.0 (1.5) million making 9.8 % (8.5 %) of the net sales. Margin on materials
remained on a good level also in Q3.

Product development expenses in Q3 equalled EUR 2.2 (2.4), in other words 11.2 %
(13.2 %) of the net sales. Some 60 % (70 %) of product development expenses
involved further development of product platforms currently in production,
maintenance, and customer-specific product applications. Activated product
development expenses stood at EUR 0.4 (0.4) million involving the Luminato
headend and the processing system for the Advanced Video Coding protocol
(H.264). Our R&D efforts continued regarding the new generation amplifier
technology (the Access product range), the optical transfer and reception system
for HFC networks (the HDO product range) and the video surveillance management
system (VMX).

Video and Broadband Solutions January to September

Orders received stood at EUR 59.5 (58.9) million, i.e. 0.9 % above the period of
comparison.

Net sales grew by 7.0 % amounting to EUR 59.2 (55.3) million. The growth in net
sales was mainly due to deliveries of the Access network to the Nordic countries
and video surveillance deliveries to the USA. Deliveries related to the Luminato
headend system were above the comparative period. Operating profit stood at EUR
4.0 (-0.2) million making 6.7 % (-0.4 %) of the net sales. This improvement in
operating profit was due to increased net sales, good margin on materials and
cost adaptation.

R&D expenses of Video and Broadband Solutions amounted to EUR 7.7 (8.3) million.
Activated R&D expenses stood at EUR 1.2 (1.2) million and depreciation on
previous activation items equalled EUR 1.9 (1.7) million.

Network Services

Clientele of Teleste's Network Services business consists mainly of large
European cable operators. The services provided by this business area include
planning, new construction, upgrading and maintenance of cable networks.
Implementation and scope of the relevant services vary by client ranging from
stand-alone applications to integrated turnkey deliveries. Most deliveries are
based on frame agreements. Some of our projects also include Teleste's own
product solutions. Our know-how in services covers all the sectors related to
the cable network technology from installation and maintenance of headends to
upgrading of house networks. Parts of the projects are carried out by our
subcontractor network.

Network Services in Q3

Orders received totalled EUR 18.7 (26.1) million. Orders received for the
comparative period included one-off deliveries of EUR 6 million. In Q3, orders
on internet connection related services placed by our main customer in Germany
continued to involve supplementary items in the lower revenue bracket exclusive
of any more demanding upgrades of house networks.

Net sales of the business area amounted to EUR 18.7 (23.4) million, i.e. 20.2 %
below the comparative period. The year-on-year decrease in net sales was caused
by the fact that the German deliveries involved internet connections in the
lower revenue bracket and because, in summer season, demand for services is
typically weaker.

Operating profit stood at EUR 0.03 (0.1) million making 0.2 % (0.4 %) of the net
sales. Year-on-year profitability fell due to decreased net sales and increased
investments in technical clarification items related to deliveries of services.

Network Services January to September

Orders received totalled EUR 56.9 (45.3) million. The growth in orders received
by 25.7 % over the comparative period was due to restructuring carried out in H2
2009 (the German acquisitions). In H1 of 2010, two new frame agreements were
signed in Germany, involving contract extensions from current clients
(NetCologne, delivery span 12 months and TeleColumbus, delivery span 6 years).
The value of these contracts equals approximately EUR 8 million.

Net sales amounted to EUR 62.0 (42.6) million. The increased net sales by 45.6 %
over the comparative period was due to German group restructuring carried out in
H2 of 2009.

Operating profit decreased over the previous year amounting to EUR 0.5 (1.0)
million. Decreased profitability in Germany was caused by increased deliveries
in the lower price bracket and greater personnel expenses in Q3 related to
technical clarification items involving deliveries of services. Also the cold
winter in the beginning of the year hampered our delivery of services. Our
German operations are being reorganized, which has caused expenses in the period
under review.

Financing and Investments - January to September

Operating cash flow stood at EUR 4.5 (2.6) million. At the end of the period
under review, the amount of unused binding stand-by credits amounted to EUR 19.5
(14.5) million. The current binding stand-by credits of EUR 40.0 million run
till November 2013. The Group's equity ratio equalled 41.5 % (43.4 %) and net
gearing 26.7 % (32.6 %). Interest bearing debt on 30 September 2010 was EUR 22.9
(27.7) million.

Investments by the Group for the period under review totalled EUR 9.2 (17.5)
million accounting for 7.6 % (17.9 %) of net sales. Investments: EUR 0.6 million
(including the estimated additional contract price) involved the Swiss
acquisition (Freycom) by Network Services, EUR 0.4 million involved redemption
of minority shareholders out of Cableway AG, EUR 6.3 million (including the
estimated additional contract price) involved acquisition of the Polish Satlan
by Video and Broadband Solutions, EUR 0.4 (1.7) million involved expansion on
the premises in Finland and EUR 1.2 (1.2) million in R&D. As to investments for
the period, EUR 0.1 (0.1) million was carried out by means of financial leasing.

