Moscow – February 04, 2011 – Rostelecom OJSC (RTS, MICEX: RTKM, RTKMP; OTCQX: ROSYY) today announced that the Company, together with OJSC Uralsvyazinform and OJSC North-West Telecom, have completed the transaction to acquire 71.8% stake in OJSC National Telecommunications (‘NTK’) for a combined cash consideration of RUB 27.9 billion. The shares were acquired from CJSC National Media Group, OJSC Surgutneftegaz and Raybrook Limited.

The deal values 100% of NTK shares at RUB 38.9 billion, or USD 1,325 million as per the official RUB to USD exchange rate as at the date of the transaction.

OJSC Rostelecom acquired 21.8% of NTK shares, and also acquired NTK promissory notes for a cash consideration of RUB 1.2 billion. OJSC Uralsvyazinform and OJSC North-West Telecom together acquired 50% of NKT shares, as well as NTK promissory notes for a combined cash consideration of RUB 2.4 billion.

The transaction has been approved by the Federal Antimonopoly Service of Russia.

The NTK group of companies (‘the Group’) is the largest independent cable TV operator and information provider in Russia. The Group comprises OJSC National Telecommunications and its subsidiaries.

The Group provides basic and extended ranges of pay-TV services, broadband Internet access for private and corporate customers, TV broadcasting services. It also produces TV channels and provides telephony and line leasing services.

The Group owns modern network infrastructure in seven Russian cities. In Moscow and Ekaterinburg, NTK utilises Fiber To The Building (‘FTTB’) technology, while in St. Petersburg, Novisibirsk, Kurgan, Elektrostal and Sredneuralsk uses Hybrid Fibre Coaxial technology (‘HFC’) (DOCSIS).

As of end of September, 2010 the Group’s subscriber base comprised approximately 5.0 million subscribers, including 4.5 million TV subscribers and 431 thousand broadband subscribers.

NTK has over 3.1 million subscribers in Moscow, 1.5 million subscribers in St. Petersburg, 240 thousand subscribers in Ekaterinburg and 165 thousand subscribers in other Russian cities. Of these, 140 thousand customers in Moscow, 186 thousand in St. Petersburg and 94 thousand in Ekaterinburg are broadband internet subscribers.

For the first nine months of 2010 the Group generated consolidated normalized revenues of RUB 7.4 billion and normalized EBITDA of RUB 3.6 billion. As at December 31, 2010, NTK had a net debt of RUB 2.8 billion. The debt included promissory notes mentioned above.

Alexander Provotorov, Rostelecom President and Chairman of the Management Board, commented: “The acquisition of NTK will enable the new Rostelecom, which will be created as a result of undergoing merger of IRCs into Rostelecom, to attain a leading position in the Russian pay-TV market, and will also significantly strengthen our competitive positions in Russia’s largest cities. This will provide us not only with new opportunities for growth, but also set the foundation for creating shareholder value.”

Investment bank Renaissance Capital has been engaged as an advisor for the transaction.