JSC North-West Telecom has summed up the results of its financial and business activities for the year 2006 according to the Russian Accounting Standards (RAS).  

According to the results of 2006, the revenue of the Company have grown by 1% as compared to the previous year and amounted to RUR 20,524.7 million.

The prime cost of the sold services was RUR 15,307.9 million, which is 7.7% less than in 2005. Revenue from communication services sales have grown by 37% and reached RUR 5,216.8 million.

The main drivers of the growth of JSC North-West Telecom's revenue from communication services in 2006 were: new services and the interconnect services. Thus, the revenue from new services in 2006 was RUR 1,829.6 million, which 83.8% more than in 2005, while the revenue from interconnect almost tripled in 2006 and yielded RUR 3,620.5 million to the Company. At the same time, because of the introduction of new rules of interaction between communication operators, NWT has lost its income from long-distance/international communication.

JSC North-West Telecom's net income for 2006 has exceeded RUR 2,618.3 million, which is 42% higher than in 2005. EBITDA has grown by 27.2% as compared to the previous year and amounted to RUR 6,936.3 million; EBITDA margin has reached 33.8%, having exceeded the figure of 2005 by 7 percentage points.

JSC North-West Telecom's investment in 2006 amounted to RUR 5,003.0 million. 117.2 thousand DSL ports, 83.65 thousand telephone numbers and 1,571 km of fibre-optic communication lines were put into operation in 2006. The network digitalization level has reached 56.6%. For 2006 the queue for installation of telephone communication facilities was reduced from 109.3 thousand to 58.7 thousand unsatisfied applications (taking into account the newly filed applications), the percentage of unsatisfied requests in the installed capacity having been reduced to 1.2%.

In 2006 North-West Telecom was actively increasing the subscriber base of the Avangard service. For the year it grew almost 9 times and has exceeded 91,000 clients.

Commenting on the results of 2006, Venera Khusnutdinova – Deputy General Manager – Chief Financial officer of JSC North-West Telecom, noted: "2006 has been a successful year for us: in spite of the numerous legislative changes in industry regulation (liberalization of the telecommunications market, introduction of the CPP principle, etc.), the Company has succeeded in completely making up for the lost revenue from international and long-distance communication services and in finally reaching positive dynamics of revenue as compared to the year 2005. A strict cost control and efficient implementation of the marketing strategy have made it possible for us to improve business efficiency and to ensure a significant growth of net income."

The Balance Sheet and the Profit and Loss Report of JSC North-West Telecom for the 2006 have been published on the corporate site of JSC North-West Telecom in the "Economics and Finance" section.

* The data of the financial reporting for the year 2006 have not been audited.