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JSC SVYAZINVEST ON TELECOMMUNICATIONS MARKET

JSC SVYAZINVEST ON TELECOMMUNICATIONS MARKET. FORWARD-LOOKING STATEMENTS. Certain statements in this presentation are not historical facts and represent “forward-looking” statements. Example of such forward-looking statements include, but are not limited to :

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JSC SVYAZINVEST ON TELECOMMUNICATIONS MARKET

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  1. JSC SVYAZINVESTON TELECOMMUNICATIONS MARKET

  2. FORWARD-LOOKING STATEMENTS • Certain statements in this presentation are not historical facts and represent “forward-looking” statements. Example of such forward-looking statements include, but are not limited to: _projections or expectations of revenues, profit (or loss), earnings (or loss) per share, dividends, capital structure, other financial indicators or ratios; _statements of our plans, objectives or goals, including those related to products or services; _statements of future economic indicators; _statements of prerequisites underlying such statements. • Words such as “believes”, “expects”, “supposes”, “plans”, “is going to” and “intends”, as well as similar expressions, are intended to identify forward-looking statements but for all that are not the exclusive means of identifying such statements. • By their very nature, forward-looking statements imply some inherent risks and uncertain points, both general and specific, and there is some risk that the plans, expectations, forecasts and other forward-looking statements will not be realized. You should remember that owing to a number of important factors, actual results might substantially differ from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements, including our ability to execute our restructuring and cost reduction programme. • When relying on forward-looking statements, you should carefully analyze the foregoing factors and other uncertainties and events which are not clear, especially in light of the political, economic, social and legal environment in which the Company operates. Such forward-looking statements are valid only as of the date on which they are published, and the Company does not undertake any obligation to update or revise any of them whether as a result of new information, new events or otherwise. The Company does not make any statement, does not provide any affirmation and does not publish any forecast that the results anticipated by such forward-looking statements will be achieved. Such forward-looking statements represent only one of many possible scenarios of situation and should not be considered as the most likely or standard course of events.

  3. SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT INDICATORS • IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF SVYAZINVEST GROUP • UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND FOR SVYAZINVEST GROUP • PROSPECTS FOR SVYAZINVEST GROUP

  4. RUSSIA TODAY Growth of Real Wage in Russia, % * Pace of growth of Russian economy, % * Direct foreign investment in Russian economy, USD bln * • High and sustainable pace of growth of Russian economy • Growth of common welfare and consumer's demand • Russian economy is becoming more attractive in the eyes of foreign partners *- source: Ministry for Economic Development and Trade of the Russian Federation

  5. SVYAZINVEST: STRUCTURE AND COVERAGE Controlling stake Blocking stake Rostelecom 7 RTOs State 75% - 1 share Comstar-UTS 17.31% + 1 share MGTS Finance 7.69% Svyazinvest MGTS Other • Rostelecom owns a powerful backbone network spreading across almost all the territory of Russia. The Company’s network is around 200,000 km long. The level of Company’s market capitalization equals $7,746mln. • At present, the estimated capitalization of Svyazinvest is some $9.8 bln. • Foundation of Svyazinvest – September 18, 1995 • Sale of the company’s blocking stake to Mustcom - July 1997 • Corporate integration: 72 telecom companies were consolidated into 7 interregional companies throughout 2000-2002 * - market caps as of November 9, 2007 5

