Elcoteq and Thomson Enter Long-Term Outsourcing Agreement.

IRVING, Texas -- Elcoteq Network Corporation, global provider of electronics manufacturing services (EMS) for the Communications Technology Industry, has reached an agreement for its largest outsourcing and acquisition to date with Thomson (Euronext Paris: 18453)(NYSE: TMS), a leading provider of technology, systems and services to integrated media and entertainment companies. The deal includes the acquisition of Thomson's manufacturing operation in Juarez, Mexico, and manufacturing co-operation in the set-top box business.

The transaction is scheduled for closing on December 31, 2004. The total consideration to be paid by Elcoteq will amount to approximately MUSD 33. The acquisition includes certain fixed assets and inventories of Thomson's Juarez manufacturing operation. Thomson's personnel in Juarez, Mexico will continue in Elcoteq's organization. Currently the plant employs approximately 2,000 employees. Elcoteq will lease the required manufacturing space of approximately 17,000 square meters and will take over the Juarez facility on January 1, 2005.

Under the long-term manufacturing agreement Elcoteq will become a preferred manufacturing partner to Thomson for the manufacture of set-top box products and produce Thomson's set-top boxes in Juarez, Mexico. In addition to manufacturing services Elcoteq will also offer other value add services such as component sourcing services to Thomson.

Elcoteq expects the deal to boost the company's sales by approximately MUSD 300 during 2005 and by MUSD 800 - 1000 during 2005 - 2007. The deal is expected to have positive impact on the company's financial results in 2005.

The acquisition of the Juarez plant will double Elcoteq's manufacturing capacity in Mexico. The Juarez plant is ideally located in the border region between Mexico and the USA, and will provide a needed strategic location to develop business with Elcoteq's current and prospective US customers.

The co-operation with Thomson - a market leader in satellite and terrestrial set-top box products with over 30% global market share - is a significant step toward executing Elcoteq's communications technology strategy and accelerates its development of services for the home communications business. The agreement will make Thomson one of Elcoteq's top ten customers and further diversifies its customer and product base inside the communications technology segment.

"Thomson, one of the leading set-top box manufacturers in the world, is a very welcome addition to our customer portfolio. This deal also marks our entrance into a new product segment that fits into our communications strategy and our manufacturing network extremely well. We see great business opportunities in this co-operation, and I am sure that our competence in manufacturing demanding communications technology products will be beneficial to Thomson as well," said Mr. Jouni Hartikainen, president and CEO of Elcoteq.

"Thomson has been at the forefront of developing new set-top box features and technologies for many years," commented Mr. Ghislain Lescuyer, executive vice president for Thomson. "Teaming up with Elcoteq for our American clients' set-top box manufacturing and supply chain needs will provide the best possible products, service, and price. Through Elcoteq we benefit from the experience of a leading EMS company in the communications technology field."

The addition of manufacturing capacity in Mexico coupled with the earlier announced expansion into Brazil is part of Elcoteq's strategic objective to balance its global footprint and organization geographically.

"The Americas is the fastest growing geographical region within Elcoteq, and the addition of Thomson as a significant new customer both accelerates this growth and diversifies and expands the product and service portfolio within Elcoteq Americas. The addition of the Juarez site further demonstrates our commitment both to Latin America and building significant capability to service U.S. customers," said Mr. Doug Brenner, president of Elcoteq Holdings, Inc., the U.S. subsidiary of Elcoteq Network Corporation.

About Elcoteq

Elcoteq Network Corporation is a global electronics manufacturing services (EMS) company that focuses on Communications Technology products. Elcoteq ranks among the world's leading EMS providers and is the largest European company in its field. Elcoteq provides end-to-end solutions consisting of design, NPI (new product introduction), manufacturing, supply chain management, and post-sales services for the whole lifecycle of its customers' products. The company operates in 13 countries, on four continents, and employs over 16,900 people. Elcoteq's annual net sales in 2003 totaled over USD 2.8 billion. Elcoteq Network Corporation is listed on the Helsinki Exchange. Elcoteq Americas headquarters is located in Irving, Texas. For more information contact Doug Brenner, president Elcoteq Americas, at 972-401-9995, e-mail [e-mail], or visit the Elcoteq website at www.elcoteq.com.

About Thomson - Partner to the Media & Entertainment Industries

Thomson (Euronext Paris: 18453)(NYSE: TMS) provides technology, systems and services to help Media & Entertainment clients realize their business goals and optimize their performance in a rapidly changing technology environment. The Group intends to become the preferred partner to the Media & Entertainment industries by offering end-to-end solutions to content creators, video network operators and retailers through its Technicolor, Grass Valley, RCA and THOMSON brands. For more information: www.thomson.net.

To the attention of analysts and press:

Elcoteq will hold a press conference (in Finnish) on the subject to analysts and press on December 20, 2004 at 4.00 pm Eastern European time at Restaurant Savoy's Salikabinetti, Etelaesplanadi 14, Helsinki. Additionally there will be a conference call (in English) on the same day at 5.30 pm EET. To participate, please dial [phone].