A management meeting was held between Artelecom, Electosvyaz of the Karelia Republic, and the Securities Division of Svyazinvest with equity analysts from investment companies and journalists. With active support from its shareholders (Svyazinvest and AIG Brunswick Millenium Fund) Artelecom has worked out a long-term program to upgrade its management system, the purpose of which is to enhance the company's performance. The implementation of this strategic management program will enable the company to finance its branches and improve its overall financial standing, monitor expenses and use of resources; optimize financial flows and operative management of business processes based on permanent cost-cutting techniques. The program also envisages phasing in International Accounting Standards (IAS) for the company's financial statements.

During the meeting, Artelecom discussed the results of its 2000 financial activities within the framework of international accounting standards and financial statements. The speakers focused special attention on the participation of Artelecom and Electrosvyaz of the Republic of Karelia in the merger of telecom operators operating in the North-Western Region, which should be completed by the summer of 2002. Enhanced performance is anticipated as a consequence of the merger process, which should help raise telecom investments both in the Arkhangel Region and the entire North-Western Region. In addition, Artelecom specialists discussed the effects of phasing in a budget system that was implemented in partnership with Arthur Andersen. The project received an excellent rating by experts and in addition to strengthening the economic framework of Artelecom, should also prove to be be a worthy contribution to the emerging company.