  6. 66,5 KEY PERFORMANCE INDICATORS OF SVYAZINVESTGROUP * International Accounting Standards Russian Accounting Standards 17.9% 16.0% 17.9% 17.9% • REVENUE • [USD, bln] • 2005 • 2006 • 2006 • 2007 F • 2005 • 3Q2006 • 3Q2007 16.9% 21.9% 14.6% 15.9% • EXPENSES • [USD, bln] • 2006 • 2007 F • 2006 • 2005 • 2005 • 3Q2006 • 3Q2007 4.1% 21.9% 24.4% 26.9% • OPERATING INCOME • [USD, bln] • 2006 • 2006 • 2007 F • 2005 • 2005 • 3Q2006 • 3Q2007 15.0% 41.4% 30.6% 24.7% • EBITDA[USD, bln] • 2006 • 2006 • 2007 F • 2005 • 2005 • 3Q2007 • 3Q2006 47.7% 13.6% 71.6% 32.1% • NET PROFIT • [USD, bln] • 2006 • 2007 F • 2006 • 2005 • 2005 • 3Q2006 • 3Q2007 * - hereinafter(unless otherwise indicated) : a) aggregated indicators are given according to RAS; b) Svyazinvest Group includes the following companies:Rostelecom, 7 RTOs, Central Telegraph, Dagsvyazinform

  7. - Share of Svyazinvest group (Rostelecom + 7 RTOs) - Share of other providers MARKET SHARE OF SVYAZINVEST GROUP OF COMPANIES * INTRA-ZONAL TELEPHONY MARKET DATACOM MARKET TELECOMMUNICATIONS MARKET LD / ILD MARKET MOBILE TELEPHONY MARKET ** LOCAL TELEPHONY MARKET * - as of the end of 1H2007 ** - on the licensed coverage area of7 RTOs .

  8. KEY INFRASTRUCTURE INDICATORS OF SVYAZINVEST GROUP INSTALLED CAPACITY, mln lines DIGITALIZATION RATE, % +5% -1%

  9. INVESTMENT POLICY: DYNAMICS AND STRUCTURE OF CAPITAL INVESTMENT INVESTMENT, USD, bln 1.93 1.53 1.40

  10. - 10.9% -9.0% KEY OPERATIONAL INDICATORS OF SVYAZINVEST GROUP LINES PER EMPLOYEE, unit REVENUE PER EMPLOYEE, USD thousand + 16% + 30% +22% + 30% + 23% +15% NUMBER OF EMPLOYEES, employees, thousand -5.0% * - forecast

  11. DEBT OVERVIEW CAPITAL STRUCTURE, USD bln RATIO BETWEEN CURRENCY AND RUBLE-DENOMINATED LOANS $ 14.2bln. $ 12.2 bln. $ 10.4 bln. AVERAGE COST OF CREDIT RESOURCES, % In 2006 – 2007, major changes were made to the structure, cost and amount of the debt portfolio of the companies in Svyazinvest Group. Changes in the cost of attracting credit resources are due both to the upgrade of the RTOs’ credit ratings and to the general market correction. * - forecast

  12. BOND ISSUES • Total volume of placement in 2006-2007 was Rub 19.2 bln (USD 716 mln) * Estimated average USD rate was based on the exchange rate quoted by the CBR as of the placement date

  13. SVYAZINVEST GROUP:DYNAMICS OF CAPITALIZATION CALCULATEDCOMPARED WITH THE RTS INDEX, 2006-2007

  14. Non-residents (legal entities) Individuals Residents (legal entities) JSC Svyazinvest RTOs AND ROSTELECOM SHAREHOLDER CAPITAL STRUCTURE NORTH-WEST TELECOM CENTERTELECOM VOLGATELECOM 39% 37% 42% 38% 38% 40% 11% 11% 9% 14% 9% 12% SIBIRTELECOM URALSVYAZINFORM SOUTH TELECOM 39% 25% 38% 38% 41% 38% 12% 13% 10% 13% 22% 11% ROSTELECOM DALSVYAZ 17% 36% 38% 38% 9% 36% 14% 12%

  15. RTOs AND ROSTELECOM CREDIT RATINGS

  16. SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT INDICATORS • IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF SVYAZINVEST GROUP • UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND FOR SVYAZINVEST GROUP • PROSPECTS FOR SVYAZINVEST GROUP

