On September 14, 2010, Governor of Novgorod Oblast Sergey G. Mitin and General Manager of North-West Telecom Vladimir A. Akulich had a meeting in Veliky Novgorod. During the meeting, the results of the “Agreement on Cooperation Between the Administration of Novgorod Oblast and JSC North-West Telecom” (hereafter “the Agreement”) signed on December 7, 2007 were discussed, and the prospects of communications development in the region for 2010-2011 were reviewed.

The parties noted that all the obligations stated in the Agreement are being fulfilled in full, the interaction under the Agreement has been efficient and has enabled successful handling of issues of infocommunication development in the region.

The result of the meeting was a review of the interim results of fulfillment of the Agreement. Te following aspects of cooperation between the Novgorod Oblast Administration and N.W.Telecom were considered the most important:

- maximum satisfaction of the individuals’ and corporations’ demand for communication services;

- higher digitization of communication networks in Novgorod Oblast for the purposes of generation of a unified information/telecommunication space in Russia;

- construction of new fiber optic communication lines (FOCL);

- implementation of new technologies and services, construction of multiservice networks;

- implementation of socially important programs and projects in Novgorod Oblast;

- interaction and information exchange to ensure public security and assistance in counter-terrorist activity;

- interaction in setting up a common telecommunication network for the executive authorities of Novgorod Oblast.

Since 2002, i.e. since the time of establishment of N.W.Telecom, the Company has invested over 3.193 billion rubles in the communication infrastructure of Novgorod Oblast . The number of telephone sets in the oblast reached 222,200 as of September 2010, and the digitization level of the local network approached 64 %. In the same period, over 1200 km of fiber optic communication lines were laid in the oblast, and the installed capacity of the multiservice communication network was extended by putting into operation over 60,000 ports for broadband Internet access.

Apart from developing the region’s engineering infrastructure and implementation of new technologies and services, N.W.Telecom does much for social responsibility of the business, actively contributing to socially important projects. For instance, under the Education priority national project, N.W.Telecom connected 253 schools of Novgorod Oblast to the Internet in 2006-2007. In June 2008, implementation of the all-in-one telephone services with the use of payphones was completed. The number of all-in-one payphones installed in the region has reached 3329, and over 1563 of them are installed in remote restricted-access communities of Novgorod Oblast with no telephones installed before.

Another, and no less important, regional project, in the development and implementation of which North-West Telecom invested over 8.5 million rubles in 2008, is the project of setting up an oblast video conference (VC) network for municipal entity heads, and a Mednet regional information network for medical facilities. The project continued to develop in 2009-2010. Currently, the VC service is provided in the oblast center and 14 district centers of Novgorod Oblast . Three more districts, Novgorod, Poddorye, and Pestovo, are currently being connected. By the end of 2010, the VC service will be available in all districts of Novgorod Oblast.

The new “pilot” socially important project with contribution by N.W.Telecom in the near future will be implementation of the unified social card of a Novgorod Oblast resident, in Khvoininsky District as the initial phase. The project is a part of the governmental program providing for development of electronic money circulation, and is not only of social but also of great economic importance for Novgorod Oblast . Its purpose is to raise the whole spectrum of banking and social services provided to residents to a higher level. The principal role in the implementation of the unified social card will belong to Novgorod Branch No. 8629 of the Savings Bank of Russia. N.W.Telecom will be a partner to the project.

Discussing the plans for the future, General Manager of N.W.Telecom Vladimir Akulich informed that N.W.Telecom would “continue investing considerable money in the updating and expansion of the region’s telecommunication network, actively implementing new advanced technologies, and providing advanced services to residents and corporations of Novgorod Land. The Company intends to replace the obsolete telephone exchanges with digital facilities all over the North-West in 2011. 141 exchanges will be replaced in Novgorod Oblast, enabling the regional N.W.Telecom branch to expand the range of advanced telecommunication services offered to rural individuals and corporations, and to improve their service quality.”

The Governor of Novgorod Oblast thanked N.W.Telecom for the work done, emphasizing the urgency and importance of all the projects and the necessity of their further development.

By the end of the meeting, Governor of Novgorod Oblast Sergey Mitin, acting on behalf of the RF President, ceremonially handed a State award, Medal of the Order for Merit for the Fatherland, 2nd Class, to Nikolai Pavlovich Yemelianov. Mr. Yemelianov has worked for the communications industry for nearly 40 years. For over 20 years he headed Novgorod Oblast’s communication system, which “literally from the zero level has set up a viable telecommunication infrastructure providing the full range of most advanced communication services to the region’s corporations and residents.”

* From 2002 till 2010 N. P. Yemelianov headed the Novgorod Branch of N.W.Telecom, from 1994 till 2002, JSC Novgorodtelecom, and from 1989 till 1994, Novgorod Oblast Communication Engineering Department.