General information about the breakthrough project

1. «Convergence of the telecommunications network of JSC Kazakhtelecom to the NGN (next generation network) technology

2. General information about the breakthrough project Brief description of the project: The network of next generation (NGN) is a universal multi target network intended to provide convergent services on voice, video and data communications with application of packet switching technology. JSC Kazakhtelecom was the first among CIS countries to implement the project on construction of long distance domestic NGN network on the nationwide scale having all the regional (oblast centers) of the country connected thereto. It is expected that within the framework of the breakthrough project the local networks will be gradually switched to the NGN technologies of the largest cities of the RK. The degree to which the project will impact the economy of the country:

3. Approvement of project implementation necessity The key advantage of switching the network of telephone communications to the NGN technology is separation of the process of call management from the switching process, which enables to fully control the process of connection at any stage as opposed to the networks based on the traditional Automated Telephone Exchanges (COs) that are not able to provide this, thereby giving the possibility to create and provide practically unlimited range of services. Practically all modern telephone services can be provided exclusively to the subscribers of the telecommunications networks based on the VoIP technology. In addition to that, switching the telephone network to the VoIP technology also has a number of economic advantages allowing to reduce both the investment costs and network operating costs. Given the world trends in development of telecommunications networks, practically complete termination of developments of switching systems based on TDM architecture, and also complications in arranging the services with value added cost in the traditional networks, the implementation of the project on convergence of the TDM networks to the NGN technology will play a decisive role for development of the telephone communications networks. Indicators of economic efficiency of the project:

4. Investment plan of the project implementation General cost of the project “Convergence of the telecommunication network of JSC Kazakhtelecom to the NextGeneration Network (NGN) technology with the capacity of 1 mln subscribers” is USD 225 mln/KZT 27,1 bln. The total volume of investments implemented at the expense of the JSC Kazakhtelecom’s own funds for the period of 2005-August - 2008 made up KZT 15,119 bln., including KZT 3,019 bln implemented in 2008.

5. The current status of the project implementation The following works were carried out in the project implementation period from 2005 to 2007: • packet domestic long distance and international communication network was created; • metropolitan transport networks Metro Ethernet were constructed in all oblast centers, and towns of Rudny, Semipalatinsk, Zyrianovsk, and 30 regional centers of the republic; • Multiservice telecommunication network of the left bank of Ishim river in the city of Astana was constructed; • 235 350 numbers of multiservice subscriber access and 205 722 ADSL ports were installed in all oblast centers of the republic and towns of oblast subordination Stepnogorsk, Schuchinsk, Kulsary, Kordai, Saran, Rudny; In 2007, the Company started construction of a new high-speed backbone IP/MPLS with bandwidth capacity 10 Gbit/s in core (between the cities of Astana, Almaty and Aktobe) and 1 Gbit/s – for other oblast centers of the Republic of Kazakhstan Till the end 2007, local NGNs were put into operation in the cities of Astana, Almaty, Karaganda, Pavlodar, Taraz, Taldykorgan. The total NGN capacity made 410 830 subscribers by the end 2007.

6. The current status of the project implementation At the end 2007 Multiservice telecommunication network of the left bank of Ishim river in the city of Astana was constructed and put into operation. 11 232 POTS and 2 464 ADSLs were introduced. During the last period NGNs were put into operation in the cities of Ust-Kamenogorsk, Semipalatinsk, Petropavlovsk and Shymkent. The total subscriber capacity of these networks equaled to 48 064 numbers of multiservice subscriber access and 103 642 ADSL ports. The works are carried out in the cities of Kokshetau, Aktobe and Atyrau. NGN is planned to be put into pilot operation by the end of this year. In 2008, it is planned to interconnect 348 222 subscribers to NGN as a whole. The total NGN capacity will equal to 759 052 subscribers by the end 2008. JSC Kazakhtelecom has been the first among CIS countries to implement NGN project nationwide and interconnect all oblast centers of the Republic. .

7. Contact information Address JSC Kazakhtelecom Astana city, Republic of Kazakhstan Sary-arka district 31, Abai avenue Contact persons: Mr. Askar Kuanyshevich Zhumagaliyev– Chairman of the Management Board of JSC Kazakhtelecom tel.: +7 (7172) 587 704 Mrs. Rimma Tagirovna Kim – Head of division tel.: +7 (727) 258 32 70 fax: + (727) 258 32 07 mobile.: +7 707 700 02 00 email: rimma.kim@telecom.kz