Vladivostok, January 12, 2005 – Far East Telecom (MICEX: DLSV, RTS, ESPK, RTS: ESPKG), the largest telecom company in Russia’s Far East, hereby announces the approval of its dividend policy at the December 28, 2004 meeting of its BoD. 

The dividend policy is Far East’s declaration with respect to future dividend payments and a guarantee concerning the amount of dividends payable.

“We are mindful that the market’s uncertainty about guarantees of the amount of dividends is a matter of great importance to investors.  This is why one of our main priorities is to safeguard the rights of investors and raise their well-being by raising share value and increasing dividend payments”, said deputy general director of business development at Far East Telecom, Alexander Zheludkov.

According to the dividend policy, Far East Telecom is required to allocate at least 10% of net profit generated during the reporting year to pay out dividends on common shares”.

The total amount to be paid out as dividend for each preferred share is 10% of Far East’s net profit based on the results of the last fiscal year, which is divided into the number of shares which comprises 25% of the operator’s charter capital.

In the event that the amount of dividends payable by Far East Telecom per each common share during a certain year exceeds the amount subject to payment as dividends per each preferred share, the amount of dividends payable on the latter will be raised by the amount of dividends payable on common shares.

The amount of dividends is announced by Far East Telecom net of taxes withheld by shareholders.  The Rules on the Dividend Policy of Far East Telecom are posted on the corporate website www.dsv.ru in the section “Corporate Governance”.