Personnel and Organisation January to September

At the end of the reporting period, the number of full-time personnel employed
by the Group equalled 1231 (1230/2009, 694/2008), of which Video and Broadband
Solutions accounted for 567 (568) and Network Services 664 (662), respectively.
Expenditure on employee benefits amounted to EUR 36.7 (31.2/January to
September/2009, 24.5/January to September/2008) million.

As part of the cost-structure adaptation measures required by the general market
situation, the Finnish personnel have continued on a rotating layoff. Measures
agreed on in the co-determination procedures will be sustained until the end of
2010 as required by the market situation. The co-determination procedure was
concluded on 22 January 2010. Streamlining of German operations of Network
Services is in progress.

Essential Operational Risks of the Business Areas

Founded in 1954, Teleste is a technology and service provider consisting of two
business areas: Video and Broadband Solutions and Network Services. With Europe
as the main market area, our most significant clients include European cable
operators.

Concerning Video and Broadband Solutions, integrated deliveries of solutions
create favourable conditions for growth, even if the involved resource
allocation and technical implementation pose a challenge involving, therefore,
also reasonable risks. The present difficult market situation may delay the
implementation of investment plans among our clientele. Network investments
carried out by the clients vary based on their need for upgrading and their
capital structure. Much of Teleste's competition comes from the USA so the
exchange rate of euro up against the US dollar affects our competitiveness.
Teleste hedges against short-term currency exposure by means of forward
contracts. Correct technological choices and their timing are vital for our
success.

Net sales for Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for services by
any one of them is reflected in the actual deliveries. To ensure quality of
services and cost-efficiency, along with an efficient service process
management, customer satisfaction requires innovative solutions in terms of
processes, products and logistics. Being committed to the technical management
of the cable operators' networks and the development of well-designed product
solutions, Teleste ensures efficient operation of the networks by providing its
own and suppliers' personnel with continuous further training.

It is equally important for our business areas to take into account any market
developments such as consolidations taking place among the clientele and
competition.

The Board of Directors annually reviews any essential risks related to the
company operation and the management thereof. Risk management constitutes an
integral part of the strategic and operative practices of our business areas.
Risks and their probability are reported to the Board by regular monthly
reports.

The company has covered major risks of damage through insurance policies. These
insurances do not include credit loss risks. In the period under review, no such
risks materialized, and no legal proceedings or judicial procedures were pending
that would have had any essential significance for the Group operation.

Group Structure

Parent company Teleste has branch offices in Australia, Spain, the Netherlands,
China and Denmark with subsidiaries in 13 countries outside Finland. Teleste
Management Oy, which was founded in March 2010, is included in the Teleste Group
figures because, owing to financial arrangements, Teleste Corporation has
control over the company.

Decisions by the Annual General Meeting (AGM)

The Annual General Meeting of Teleste Corporation on 9 April 2010 confirmed the
financial statements for 2009 and discharged the Board of Directors and the CEO
from liability for the financial period. The AGM confirmed the Board's proposed
dividend of EUR 0.08 per share. The dividend was paid out on 21 April 2010.

The AGM decided that the Board of Directors shall consist of six members. Marjo
Miettinen was reappointed Chairman of the Board of Directors while the
reappointed Board Members include Pertti Ervi, Tero Laaksonen, Pertti
Raatikainen, Kai Telanne and Petteri Walldén.

Authorised Public Accountants KPMG Oy Ab continue as the auditor until the next
AGM. Accountant authorised by the Central Chamber of Commerce of Finland Esa
Kailiala was chosen auditor-in-charge.

The AGM authorised the Board to acquire the maximum of 1,400,000 of the
company's own shares and to convey the maximum of 1,779,985 company's own
shares. The AGM also authorised the company Board to issue 10,000,000 new
shares. Pursuant to the special rights provided by the company, the maximum
number of significant shares is 5,000,000; these special rights are included in
the authorisation to issue 10,000,000 new shares.

The authorizations are valid until the Annual General Meeting of Shareholders
for year 2011. The Board has not exercised these rights.

Shares and Changes in Share Capital

On 30 September 2010, EM Group Oy was the largest single shareholder with a
holding of 21.02 %.

In the period under review, the lowest company share price was EUR 3.63 (2.25)
and the highest was EUR 5.33 (4.30). Closing price on 30 September 2010 stood at
EUR 4.91 (4.10). According to Euroclear Finland Ltd, the number of shareholders
at the end of the period under review was 5,306 (5,470). Foreign ownership
accounted for 8.5 % (10.3 %). From 1 January to 30 September 2010, trading with
Teleste share at NASDAQ OMX Helsinki amounted to EUR 11.6 (25.8) million. In the
period under review, 2.6 (7.1) million Teleste shares were traded on the stock
exchange.

In March 2010, Teleste Board of Directors decided on a directed share issue of
381,000 shares to Teleste Management Oy established by the management of Teleste
Corporation. This directed share issue was authorized by the AGM on 7 April
2009.

At the end of September 2010, the number of own shares in the Group possession
stood at 760,985 (379,985) out of which parent company Teleste Corporation had
none (0) while other Group or controlled companies had 760,985 shares,
respectively. At the end of the period, the Group's holding of the total amount
of shares amounted to 4.18 % (2.13 %).

On 30 September 2010, the registered share capital of Teleste stood at EUR
6,966,932.80 divided in 18,186,590 shares.

