STC rendered telecom services for a total of RUB 1,794.3bn during the first nine months of the 2001 reporting year. This figure is up RUB 405 mn (29.1%) compared to the year-earlier period. A stabilizing economy and lower inflation have enabled the company to raise its market share by 3.2%.

New types of telecom services are also being phased in as a result of the upturn in the industry, alongside traditional business. Thus STC's new telecom services generated RUB 67.4mn in the first nine months of 2001, which is up 70% y-o-y.

To a large extent, STC has managed to stay competitive for a number of years (1999 - 2001) due to its strict production expense control, which has allowed the company to consistently maintain high earnings. During the reporting period the company posted revenues of RUB 498.5mn, while pre-tax profit was RUB 378.1mn. After switching over to a new accounting methodology, which involves reporting expenses at the end of Q3, the company has been able to raise its profit margins, as follows:

• revenue - 26.6% (vs. 3Q 2000 - 24%);

• pre-tax profits - 27.4% (vs. 3Q 2000 - 26.5%).

STC's Q3 01 financials once again show that the company is in sound financial condition and is an attractive play for foreign investors.