  17. 83,4 IN 2007, THE RUSSIAN TELECOM MARKET HAS DEVELOPED ACCORDING TO GENERAL INTERNATIONAL TENDENCIES HOWEVER, IT HAS ALSO BEEN CHARACTERIZED BY A NUMBER OF SPECIFIC FEATURES • GENERAL TENDENCIES • SPECIFIC TENDENCIES • Mobile traffic replacing fixed traffic 1 1 • Switch to new system of tariff plans • Development of broadband Internet access • Introduction of “Calling Party Pays“ principle 2 2 3 3 • Liberalization of LD market • Introduction of new interconnect rules 4 • Convergence of telecom services • ALL THESE FACTORS HAVE A DIFFERENT IMPACT COMPANIES OF SVYAZINVEST GROUP KEEP THEIR MARKET POSITIONS

  18. LIBERALIZATION OF LD MARKET • SINCE JANUARY 1, 2006LD MARKET HAS BEEN LIBERALIZED • 32LICENCES HAVE BEEN ISSUED TO DATE • SEVERAL PROVIDERS ARE ACTUALLY OPERATING ON THE LD MARKET: ROSTELECOM, GOLDEN TELECOM, MTT, TRANSTELECOM MARKET POSITION OF ROSTELECOM ON ILD MARKET, ESTIMATED TRAFFIC (1H 2007) MARKET POSITION OF ROSTELECOM ON LD MARKET, ESTIMATED TRAFFIC (1H2007) 91% 89% - Share of Rostelecom - Share of other operators Source:iKS-consulting, internal accounts of Svyazinvest

  19. -11% +9% +12% +19% +9% +31% +14% +24% INTRODUCTION OF“СALLING PARTY PAYS” PRINCIPLE F2M REVENUE, [USD MLN] MOUF2M, [MIN / MONTH] +24% +11% +16% +12% +21% +17% +17% +32% SUBSCRIBERS ACTIVITY FOR F2M CALLS AS OF JUNE, 2007, % SUBSCRIBERS ATTITUDE TO THE INTRODUCTION OF CPP, % Source:Research by ComCon, March 2007 Source: Research by ROMIR, June 2007

  20. - Payment for line -Cost per minute of connection -Payment for base number of connections -Payment for maximum number of connections SWITCH TO NEW SYSTEM OF TARIFF PLANS (1) • SUBSCRIBER TARIFF PLAN (PSTN, average for RTOs), USD CURRENT TARIFFS (PSTN as of date below, average for RTOs), USD • TARIFF PLANS(PSTN, average for RTOs), USD - 32% 11 ** ** ¢ 0.7 368 min 16* ¢0.9 8 * FORMATION OF TRANSITIONAL PERIOD MASS PR CAMPAIGN CONDUCTED ACCORDING TO RF CIVIL CODE, THE CURRENT PAYMENT SYSTEM REMAINS EFFECTIVE FOR THOSE WHO FAIL TO SELECT A TARIFF PLAN * - Total fee incl. line rental ** - Tariff for regions where it is not technically possible to introduce tariff plans

  21. 83,4 SWITCH TO NEW SYSTEM OF TARIFF PLANS (2) BREAKDOWN OF INDIVIDUAL SUBSCRIBERS BY TARIFF PLAN (IN REGIONS WHERE IT IS TECHNICALLY POSSIBLE TO INTRODUCE TARIFF PLANS), AS OF OCTOBER 1, 2007 BREAKDOWN OF INDIVIDUAL SUBSCRIBERS BY TARIFF PLAN (TAKING INTO ACCOUNT THE REGIONS WHERE IT IS NOT TECHNICALLY POSSIBLE TO INTRODUCE TARIFF PLANS), AS OF OCTOBER 1, 2007

  22. SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT INDICATORS • IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF SVYAZINVEST GROUP • UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND FOR SVYAZINVEST GROUP • PROSPECTS FOR SVYAZINVEST GROUP

