Telekom Austria has announced that it is transferring 500 of its landline staff to the local police force. As a former state-owned company, the staff have civil servant status and cannot be made redundant, but are also no longer required by the company thanks to technology changes. Hence the agreement to transfer them to another arm of the state.

"This agreement is ground breaking as it is the first of its kind and creates a win-win situation for all parties: It addresses one of the key issues for a sustainable development of Telekom Austria Group and offers our civil servants a positive perspective for their future careers. Plus, it supports the Austrian police force to make Austria more secure", says Hannes Ametsreiter, CEO Telekom Austria Group.

According to this agreement up to 500 out of 6,100 civil servants employed by the Fixed Net division may apply to the police force to take on administrative tasks. After six months and provided a positive assessment the civil servants may apply for a permanent transfer to the police force and cease the right to return to Telekom Austria Group.

Telekom Austria Group will pay the salaries of the civil servants transferred to the police force until June 30, 2014 and will compensate the civil servants until retirement for a potential shortfall of salary and pension contribution including an extra allowance of EUR 6,000 per year for transferring to the police.

"This agreement constitutes a major milestone in the ongoing restructuring of the Fixed Net in a socially responsible way. It will have a positive impact on cash flow from mid 2014 on as each civil servant transferred to the police force will lead to a significant cash saving over his remaining average 17 years of work life," adds Hans Tschuden, CFO Telekom Austria Group.

The agreement will not impact the financial results 2009 and the net debt position of the company. The impact on the financial results of Telekom Austria Group in 2010 and beyond depends on a number of factors, including age, salary, time of transfer to the police, but most importantly assignment to the Fixed Net operations or the idle work force and can only be assessed upon the final transfer of the civil servant.

Telekom Austria will provide an update on the uptake of the program in due time.