Moscow, October 14, 2005. OJSC «CenterTelecom» (RTS: ESMO, ESMOP; MICEX: CTLK, CTLK?; OTC: CRMUY) – the RF Central Federal District regional telecom operator, today reported results for the first half of 2005 under IFRS. The consolidated financial statement is unaudited and includes balance sheet, profit and loss statement and notes.

This is the first time that OJSC «CenterTelecom» has disclosed interim figures under IFRS*. The statement does not show comparable figures for the first six months of 2004. In order to allow some comparison, OJSC «CenterTelecom» has included figures for 2004, as at December 31, 2004.

Key figures from profit and loss statement (mln rubles)

Ruben Amaryan, General Director of OJSC «CenterTelecom», said: “The management team is satisfied with the results for the first half of 2005. We have achieved significant growth in profitability. The key elements - revenues, profit on sales, and EBITDA have all increased. All this stems from our work. We set out to deliver value for the Company, including strengthening our position in the traditional business sectors. The major priority for us now is focus strongly on activities aimed at the development of new services”.

The consolidated revenues of OJSC «CenterTelecom» in the first half of 2005 reached 13 594 mln rubles. The main components are revenues from the provision of local, domestic long-distance and international communication services (38.7%, 31.2% and 6.6% respectively). The revenues from installation and connection of fixed-line subscribers (5.1%), new services provision (4.7%) and services for the Russian telecom operators (3.7%) are the other main lines in the revenues structure of the Company.

Structure of revenues from communication services (mln rubles)

Operating expenditures of OJSC «CenterTelecom» in the first half of 2005 amounted to 12 151 mln rubles. The most significant items are payroll costs, other payments and social expenditures, amortization and depreciation, expenditure on telecom operators services, materials, repair and municipal services expenses, other operating expenses (general and administrative expenses, insurance, premises rent, expenditures on consultancy services and advertising).

  Structure of operating expenditures (mln rubles)

The full version of the unaudited consolidated financial statement of OJSC «CenterTelecom» for the first six months of 2005 according to IFRS is available at the corporate web-site of the Company.

*Principles of unaudited consolidated financial statement preparation:

The intermediate statement of OJSC «CenterTelecom» for the first six of 2005 was prepared on the basis of IFRS taking into account a number of limitations listed in «Limitations and assumptions in the statement». The intermediate statement consists of balance sheet, profit and loss statement and notes to financial statements. The statement does not include all the necessary information obligatory for disclosure in intermediate statements under IFRS. However, the Company’s management thinks that this statement is sufficient to indicate the financial performance and the Company’s operating activities for the first six month of 2005.

The statement under IFRS for the first six month of 2005 is disclosed by OJSC «CenterTelecom» for the first time; CenterTelecom has not provided such disclosure before. This statement is the unaudited consolidated financial statement of OJSC «CenterTelecom». No audit, revision or other similar procedures will be conducted in connection with it. At the same time, taking into account the experience of OJSC «CenterTelecom» in the field of statement disclosure under IFRS, the Company believes that readers of this statement can rely on information given in this statement.

OJSC «CenterTelecom» and its daughter and affiliated companies keep its records in Russian rubles and draw up financial statement in correspondence to the Russian Federation Federal Law «About business accounting». The preparation of this unaudited consolidated financial statement of OJSC «CenterTelecom» was carried out on the basis of the unaudited financial statement of OJSC «CenterTelecom» and its daughter and affiliated companies drawn up in accordance with the International Financial Reporting Standards with a glance to the assumptions given below.

Limitations and assumptions in the statement of OJSC «CenterTelecom» for the first six months of 2005

The number of procedures conducted for preparation of this unaudited consolidated financial statement of OJSC «CenterTelecom» is less than it is necessary for financial statements drawn up under IFRS. Thereupon OJSC «CenterTelecom» applied a number of assumptions related to IFRS fixed assets value, fair value of assets and daughter companies obligations, acquired in 2005, value of obligations on retirement insurance, deferred revenues, reserves on fixed assets depreciation, inventories and accounts receivable. The actual figures of the financial statement of the year ended on December 31, 2005 may differ from the figures of the current financial statement due to the verification of information about the assumption made by the Company and appearance of the other updated information.

This unaudited consolidated financial statement does not include information about comparable figures for the first six month of 2004. In order to compare the figures, the Company has included the financial performance for the year ended on December 31, 2004. The list of notes to the unaudited consolidated financial statement of OJSC «CenterTelecom» does not reveal all the necessary information which should be disclosed under the International Financial Reporting Standards.

The list of notes to the annual consolidated financial statement of OJSC «CenterTelecom» may reveal more information than in this unaudited consolidated financial statement of OJSC «CenterTelecom».