Outlook

Cautious approach to network investments is likely to continue among the
operator clientele of Video and Broadband Solutions even for the rest of the
year. Nevertheless, we believe the deliveries will continue at least on the
level of 2009.

We estimate the demand by the current clientele of Network Services to remain
stable on an annual level but with some fluctuation between the quarters. The
strategic investments already carried out ensure that our net sales will improve
over last year.

Due to increased net sales and adaptation of costs we estimate the operating
profit for 2010 to improve clearly over 2009.

Teleste's final accounts for the financial year 2010 will be released on 2
February 2011.

26 October 2010

TELESTE CORPORATION Jukka Rinnevaara
Board of Directors President and CEO

This interim report has been compiled in compliance with IAS 34, as it is
accepted within EU, using the recognition and valuation principles with those
used in the Annual Report. The data stated in this report is unaudited.

--------------------------------------------------------------------------------
| STATEMENT OF | 7-9/2010 | 7-9/2009 | Change % | |
| COMPREHENSIVE INCOME | | | | |
| (tEUR) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Sales | 38,625 | 41,711 | -7.4 % | |
--------------------------------------------------------------------------------
| | Other operating | 363 | 478 | -24.2 % | |
| | income | | | | |
--------------------------------------------------------------------------------
| | Materials and | -18,650 | -23,416 | -20.4 % | |
| | services | | | | |
--------------------------------------------------------------------------------
| | Personnel expenses | -11,624 | -10,912 | 6.5 % | |
--------------------------------------------------------------------------------
| | Other operating | -5,080 | -4,841 | 4.9 % | |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Depreciation | -1,650 | -1,412 | 16.9 % | |
--------------------------------------------------------------------------------
| Operating profit | 1,984 | 1,608 | 23.4 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Financial income and | -111 | -154 | -27.9 % | |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Share of profit of | 0 | -354 | n/a | |
| | associates | | | | |
--------------------------------------------------------------------------------
| Profit after financial | 1,873 | 1,100 | 70.2 % | |
| items | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before taxes | 1,873 | 1,100 | 70.2 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Taxes | -635 | -560 | 13.4 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit | 1,238 | 540 | 129.1 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of | 1,238 | 540 | 129.1 % | |
| | the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share for result of the year attributable to the equity holders |
| of the parent (expressed in EUR per share) |
--------------------------------------------------------------------------------
| | Basic | 0.07 | 0.03 | 136.8 % | |
--------------------------------------------------------------------------------
| | Diluted | 0.07 | 0.03 | 133.2 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (tEUR) |
--------------------------------------------------------------------------------
| Net profit | 1,238 | 540 | 129.1 % | |
--------------------------------------------------------------------------------
| Translation differences | -67 | -73 | -8.2 % | |
--------------------------------------------------------------------------------
| Fair value reserve | 7 | 0 | n/a | |
--------------------------------------------------------------------------------
| Total comprehensive | 1,178 | 467 | 152.0 % | |
| income for the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of | 1,178 | 467 | 152.0 % | |
| | the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| STATEMENT OF | 1-9/2010 | 1-9/2009 | Change % | 1-12/2009 |
| COMPREHENSIVE INCOME | | | | |
| (tEUR) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Sales | 121,193 | 97,867 | 23.8 % | 141,651 |
--------------------------------------------------------------------------------
| | Other operating | 971 | 2,591 | -62.5 % | 3,124 |
| | income | | | | |
--------------------------------------------------------------------------------
| | Materials and | -59,980 | -48,924 | 22.6 % | -69,962 |
| | services | | | | |
--------------------------------------------------------------------------------
| | Personnel expenses | -36,684 | -31,177 | 17.7 % | -44,584 |
--------------------------------------------------------------------------------
| | Other operating | -16,492 | -15,461 | 6.7 % | -21,323 |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Depreciation | -4,543 | -4,090 | 11.1 % | -5,582 |
--------------------------------------------------------------------------------
| | Impairment loss | 0 | 0 | n/a | -800 |
--------------------------------------------------------------------------------
| Operating profit | 4,465 | 806 | 454.1 % | 2,524 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Financial income and | -497 | -539 | -7.8 % | -605 |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Share of profit of | 0 | -544 | n/a | -544 |
| | associates | | | | |
--------------------------------------------------------------------------------
