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Golden Telecom

May 12, 2004

Extending presence in Kaliningrad: Golden Telecom acquires WestBalt Telecom

MOSCOW, Russia (May 12, 2004)Golden Telecom, Inc. (NASDAQ: “GLDN”) announced that it has completed the acquisition of 100% of the shares of OAO Balticom Mobile, that owns 62% of ZAO WestBalt Telecom. WestBalt Telecom operates in the strategically important enclave of Kaliningrad. The purchase price of the acquisition was approximately $7.0 million in cash. 

This press release contains supplementary information to that contained in the press release issued on May 6, 2004 by Golden Telecom, Inc., which is available on the company’s website, www.goldentelecom.com.

WestBalt Telecom is the largest alternative operator in Kaliningrad and the only alternative operator in Russia, outside Moscow and St Petersburg, which owns and operates its own intercity exchange. It has been allocated approximately 100,000 subscriber lines in Kaliningrad, of which approximately 65,000 are currently in use by clients:  15,000 of these lines are used by mobile operators; 19,000 are used by other operators; 7,500 are used by local corporates; 23,500 are used by residential customers. WestBalt Telecom also operates ByteCity, a dial-up Internet Service Provider, which is one of the top three Providers in Kaliningrad with 2,000 clients.

WestBalt Telecom recorded revenues of approximately $[s1] 5.0 million in 2003, according to WestBalt Telecom’s unaudited accounts, calculated using Russian Accounting Standards (RAS). The company estimates that it serves about 20% of the Kaliningrad telecoms market, with the remainder of the market served by the incumbent operator (approximately 70%), and other alternative operators (approximately 10%).

Alexander Vinogradov, Chief Executive Officer and President of Golden Telecom, Inc. commented: “We already have a presence in Kaliningrad, but acquiring WestBalt Telecom will help us to better serve our existing customer base. It will also bring an attractive new customer base. The Kaliningrad region is an important growth center for trade, and as such represents a fertile telecoms market.”

Oleg Malis, Senior Vice-president of Golden Telecom stated: “WestBalt Telecom is a well managed company in a developing region with significant numbering capacity and an important license. In addition, it is the only major operator in Kaliningrad with a wholly digital network. This acquisition is an important part of our aggressive regional expansion policy.”

 

 

About Golden Telecom (www.goldentelecom.com)

 Golden Telecom, Inc., (NASDAQ: “GLDN”) is a leading facilities-based provider of integrated telecommunications and Internet services in major population centers throughout Russia and other countries of the CIS.  The Company offers voice, data and Internet services to corporations, operators and consumers using its metropolitan overlay networks in major cities including Moscow, Kiev, St. Petersburg, Nizhny Novgorod, Samara, and Krasnoyarsk and via intercity fiber optic and satellite-based networks – including approximately 200 combined access points in Russia and other countries of the CIS. The Company offers mobile services in Kiev and Odessa.

 

This press release presents measures not derived in accordance with generally accepted accounting principles in the United States of America (US GAAP). Such measures should not be considered substitutes for any measures derived in accordance with US GAAP, and may also be inconsistent with similar measures presented by other companies.

 

Statements made in this press release are forward looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements include our ability to maintain the revenue base, customer base and license of WestBalt Telecom. It is important to note that such statements involve risks and uncertainties, which may cause outcomes to differ materially from those set forth in these statements.  Such risks and uncertainties include, but are not limited to, the possibility that WestBalt Telecom’s revenues, when stated according to US GAAP, may be lower than when stated according to RAS, the possibility that the customers may choose to migrate to another operator, and that WestBalt Telecom may not be able to maintain its license under a new owner. Additional information concerning factors that could cause results to differ materially from those in the forward looking statements is contained in the Company's filings with the U.S. Securities and Exchange Commission including the Company's quarterly reports on Form 10-Q, currentreports on Form 8-K filed during 2004, and the Company's annual report on Form 10-K for the year ended December 31, 2003.

 

 

FOR MORE INFORMATION, CONTACT:

Public Relations:

Anna Chin Ga Pin

e-mail: achin@gldn.net

tel.: +7-501-797-9300; fax: +7-501-797-9332

Investor Relations:

Tom Adshead

e-mail: tadshead@gldn.net

tel.: +7-501-797-9300; fax: +7-501-797-9332

www.goldentelecom.com

 [s1]Tom, they made 6.5 million

 

 

 

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