PRESS RELEASE

ROSTELECOM REPORTS CONSOLIDATED IFRS FINANCIAL RESULTS FOR THE THIRD QUARTER AND NINE MONTHS, ENDED SEPTEMBER 30, 2011 – December 8, 2011 – OJSC (the “Group”) (RTS, MICEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announced its unaudited consolidated 1 IFRS financial results for the third quarter and nine months, ended September 30, 2011. Video version of this press-release is available on the Company’s website http://www.old.rt.ru/en/centr-invest/financial/IFRS/detail.php?SECTION_ID=1091.

THIRD QUARTER FINANCIAL HIGHLIGHTS • Consolidated revenues up 8% year on year to RUB 73.9 billion • OIBDA 2 up 9% year on year to RUB 29.5 billion • OIBDA margin increased to 39.9% • Net income 2 up 1% year on year to RUB 10.3 billion • Capital expenditure amounted to RUB 15.4 billion or 21% of consolidated revenues

NINE MONTHS FINANCIAL HIGHLIGHTS • Consolidated revenues up 7% year on year to RUB 217.5 billion • OIBDA up 5% year on year to RUB 85.5 billion with OIBDA margin of 39.3% • Net income up 2% year on year to RUB 29.4 billion • Capital expenditure 3 of RUB 40.9 billion representing 19% of the consolidated revenues • Net debt 4 of RUB 138.1 billion (net debt / annualized OIBDA of x1.3) as of September 30, 2011

NINE MONTHS OPERATING HIGHLIGHTS • Total broadband subscriber base up 27% year on year to 7.9 million with revenues increasing by 21% to RUB 34.7 billion • Total Pay-TV subscriber base increased by almost seven times year on year to 5.8 million • Total subscriber base for local telephony services decreased by 3% year on year to 28.8 million

Alexander Provotorov, President and Chief Executive Officer commented: “We continue to deliver growth despite the turbulent situation in the financial markets and the global economy. Consolidated revenues for the third quarter and nine months were up 7% year on year, OIBDA increased by 5% and we are comfortable with our current level of predominantly rouble-denominated debt remains”.

“We continue to grow our broadband and Pay-TV subscriber base. We have launched a large-scale rebranding campaign, centered on our successful transition to a single entity. The campaign addresses the need to have a single, unified Rostelecom brand by the end of 2012 to replace the dozens of brands that currently represent the Company. We continue to pursue selective acquisitions of local market leaders and we completed two more important transactions during the quarter, increasing our stakes to 100% in each of our two mobile operators in Russia. In addition to this, we recently signed an agreement with Yota to jointly develop and utilise fourth-generation wireless networks and we expect to launch 4G services as a Mobile Virtual Network Operator in the near future. We are on track to achieving the ambitious targets outlined in our strategy by 2015.”

1 Combination of consolidated financial statements of North-West Telecom OJSC, CenterTelecom OJSC, Southern Telecommunications Company OJSC, VolgaTelecom OJSC, Uralsvyazinform OJSC, Sibirtelecom OJSC, Far East Telecom OJSC (“RTOs”), Dagsvyazinform OJSC and Rostelecom OJSC, which had been under common control of OJSC and were merged on April 1, 2011. 2 Here and below, please refer to Attachment 1 to this statement for a full definition of OIBDA 3 Here and below, capital expenditure (“CAPEX”) comprises cash spent on purchase of property, plant and equipment and intangible assets 4 Here and below, net debt is calculated as the sum of long-term loans and short-term borrowings minus cash and cash equivalents and short- term investments

