The company's net profit under RAS was in excess of RUR 1 bln.

          Operatingrevenuerose31%

          Net income increased 160% compared to Q3 2003 was 15% higher than in 1H 2004;

         Cellular revenues were up 72%;

          Internet revenues were up 57%;

          ILD traffic was up 11.4% and LD traffic was up 13.4%;

          EBITDA (1) stood at RUR 2.1 bln which is up 160% on 9M 2003 (RUR 840 mln)

Vladivostok, November 2, 2004 - Far East Telecom (RTS: ESPK, ÌÌÂÁ: DLSV, ÀÄÐ: FEEOY), a leader in Russia's Far East telecom market, hereby announces its audited 3Q 2004 financial results in accordance with Russian Accounting Standards (RAS).

Far Easthas shown robust growth for eight straight quarters.  Operating revenue stood at RUR 6.3 bln, which is 31% more than the same period last year (RUR 4.8 bln).  Revenues were positively impacted by growth in local traffic, LD and ILD traffic as well as introduction and expansion of a range of value-added services.

ARPU was up 23% compared to 3Q 2003 and reached RUR 5,300.

Net income (RUR 1,062 bln) rose 14% against 1H 2004 (RUR 0.929 bln) and surged 160% compared with 3Q 2003 (RUR 0.402 bln) on the June sale of shares in Primtelefon.

On the cost side, Far East's operating expenses stood at RUR 5.4 bln (up from RUR 4 bln in 3Q 2003).  The 35% rise in expenditures is attributable first and foremost to a change in the settlement procedure with Rostelecom and increased depreciation charges.  Payments to Rostelecom rose by 55% (RUR 745.6 mln while traffic increased by 13%.  Depreciation doubled to RUR 464 mln.  

In a statement, Deputy General Director of Business Development Alexander Zheludkov noted: "Today Far East Telecom should be viewed not as a small regional operator but rather as a company with immense growth potential.  We are confident that our quality enhancement efforts to raise corporate governance standards, replace outdated analog equipment with digital facilities, work out a project to use satellite com and cut costs of ground-based lines in low-density areas will have a positive impact on operating efficiency, which, in turn, will push up the operator's market cap.

Far East's 3Q receivables stood at RUR 4.5 bln (up from RUR 1.8 bln in 3Q 2003).  In addition, short-term liabilities stood at RUR 1.9 bln (up from RUR 1.5 bln in 3Q 2003).  Long-term liabilities stood at RUR 2.6 bln and RUR 0.3 bln, respectively).  The RUR 2.3 bln increase in accounts receivable results from a bond placement in 4Q 2004 and the signing of a leasing contract for the delivery of telecom equipment.

Key performance indicators by segments:

In 3Q 2004 sales revenue from telecom services stood at RUR 6.2 bln, which is up 31.6% compared to 3Q 2003 (RUR 4.7 bln).  Local traffic accounted for 35.7% and 35.6%, respectively, 36.5% and 44.7% from LD and ILD services, 4% and 2.8% from cellular communication and 5.6% and 4.8% from value-added services. Other services accounted 18.2% and 12.1%, respectively.

          Local Traffic

Revenue from local traffic (urban and rural telecom services) rose by 31% compared to the same period in 2003 and reached RUR 2.2 bln.

Compared to 3Q 2003 the number of corporate clients rose by 5% to 187,700 legal entities, while the number of individual subscribers increased by 9% to 1,017,038.

          LD and ILD traffic

Revenue from LD was up 13.4% in 3Q compared to the same period in 2003 and reached RUR 2 bln.

Revenue from ILD was up 11.4% in 3Q compared to the same period in 2003 and reached RUR 349 mln.

LD traffic reached 435,603 minutes, while ILD traffic stood at 27,566 minutes.

          Cellular traffic

Revenue from cellular traffic was up 72% in 3Q compared to the same period in 2003 and reached RUR 234 mln.

The company presently holds a 100% share of the cellular market in Magadan region and a 50% share of the market in Kamchatkaregion.  One of operator's primary objectives is to further expand its share of the Far Eastmobile telecom market.

          Value-added services

The company's share of value-added services was up 53% compared to the same period in 2003 and reached RUR 351.5 mln.

The range of Far East Telecom's new value-added services includes Internet.  During 3Q this segment generated RUR 340 mln (up 57% on the year-earlier period).

The company devotes great attention to advancing the competitiveness of its DSL - Fast Internet services, which is one of the services in highest demand in the Primorsk region.  In 3Q 2004 the number of DSL rose 200% in 1Q 2004 and reached 4,000 subscribers.

Main corporate events

To raise the quality of its corporate governance, the BoD has formed 4 committees, including: the Corporate Governance Committee, the Salary Committee, the Audit Committee and the Business Planning Committee.

The BoD also adopted a resolution to liquidate the branch of Far East Telecom in the Jewish Autonomous Republic and reorganize it into a telecom unit of the Kharbarovsk branch.  This will allow the company to lower its operating expenses by downsizing administrative personnel and reducing payroll.

The market cap of Far East Telecom stood at $US 122 mln as of the end of 3Q 2004, which is up 12% on 3Q 2003.