| Profit after financial | 3,968 | -277 | n/a | 1,375 |
| items | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before taxes | 3,968 | -277 | n/a | 1,375 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Taxes | -1,288 | -302 | 326.5 % | -959 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit | 2,680 | -579 | n/a | 416 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of | 2,680 | -579 | n/a | 416 |
| | the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share for result of the year attributable to the | |
| equity holders of the parent | |
--------------------------------------------------------------------------------
| (expressed in EUR per | | | | |
| share) | | | | |
--------------------------------------------------------------------------------
| | Basic | 0.15 | -0.03 | n/a | 0.02 |
--------------------------------------------------------------------------------
| | Diluted | 0.15 | -0.03 | n/a | 0.02 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (tEUR) |
--------------------------------------------------------------------------------
| Net profit | 2,680 | -579 | n/a | 416 |
--------------------------------------------------------------------------------
| Translation differences | -125 | 19 | n/a | 189 |
--------------------------------------------------------------------------------
| Fair value reserve | -150 | 0 | n/a | -116 |
--------------------------------------------------------------------------------
| Total comprehensive | 2,405 | -560 | n/a | 489 |
| income for the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of | 2,405 | -560 | n/a | 489 |
| | the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| STATEMENT OF FINANCIAL | 30.09.201 | 30.09.200 | Change % | 31.12.2009 |
| POSITION (tEUR) | 0 | 9 | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| | Property,plant,equip | 9,020 | 8,520 | 5.9 % | 9,960 |
| | ment | | | | |
--------------------------------------------------------------------------------
| | Goodwill | 36,914 | 25,999 | 42.0 % | 31,657 |
--------------------------------------------------------------------------------
| | Intangible assets | 7,021 | 8,216 | -14.5 % | 7,664 |
--------------------------------------------------------------------------------
| | Investments | 713 | 703 | 1.4 % | 713 |
--------------------------------------------------------------------------------
| | | 53,668 | 43,438 | 23.6 % | 49,994 |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| | Inventories | 19,623 | 19,876 | -1.3 % | 20,682 |
--------------------------------------------------------------------------------
| | Other current assets | 33,438 | 32,120 | 4.1 % | 26,884 |
--------------------------------------------------------------------------------
| | Liquid funds | 10,063 | 12,836 | -21.6 % | 12,518 |
--------------------------------------------------------------------------------
| | | 63,124 | 64,832 | -2.6 % | 60,084 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 116,792 | 108,270 | 7.9 % | 110,078 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholder's equity and | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | Share capital | 6,967 | 6,967 | 0.0 % | 6,967 |
--------------------------------------------------------------------------------
| | Other equity | 40,902 | 38,544 | 6.1 % | 39,702 |
--------------------------------------------------------------------------------
| | Non-controlling | 319 | 0 | n/a | 0 |
| | interest | | | | |
--------------------------------------------------------------------------------
| | | 48,188 | 45,511 | 5.9 % | 46,669 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| | Provisions | 513 | 314 | 63.4 % | 513 |
--------------------------------------------------------------------------------
| | Non interest bearing | 10,720 | 2,250 | 376.4 % | 6,726 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | Interest bearing | 11,676 | 12,412 | -5.9 % | 12,237 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | | 22,909 | 14,976 | 53.0 % | 19,476 |
--------------------------------------------------------------------------------
| Short-term liabilities | | | | |
--------------------------------------------------------------------------------
| | Trade payables and | 33,212 | 31,043 | 7.0 % | 32,372 |
| | other s-t | | | | |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | Provisions | 1,227 | 1,469 | -16.5 % | 1,026 |
--------------------------------------------------------------------------------
| | S-t interest bearing | 11,256 | 15,271 | -26.3 % | 10,535 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | | 45,695 | 47,783 | -4.4 % | 43,933 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholder's | 116,792 | 108,270 | 7.9 % | 110,078 |
| equity and liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW | 1-9/2010 | 1-9/2009 | Change % | 1-12/2009 |
| STATEMENT (tEUR) | | | | |
--------------------------------------------------------------------------------
| Cash flows from operating | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| | Profit for the | 2,680 | -579 | n/a | 416 |
| | period | | | | |
--------------------------------------------------------------------------------
| | Adjustments | 6,517 | 5,106 | 27.6 % | 8,230 |
--------------------------------------------------------------------------------
| | Interest and other | -497 | -539 | -7.8 % | -937 |