FINANCIAL SUMMARY

% % RUB million 3Q 2011 3Q 2010 change, 9M 2011 9M 2010 change, y-o-y y-o-y Revenue 73,860 68,574 8% 217,458 203,287 7% OIBDA 29,477 27,055 9% 85,517 81,525 5% OIBDA margin, % 39.9% 39.5% 39.3% 40.1% Operating income 15,287 15,066 1% 44,100 44,042 0.1% Operating margin, % 20.7% 22.0% 20.3% 21.7% Net income 10,285 10,149 1% 29,397 28,885 2% Net margin, % 13.9% 14.8% 13.5% 14.2% Capital expenditures 15,361 13,941 10% 40,940 35,128 17% % of revenue 20.8% 20.3% 18.8% 17.3% Net debt 138,068 n.a. - 138,068 n.a. - Net debt/annualized OIBDA 1.3x 1.3х

OPERATING REVIEW Revenue structure by services % % RUB million 3Q 2011 3Q 2010 change, 9M 2011 9M 2010 change, y-o-y y-o-y Fixed Line Local telephony services 21,616 21,120 2% 66,112 63,798 4% Intra-zone telephony services 5,288 5,908 (10%) 16,264 17,917 (9%) DLD/ILD telephony services 5,633 6,742 (16%) 17,782 21,059 (16%) Interconnection and traffic 6,233 5,730 9% 16,399 15,902 3% transit services Broadband Internet 11,429 9,749 17% 34,740 28,635 21% Pay TV 1,905 279 583% 5,036 804 526% Mobile communication services 8,625 8,195 5% 25,094 23,855 5% Data services (VPN, data centres, wholesale Internet 4,957 4,316 15% 13,653 12,172 12% sales) Rent of channels 2,579 2,203 17% 7,128 6,701 6% Other 5,595 4,332 29% 15,250 12,444 23% Total revenue 73,860 68,574 8% 217,458 203,287 7%

Revenue structure by customer segments % % RUB million 3Q 2011 3Q 2010 change, 9M 2011 9M 2010 change, y-o-y y-o-y Residential customers 39,379 38,643 2% 120,066 114,790 5% Corporate customers 17,694 16,058 10% 51,896 47,739 9% Governmental customers 7,929 6,782 17% 22,981 19,408 18% Operators 8,858 7,080 25% 22,515 21,346 5% Total revenue 73,860 68,574 8% 217,458 203,287 7%

The Company generated an 8% year on year increase in revenue in the third quarter to RUB 73,860 million, which reflected: • a 17% year on year increase in revenues from broadband, due to an increased subscriber base

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• a 583% year on year growth of revenues from pay-TV services, mainly due to the acquisition of NTK in February 2011 • a 15% year on year increase in revenues from data services, due to an increasing number of new corporate customers and a strengthening market position. The growth was partially offset by a 16% year on year decline in revenues from Domestic Long Distance and International Long Distance (DLD/ILD) telephony services, which primarily reflected the ongoing changes in customer behavior patterns related to the use of traditional long distance services. Rostelecom reported a 7% year on year revenue growth to RUB 217.5 billion in the nine months of 2011.

Key operating indicators % % Number of Subscribers 3Q 2011 3Q 2010 change, 2Q 2011 change, (millions): y-o-y y-o-y Local telephony 28.8 29.5 (3%) 29.0 (1%) Mobile telephony 5 12.7 11.7 8% 12.0 6% Broadband Internet access incl. 7.9 6.2 27% 7.7 3% Residential 7.3 5.7 28% 7.1 3% Corporate 0.6 0.5 16% 0.6 5% Pay TV 5.8 0.9 574% 5.6 2%

Traffic, generated by residential and corporate subscribers 6 (billions of minutes) Intra-zone 2,7 3,0 (10%) 2,8 (3%) DLD 1,2 1,5 (17%) 1,2 3% ILD 0,1 0,2 (19%) 0,1 0%

Rostelecom’s total subscriber base for local telephony services was down 3% year on year to 28.8 million. The decrease was mainly due to the ongoing change in customer patterns regarding the use of traditional fixed-line services. The broadband and Pay-TV subscriber bases continued to grow, both on an organic basis due to the increased penetration of broadband and pay-TV services among local telephony subscribers, and as a result of the acquisition of telecom operators such as NTK. The total broadband subscriber base was up 27% year on year to 7.9 million, while the total Pay-TV subscriber base increased almost by seven times year on year to 5.8 million. The number of mobile telephony subscribers increased by 8% year on year to 12.7 million. The increase resulted from the consolidation of the remaining 50% in Volgograd GSM in third quarter of 2011.

