The Board of Directors of OJSC VolgaTelecom approved a resolution to launch a bond issue and the issue prospectus for the bonds to be circulated by OJSC VolgaTelecom, which is to be submitted to the Federal Securities Commission of the Russian Federation on January 4, 2003.

The company plans to issue 1,000,000 bonds with a nominal value of rub 1,000 each in the form of interest-bearing document bonds, series BT-1.  The total value of the issue is rub 1 billion.

The arranger and payment agent of the issue will be MDM Bank, the co-arranger will be ZAO Web Invest Bank and the project coordinator will be OJSC Svyazinvest.

The bonds are to be issued on the Moscow Inter-Bank Currency Exchange in February 2003.  The term to maturity of the issue is  three years, and payments are to be made on a quarterly basis.

The main objective of the bond issue is to raise the company's level of profitability.  At present, OJSC VolgaTelecom is preparing to embark on a series of large-scale and highly-profitable telecommunications projects aimed at developing the telecommunications resources of the Volga Federal District.  All funds derived from the issue are to be allocated to expansion of the company's cellular business, and implementing projects to create a multi-service telecommunications network.