Rostelecom reaches 1.4 million Interactive TV subscribers across Russia

Moscow, Russia – December 27, 2012 – Rostelecom OJSC (the “Group”) (MICEX - RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, announces that its Interactive TV subscriber base doubled year-on-year to reach 1.4 million households across Russia.

Pavel Zaitsev, Vice President and Commercial Director at Rostelecom, commented: "We expect pay-TV services to grow at an average annual rate of 50% over the next few years, making it one of our business’s fastest growing segments. Our Interactive TV subscriber base doubled during 2012 and revenues generated by the segment have also doubled. As we develop this service, we expect to expand our presence in the market at a similar pace.”

The variety of additional interactive services offered by Rostelecom’s Interactive TV product gives it a significant advantage. Users benefit from having record, pause and rewind functions, there is a Video-On-Demand service and subscribers also have access to a video archive among other services. Since the product was launched, more and more customers have used the Video-On-Demand service and, on average, customers are ordering four films per month.

Subscription services have proven to be very popular with customers of the Video-On-Demand service. Over 15% of Video-On-Demand users subscribed to thematic TV packages, such as “Children’s Club” and NBCUniversal “Picture Box”, which were launched in September 2012 and gained great popularity in the Volga and Ural regions.”

The Interactive TV service is also available on Rostelecom’s media portal, ZABAVA.ru, as well as through a standard TV set-top box. The Company also launched an IPAD application for the portal in mid-December. Rostelecom now offers up to 180 DTV channels and 21 HD channels in the majority of the Russian regions. Customers can subscribe to the basic package from RUB 170 per month, depending on the region and options selected by a customer. The TV service also enables subscribers to interact with social networks through which users can rate a film or a show they watched, simply by clicking a button once, before sharing their opinions with friends.

The Company’s portal, ZABAVA.ru, is an important feature of the Interactive TV service package. It offers a wide selection of licensed content, including over 60,000 electronic books, 8,000 games, over 3 million music tracks, high quality videos and software. The subscription price for a catalogue to download books, games and music is only RUB 99 per month. Rostelecom has multiple licence agreements with world’s largest content producers, including NBCUniversal, Warner Bros., Sony Pictures, 20^th Century Fox, as well as music studios, such as Universal Studios, Freestyle Records and Warner Music, which will keep the portal’s library up-to-date on a weekly basis.