Krasnodar, November 25, 2004: Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; OTC: STJSY), the principal telecommunications provider for Russia’s Southern Federal District, reports that modernization of UTK’s multi-service networks carried out in 3Q2004 allows to connect xDSL subscribers with increased speed. During the ten months of 2004 number of Internet subscribers of "UTK" PJSC using broadband access through xDSL technology is up 8.8 times to 5.9 thousand users.

As a result of the advertising campaign carried out by the Company in Krasnodar, 900 applications for connection to Internet through xDSL technology were submitted during four days, 100 of them – by juridical persons. Advertising campaigns carried out in Stavropol, Volgograd, Rostov-on-Don resulted in connections of 300-400 subscribers per day. The Company plans to continue its promotional actions in other cities and towns of the Southern federal district. The branch “Rostovelectrosvyaz” takes the first place in terms of connections to Internet using broadband access, as of November 1, 2004 its share accounted for 50 % of all served xDSL ports.

Such a progress resulted from paying priority attention to commercial operations of the Company as well as introducing practices of active and direct sales and better distributing information among the target segments of the market. By the end of 2004 "UTK" PJSC plans to increase total number of the equipped broadband access ports up15.8 times to 10.5 thousand.

Alongside with xDSL-based services "UTK" PJSC continues to increase volume of Internet switched access services. In 2004 the Company plans to increase the number of switched access ports by 103 % over 2003 to 31.5 thousand ports. As a result, the revenues from switched access is expected to grow by 53 % to 340 million rubles.

In 2004 "Southern Telecommunications Company" PJSC plans to use the installed capacity of ISDN ports to the maximum: the equipped ISDN ports are to be increased by 2.5 times to 6 thousand ports in order to generate a revenue of 73.9 million rubles in 2004 versus 47.2 million rubles in 2003. As of October 1, 2004 the number of equipped ISDN ports of "UTK" PJSC stood at 4.2 thousand ports.

During the Exhibition “InfoCom-2004” representatives of some companies of the Krasnodar Region expressed their intention to take part in realization of the partnership program on development of the public Internet access network based on Wi-Fi technology. At present installation of 5 objects (about 55 base stations) using Wi-Fi equipment in Krasnodar and in the south of Krasnodar Territory is continuing; also installation of 12 base stations using Wi-Fi equipment for providing wireless Internet access in hotels of Rostov-on-Don is coming to the end in the branch “Rostovelectrosvyaz”. Thus, "UTK" PJSC is creating the first centers of Wi-Fi (and Wi-Max in future) based wireless access in the South of Russia which will make it possible to use the data transmission speed of 55 Mbit /sec. In future the Company will continue to develop this hi-tech service in the most perspective regions of the Southern federal district.