• Local services – RUR 1 269 mln (37,3 % of total investments);
• Long distance services – RUR 744,5 mln (21,9 %), including
  • Intra-zone lines – RUR 656,7 mln (19,3 %),
  • Automatic exchanges – RUR 87,8 mln (2,6 %).
• Mobile services of GSM900/1800 standard – RUR 581,9 mln (17,1 %);
• New services – RUR 252,4 mln (7,4 %);
• Other services – RUR 551 mln (16,3 %).

• Local telephony installations – 142,5 thousand lines, including
  • Urban lines – 137,7 thousand,
  • Rural lines – 4,8 thousand.
• Long-distance telephony installations – 830,6 km, including
  • Intra-zone optical fiber lines – 261,4 km.
  • Intra-zone radio microwave lines – 569,2 km.
  • Automatic exchange channels – 16,1 thousand;
• Mobile telephony installations (GSM900/1800) – 454,0 thousand lines.

1. Capacity extension and upgrade of local fixed-line networks, based on packet switched networks and optical access technology
Over the reported period, the company has continuously extended and renovated its exchange facilities and implemented new network lines across all the regional divisions. 4Q 2003 is expected to extend the fixed-line capacity by another 201,6 thousand lines, thus bringing the annual installations in fixed-line capacity to around 356 thousand lines. 200 thousand of above lines will constitute net additions, whereas 156 thousand will replace obsolete exchange capacity for digital equipment.

2. Development of GSM900/1800 networks
The planned annual increase of GSM network capacity totals 614 thousand lines. The networks will be extended in Perm, Tyumen, Khanty-Mansyiski and Yamalo-Nenetski regional divisions of the company. As of year-end, the installed GSM capacity will reach 1,2 mln lines.

3. Deployment and expansion of intra-zone optical and radio microwave transport networks
The development of transport network is based on building the optical fiber and radio microwave lines. In the 4Q 2003 we expect to introduce another 2 890 km of such intra-zone lines, including 1 100 km of radio microwave lines and 1 790 km of optical fiber cabling.

4. Radio access systems
The radio access systems of CDMA (IS-95) and DECT standards have been successfully used to ensure that suburb areas are covered with telephony services, along with areas where traditional fixed-line services are not cost-efficient. The CDMA networks have been deployed in Chelyabinsk and Tyumen divisions. In terms of capacity, as of 9M 2003 the network of this standard is comprised of 19 thousand lines, with plans to increase it by 4,5 thousand lines by the end of the year.
DECT is employed in Perm, Kurgan, and Khanty-Mansyiski divisions. Over 9M 2003 the company has put in operation 38,4 thousand lines of this standard. DECT installations in 4Q 2003 will total 30 thousand lines to be put in operation in Ekaterinburg division.

The overall Capex in 2003 is expected at the rate of RUR 7,4 bln, except for the expense of acquisitions of subsidiary businesses. The revenue target as of 2003 is RUR 19,3 bln.