Elcoteq Lowers Growth Forecast to 40%

Elcoteq has lowered its full year 2003 net sales growth forecast from the previously announced level of 60% to 40%. The main reasons for the change are slower economic development in China due to the SARS epidemic and the weakening of the US dollar. Based on the current outlook the company estimates that its full-year net sales will reach approximately EUR 2.5 billion. Elcoteq further estimates that its full-year result in 2003 will be an improvement compared to the previous year.

Elcoteq estimates today that its second-quarter (April-June) net sales will total approximately MEUR 500 having been MEUR 425 a year before.

Roughly 30% of Elcoteq's manufacturing capacity is situated in China and therefore the impact of the SARS epidemic on the general level of demand in China is clearly visible in Elcoteq's operations. Although the number of SARS cases is now on the decline, the unwillingness of the population to travel and spend has had a permanent effect on demand in 2003. This effect will be particularly evident in demand during the second quarter ending June 30. The SARS epidemic has had no direct impact on Elcoteq's manufacturing plants as no SARS cases have been noted in the company.

The weakening of the dollar against the euro will reduce the company's euro-denominated net sales. The dollar's exchange rate will be felt most keenly in net sales of Elcoteq's operations in China, where invoicing is dollar-linked. Elcoteq's net sales in Europe are not immune to the impact of the dollar either since a substantial quantity of dollar-priced components are used in Europe. However, Elcoteq's product pricing model takes account of exchange rates, and changes in the value of the dollar will have no significant effect on Elcoteq's result as long as net currency hedging is appropriate.

CEO's comments

"We had no chance of taking the SARS epidemic into consideration when planning the year at hand. Another factor slowing sales growth during the first months of the year is the general economic uncertainty resulting from the war in Iraq. Where our financials are concerned, however, our main focus continues to be on positive earnings per share development," noted Elcoteq's President and CEO Lasse Kurkilahti.

"We will continue to pursue our strategy of concentrating on communications technology products and customers through active sales work to gain new accounts. We are also assessing the feasibility of implementing consolidation measures that could improve Elcoteq's position," Kurkilahti said.

ELCOTEQ NETWORK CORPORATION

Osmo Kammonen

Senior Vice President, Communications and IR

Further information:

Mr Lasse Kurkilahti, President and CEO, +358 10 41311

Mr Osmo Kammonen, Senior Vice President, Communications and IR, +358 10 413 1406, GSM +358 50 593 0770

Elcoteq will publish its interim report for January - June at 9.00 (Eastern European Time) on August 7, 2003.

Elcoteq Network Corporation is the largest European electronics manufacturing services (EMS) company and one of the global leaders in its field. The company focuses on communications technology products and customers. Elcoteq provides globally end-to-end solutions consisting of design, NPI, manufacturing, supply chain management and after-sales services for the whole lifecycle of its customers' products. The company operates on three continents in 12 countries and it has over 10,000 employees. Elcoteq's consolidated net sales in 2002 totaled MEUR 1,840. Elcoteq Network Corporation is listed on the Helsinki Exchanges. More information on the company at http://www.elcoteq.com.