Ekaterinburg – November 8, 2006 – Uralsvyazinform (RTS: URSI/URSIP, ADR: UVYZY/ UVYZYP), the leading carrier of fixed-line and mobile services in the Urals region, Russia reports the unconsolidated financial and operational results for the 9M 2006 prepared under Russian Accounting Standards (RAS).

• Revenues increased by 18% over 9M 2005 driven by revenue gains in:
  Local services – up 15%;
  • Mobile services – up 123%;
  • New services – up 77%;
  • Services for national operators – up 68%.
• OIBDA increased by 25% compared to 9M 2005. OIBDA margin amounted to 37.4%, Operating margin – 25.9%
• Overall subscriber base totaled 7.9 million, including 4.2 million in GSM.

Financial and operational highlights

* Here and henceforth currency conversions are based on average exchange rates: 9M 2006 – RUR 27.3, 9M 2005 – RUR 28.2

Anatoly Ufimkin, CEO comments on 9M 2006 results: ‘In 9M 2006 we showed good performance with mobile and new services proving the main growth catalysts again, together with services for operators. In new services, broadband access using DSL technology is increasingly important from revenue perspective. From January to September this year the number of DSL subscribers more than tripled (x3.6) at 60 thousand. Net profit increased substantially (up 80%) as a result of organic growth of the business and efficiencies, and our continued efforts to collect compensation from federal budget for state-subsidized client categories (as of 3Q 2006 the compensation received by Uralsvyazinform totaled US$ 10 million).

Besides, the ‘Caller Party Pays’ principle that came into force on June 1, 2006 had positive impact on revenues and operating profit as of 3Q 2006. The new regulations specify that fixed-to-mobile calls are categorized as intra-zone calls and are now charged in separate. As of 3Q 2006 fixed-to-mobile traffic amounted to 539 mln minutes, which translates into US$ 28 million of additional cash of which over US$ 19 million went to mobile operators for call termination’.

To proceed with financial and operational review as of 9M 2006 please download PDF version

Complete financial statements of Uralsvyazinform as of 9M 2006 may be found in the Financials section