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Moscow City Telephone

March 25, 2003

The Public Joint Stock Company Moscow City Telephone Network (MGTS) has fully resolved by the present moment a bottleneck problem of obtaining trouble-free access to long distance and international lines, including that to cellular operators' networks through their dedicated dialing codes.

During 2001-2002, the problem of failures in obtaining access to index "8" that arose as a result of impetuous development of federal standards for the cellular operators, was resolved by PJSC MGTS at the expense of its own. An extensive work was done by the Company for increasing the number of trunk lines at all its telephone exchanges in Moscow to ensure long distance and international interconnections along with building digital channels. In particular, component equipment of SDH transmission systems was deployed at ten (10) PJSC MGTS backbone transit nodes, with new optical paths set up and new optical fiber cables laid by the Company's specialists. Besides, reorientation of trunk lines at all the telephone exchanges in Moscow was made with the lines increasing in number; new line paths were constructed and the existing ones were changed over. In order to implement the project, the Company purchased and installed the equipment supplied and manufactured by Strom Telecom and ECI Telecom companies. By early 2003, Ninety-Nine per cent (99%) of PJSC MGTS telephone exchanges were transferred to a new communication management system based on the Company's digital transport network. The total cost of the project has made up Twenty Billion US dollars (US$20,000,000,000.-) approximately.

Thus, the number of trunk lines to gain access to long distance and international lines has been increased by five times, thereby reducing index "8" subscriber interconnection failures practically to zero.

Bearing the above-stated in mind, the Public Joint Stock Company Moscow City Telephone Network (MGTS) believes the claims voiced by some cellular operators in connection with the Moscow authorities' criticizing the quality of their services to be absolutely groundless. In the view of PJSC MGTS leadership, the quality of services provided by cellular operators is fully dependent on the technical condition of their networks.

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