OJSC North-West Telecom has reported its audited operating and financial results for the year 2007 under Russian Accounting Standards.

By the end of 2007, the Company's revenue has increased by 15.5% compared to the previous year and totaled RUR 23,643 million.

The main revenue drivers in 2007 were local access and new services (Internet and data transmission services). Compared to 2006, income from the local access increased by 15.1% and amounted to RUR 12,549 million, while income from the internet and data transmission grew by 55% and totaled RUR 2,898 million.

Operating income increased by 20.2% and amounted to RUR 5,954.6 million.

Net income of OJSC North-West Telecom in 2007 amounted to RUR 11,304 million, which is an almost 5 times increase compared to the year 2006. EBITDA increased by 2.8 times and totaled RUR 18,551 million.

A substantial part of the growth in these values in OJSC North-West Telecom was attributable to the sale of a 15% stake in OJSC Telecominvest. Even without taking this deal into consideration the Company has shown a considerably improved performance: its net income increased by 46% and totaled RUR 3,540 million, EBITDA increased by 25.2% and amounted to RUR 8,335 million, and EBITDA margin 35.3%, which is a 2.7 p.p. increase compared to the year 2006*.

The investment program of OJSC North-West Telecom in 2007 totaled RUR 9.8 billion. In 2007, the installed capacity of the Company's network exceeded 5 million numbers, 364.6 thousand ?DSL-ports were put into operation, over 3 thousand km of fiber optics lines were routed, and digitalization rate reached 61.5%.

In 2007, OJSC North-West Telecom made efforts to increase the subscriber base for the the Avangard service . During one year it increased more than 3 times and amounted to 310 thousand users.

Commenting upon the results of the year 2007, Mr. Oleg Popov, Deputy General Director, Sales and Marketing Director, said, "The year 2007 has ended as another year of our successful growth. Thanks to efficient marketing policy, OJSC North-West Telecom not only preserved its leading positions in the local and intra-zonal access market, but also significantly increased its presence in the most rapidly growing segment of the industry – broadband internet access services. As of the end of 2007, the market share of OJSC North-West Telecom in the North-Western federal district amounted to about 40%**".

Ms. Venera Khusnutdinova, Deputy General Director, Chief Financial officer of OJSC North-West Telecom, said, "The company follows a balanced budgeting policy: through cost control we managed to make the total revenue growth exceed the costs, and the ambitious investment program and business optimization actions helped us to preserve high efficiency of operations along with a significant net income growth at OJSC North-West Telecom in 2007".

Balance Sheet, Profit and Losses Statement, of OJSC North-West Telecom for the year 2007, and the Auditing Report for the year 2007 are published at the web site of OJSC North-West Telecom under 'Economic and Finance'.