JSC Svyazinvest 

Information Department

 119121 Moscow Plyushikha St., 55 str. 2, tel. (095) 727-04-18/Fax (095) 727-04-75

E-mail: pr@svyazinvest.ru

 January 14, 2002                                                          Moscow

The RF Anti-Monopoly Ministry has adopted a decision to meet the request of OJSC Uralsvyazinform to merge with six telecom operators based in the Urals region.

In accordance with Article 17.1 of the RF Law "On competition and limiting monopolies on trade markets" the Anti-Monopoly Ministry of Russia has reviewed the application of OJSC Uralsvyazinform with respect to merging with OJSC Uraltelecom, OJSC Svyazinform, Chelyabinsk region, OJSC Tyumentelecom, OJSC Elektrosvyaz, Kurgan region, OJSC Khantymansiiskokrtelecom and OJSC Yamalelektrosvyaz, and adopted a resolution on January 3, 2002 in support of this application.

The Anti-Monopoly Ministry gave its approval pending compliance with the following pre-requisites: 

·        Ensuring that the other operators are connected to separate local networks on comparable technical and economic terms, and making sure all related information is made available to the media on an ongoing basis;

·        Within six months from the completion date of the merger to make arrangements with the Anti-Monopoly Ministry to take measures to ensure that the regulated forms of telecom activity by OJSC Uralsvyazinform are carried on independently, which precludes the existence or intensification of a dominant position by any group of individuals at OJSC Uralsvyazinform on the respective trade markets;

·        Not to allow any discriminatory treatment in the mutual business dealings between OJSC Uralsvyazinform and other operators with respect to other operators which are controlled directly or indirectly by OJSC Uralsvyazinform and (or) OJSC Svyazinvest;

·        Not to allow any discriminatory treatment with respect to the access of cellular or other operators, as well as companies which provide data transmission services to telephone lines and switching centers, and which provide access to local, long-distance and international traffic, while ensuring equal access to the aforementioned switching points;

·        Not to allow any reduction of quality or volume of customer service, and to upgrade and develop telecom networks, including those located in remote and rural areas.

On December 25, 2001 the Anti-Monopoly Ministry granted approval to a similar application filed by OJSC Dalsvyaz, which is the core company around which six Far Eastern telecom operators are to merge.

For the record:

Urals telecom operators owned by OJSC Svyazinvest service a territory of 1,949,500 square kilometers with a population of 15,506,000.

The total number of lines in service is 2.5 mn.  Urals telecoms generated revenues of Rub 6,942, 893,600 from telecom services at the end of 3Q 2001. At present, the market cap of the unified company stands at $300 mn. 

Shareholders meetings for the Urals region devoted to the merger issue were held in September and October, 2001.  Urals companies formally filed a merger application to the Anti-Monopoly Ministry on August 2, 2001.