BAYAN categorically denies the accusation by Extelcom that Bayan and Multi- Media Telephony Inc. (MTI) are a merged entity, and that based on this, a “deceptive strategy” was employed to capture the last 3G frequency.

Bayan and MTI also categorically deny any plan under which all assets and operations of Bayan would be consolidated under MTI. Any such plan would not have been possible to execute without having secured prior approvals from regulatory agencies, Bayan’s creditors and the Rehab Court. Bayan and MTI have not merged into a single entity. Bayan and MTI operate as two different companies.

However, Bayan and MTI have an existing cooperation agreement to share resources relating to the operation of Bayan’s CDMA wireless landline network. This allows Bayan CDMA customers to expand the usable area for their wireless landline service. The agreement includes revenue sharing and co-branding arrangements. It is also not unusual in the telecom industry to share resources in the interest of providing quality service to its customers and the public in general (co-location, sharing of backbone capacity, interconnection, etc.) Bayan and MTI in the past had contemplated consolidating their wireless assets subject to the necessary government, creditor and court approvals. Both companies had decided not to pursue this consolidation. To reiterate, outside of the CDMA asset sharing agreement, both companies continue to remain separate legal entities. As such, MTI and Bayan have legal rights to separately pursue their respective 3G applications.