Krasnodar, June 7, 2007: Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that on June 6, 2007 Standard & Poors Ratings Services placed its B- long-term corporate credit rating and ruBBB Russia national scale rating on CreditWatch with positive implications.

According to Standard & Poors, the CreditWatch placement reflects potential improvement in UTKs creditworthiness given the Company’s apparent progress in gradually addressing its liquidity risk, strengthening financial position and maintaining positive performance trend.  

The CreditWatch should be resolved after the Company’s release of audited 2006 IFRS results and following the meeting of Standard & Poor’s analysts with the management and detailed discussion of UTKs future business strategy and financial plans.