According to the OJSC MGTS General Director Mr. Vladimir S. Lagutin's estimation, the project, in terms of its scale and level of sophistication, does not yield to any similar overseas one, and permits us to speak not in terms of the future, but in terms of the present tense, about the undertaking.

According to the results of the tender, CISCO Systems and Lucent Technologies were named equipment supplier companies, and AMT Group, a Russian telecommunications company, was selected as the system integrator.

At the first phase, May - December 2000, a pilot network was deployed based on ADSL (Asymmetrical Digital Subscriber Line) technology that successfully passed the trial operation. The basic technology utilized was the one enabling, along with the traditional data services, to introduce most promptly the newest telecommunications services, and to most optimally control the quality of subscriber servicing. Access to the network is achieved through the OJSC MGTS existing cable distribution network, which makes it possible to set up a broadband digital data channel in parallel with the current city telephone infrastructures. It was established at the first phase of the project implementation that the condition of the OJSC MGTS cable network conformed to the requirements set forth by the Company, bearing in mind its selected technology. Besides, all
the technical details of the project were adjusted, with the appropriate marketing research conducted and summarized that showed the presence of a stable effectual demand for the broadband access services.

At the second phase of the project implementation, in 2001, a backbone core of the data network was built with ten (10) powerful packet switch nodes that were interconnected via fiber optic lines by means of STM16 and STM4 channels (representing IP/MPLS [Multi-Protocol Label Switching] and ATM [Asynchronous Transfer Mode] technologies respectively). At the present moment, the number of the access nodes was increased up to One Hundred and Sixty (160) structures. And at the third phase, the implementation of which is to be completed by late 2002, the public data network will become accessible to the customers in 98% of the Moscow area.

In the near-term perspective, OJSC MGTS intends, in order to furnish physical persons with a high rate access, to actively develop technologies of collective interconnection to ADSL lines ("Home PNA" technology). The cost of this specific service will be comparable with the charge for interconnection via the switched lines, but the quality of the service stands close to that of a dedicated line. Furthermore, plans are made in the current year to start providing additional telephone numbers of the city network via the data network ADSL channels based on the "voice atop of IP" technologies.

The development of new services overlaying the basic service furnished by the data network and being provided by OJSC MGTS in partnership with the manufacturer companies or jointly with the owners of the application resources and services, is yet another field of the Company's activity. These are, first and foremost, the services resting on an on-line exchange of video and audio information such as telemedicine, teletraining, interactive TV, video broadcasts on demand, and the services ensuring the operation of electronic payment systems employed in retail trade, etc.

OJSC MGTS is also engaged in mastering the other promising technologies, primarily those of spectral multiplexing of DWDM (Dense Wavelength Division Multiplexing) optical lines. The application of such technology in the OJSC MGTS transport network will enable to increase the capacity of its fiber-optic cables by dozens of times.

The DWDM networks are fundamentally new ones where the information is switched, routed and transmitted by means of wavelengths. In 2002, the Company contemplates conducting large-scale equipment tests, determining the interfaces to be used between the DWDM fiber-optical network and the SDH digital one. The DWDM fiber-optical network will enable the creation of an integrated information transfer environment to provide users with high quality broadband services.

Thus, OJSC MGTS is gaining a foothold in this high-yielding sector of the telecommunications services market.