Krasnodar, 14 April 2006 – Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; OTC USA: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that on 14 April 2006 holders of UTK series 03 bonds (UTK-03?b., ISIN RU000A0DD202) did not use their right to submit series 03 bonds for the redemption that proved the attractiveness of the bond issue for investors and market players. According to the Decision on 03 series bond issue (Minutes N 39 of 28 June 2005), the third coupon was callable from April 3 to 7, 2006.  The call option was to be exercised on 14 April 2006 but no notification of intention to sell UTK series 03 bonds was submitted.

Earlier, the Company’s Board of Directors assigned a 10.9% interest rate to the fourth, fifth and sixth coupons of its 03-series bond issue (Minutes ? 28 ?f 24 March 2006) providing for Rub 54.65 payable on one bond.

Estimating fairly the Company’s performance results and development prospect, most investors considered the declared coupon to be attractive and expressed their confidence in the Company as none of 03-series bonds had been presented for the redemption.

Information about the bond issue:

UTK’s issue of 03-series non-convertible interest-bearing documentary pay-to-bearer bonds is for a total of RUR 3.5 bln with maturity of 5 years (1830 days), semi-annual coupon periods (183 days) and a buyback option every year and a half. The interest rate of 12.3% per annum on the  first, second and third coupons was fixed at the bond placement (October 6, 2004, MICEX). The coupon rate for coupons 4–6 was set at 10.9% per annum by the Company’s Board of Directors (Minutes ? 28 of 24 March 2006). The coupon rate for coupons 7–10 is to be set by the Company no later than 10 business days prior to the redemption date of the sixth coupon. The state registration number is 4-07-00062-? dated August 17, 2004, trading codes are UTK-03?b., ISIN RU000A0DD202. Arranger of series 03 bond issue is AKB Rosbank. Co–arranger of the bond issue is Promsvyazbank. Financial Consultant is  FFK. UTK-Finance Ltd. acts as UTK’s underwriter. Additional information on the issue can be obtained here.