Portugal Telecom Extraordinary Shareholders' Meeting.

Business/High Tech Editors

LISBON, Portugal--(BUSINESS WIRE)--Aug. 1, 2001

Portugal Telecom, SGPS, S.A. (NYSE:PT; BVLP:PTCO.IN) announces the approval of the sole item on the agenda of the Extraordinary General Shareholders' Meeting held this afternoon.

Pursuant to the terms of No.1 of article 89 and No.1 of article 28 of the Portuguese Commercial Companies Code, Portugal Telecom's shareholders approved today the appointment of the Statutory Audit Society, Afonso Diz & Santos Silva to evaluate payments in kind to be made in connection with the share capital increase of Portugal Telecom to be proposed at its next shareholders' meeting, to be held on August 20, 2001.

This share capital increase will be subscribed for by shareholders of Telesp Celular Participacoes, S.A. that decide to exchange their shares in Portugal Telecom's offer, announced on May 21, 2001, to acquire all of the outstanding shares of Telesp Celular that it does not already own.

This information is also available at www.telecom.pt.

Investors and security holders are strongly advised to read both the exchange offer prospectus and the solicitation/recommendation statement regarding the exchange offer relating to the proposed acquisition described in this press release, when they become available, because they will contain important information. A registration statement has been filed by Portugal Telecom with the SEC. The solicitation/recommendation statement will be filed by Telesp Celular with the SEC. Investors and security holders may obtain a free copy of these statements when available and other documents filed by Portugal Telecom and Telesp Celular by contacting the SEC. The final exchange offer prospectus and related materials may be obtained for free by directing such requests to Portugal Telecom. The solicitation/recommendation statement and such other documents may be obtained for free by directing such requests to Telesp Celular.

This communication does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Portugal Telecom is listed on the Lisbon and Oporto and New York Stock Exchanges and traded on London SEAQ International. Information may be accessed on the Reuters 2000 Service under the symbols PT and PTCO.IN, on Bloomberg under the symbol PLTM PL and on Quotron under the symbol PT.