5 Excluding Skylink Group (subsidiary of Svyazinvest) 6 Excluding traffic, generated by other telecom operators 3

STRUCTURE OF OPERATING EXPENSES 7 % % RUB million 3Q 2011 3Q 2010 change, 9M 2011 9M 2010 change, y-o-y y-o-y Personnel costs 18,038 18,215 (1%) 58,265 53,426 9% Interconnection charges 11,376 9,980 14% 29,441 28,306 4% Materials, repairs and 7,316 6,381 15% 21,112 18,950 11% maintenance, utilities Other operating income (2,833) (3,641) (22%) (10,034) (10,530) (5%) Other operating expenses 10,487 10,586 (1%) 33,157 31,609 5% Total 44,384 41,521 7% 131,941 121,761 8%

The Company’s total operating expenses, before depreciation and amortization expenses, increased by 7% year on year to RUB 44,384 million in the third quarter of 2011 (including expenses of “NTK” and Volgograd GSM, acquired in 2011). The performance primarily reflected:

• a 14% year on year increase in interconnect charges to RUB 11,376 million mainly due to an increase in traffic transit; • a 15% year on year increase in materials, repairs and maintenance and utility costs to RUB 7,316 million mainly due to an increase in the running cost of existing infrastructure and an increase in maintenance tariffs. Operating expenses, before depreciation and amortization expenses, increased by 8% year on year to RUB 131,941 million in the nine months of 2011. The Company reported a 9% increase in OIBDA to RUB 29,477 million in the third quarter and a 5% increase in OIBDA to RUB 85,517 million for the nine months of 2011, with an OIBDA margin of 39.9% and 39.3%, respectively. Depreciation and amortization expenses increased by 18% year on year in the third quarter to RUB 14,190 million and by 10% year on year for the nine months of 2011 to RUB 41,417 million, due to an increase in capital expenditure and the consolidation of NTK. Rostelecom`s capital expenditure increased by 10% year on year in the third quarter to RUB 15,361 million and by 17% year on year for the nine months of 2011 to RUB 40,940 million. The Company’s capital expenditure primarily comprised the launch of new projects to modernize broadband networks and IT systems; the launch of new services; and the construction of data transmission networks. The Company reported an operating profit of RUB 15,287 million in the third quarter and RUB 44,100 million for the nine months of 2011, with an operating margin of 20.7% and 20.3%, respectively. The year on year increase in financial expenses reflected the payment of interest on the credit lines which were used to acquire the 25% stake in Svyazinvest and 71.8% in NTK. The Group’s equity participation in the earnings of Svyazinvest and Bashinformsvyaz totaled RUB 983 million in the third quarter and RUB 2,531 million for the nine months of 2011. Profit before taxes remained stable year on year in the third quarter, amounting to RUB 13,223 million, and increased by 2% year on year for the nine months of 2011 to RUB 38,082 million. The Company’s income tax was decreased by 4% year on year in the third quarter and increased by 2% year on year for the nine months of 2011 to RUB 2,937 million and RUB 8,684 million respectively, which reflected a decrease in expenses not accountable for tax deduction purposes. Rostelecom’s effective tax rate was 22% in the third quarter and 23% for the year to date, which exceeded the Russian Statutory Income tax rate of 20%, mainly due to certain expenses which were non-deductible for tax purposes. The Company reported a 1% year on year increase in net income to RUB 10,286 million for the third quarter. Net income for the year to date also increased by 2% year on year to RUB 29,398 million.

