On April 28 bidding to determine the rate of the first semi-annual coupon of MGTS first issue bonds was held at Moscow Interbank Currency Exchange. As of the bidding results the rate of the first coupon was set by the issuer at the annual rate of 10 %. Bonds effective yield at placement amounted to 10.25 % for 2 years.

The total bid amount was RUR 3.076 billion exceeding the issue volume by 100 %. Bids ranged between 8.50 % and 12.50 % per annum. 44 bids were received, 23 covered for a total of RUR 1.370 billion. RUR 130 million of par bonds were sold during the trading session through Moscow Interbank Stock Exchange trading system after the bidding ended.

Placement proceeds will be used to finance Moscow PSTN reconstruction and upgrade program.

The issue managers are Foreign Trade Bank, Reiffeisenbank Austria and The Moscow Bank for Reconstruction and Development. The Moscow Bank for Reconstruction and Development is the issue’s underwriter. The Federal Fund Corporation is the issue’s financial adviser.

The issuer set the bonds coupon rate at the first coupon rate for first two years. The rates for subsequent coupons will be set by the issuer ten days prior to the date of payment of the fourth coupon.

The RUR 1.5 billion par issue was registered by the Federal Securities Commission of the Russian Federation on March 23, 2004. The bonds mature in 5 years. According to issuer decision, the bonds owners have right to bring them to long-term pay-off after 2 years - at the date of payment of the fourth coupon - on April 26, 2006.

----------------------------------------------------

PJSC Moscow City Telephone Network is one of the biggest not only in Russia, but among the local wire telecommunications companies in Europe too. The Company's continual priority task is to provide quality telephone communication accessible to the millions of the Russia's capital-city inhabitants. The MGTS personnel of 20 000 persons supply services to about 4.2 million subscribers. The telephone density in Moscow conforms to the European standards - over 50 MGTS telephones per 100 metropolitan residents. There are about 600 MGTS telephone exchanges in operation, and their number increases year by. There are presently 18 000 pay stations available at the Company's public payphone network. To date, the MGTS share amounts to 80% in the Moscow fixed telecommunications market. The dynamic development of the Company is noted for its stable economic situation, prescheduled on-going income growth rate, and for the amount of provided services on the upgrade. The Central Office of PJSC MGTS is located in Moscow at 12, bdg. 3, Petrovskiy Boulevard, Moscow, Russia. The Company's Internet address is www.mgts.ru.

For further details, please approach the Department of Information and Public Relations - PJSC MGTS.
Tel: +7 (095) 950 0623, fax: +7 (095) 950 0622,
E-mail: pressa@mgts.ru