Doha, Qatar – 1 June 2004

1. Challenges and Opportunities in Financing the Current Expansion Phase in the Arab Telecom IndustryPresentation made by NBK to Doha, Qatar – 1 June 2004

2. Growth in mobile subscriber base in the Arab world has historically under-performed the global growth; however, projected growth is expected outpace global growth Global Subscribers Arab Subscribers 80% 100% 186% 94% Source: Deutsche Bank Source: Arab Advisors Group estimates, EMC estimates

3. The mobile market in the Arab world is currently under-penetrated compared to international peers Arab World Weighted Average Penetration Rate in 2003 is: 15% Peer Group Weighted Average Penetration Rate in 2003 is: 58% Source: Arab Advisors Group estimates, EMC estimates, Gulf Investment Corp. estimates, NBK estimates

4. Mobile penetration in the Arab world is expected to almost double over the next three years… Source: Arab Advisors Group estimates, EMC estimates, Gulf Investment Corp. estimates, NBK estimates

5. … leading to a doubling in the subscriber base Arab World Subscriber Distribution 2003 Arab World Subscriber Distribution 2006 Total Subscriber Base 66.5 million Total Subscriber Base 33.3 million Source: Arab Advisors Group estimates, EMC estimates, Gulf Investment Corp. estimates, NBK estimates Source: Arab Advisors Group estimates, EMC estimates, Gulf Investment Corp. estimates, NBK estimates

6. Subscriber base is expected to grow by 33.2 million to 66.5 million at year-end 2006, with the most rapid growth coming from North Africa Source: Arab Advisors Group estimates, EMC estimates, Gulf Investment Corp. estimates, NBK estimates

7. To cope with projected subscriber growth, mobile operators in the Arab world are expected to spend approximately US$ 8.3 billion over the next three years Source: NBK estimates

8. Over the next three years, we projected : subscriber growth of operators the internal cash generation of operators the dividend distribution levels of existing operators the network CAPEX requirements of operators the equity requirements of new operators Out of the US$ 8.3 billion investments in network CAPEX over the next three years, only US$ 2.8 billion (or 34%) will be required from external sources Network CAPEX Financing Sources Total Network CAPEX Requirements (2004-2006) is equal to US$ 8.3 billion US$ 2.8 billion US$ 5.5 billion Source: NBK estimates

9. The market structure in Arab world: We expect 3 new licenses and 3 existing regional licenses to become national between 2004 and 2006 Country Current Market Comments Structure Saudi Arabia Monopoly A new license is expected to be granted in H2-2004 Oman Monopoly A new license is expected to be granted in H2-2004 Bahrain Duopoly MTC-Vodafone Bahrain commenced operations in Dec-2003 Kuwait Duopoly Talks about a 3rd license. Market is too saturated to support new entrant U.A.E. Monopoly Despite recent announcements, 2nd operator is not expected before 2007 Qatar Monopoly Monopoly is expected to continue over medium-term Iraq Regional Monopolies 2-year licenses. Regional exclusivity expected to end at YE 2004.National coverage Egypt Duopoly TE bought 25.5% of Vodafone Egypt. TE restricted from GSM until 2007 Algeria Competitive 3 operators Tunisia Duopoly Morocco Duopoly 3rd mobile license might be bundledwith new fixed line license expected in 2004 Lebanon Duopoly Government owns mobile assets. Operators have management contracts only Syria Duopoly A controlled duopoly Jordan Duopoly Turnout for 3rd license disappointing. Radio Trunking operator expected in 2H-2004

10. We expect the telecom sector to inject US$ 950 million in equity over the next three years Equity Injection is equal to US$ 950 million Saudi Arabia* US$ 500 million Oman US$ 100 million Iraq US$ 200 million Morocco US$ 150 million Source: NBK estimates * Excludes any additional equity that may be required for financing license fees/costs for Saudi Arabia

11. The residual external financing of US$ 1.9 billion is expected to be funded through debt + = Equity Injection is equal to US$ 0.95 billion Debt is equal to US$ 1.89 billion External Funding Sources is equal to US$ 2.84 billion Source: NBK estimates Source: NBK estimates Source: NBK estimates

12. We expect debt requirements in the telecom sector in the Arab world to amount to US$ 1.89 billion over the next 3 years, coming mostly from newly established operators NORTH AFRICA US$ 660 MM GCC* US$ 330 MM EGYPT US$ 390 MM IRAQ US$ 270 MM THE LEVANT US$ 240 MM + + + + Sources of Debt * Excludes any debt that may be required for financing license fees/costs for Saudi Arabia Bank Borrowing & Debt Securities Vendor Financing Source: NBK estimates

13. We see no financing challenges in the Arab mobile telecommunication sector over the next three years. Banks should not expect a significant rise in lending to telecoms … Reason 1 Reason 3 Reason 2 Operators are cash rich, especially in the GCC New market entrants are sponsored by regional and international operators with strong balance sheets and high negotiation power with suppliers, especially when it comes to vendor financing Incumbent mobile operators have strong and sustainable cash flows from operations

14. … however, financial institutions can play other important roles in the telecommunication sector in the Arab world Role 1 Role 3 Role 2 Role 4 Provide financial advisory services in M&A transactions Provide operators with acquisition finance Provide placement services through IPOs Provide capital restructuring advice and financing

15. The NBK’s experience with MTC: Selected transactions Financial advisory services Acquisition finance Capital restructuring advise & finance Apr 2003 Jan 2003 Jan 2004 Jan 2003 US$ 424 million acquisition of Fastlink by MTC The Second Mobile License in the Kingdom of Bahrain Arranged US$ 300 million in acquisition finance to acquire Fastlink Advised MTC on the optimal capital structure of Fastlink Dec 2003 Oct 2003 The contemplated acquisition of the 2 mobile businesses in Lebanon The 2-year Mobile License in Iraq