This 9 February, a press conference was held at the "Ararat Park Hayatt Moscow" Hotel on the occasion of the purchase by JSC CenterTelecom of the 100% block of shares of the telecom operator 'Rossiyskaya Telekommunikatsionnaya Set’ " (RTS) ("Russian Telecommunications Network" (ROSNET), Engl.) working under the trademark of ROSNET in the Russian telecommunications market.

Messrs V.N. Yashin, General Director of JSC Svyazinvest, R.A. Amaryan, General Director of JSC CenterTelecom, V.A. Polischuk, President of RTS, and financial adviser companies’ officials took part in the press conference.

The acquisition of RTS’ 100% equity stake by JSC CenterTelecom will enable the latter to consolidate significantly its standing in the high- -yielding non-regulatory telecommunications services segment. According to the Svyazinvest General Director V.N. Yashin, "This is but a second large-scale alternative telecom operator assets acquisition transaction being conducted within the framework of the Holding development strategy".

The RTS company has a developed telecommunications infrastructure, including automatic telephone exchanges in Moscow and the constituent regions, a large customer base, and a broad experience in working with major corporate clients and state agencies. Among the RTS customers are, inter alia, the RF State Customs Committee, Central Election Committee, the Moscow Government, and other high-up organizations.

The acquisition of JSC RTS will permit CenterTelecom to increase the number of its large corporate clients and significantly strengthen its standing in the priority corporate segment.

The terms and conditions of the transaction were passed by the Boards of Directors of CenterTelecom and RTS. Presently, all approvals and go-aheads from the relevant state offices, including the RF Antitrust Policy Ministry, are obtained.

The investment group "Aton" officiated as transaction adviser for JSC RTS, and the financial company RSF – for JSC CenterTelecom.

"I believe our acquisition of JSC RTS will not be only an important step towards implementation of the CenterTelecom’s long-term marketing strategy, but will also produce a positive effect on its investment allurement", CenterTelecom General Director R.A. Amaryan commented on the transaction.

JSC CenterTelecom is one of the largest interregional communication companies established in 2002 within the framework of the Svyazinvest Holding restructuring. The Company operates in 17 constituents of the Central Federal District of Russia, furnishing a broad spectrum of telecommunications services that comprise conventinal telephony, access to Internet, data transmission, wireless and cable television, etc. The Company provides services to over 5.6 million subscribers, its installed capacity is over 6 milion lines. The biggest CenterTelecom shareholder is JSC Svyazinvest which has 50.688% of the voting stocks in possesion.

Rossiyskaya Telecommunikatsionnaya Set’ (JSC RTS) is an operator and provider of telecommunications services across Russia. JSC RTS carries out its activity in the domestic telecommunications market under the trademark of ROSNET. The Company owns a hightech extensive data network having access nodes in most of the regions of Russia. The Company provides solutions to and implementation of multi-purpose telecom projects to build corporate telecommunications networks.

Investment Group Aton was founded in 1991. It furnishes a full spectrum of services in financing and investment, broker, asset mangement, corporate finances, and consulting fields, affording large access to the Russian and international trading sites.

09.02.2004