| | financial expenses | | | | |
| | and incomes | | | | |
--------------------------------------------------------------------------------
| | Paid Taxes | -378 | -881 | -57.1 % | -1,708 |
--------------------------------------------------------------------------------
| | Change in working | -3,805 | -556 | 584.3 % | 3,830 |
| | capital | | | | |
--------------------------------------------------------------------------------
| Cash flow from operating | 4,517 | 2,551 | 77.1 % | 9,831 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from investing | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| | Acquisition of | -3,120 | -10,281 | -69.7 % | -10,281 |
| | subsidiary, net of | | | | |
| | cash acquired | | | | |
--------------------------------------------------------------------------------
| | Purchases of | -620 | -1,258 | -50.7 % | -2,772 |
| | property, plant and | | | | |
| | equipment (PPE) | | | | |
--------------------------------------------------------------------------------
| | Purchases of | -1,006 | -924 | 8.9 % | -1,327 |
| | intangible assets | | | | |
--------------------------------------------------------------------------------
| | Investments in | 0 | 0 | n/a | -10 |
| | shares | | | | |
--------------------------------------------------------------------------------
| Net cash used in | -4,746 | -12,463 | -61.9 % | -14,390 |
| investing activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| | Proceeds from | 0 | 20,500 | n/a | 20,542 |
| | borrowings | | | | |
--------------------------------------------------------------------------------
| | Payments of | -966 | -4,740 | -79.6 % | -10,623 |
| | borrowings | | | | |
--------------------------------------------------------------------------------
| | Dividends paid | -1,364 | -2,035 | -33.0 % | -2,035 |
--------------------------------------------------------------------------------
| | Own shares | 0 | -264 | n/a | -264 |
--------------------------------------------------------------------------------
| | Proceeds from | 229 | 0 | n/a | 0 |
| | issuance of ordinary | | | | |
| | shares | | | | |
--------------------------------------------------------------------------------
| Net cash used in | -2,101 | 13,461 | n/a | 7,620 |
| financing activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash | | | | |
--------------------------------------------------------------------------------
| | Cash in the | 12,518 | 9,268 | 35.1 % | 9,268 |
| | beginning | | | | |
--------------------------------------------------------------------------------
| | Change in cash | -2,330 | 3,549 | n/a | 3,061 |
| | during period | | | | |
--------------------------------------------------------------------------------
| | Effect of currency | -125 | 19 | n/a | 189 |
| | changes | | | | |
--------------------------------------------------------------------------------
| | Cash at the end | 10,063 | 12,836 | -21.6 % | 12,518 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | 1-9/2010 | 1-9/2009 | Change % | 1-12/2009 |
--------------------------------------------------------------------------------
| | Earnings per share, | 0.15 | -0.03 | n/a | 0.02 |
| | EUR | | | | |
--------------------------------------------------------------------------------
| | Earnings per share | 0.15 | -0.03 | n/a | 0.02 |
| | fully diluted, EUR | | | | |
--------------------------------------------------------------------------------
| | Shareholders' equity | 2.77 | 2.61 | 5.9 % | 2.68 |
| | per share, EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Return on equity | 7.5 % | -1.7 % | n/a | 0.9 % |
--------------------------------------------------------------------------------
| | Return on capital | 8.6 % | 0.4 % | 2050.0 % | 3.3 % |
| | employed | | | | |
--------------------------------------------------------------------------------
| | Equity ratio | 41.5 % | 43.4 % | -4.3 % | 43.6 % |
--------------------------------------------------------------------------------
| | Gearing | 26.7 % | 32.6 % | -18.1 % | 22.0 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Investments, tEUR | 9,232 | 17,519 | -47.3 % | 25,241 |
--------------------------------------------------------------------------------
| | Investments % of net | 7.6 % | 17.9 % | -57.4 % | 17.8 % |
| | sales | | | | |
--------------------------------------------------------------------------------
| | Order backlog, tEUR | 13,271 | 30,329 | -56.2 % | 33,100 |
--------------------------------------------------------------------------------
| | Personnel, average | 1,221 | 1,090 | 12.0 % | 1,103 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Number of shares | 18,062 | 17,806 | 1.4 % | 17,806 |
| | (thousands) | | | | |
--------------------------------------------------------------------------------
| | including own shares | | | | |
--------------------------------------------------------------------------------
| | Highest share price, | 5.33 | 4.30 | 24.0 % | 4.30 |
| | EUR | | | | |
--------------------------------------------------------------------------------
| | Lowest share price, | 3.63 | 2.25 | 61.3 % | 2.25 |
| | EUR | | | | |
--------------------------------------------------------------------------------
| | Average share price, | 4.44 | 3.61 | 23.0 % | 3.62 |
| | EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Turnover, in million | 2.6 | 7.1 | -63.5 % | 7.8 |
