Krasnodar, 9th October 2008 – Southern Telecommunications Company [(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 Standard & Poors Rating Services affirmed its B long-term corporate credit rating on STC. At the same time Standard & Poors revised the outlook to stable from positive and lowered the national scale rating to ruA- from ruA.

According to Standard & Poors, STC will retain a resilient business position and healthy cash flow generation, while capital-expenditure requirements remain moderate. And continuing support from state-owned banks should enable the Company to manage financial risks, being aggravated due to the stiff deterioration in the global and Russian credit markets.

More information about the credit rating can be viewed at https://www.standardandpoors.ru/