Open Joint Stock Company Sibirtelecom (hereinafter - the Company), the largest operator of telecommunications services in the Siberian Federal District, announces Consolidated Financial Statements for 2003 under International Accounting Standards (IAS). The statements have been confirmed by the company's auditor: CJSC Ernst & Young Vneshaudit.

The Consolidated Financial Statements include the assets, liabilities and financial results of the Company and its 10 subsidiaries, the largest of which are ZAO Eniseytelecom (100%) and ZAO Baikalwestcom (100%).

2003 was the first year of the united Company, formed by joining ten telecommunication companies of the Siberian Federal District on November 30, 2002. The reported period brought positive changes and organizational results, main problems in the field of nets' modernization, tariff rebalancing, reorganization of management and integration of the united Siberian companies were solved.

IAS Financial Highlights 2002-2003 (RUR mln.):

• In 2003 Company's revenues reached 17,718.3 RUR mln., increased by 3,722.6 RUR mln. or 26.6% as compared with 2002. In the structure of the Company's revenues in 2003 the main components were, as in 2002, revenues from long-distance intercity connection (30.8%), local telephone traffic (23.9%) and mobile telecommunications services (13.0%). Also essential revenues were obtained from new services (Internet, ISS, ISDN) - 596.5 RUR mln. and from data transfer and telematic services (an increase of 133.9% in 2003).

The main factors for increased revenues in the accounting year were the growth of tariffs for local telephone communications, more domestic long-distance traffic, development of mobile communications, changes of settlement pattern with OJSC Rostelecom.

•  Revenue increase from local telephone traffic formed 30.3% (the growth rate for telephone subscription and per minute billing averaged 30%, the number of principal subscribers' sets rose by 5.7% during the accounting year and at the end of the year was 3,599 thousand units).

•  Revenues from mobile telecommunications services increased by 68.3% (over the reported period the number of mobile subscribers increased by 2.8 times and reached 507 thousand (735 thousand subscribes as of September1, 2004)).

•  Revenue increase from long-distance intercity connections - 13.2%. (outgoing payable intercity traffic rose by 17% in 2003 and reached 1,666 mln. minutes).

•  The change to the new pattern of settlements with OJSC Rostelecom in August 2003 allowed the Company to receive revenue for the termination of traffic in its network depending on the actual amount of traffic in the period leading to an increase in revenue of 308,9 RUR mln.

The structure of the Company's revenues in 2002-2003 (IAS) (RUR mln.):

•  The Company's expenses increased by 26.7% in 2003 and totaled 14,730.8 RUR mln. The main contributors to the growth of expenses in 2003 were wages, salaries, other benefits and payroll taxes, interconnection charges and bad debts reserve. Moreover, service expenditures grew appreciably, mainly those for professional services, connected with the reorganization of the Company and improvement of its management.

•  Expenses on wages, salaries, other benefits and payroll taxes increased by 20.0%. The main factor that influenced these expenses was the increase in an average wage, but the share of this item in the total expenses breakdown decreased from 42.4% in 2002 to 40.1% in 2003. Technical innovations, combined with organizational efforts, made it possible to rationalize the number of the Company's personnel and reduce it by 5%.

•  Interconnection charges increased by 32.9%. The costs of settlements with OJSC Rostelecom for the transfer of intercity traffic due to the change of the pattern increased by 317,3 RUR mln.

The structure of the Company's expenses in 2002-2003 (IAS) (RUR mln.):

• EBITDA grew by 25.3% as compared with 2002. EBITDA margin - 27.2%.

•  Operating income reached the level of 2,987.4 RUR mln., increased by 621.9 RUR mln. or 26.3%. Operating margin - 16.9%.

•  Income before taxation increased by 1.5 times, the amount of the net income reached 1,883.0 RUR mln., increased by 2.6 times in comparison with the net income in 2002. The essential influence on the income growth in 2003 was the sale of the Company's interest in CJSC Siberian Cellular Systems-900. The resulting gain of 431,2 RUR mln. is reflected as a component of income from other investments. The net income margin grew from 5.2% in 2002 to 10.6% in 2003.

The full version of the 2003 Audited Consolidated Financial Statements under IAS of OJSC Sibirtelecom may be found on the Company's website at https://www.sibirtelecom.ru/investor/finance.php (in russian) and at https://www.sibirtelecom.ru/english/investors/financial.php (in english).

Open Joint Stock Company Sibirtelecom (Russian Trade System: ENCO/ENCOP; Moscow Interbank Currency Exchange: STKM/STKMP; OTC, USA: SBTLY)

Investor Relations Department
Tel .: +7 (3832) 191 197
shipitsin@sibirtelecom.ru

Public Relations Department
Tel.: +7 (3832) 191-567
shibanov@sibirtelecom.ru