Elcoteq Announces Expansion of Tallinn, Estonia Plant; EMS Company Expands Manufacturing and Supply Chain Services for Communications Technology Products.

ESPOO, Finland -- Elcoteq Network Corporation, global provider of electronics manufacturing services (EMS) for the Communications Technology industry, has announced the expansion of its second manufacturing plant, Tallinn 2, in Tallinn, Estonia. Between Tallinn 1 and Tallinn 2, Elcoteq will employ nearly 3200 employees and maintain 42,000 square meters of factory space in Tallinn. It can be compared with the size of 6 football fields. The expansion was needed because of growth in demand for communications network equipment products and an increase in Elcoteq's business and customer portfolio. The total investment including the equipment and current assets was 40 million euros.

"The expansion increases the production capacity of the whole Elcoteq Tallinn and therefore improves the competitiveness of our plant," explained Risto Gaggl, General Manager of Elcoteq Tallinn.

The official opening of the expanded facility took place on August 25, 2004 with a ceremony presided over by Estonian Prime Minister Juhan Parts and Antti Piippo, Chairman of the Board and Principal Owner of Elcoteq Network Corporation. Other government officials in attendance included Minister of Economic Affairs and Communications Mr. Meelis Atonen and former Prime Minister Mr. Mart Laar.

Elcoteq Tallinn has been the largest exporter in Estonia since 1994 with a 14% share of exports in 2003, according to the Estonian Statistical Office. With the expansion, the floor space in Tallinn 2 will double from 9,000 to 18,000 square meters. During the period January through August 2004, the number of employees in Elcoteq Tallinn increased by 880, from 2,280 to 3,160, and will continue to increase in the third quarter of 2004. "We see the number of employees possibly exceeding 3300. This will be an all time maximum for Elcoteq Tallinn operations," added Gaggl.

Production in Estonia focuses on two main business areas. Terminal products includes mobile phones (parts, modules, and accessories), wireless modules, and home communication products. Communications network equipment includes GSM base station modules, cellular networks, antennas, broadband switches and routers, and optical devices. In addition, Elcoteq will provide design, new product introduction (NPI), manufacturing, supply chain management, in-bound and out-bound logistics, purchasing, and after-sales services.

Elcoteq began pilot production in Estonia in 1992 with twelve employees. The company was established as a legal entity in March, 1993. The GSM factory level repair centre started in 1996. In 1997, Elcoteq's Tallinn plant was the first electronics manufacturing services plant in the world to start volume production of complete mobile phones (box build). An NPI Centre was established in 2000, and the Tallinn 2 plant was opened in 2001 with an expansion just completed.

Elcoteq Tallinn engages in Six Sigma Quality and lean manufacturing practices, has met ISO 14001 environment system standards since 1999, and has ISO 9001 certification since 1996. It has received the Estonian Quality Award, the state's acknowledgement to an organization for achieving and maintaining high quality standards and for implementing modern management concepts in Estonia.

Elcoteq Tallinn is a part of Elcoteq Network Corporation, Espoo, Finland, which is a global company with MEUR 2.235,7 (2.8 billion USD) net 2003 sales. Elcoteq Americas is located in Irving, Texas. Elcoteq will open a new plant in St. Petersburg, Russia next year, has increased personnel at its plant in Pecs, Hungary, and is expanding its operations to Bangalore, India during 2004. Elcoteq is the first EMS company offering manufacturing services to infrastructure and handset OEMs in India.

Elcoteq Tallinn Ltd. is located at Peterburi tee 66, Tallinn. For more information, phone [phone] or e-mail [e-mail].

About Elcoteq Network Corporation

Elcoteq Network Corporation is the largest European electronics manufacturing services (EMS) company and focuses on Communications Technology products. Elcoteq provides global end-to-end solutions and value added services consisting of design, new product introduction (NPI), manufacturing, supply chain management, and after-sales services for the whole lifecycle of its customers' products. The company operates in 11 countries, on three continents, and employs approximately 14,600 people. Elcoteq's consolidated net sales for 2003 totaled MEUR 2.235,7. Elcoteq Network Corporation is listed on the Helsinki Exchanges. For more information contact Ms. Reeta Kaukiainen at [phone], e-mail [e-mail], or visit the Elcoteq website at www.elcoteq.com.