| | shares | | | | |
--------------------------------------------------------------------------------
| | Turnover, in MEUR | 11.6 | 25.8 | -55.1 % | 28.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Treasury shares |   |   |   |   |
--------------------------------------------------------------------------------
| | | Number | | % of | % of |
--------------------------------------------------------------------------------
| | | of shares | | shares | votes |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Teleste companies | 760,985 | | 4.18 % | 4.18 % |
| | own shares 30.9.2010 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities |   |   |   |   |
| and pledged assets (tEUR) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| For own debt | | | | |
--------------------------------------------------------------------------------
| | Other securities | 120 | 120 | 0.0 % | 120 |
--------------------------------------------------------------------------------
| Leasing and rent | 6,518 | 5,990 | 8.8 % | 6,016 |
| liabilities | | | | |
--------------------------------------------------------------------------------
|   |   | 6,638 | 6,110 | 8.6 % | 6,136 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative instruments |   |   |   |   |
| (tEUR) | | | | |
--------------------------------------------------------------------------------
| | Value of underlying | 5,285 | 6,962 | -24.1 % | 8,043 |
| | forward contracts | | | | |
--------------------------------------------------------------------------------
| | Market value of | -176 | -236 | -25.4 % | -228 |
| | forward contracts | | | | |
--------------------------------------------------------------------------------
| | Interest rate swap | 11,500 | 0 | n/a | 11,500 |
--------------------------------------------------------------------------------
| | Market value of | -266 | 0 | n/a | -157 |
| | interest swap | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Taxes are computed on the basis of | | | |
| the tax on the profit for the period. | | | |
--------------------------------------------------------------------------------
|   |   |   |   |   |   |
--------------------------------------------------------------------------------
| RECLASSIFICATION OF SEGMENTS 1.1.2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING SEGMENTS (tEUR) | 1-9/2010 | 1-9/2009 | Change % | 1-12/2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Video and Broadband | | | | |
| Solutions | | | | |
--------------------------------------------------------------------------------
| | Order intake | 59,450 | 58,907 | 0.9 % | 81,612 |
--------------------------------------------------------------------------------
| | Net sales | 59,159 | 55,264 | 7.0 % | 76,280 |
--------------------------------------------------------------------------------
| | EBIT | 3,976 | -235 | n/a | -692 |
--------------------------------------------------------------------------------
| | EBIT% | 6.7 % | -0.4 % | n/a | -0.9 % |
--------------------------------------------------------------------------------
| Network Services | | | | |
--------------------------------------------------------------------------------
| | Order intake | 56,914 | 45,289 | 25.7 % | 69,408 |
--------------------------------------------------------------------------------
| | Net sales | 62,034 | 42,603 | 45.6 % | 65,371 |
--------------------------------------------------------------------------------
| | EBIT | 489 | 1,041 | -53.0 % | 3,216 |
--------------------------------------------------------------------------------
| | EBIT% | 0.8 % | 2.4 % | -67.7 % | 4.9 % |
--------------------------------------------------------------------------------
| Total | | | | |
--------------------------------------------------------------------------------
| | Order intake | 116,364 | 104,196 | 11.7 % | 151,020 |
--------------------------------------------------------------------------------
| | Net sales | 121,193 | 97,867 | 23.8 % | 141,651 |
--------------------------------------------------------------------------------
| | EBIT | 4,465 | 806 | 453.9 % | 2,524 |
--------------------------------------------------------------------------------
| | EBIT% | 3.7 % | 0.8 % | 347.3 % | 1.8 % |
--------------------------------------------------------------------------------
| | Financial items | -497 | -539 | -7.8 % | -605 |
--------------------------------------------------------------------------------
| | Share of profit of | 0 | -544 | n/a | -544 |
| | associates | | | | |
--------------------------------------------------------------------------------
| | Operating segments | 3,968 | -277 | n/a | 1,375 |
| | net profit before | | | | |
| | taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Segment assets include items directly attributable as well as those |
| | that can be allocated on a reasonable basis. |
--------------------------------------------------------------------------------
| | | 30.9.2010 | 30.9.2009 | Change % | 31.12.2009 |
--------------------------------------------------------------------------------
| | Video and Broadband | 66,260 | 57,212 | 15.8 % | 56,120 |
| | Solutions | | | | |
--------------------------------------------------------------------------------
| | Network Services | 40,469 | 38,223 | 5.9 % | 41,440 |
