Moscow, Russia – December 26, 2011 – Rostelecom OJSC (MICEX & RTS: RTKM, RTKMP; OTCQX: ROSYY) (“the Company”), Russia’s national telecommunications operator, today announces that its Board of Directors has approved a revision of the Company’s dividend policy.

According to the new policy, the Company will pay not less than 20% of its net profit, as determined in accordance with International Financial Reporting Standards (“IFRS”), as a dividend on ordinary shares. Under the previous dividend policy, the minimum level of dividend was set out on the basis of net profit according to Russian Accounting Standards (“RAS”). 

The dividend policy for preferred shares remains the same, as set out in the Company’s Charter. Under this policy, the dividend per one preferred share is set at 10% of net profit according to RAS, divided by the total number of shares, which comprise 25% of the Company’s share capital. This policy will be valid until the necessary changes are made to the Company’s Charter, which will then enable the dividend per preferred share to be calculated on the basis of net profit in accordance with IFRS.

Ivan Rodionov, Chairman of the Board of Directors of Rostelecom, commented: “The approval of the new dividend policy is a milestone in the Company’s development, as it sets out the main principles and parameters for dividends paid out by the united Rostelecom and it furthers investors and shareholders understanding of the policy. The transition to net profit under IFRS in determining the dividend policy on ordinary shares corresponds to best international practices. This approach enables more objectivity in evaluating the Company’s performance and also in determining its overall profit, as contributions from Rostelecom’s subsidiaries and affiliates can be taken into account.”

“In the new policy, we have set the recommended minimum level of potential dividend payments. The actual size of the dividend payout in the coming years will be determined in accordance with our investment plans for modernisation of the network infrastructure and the development of 3G/4G mobile networks which were approved as part of our strategy. We will also consider international best practices in the industry when setting the level of dividend payouts.”