Annual Report - 01. address

Dear Clients, Partners and Co-workers,

In comparison to 2010, Slovanet's 2011 revenues decreased by five percent. A detailed analysis of revenue structure, however, shows that regular monthly revenue from services representing the company's core business increased by five percent, which is what is most important from the perspective of long-term stability and further development. The operating profit EBITDA also increased and, for the first time in its history, exceeded 6 million Euros.

These results can be attributed primarily to two factors. Revenue was pressured down by substantial cuts in state spending and by the efforts of business customers to reduce costs. Two important acquisitions, however, provided a new source of revenue for Slovanet, especially in the providing of internet, telephone and television services to households.

An important role was played by ongoing attempts to increase service quality, customer satisfaction, and efficiency and automation in internal company processes. Among these efforts was an internal project to establish automated providing for WiMAX based broadband service automated process of transfer of phone numbers among operators and softcollection system. Such projects had already begun to reduce company costs in 2010. New technology and a newly designed website have significantly improved Slovanet's public image and, more importantly, have enabled the providing of new services to our customers. A new internal reporting tool providing information on developments in service sales and customer base enables us to react promptly to market and customer needs, taking into consideration a variety of technologies and locations covered.

In 2011 Slovanet invested the majority of its disposable funds in technology and in improving its coverage of Slovakia through its own infrastructure. Among other things, a total investment of more than 3.4 million Euros has substantially increased the capacity of Slovanet's backbone network from 1 Gbps to 10 Gbps, in addition to improving the company's accessibility, reliability and ability to back up its key elements, all of which has positively impacted the quality of customer services. Investments in new servers and virtualisation platforms will further enable us to enter the cloud computing market.

I am personally glad that, in addition to carrying out standard business and operating activities, we were also able in the past year to acquire and integrate two large businesses, WiMAX Telecom Slovakia and M-Elektronik, into our company. This has brought Slovanet 15,000 customers and a commitment to providing these customers withimprovements in existing services and with new products, as well. Moreover, the company has gained two nationwide frequencies in the band of 3.5 GHz, which are expected to improve the accessibility and quality of services for business customers and households.

In 2012 we will continue developing projects for improving service quality and for extending our infrastructure through acquisitions and investments, as this is necessary in order to ensure long-term growth and to maintain our position in the market. This strategy also includes continuous investment in training our employees, so as to support their personal and professional growth and to increase their participation in the company's success.

Let me thank all of you, our employees, customers and partners, for your trust and cooperation over the past year. Positive mutual communication and teamwork have enabled us to successfully follow the path we chose. I believe that these values are crucial for maintaining strong relationships, and for that reason Slovanet will continue developing them, now and in the future.

Peter Máčaj
Chairman of the Board of Directors and Chief Executive Officer
Slovanet, a. s.