On November 25, 2009 the Standard & Poor’s Corporate Governance Ratings Service assigned North-West Telecom the GAMMA rating (“Governance, Accountability, Management Metrics and Analysis”) at GAMMA - 5+.

The GAMMA rating is a new corporate governance evaluation format, superseding the previous corporate governance score (CGS). At the time of change to the new GAMMA rating, NWT’s corporate governance rating was confirmed at CGS -5+ on the international scale and rose from CGS-5.7 to CGS -5.8 on the Russian scale. In connection with the assignment of the GAMMA rating, NWT’s CGS will no longer be maintained.

According to Standard & Poor’s experts, the GAMMA rating offers a fuller evaluation of the corporate governance structure and practice. It is assigned using the improved CGR methodology, including two new corporate governance analysis elements: the risk management system and the strategic planning process.

For analysis components, NWT was assigned the following ratings (scale 1 to 10):

- Property structure and external influence, 5;

- Shareholders’ rights, 7;

- Transparency, audit and risk management, 6+;

- Board of Directors performance, strategic process, motivation system, 5+.

The Standard & Poor’s analysts note the following strengths of North-West Telecom’s corporate governance practice that served as the basis for rating:

- The Company has efficient procedures for preparing and holding the shareholders’ meetings. The IFRS annual reports are published before the annual general meeting of shareholders. The minority shareholders have broad voting rights in accordance with Russian legislation and NWT’s Articles of Association.

- There are some evidences of positive changes in Svyazinvest’s influence: more attention is given to financial aspects of the investment program as compared with the social function. The new management is disposed to maintain a dialogue with the minority shareholders.

- The overall information disclosure level is rated as high. The Company publishes annual and quarterly financial reports according to the IFRS. NWT adheres to the policy of proactive interaction with the investors.

- The minority shareholders play an active role with four directors representing their interests. Independent directors head two out of four Board of Directors committees (including the Audit Committee).

- The Board of Directors has significant powers. Its operation is supported by its four committees. The Board of Directors and all the four committees operate quite actively.

- The Company has structural elements of the risk management system.

- The strategic planning process has a number of considerable strengths.

Ella Tomilina, Deputy General Manager, Corporate Affairs officer, noted that "NWT's corporate governance system is rapidly developing, thanks to the strategic initiatives from the Company’s management and shareholders. This is confirmed by the high ratings assigned to NWT's corporate governance practice by recognized experts as well as by the numerous awards the Company received this year for the high level of disclosures”.

The full version of the report is available at the Standard & Poor’s web-site www.governance.standardandpoors.com  as well as at the Russian-language web-site www.standardandpoors.ru.

The opinions quoted in this report reflect the independent position of the Corporate Governance Ratings Service within Standard & Poor’s Market Study unit and do not express the position of other Standard & Poor’s analytic services. The GAMMA ratings are assigned in emerging markets, first of all, in the BRIC countries (Brazil, Russia, India, China) on a 1 to 10 (top grade) scale.