Dear shareholders,

At present OJSC Sibirtelecom is a traditional telecommunications service operator with a wide range of telecommunication services. The largest share of revenues comes from regulated telecommunications services, whereas highly profitable services comprise no more than 6% of total revenues. In line with the approved strategy of developing highly profitable services, the management of Sibirtelecom plans to strengthen its position on the market for these services: mobile business, Internet access and data transmission.

In connection with this, Sibirtelecom plans to acquire a 49% ownership interest in CJSC Eniseytelecom and CJSC Baikalwestcom, which are the two leading mobile operators providing services using the GSM 900/1800 standard in Krasnoyarsk krai, the Republic of Khakassia and Irkutsk region.

Completing these transactions along with the development of existing licenses for mobile services in Kemerovo region and the Republic of Buryatia will create a strong base for further development of Sibirtelecom’s mobile business. Moreover, the successful closing of these transactions will lead to full business consolidation (Sibirtelecom currently owns 51% stakes in the companies).

The acquired companies are already successful, with healthy financials as well as a strong customer base. Sibirtelecom management believes that the full-scale integration of mobile companies into Sibirtelecom will lead to accelerating growth, which in turn will be reflected positively in the share price of Sibirtelecom.

According to the laws of the Russian Federation, these particular transactions have to be approved by shareholders by means of absentee voting. The results of the shareholders’ voting will be tabulated and made public on February 12, 2003. OJSC Svyazinvest, a major shareholder of Sibirtelecom, will not participate in the voting process due to its affiliation with the seller – Russian Telecommunications Development Holdings Corporation.

For the successful development of Sibirtelecom, management kindly asks you to actively participate in the voting on the issue and vote FOR the proposed transactions. Failure to participate in the voting effectively means voting against these transactions, which represent a strategic priority for the company. 

Sincerely,