JSC Svyazinvest

 INFORMATIONAL DEPARTMENT

 119121 Moscow, Plyushikha St. 55, building 2, tel:(095) 727-04-18/fax (095) 727-04-75

E-mail: pr@svyazinvest.ru

 December 25, 2001                                                                                  Moscow 

On December 25^th the Anti-Monopoly Ministry passed a resolution to approve an application by OJSC Dalsvyaz (before November 26, 2001 referred to as Elektrosvyaz, Primorsky krai) to authorize a merger of six operators in the Far East Region.

Thus, in accordance with Article 1.17 of the RF Law "On competition and the limitation of monopoly activities on trade markets" the Anti-Monopoly Ministry of Russia reviewed a petition by Dalsvyaz to allow OJSC Amursvyaz, OJSC Sakhalinsvyaz, OJSC Kamchatsvyazinform, OJSC Elektrosvyaz, Khabarovsk krai, and OJSC Telephone and Telegraph Company of the Jewish Autonomous Republic and adopted a decision to approve this petition.

In order for the Anti-Monopoly Ministry to approve the petition the following terms and conditions must be met: 

·        to merge other operators to local networks on comparable technical and economic terms, making sure that related information is made available to the mass media on a permanent basis;

·        to ensure that measures are taken within six months from the time when the Anti-Monopoly Ministry approve the merger, to organize various types of regulated business activity in the field of telecommunications for OJSC Elektrosvyaz, Primorsky krai, while making sure that OJSC Dalsvyaz does not establish or intensify a dominant position on non-regulated trade markets;

·        not to allow OJSC Dalsvyaz to adopt a discriminatory position vis-?-vis other telecom operators which are directly or indirectly controlled by OJSC Dalsvyaz and/or OJSC Svyazinvest;

·        not to allow discriminatory access for cellular or other operators, or companies which provide electronic data transmission services to lines or switching centers offering connections with local, long-distance and international traffic, and to maintain equal access conditions to the above-mentioned switching points;

·        not to allow any reduction in quality or volume of consumer service, to upgrade and develop telecom networks, including remote and rural areas;

 JSC accepted all of the aforementioned obligations.  

For the record: the merger issue was dealt with by OJSC Amursvyaz shareholders back in June 2001 (the merger was approved by an EGM on the second attempt in September).  The company submitted a petition to take part in the Far East merger to the Anti-Monopoly Ministry on July 25^th. 

In October shareholders of OJSC Elektrosvyaz, Primorsky krai made amendments to their founding documents and approved the company's new name as OJSC Dalsvyaz.  

 Note:

Far Eastern operators of OJSC Svyazinvest service a territory of 6,215.9 thousand square kilometers with a population of 7,345.6 thousand people.

 The total amount of lines in service stands at 998.18 thousand.

 The total amount of revenue generated from sales of telecom services for the first nine months of 2001 was Rub 2,914,822, 000.

Capitalization of the mega-regional company currently stands at around $50 mn.  This amount is expected to rise, according to telecom analysts.