  23. 8 GROWTH ON DATACOM MARKET EARNINGS FORM DATACOM SERVICES, USD BLN GROWTH FORECAST FOR TELECOM MARKET, USD BLN СAGR% СAGR% + 11% annual average + 23% annual average +23% +30% + 11% Internet and datacom Mobile communications Individuals 0% LD services 17% Organisations Local voice + 8% Source:McKinsey Source:McKinsey INTERNET PENETRATION AND BIA IN RUSSIA (SUBSCRIBERS), % • Datacom will be the fastest growing market segment. Most expansion will come from broadband Internet access. • The penetration of broadband Internet access (BIA) will grow in line with disposable income, computerization, network upgrades and cost reduction. Source:UralSib

  24. GROWTH POTENTIAL OF SVYAZINVEST GROUP IN THE NEW SERVICES SEGMENT, USD mln * REVENUE FROM NEW SERVICES IN TOTAL REVENUE OF SVYAZINVEST GROUP, USD mln* DYNAMICS OF INVESTMENTS IN THE DEVELOPMENT OF NEW SERVICES AND IT TECHNOLOGIES, USD mln * BREAKDOWN OF REVENUE FROM UNREGULATED SERVICES IN 2007(FORECAST) + 70 % • Based on our forecast, Internet and datacom will achieve revenue growth of 70% in 2007. * - not incl. cellular communication

  25. BROADBAND ACCESS SERVICES MARKET SHARE OF DATACOM SERVICES, % NUMBER OFxDSL ANFETTHPORTS ENABLEDAS OF OCTOBER 1, 2007, TH. 40% 24% KEY REGIONAL BRANDS AND ARPL(3Q2007)

  26. SVYAZINVEST GROUP ON THE MOBILE TELEPHONY MARKET MOBILE SUBSCRIBERS BASE, thousand LICENCE COVERAGE OF GSM OPERATORS OF SVYAZINVEST GROUP • In 2006, the Group’s mobile business policy was to increase the presence of RTOs on the cellular market and to consolidate assets. • Svyazinvest Group companies offer mobile services in 27 regions of the Russian Federation.

  27. FINANCIAL RESULTS OF CELLULAR OPERATORS OF SVYAZINVEST GROUP VOLGA,USD mln URAL,USD mln SIBIR,USD mln

  28. TRENDLINES IN AVERAGEARPU* ANDMOU* OF MOBILE ASSETS OF SVYAZINVEST GROUP IN THE MAIN REGIONS AVERAGE MOUTRENDLINE, min. AVERAGE ARPU TRENDLINE, USD *ARPU – average revenue per user **MOU – minutes of use per subscriber

  29. SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT INDICATORS • IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF SVYAZINVEST GROUP • UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND FOR SVYAZINVEST GROUP • PROSPECTS FOR SVYAZINVEST GROUP

  30. SVYAZINVEST GROUP: PRIMARY OBJECTIVES • To boost revenue by broadening the scope of services provided (employing modern technologies) and by raising tariffs for local voice services. • To maintain strong operating efficiency with a view to revised relations between operators, liberalization of the LD market and emergence of new competitive environment. • To roll out new generation networks (NGNs) and provide a technological framework so that the company can rapidly create and provide top-notch services throughout the Russian Federation. • To take further steps towards improving the efficiency of Svyazinvest Group’s management system (to phase in ERP, to introduce a unified billing system andOSS – Operations Support System; to implement a set of actions to use human resources more effectively, etc.)

