The basis of the tariff increase is Decision No 37/05-1 of the Board of the RF Ministry of Antitrust Policy and Entrepreneurship Support passed on 12 October 2001.

In conformity with the Decision of the MAP of the Russian Federation (the Russian abbreviation for the above-said Ministry), the telephone installation for residential subscribers will be 6,000 rubles. At the same time, pursuant to the OJSC MGTS' decision, additional telephone installation soft terms and benefits will be introduced. They will apply to the applicants standing on the waiting list before 31 December 1996 onwards - the installation fee being 1,000 rubles; and to those queuing up from 1 January 1997 to 31 December 1999 inclusive, the installation fee will be 3,000 rubles.

Besides, OJSC MGTS retains all existing soft terms and benefits envisaging preemptive telephone mounting for particular brackets of citizens. Likewise, the Company preserves a reduced installation fee payment privilege, INCLUDING FREE TELEPHONE INSTALLATION, relative to the following categories of the population: the Great Patriotic War invalids and disabled veterans participated in military operations in the territories of other countries, veterans of the Great Patriotic War suffered subsequent disability, Heroes of the USSR and the Russian Federation, full holders of the Order of Glory, former under-age concentration camp inmates who subsequently became disabled, persons subjected to political repressions and rehabilitated afterwards, and who are presently invalids or retirees, Heroes of Socialist Labor, and full holders of the Order of Labor Glory.

The telephone installation fee for all organizations, both state-budget and business enterprises, will be increased from 1 November 2001 up to 9,000 rubles.

The previous raise of the telephone installation tariffs dates back to 1 April 1997.