--------------------------------------------------------------------------------
| | Segment assets total | 106,729 | 95,435 | 11.8 % | 97,560 |
--------------------------------------------------------------------------------
| | Unallocated assets | 10,063 | 12,836 | -21.6 % | 12,518 |
--------------------------------------------------------------------------------
| | Assets total | 116,792 | 108,271 | 7.9 % | 110,078 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| Information per | 7-9/10 | 4-6/10 | 1-3/10 | 10-12/0 | 7-9/09 | 10/2009- |
| quarter (tEUR) | | | | 9 | | 9/2010 |
--------------------------------------------------------------------------------
| Video and Broadband Solutions |
--------------------------------------------------------------------------------
| | Order | 21,170 | 19,702 | 18,578 | 22,705 | 22,508 | 82,155 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 19,915 | 20,148 | 19,062 | 21,015 | 18,262 | 80,140 |
--------------------------------------------------------------------------------
| | EBIT | 1,955 | 1,463 | 562 | -457 | 1,524 | 3,523 |
--------------------------------------------------------------------------------
| | EBIT % | 9.8 % | 7.3 % | 2.9 % | -2.2 % | 8.3 % | 4.4 % |
--------------------------------------------------------------------------------
| Network Services |
--------------------------------------------------------------------------------
| | Order | 18,710 | 19,278 | 18,926 | 24,119 | 26,136 | 81,033 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 18,710 | 23,326 | 20,032 | 22,769 | 23,449 | 84,837 |
--------------------------------------------------------------------------------
| | EBIT | 28 | 192 | 264 | 2,175 | 84 | 2,659 |
--------------------------------------------------------------------------------
| | EBIT % | 0.2 % | 0.8 % | 1.3 % | 9.6 % | 0.4 % | 3.1 % |
--------------------------------------------------------------------------------
| Total |
--------------------------------------------------------------------------------
| | Order | 39,880 | 38,980 | 37,504 | 46,824 | 48,644 | 163,188 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 38,625 | 43,474 | 39,094 | 43,784 | 41,711 | 164,977 |
--------------------------------------------------------------------------------
| | EBIT | 1,984 | 1,655 | 826 | 1,718 | 1,608 | 6,183 |
--------------------------------------------------------------------------------
| | EBIT % | 5.1 % | 3.8 % | 2.1 % | 3.9 % | 3.9 % | 3.7 % |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| Attri- | Share | Share | Trans | Reta | Inve- | Othe | Tota | Share | Total |
| butabl | capit | premi | -lati | -ine | sted | r | l | of | equit |
| e to | al | um | on | d | free | fund | | non-co | y |
| equity | | | diffe | earn | capit | s | | nt-rol | |
| holder | | | r-ren | -ing | al | | | ling | |
| s of | | | ces | s | | | | inte-r | |
| the | | | | | | | | est | |
| parent | | | | | | | | | |
| (tEUR) | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | 6,967 | 1,504 | -372 | 35,9 | 2,737 | -116 | 46,6 | 0 | 46,66 |
| holder | | | | 49 | | | 69 | | 9 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 1.1.20 | | | | | | | | | |
| 10 | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | -125 | 2,68 | | -150 | 2,40 | 0 | 2,405 |
| compre | | | | 0 | | | 5 | | |
| -hensi | | | | | | | | | |
| ve | | | | | | | | | |
| income | | | | | | | | | |
| for | | | | | | | | | |
| the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | | | 0 | | 0 | 289 | 289 |
| issue | | | | | | | | | |
--------------------------------------------------------------------------------
| Paid | | | | -1,3 | | | -1,3 | 30 | -1,36 |
| divide | | | | 94 | | | 94 | | 4 |
| nd | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | 189 | 0 | 0 | 189 | 0 | 189 |
| -settl | | | | | | | | | |
| ed | | | | | | | | | |
| share- | | | | | | | | | |
| based | | | | | | | | | |
| paymen | | | | | | | | | |
| ts | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | 6,967 | 1,504 | -497 | 37,4 | 2,737 | -266 | 47,8 | 319 | 48,18 |
| holder | | | | 24 | | | 69 | | 8 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 30.9.2 | | | | | | | | | |
| 010 | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share- | 6,967 | 1,504 | -561 | 37,2 | 1,451 | 0 | 46,6 | 0 | 46,64 |
| holder | | | | 84 | | | 45 | | 5 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 1.1.20 | | | | | | | | | |
| 09 | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | 19 | -579 | | 0 | -560 | 0 | -560 |
| compre | | | | | | | | | |
| - | | | | | | | | | |
| hensiv | | | | | | | | | |
| e | | | | | | | | | |
| income | | | | | | | | | |
| for | | | | | | | | | |
| the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Paid | | | | -2,0 | | | -2,0 | 0 | -2,03 |
| divide | | | | 35 | | | 35 | | 5 |
| nd | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | 175 | 1,286 | 0 | 1,46 | 0 | 1,461 |
| -settl | | | | | | | 1 | | |
| ed | | | | | | | | | |
| share- | | | | | | | | | |
| based | | | | | | | | | |
| paymen | | | | | | | | | |
| ts | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | 6,967 | 1,504 | -542 | 34,8 | 2,737 | 0 | 45,5 | 0 | 45,51 |
| holder | | | | 45 | | | 11 | | 1 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 30.9.2 | | | | | | | | | |
| 009 | | | | | | | | | |
--------------------------------------------------------------------------------

