Krasnodar, 13 February 2006:Southern Telecommunications Company (“UTK”) [(RTS: KUBN, KUBNP; OTC USA: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District reports that on 9th February 2006 the first day of the offer for 02-series bond issue by "UTK" PJSC was completed (UTK-02commons, ISIN RU000A0AUU?0). According to the Decision on the Bond issue approved by the Company’s Board of Directors (Minutes ? 18 of 30 September 2003), the bondholders could present the bonds for redemption from February 2 till February 8, 2006 inclusive. The period for fulfilling the offer was February 9 till February 15, 2006. On the 9th of February 2006 the Company acquired the bonds presented for redemption on 2nd February 2006 to the amount of Rub 208,590,473.70 (including the accrued fifth coupon income to the sum of Rub 60,473.70). All obligations provided by "UTK" PJSC offer were fulfilled on time and completely. The agent for the offer was AKB Rosbank.

Information about the bond issue:

Volume of the issue of UTK series 02 non-convertible interest-bearing  documentary pay-to-bearer bonds is RUR 1.5 billion, the term to maturity is 3 years (1,092 days) with semi-annual coupon periods (182 days) and a buyback option every year  from the date of placement at 100 % of the par value. The first buyback option was executed in full through repurchase of 1, 092, 657 Bonds on February 16, 2005. The interest rate of 9.25% per annum on the  first and second coupons was fixed at the bond placement (February 11, 2004, MICEX). Effective redemption yield constituted 9.46% per annum at the bond placement. Secondary bidding started in the MICEX on April 8, 2004. The interest rate on the third and fourth coupons was fixed at 12.0% per annum. The rate for coupons 5-6 was fixed at 10.5% (Minutes ? 22 of 21 January 2005).  State registration number of the bond issue is 4-06-00062-A of November 28, 2003; trade codes are UTK-02commons, ISIN RU000A0AUU?0. Arranger, Underwriter and Payment agent of the series 02 bond issue is OJSC AKB "Rosbank". “Investment company “AVK” acts as Financial Consultant. You can familiarize yourself with additional information on the bond issue here.