Rostelecom completes deal to create a JV with Tele2 Russia

Moscow, Russia – August 6, 2014 – Rostelecom OJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces that it has completed the second and final stage of the deal to create a new national mobile operator (hereinafter “JV”).

As a result of completing the final stage of the deal, Rostelecom has transferred 100% of its shares in its subsidiary CJSC RT-Mobile to the JV. As part of the deal, Rostelecom spun off its integrated mobile assets into RT-Mobile and had its licences reissued to this entity. After incorporating the relevant amendments into the JV’s charter, Rostelecom will have a 45% stake in the JV’s share capital.

During the first stage of the deal, which was completed on March 28, 2014, Rostelecom transferred its shares in Sky Link and its other mobile subsidiaries to the JV, along with the assets of its “start-up regions”, including Moscow and St Petersburg.

By forming a JV and bringing their mobile assets together, Rostelecom and Tele2 Russia have created a national mobile operator present in 64 Russian regions that owns a wide range of licences and spectrums across Russia, including for 3G and LTE services. The new operator has more than 38 million subscribers and a 16% share of the Russian mobile market^[1].

Sergey Kalugin, President of Rostelecom commented: “The creation of this JV is a major milestone in the implementation of Rostelecom’s mobile strategy. By possessing a stake in a large and fast-growing mobile operator, we significantly strengthen our presence in Russia’s rapidly developing mobile data market, enabling us to successfully compete with other market players.

We have completed our deal to create a mobile JV several months ahead of schedule. This reflects how all of the JV’s shareholders are committed to focusing on the operations of the newly created national mobile player as soon as possible. Our priority now is to integrate the businesses, and finalise the JV’s strategy and business plan. The fact that we were able to finalise this complex deal ahead of schedule leaves us feeling both optimistic and confident that the JV will follow the same pace in strengthening its competitive position, increasing its subscriber base, enhancing top-line growth and delivering additional shareholder value.”