CALCULATION OF KEY FIGURES

--------------------------------------------------------------------------------
| Return on equity: | Profit/loss for the financial period |
| | ------------------------------ * 100 |
| | Shareholders' equity (average) |
--------------------------------------------------------------------------------
| Return on capital | Profit/loss for the period after financial |
| employed: | items + financing charges |
| | ------------------------------ * 100 |
| | Total assets - non-interest-bearing |
| | liabilities (average) |
--------------------------------------------------------------------------------
| Equity ratio: | Shareholders' equity |
| | ----------------------------- * 100 |
| | Total assets - advances received |
--------------------------------------------------------------------------------
| Gearing: | Interest bearing liabilities - cash in hand and |
| | in bank - interest bearing assets |
| | ----------------------------- * 100 |
| | Shareholders' equity |
--------------------------------------------------------------------------------
| Earnings per share: | Profit for the period attributable to equity |
| | holder of the parent |
| | ---------------------------------------------- |
| | Weighted average number of ordinary shares |
| | outstanding during the period |
--------------------------------------------------------------------------------
| Earnings per share, | Profit for the period attributable to equity |
| diluted: | holder of the parent (diluted) |
| | ----------------------------------------------- |
| | Average number of shares - own shares + number |
| | of options at the period-end |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| MAJOR SHAREHOLDERS 30.9.2010 | Shares | % |
--------------------------------------------------------------------------------
| EM Group Oy | 3,822,813 | 21.02 |
--------------------------------------------------------------------------------
| Mandatum Life | 1,679,200 | 9.23 |
--------------------------------------------------------------------------------
| Ilmarinen Mutual Pension Insurance | 936,776 | 5.15 |
| Company | | |
--------------------------------------------------------------------------------
| Kaleva Mutual Pension Insurance Company | 824,641 | 4.53 |
--------------------------------------------------------------------------------
| Op-Suomi Small Cap | 596,112 | 3.28 |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 521,150 | 2.87 |
--------------------------------------------------------------------------------
| State Pension Fund | 500,000 | 2.75 |
--------------------------------------------------------------------------------
| Aktia Capital Mutual Fund | 450,000 | 2.47 |
--------------------------------------------------------------------------------
| Skagen Vekst Verdipapierfond | 437,000 | 2.40 |
--------------------------------------------------------------------------------
| Teleste Management Oy | 381,000 | 2.09 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| SECTOR DISPERSION 30.9.2010 | Shareholder | % | Shares | % |
| | s | | | |
--------------------------------------------------------------------------------
| Corporations | 315 | 5.93 | 5,825,143 | 32.02 |
--------------------------------------------------------------------------------
| Financial and insurance | 14 | 0.26 | 3,803,077 | 20.91 |
| corporations | | | | |
--------------------------------------------------------------------------------
| Public institutions | 9 | 0.16 | 2,290,744 | 12.59 |
--------------------------------------------------------------------------------
| Non-profit institutions | 36 | 0.67 | 366,611 | 2.01 |
--------------------------------------------------------------------------------
| Households | 4,893 | 92.21 | 4,364,078 | 23.99 |
--------------------------------------------------------------------------------
| Foreign countries and nominee | 39 | 0.73 | 1,536,937 | 8.45 |
| registered | | | | |
--------------------------------------------------------------------------------
| Total | 5,306 | 100.00 | 18,186,590 | 100.00 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| HOLDING DISPERSION 30.9.2010 | Shareholde | % | Shares | % |
| | rs | | | |
--------------------------------------------------------------------------------
| 0 - 100 | 1,184 | 22.31 | 82,346 | 0.45 |
--------------------------------------------------------------------------------
| 101 - 1000 | 3,127 | 58.93 | 1,311,221 | 7.20 |
--------------------------------------------------------------------------------
| 1001 - 10000 | 900 | 16.96 | 2,507,053 | 13.78 |
--------------------------------------------------------------------------------
| 10001 - 100000 | 77 | 1.45 | 1,859,781 | 10.22 |
--------------------------------------------------------------------------------
| 100001 - 1000000 | 16 | 0.30 | 6,924,176 | 38.07 |
--------------------------------------------------------------------------------
| 1000001 - | 2 | 0.03 | 5,502,013 | 30.25 |
--------------------------------------------------------------------------------
| Total | 5,306 | 100.00 | 18,186,590 | 100.00 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| Preliminary calculation of recognised fair values on the acquisition |
| Freycom: |
--------------------------------------------------------------------------------
| 1,000 EUR | Recognised fair values on |
| | acquisition |
--------------------------------------------------------------------------------
| Fair values used in consolidation | |
--------------------------------------------------------------------------------
| Trade marks (inc. in intangible | 62 |
| assets) | |
--------------------------------------------------------------------------------
| Customer relationship (inc. in | 172 |
| intangible assets) | |
--------------------------------------------------------------------------------
| Book values used in consolidation | |
--------------------------------------------------------------------------------
| Tangible assets | 107 |
--------------------------------------------------------------------------------
| Inventories | 280 |
--------------------------------------------------------------------------------
| Other receivables | 215 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 340 |
--------------------------------------------------------------------------------
| Total assets | 1,176 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Book values used in consolidation | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 60 |
--------------------------------------------------------------------------------
| Other liabilities | 668 |
--------------------------------------------------------------------------------
| Total liabilities | 728 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net identifiable assets and | 448 |
| liabilities | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total consideration | 571 |
--------------------------------------------------------------------------------
| Goodwill on acquisition | 123 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consideration paid in cash | -571 |
--------------------------------------------------------------------------------
| Cash and cash equivalents in acquired | 340 |
| subsidiary | |
--------------------------------------------------------------------------------
| Total net cash outflow on the | -231 |
| acquisition | |
--------------------------------------------------------------------------------
| Preliminary calculation of recognised fair values on the acquisition Satlan: |
--------------------------------------------------------------------------------
| tEUR | Recognised fair values on |
| | acquisition |
--------------------------------------------------------------------------------
| Fair values used in consolidation | |
--------------------------------------------------------------------------------
| Trade marks (inc. in intangible | 154 |
| assets) | |
--------------------------------------------------------------------------------
| Customer relationship (inc. in | 843 |
| intangible assets) | |
--------------------------------------------------------------------------------
| Inventories | 1,314 |
--------------------------------------------------------------------------------
| Book values used in consolidation | |
--------------------------------------------------------------------------------
| Tangible assets | 51 |
--------------------------------------------------------------------------------
| Trade receivables | 1,305 |
--------------------------------------------------------------------------------
| Other receivables | 219 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 333 |
--------------------------------------------------------------------------------
| Total assets | 4,219 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Book values used in consolidation | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 259 |
--------------------------------------------------------------------------------
| Other liabilities | 2,363 |
--------------------------------------------------------------------------------
| Total liabilities | 2,622 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net identifiable assets and | 1,597 |
| liabilities | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total consideration | 6,330 |
--------------------------------------------------------------------------------
| Goodwill on acquisition | 4,733 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consideration paid in cash | -2,780 |
--------------------------------------------------------------------------------
| Cash and cash equivalents in acquired | 333 |
| subsidiary | |
--------------------------------------------------------------------------------
| Total net cash outflow on the | -2,447 |
| acquisition | |
--------------------------------------------------------------------------------

ADDITIONAL INFORMATION:
Mr Jukka Rinnevaara, CEO, Tel. +358 2 2605 866 or +358 400 747 488

DISTRIBUTION:
NASDAQ OMX Helsinki
Primary media
www.teleste.com