The Board of Director's decision reflects two main issues:

1. At present OJSC Central Telegraph is a dynamically expanding company which is active in the Moscow Region telecom market and which is positioned to offer its customers a comprehensive and integrated range of telecom solutions using advanced technologies.  Along with traditional areas, this telecom operator provides digital telephone services, data transmission and ISP based on tariffs which are not regulated by the Anti-Monopoly Ministry.

2. In the event that OJSC Central Telegraph does take place in the merger, there is a question whether or not the company would be able to carry out a number of its long-term projects, such as that of setting up and integrating an advanced Centel network in the Moscow region.  So far the company provides digital telecom services in the following cities: Lyubertsy, Mytishi, Korolev, Khimki, and Balashikha.  The total amount already invested in the Centel project already stands at $31.8 mn.  The company's business plan provides for delivering telephony services at tariffs comparable to those of commercial organizations and $62 mn has already been invested into this project. A change in tariffs would prevent the company from being able to carry out its business plans.  For this reason there are a number of complex issues to be addressed if OJSC Central Telegraph were to merge with the Central Telecommunications Company.

Given that the Board of Directors of OJSC Central Telegraph deemed it is not advisable to take part in the mega-regional merger, the Board requested a motion to work out other options for the company's involvement in the Svyazinvest merger process.