Moscow – December 8, 2008:  Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national telecommunications operator, today announced unaudited consolidated results for the first six months of 2008 in accordance with International Financial Reporting Standards (IFRS):

Rostelecom continued to actively diversify its business through the development of innovative services in the first half of 2008.  As a result, the Company delivered increases in the following key figures:

- First half 2008 OIBDA* increased by 14% year on year to RUB 7.8 billion, representing an OIBDA margin of 25%;

- Revenue from new and value-added services in the first half of 2008 grew by 45% year on year and totaled more than RUB 4 billion as the Company executed its business diversification;

- Rostelecom’s consolidated net profit increased by 4 times year on year to RUB 9.8 billion.

The strong growth in revenue from new and value-added services (RUB 4,157.0 million – a year-on-year increase of 45.1%) in the first half of 2008 was driven by:

- Revenue from Internet access services for operators and corporates, which surged by 3.9 times year on year to RUB 1,278.0 million;

- Revenue from intelligent network services (INS), which rose by 26.8% year on year to RUB 653.0 million;

- Revenue from technical support and customer equipment servicing, which increased by 53.3% year on year to RUB 627.0 million.

Rostelecom attracted additional incoming international traffic volume to the Company's network by successfully partnering with international operators. In the first half of 2008, incoming international traffic rose by 9.4% compared to the same period a year ago.

Rostelecom’s first half 2008 operating profit increased by 1.5 times year on year to 4,237.0 million. Operating margin improved to 13.5%. This was mainly driven by a decrease in operating expenses due to the elimination of a compensation surcharge as of January 1, 2008**, as well as other factors. Compared to the first half of 2007 the Company’s operating expenses amounted to RUB 27,162.0 million – a year-on-year decrease of 5.7%.

Consequently, OIBDA rose by 14.0% year on year to RUB 7,846.0 million representing an OIBDA margin of 25.0%.

Other income for the first half of 2008 amounted to RUB 9,030.0 million from RUB 406.0 million in the same period of 2007, up 22 times year on year. The increase is due to additional income from the sale of investments as well as higher net interest income that offset a foreign exchange loss.

Due to ongoing business process optimization and the streamlining of the Company's organizational structure, headcount for Rostelecom and its subsidiaries was reduced from approximately 22.9 thousand employees as of June 30, 2007 to approximately 22.4 thousand employees as of June 30, 2008 – a year-on year decrease of 2.6%.

First half 2008 consolidated financial statements include the results of operations of Rostelecom and its subsidiaries - Westelcom, GlobalTel, Globus-Telecom, Zebra Telecom, MTs NTT and others. Consolidated financial statements for the first six months of 2008 do not include assets, liabilities and operating results of RTComm.RU as Rostelecom only acquired full control over this company in July 2008.  RTComm.RU's assets, liabilities and results of operations will be included in the Rostelecom’s FY 2008 consolidated financial statements.

Rostelecom will host its first half 2008 results conference call on December 8, 2008 beginning at 9.30 AM (Eastern US) / 2.30 PM (London) / 5.30 PM (Moscow).  A listen-only webcast of the call will be available both live, and for replay purposes, on the Investor Center page of Rostelecom’s website at www.rt.ru/en/icenter.

Appendices:

- Financial highlights: First half 2008 versus first half 2007 in RUB;

- Traffic and revenue figures for the first half of 2008 versus the first half of 2007;

- Condensed consolidated interim profit and loss statements for the six months ended June 30, 2008 and June 30, 2007 in RUB;

- Condensed consolidated interim balance sheets as of June 30, 2008 and December 31, 2007 in RUB.

* OIBDA is a non-U.S. GAAP and non-IFRS financial measure, which the Company defines as operating income before depreciation, amortization, loss from impairment of PP&E, goodwill and other intangible assets as well as loss (gain) on disposal of PP&E. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt.  OIBDA should not be considered in isolation as an alternative to net income, operating income or any other measure of performance under U.S. GAAP or IFRS.

**According to regulatory requirements, from January 1, 2006 through January 1, 2008 Rostelecom as a long-distance operator was obligated to pay a compensation surcharge to local and intra-regional operators occupying a “significant position” in the market for the initiation of DLD/ILD calls.