On August 6, 2003 Standard & Poor's Ratings Services said it assigned its "ruBBB" Russia national scale rating to PJSC "Southern Telecommunications Company" ("UTK" PJSC).

At the same time, Standard & Poor's assigned its "ruBBB" rating to "UTK" PJSC proposed Russian ruble (RUR) 1.5 billion ($49.5 million) senior unsecured bond issue due 2006. The proceeds from the bond issue will be used to finance "UTK" PJSC`s RUR 5 billion capital expenditure program in 2003, which will further upgrade the company's outdated network and expand its network capacity.

The ratings are supported by "UTK" PJSC`s dominant market share as the main provider of essential telecoms services in the southern region of the Russian Federation and progress in enabling the provision of a wider range of higher-quality services. Standard & Poor's expects "UTK" PJSC to increase its debt to a manageable level to finance relatively high capital expenditures in 2003 without materially weakening its financial profile and ability to service its debt obligations.