  31. 83,4 DEVELOPMENT OF LOCAL TELEPHONY MARKET • LOCAL TELEPHONY MARKET : • Svyazinvest’s position in 2007 • Market Tendencies • Objectives for 2012 • To keep leading positions in the local telephony segment • MOU growth in the local connections segment, [MIN / MONTH] • Mobile traffic replacing fixed traffic • Alternative operators and players from other segments entering the market • Switching voice traffic to datacom networks +20% • Svyazinvest Initiatives • Revenue growth in the local connections segment, [USD MLN] * • To increase the value of subscriber line: • Digitalization of networks • Introduction of service packages • New communication services • «Unlimited» tariffs Market share of Svyazinvest Group in this segment 81% +18% * - line rental and connection services

  32. 83,4 DEVELOPMENT OF INTRA-ZONAL TELEPHONY MARKET • INTRA-ZONAL TELEPHONY MARKET : • Svyazinvest’s position in 2007 • Market Tendencies • Objectives for 2012 • To keep leading positions in the intra-zonal telephony segment • F2M revenue growth, [USD MLN] • Mobile traffic replacing fixed traffic • Reduction of tariffs • New players entering the market +17% • Svyazinvest Initiatives • F2F revenue decrease, [USD MLN] • To provide package offers • To optimize tariffs -12% Market share of Svyazinvest Group in this segment 92%

  33. 83,4 DEVELOPMENT OF INTERNET AND DATACOM MARKET • INTERNET AND DATACOM MARKET : • Svyazinvest’s position in 2007 • Market Tendencies • Objectives for 2012 • Growth of demand for and speed of Internet access • Switching to unlimited offers • Competition between technologies (DSL, ETTH, Wi-Fi, Wi-Max, 3G) • Content becoming increasingly important • To increase market share in the Internet access and datacom segment • Internet and datacom revenue growth, [USD MLN] +62% • Svyazinvest Initiatives • Rapid growth of subscriber database, [xDSL + ETTH, th. ports] • To develop DSL accesson existing subscribers’ lines • To develop ETTH as soon as market saturation occurs • To establish partnerships with content aggregating agents Market share of Svyazinvest Group in this segment 59% +27% As of Jan 1 +28% As of Apr 1 +31% As of Jul 1 As of Oct 1

  34. 83,4 • 2006 • 1H2007 Rostelecom Competitors • 96% • 94% • 91% • 89% ILD DLD • 2006 • 1H2007 2006 1H2007 DEVELOPMENT OF LD MARKET • LD MARKET : • Svyazinvest’s position in 2007 • Market Tendencies • Objectives for 2012 • New players entering the market andcompetition increasing • Voice traffic switching to datacom networks • Mobile traffic replacing fixed traffic • Development of intelligent telecom networks • To keep leading positions in the LD communications segment • Prices for services rendered are lower than competitors’[Average Income Rate, USD MIN] • Svyazinvest Initiatives • Market share is decreasing as a result of liberalization • To protect company’s positions on the retail market • To develop intelligent telecom networks • To strengthen positions on the corporate clients market, incl. at the federal level Market share of Svyazinvest Group in this segment 60%

  35. GROWTH OF OPERATING RESULTS Between 2008 and 2012, the income CAGR will equal8,5%* GoodFINANCIAL RESULTS, as the company anticipates that income will grow more than expenses Income • Svyazinvest Initiatives 2012 • To increase the share of broadband services • To promote bundled services • To increase customer loyalty • To diversify distribution channels and roll out a system for active agent sales • To increase the share of corporate clients Between 2008 and 2012,the expenses CAGR will equal 7,2%* Expenses • Svyazinvest Initiatives EBITDA margin 41,4%* • To introduce outsourcing • To develop e-auctions • To optimize real estate assets • To optimize business processes and organizational structure • To roll out New Generation Networks • To optimize the number of employees * - 7 RTOs

  36. SVYAZINVEST GROUP: PROSPECTS OF KEY PERFORMANCE INDICATORSFOR 2008 * REVENUE, USD bln OPERATING EXPENSES, USD bln OPERATING INCOME, USD bln NUMBER OF EMPLOYEES,thousand * - 7 RTOs + Rostelecom

  37. 55 bld. 2 ulitsa Plyuschikha • 119121 Moscow RUSSIA • Phone: +7 (495) 727 0473 • Fax: +7 (495) 727 0475 • E-mail: ir@svyazinvest.ru • Web site: www.svyazinvest.ru

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