Rostelecom to develop flexible multiplexer network

Within the framework of construction and upgrading of the flexible access multiplexer network (FAMN) the branches of OJSC Rostelecom are in the process of connecting subscribers to FAMN in a number of cities located within their respective coverage zones. Thus, the Southern Branch obtained authorization to operate facilities in the towns of Stavropol, Sochi and Volgograd.

Authorization is obtained by the Volga Branch to operate five facilities located down in Ulyanovsk, Samara, Togliatti, Kazan and the town of Shigony, Samara region. Obtaining of authorization to establish connection to FAMN in Saratov, Izhevsk and Yoshkar-Ola is expected in the near future.

The Siberian Branch is authorized to operate facilities located in Ulan-Ude, Chita and Kochnevo township, Novosibirsk region.

Facilities are connected in the cities of Yaroslavl, Kostroma and Tver on the territory served by the Central Branch. Authorization to operate access nodes to FAMN in some other cities located within the Central Branch coverage zone is expected to be received in 2003. On the territory of the North-Western Branch FAMN equipment was installed in Kalinigrad. A construction of FAMN access nodes is foreseen to take place in 2003 in St. Petersburg, Murmansk, Lyuban and Petrozavodsk.

Connection to flexible access multiplexer network will enable OJSC Rostelecom:

• to enhance service quality for existing clients due to provision of optimum put-through capacity communication channels;
• to optimize network performance;
• to create prerequisites for a further service volume increase related to digital channel lease.

Expanding flexible multiplexer network to over 45 Russian cities is on Rostelecom’s target for the year 2003. Decisions on where to construct new access nodes and on the necessity of such construction are to be made based upon projected demand for digital communication channels on the territory of the Russian Federation.

Certain statements in this press-release are “forward-looking statements” within the meaning of the U.S. federal securities laws and are intended to be covered by the safe harbors created thereby. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks include the risk of changes the Company's operations and business prospects, the general financial and economic circumstances, relating to regulation of the Russian telecommunications industry and the Russian legislation; the competition and other risks. For a more detailed discussion of these and other factors, see the Company's Annual Report on Form 20-F for its most recently completed fiscal year and the Company's other public filings with The U.S. Securities and Exchange Commission. Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, the Company cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as maybe required under applicable the U.S. federal securities laws.