Moscow, November 5, 2004 - CenterTelecom (RTS: ESMO, ESMOP; OTC: CRMUY), a major fixed telecommunications provider, held a telephone conference yesterday dedicated to the company’s operation results to RAS for the 9 months of 2004.

The conference was held by CenterTelecom General director R.A. Amaryan. He presented an assessment of the company’s operations, talked about the development forecasts, and provided answers to the analysts’ questions.

During his speech R.A. Amaryan noted that the company was positively estimating its operation results for 9 months of 2004. Sales grew by 20.9 % up to RUR 18 billion, a total of 405 thousand lines were commissioned, of them 134 thousand lines were used to replace the obsolete equipment. The international and long-distance traffic continued to grow; the volume of new kinds of services including the Internet, ISDN, IP-telephony, intelligent networks etc grew.

Long-distance traffic grew by 105.8 % y-o-y and exceeded 2 billion minutes for 9 months of 2004; the international traffic grew by 108.8 % accordingly and totaled 148 million minutes.

The company’s Y 2004 considerable investment volume in its core business and the development of multiservice networks is explained by the need to strengthen the company’s position on the very profitable corporate segment of the market and reflects the objectives of the company’s marketing strategy.

The cost of services during 9 months of 2004 totaled RUR 14.4 billion. During three quarters the company made capital investments in the amount of RUR 5.3 billion, RUR 2 billion were invested in Q3.

The total adjusted amount of capital investment in 2004 will not exceed RUR 8.5 billion against the earlier projected RUR 9.5 billion. In 2005 CenterTelecom capital investments will not exceed RUR 5 billion.

The company further plans to optimize its investment outlays in order to improve its financial results.

After the increase of local telecommunications charges on 01.10.2004 and costs optimization CenterTelecom expects a better performance in 2004.

The company is preparing an application with the Federal Rates Service to increase the rates in 2005. According to the optimistic forecast a 10-15 % increase could take place on 01.04.2005, according to the pessimistic one a 15-20 % increase is to be expected on 01.10.2005.

CenterTelecom is optimizing its liabilities. In 2005 the company plans to decrease its payables and refinance its short-term creditor liabilities with long-term liabilities. By 2007 the company plans to decrease its liabilities by half.

In addition, the company is reducing its production costs. In 2005 the company will conduct branch management reorganization through the reduction of their number and costs. The company continues working to reform its affiliated businesses.

The representatives of foreign and Russian investment community and analysts as well as mass-media took part in the conference.

For your convenience, a replay will be available Thursday, November 4, 2004 at 21:00 Moscow Time (18:00 UK, 1:00 PM ET) until Saturday, November 6, 2004.

The replay telephone numbers are:
Moscow: +810-800-225-71012 (conference ID#1922753)
UK: +0-800-917-2646 (conference ID#1922753)
USA: +1-800-642-1687 (conference ID#1922753)

The key indicators for 9 months of 2004:

Contacts:

CenterTelecom is a leading fixed communications company providing the entire range of telecommunication services in the Central Federal District where over 20 % of the population of Russia resides. CenterTelecom offers the full range of telecommunication services, including telephony service, the Internet, IP telephony, data communications, CATV, wired and VHF broadcasting. The company actively develops modern multiservice and SDH networks as well as new radio access systems. The Company trades on RTS (ESMO, ESMOP), Moscow Interbank Currency Exchange (CTEL, CTELP) and has ADR Level 1 common stock program (CRMUY).

Copyright © 2004 Joint-Stock Central Telecommunication Company