7 Excluding depreciation and amortization 4

FINANCIAL REVIEW Net cash generated by operating activities decreased by 4% year on year in the nine months of 2011 and amounted to RUB 60,479 million.

Cash used in investing activities increased more by 61% year on year in the nine months of 2011 to RUB 71,863 million, mainly as a result of the acquisition of 71.8% of NTK and 39.9% of Bashinformsvyaz, as well as purchases of property, plant and equipment.

Cash provided by financing activities in the first nine months of 2011 amounted to RUB 4,823 million, and primarily comprised loans secured to finance the acquisition of NTK.

The Group’s total borrowings, including current and non-current obligations, were up 5% during the quarter to RUB 145,575 million, and comprised loans raised by the companies to acquire the 25% stake in Svyazinvest and the 71.8% stake in NTK, as well as RUB 14,462 million of bonds. More than 96% of the Group’s total debt was ruble denominated at the end of the quarter.

The Group’s net debt therefore amounted to RUB 138,068 million. This was equivalent to 1.3x times annualized OIBDA.

SIGNIFICANT EVENTS OF THE THIRD QUARTER OF 2011 AND AFTER THE END OF REPORTING PERIOD • On August 10, 2011, Rostelecom ordinary shares of the unified issue commenced trading on MICEX under the ticker RTKM in line with the approval of the cancellation of the individual numbers (codes) of the 16 additional issues of ordinary Rostelecom shares (RTKM-002D - RTKM-017D 8) by the Russian Federal Service for Financial Markets’ (‘FSFM’). Since August 10, 2011 one issue of Rostelecom ordinary shares (RTKM) and one issue of preferred shares (RTKMP) have been traded on MICEX. • On August 31, 2011, Rostelecom acquired a 50% stake in CJSC Volgograd-GSM from SMARTS Group for a total cash consideration of RUB 2,322 million (approximately US$ 80.5 million 9). As a result, Rostelecom now holds a 100% stake in Volgograd-GSM. The company had 855 thousand mobile subscribers as at the end of the first quarter of 2011. • The MSCI has included the Company’s ordinary shares in the Large Cap Segment of the MSCI Global Standard Indices and MSCI Russia Index with 3.43% weight, effective from September 1, 2011. • On September 2, 2011, Rostelecom acquired a 49% stake in CJSC Orenburg – GSM from SMARTS Group for a total cash consideration of US$ 4 million (approximately RUB 115.6 million 10 ). As a result, Rostelecom now holds a 100% stake in Orenburg – GSM. The company had 185 thousand subscribers at the end of the first quarter of 2011. • On October 31, 2011, Rostelecom announced that its Board of Directors has authorised a buyback of Rostelecom’s ordinary and preferred shares up to a total value of US$ 500 million. • On December 2, 2011, Rostelecom signed an agreement with Yota, the Russian mobile broadband provider, to jointly develop and utilise fourth-generation wireless networks (4G). The agreement will facilitate the development and expansion of advanced communications technologies in the Russian Federation, including the latest 4G-LTE system. Both companies will make full use of each other’s telecommunications infrastructures and advanced telecommunications services will be made more accessible to Russian residents.

8 Registered numbers 1-01-00124-А-002D - 1-01-00124-А-017D 9 Exchange rate of Central Bank of Russia as of August 31, 2011 10 Exchange rate of Central Bank of Russia as of September 2, 2011 5

OTHER INFORMATION

Conference call

Rostelecom will host a conference call today at 8.00 AM (ET) / 1.00 PM (UK) / 2.00 PM (CET) / 5.00 PM (MOSCOW).

Participants may access the call by dialling the following numbers:

UK/ International: +44 20 8515 2302 US: +1 480 629 9771

A replay of the conference call will be available on the Company’s website http://www.old.rt.ru/en/centr- invest/financial/IFRS/detail.php?SECTION_ID=1091 in due course.

FOR MORE INFORMATION PLEASE CONTACT:

IR department Tel. +7 (499) 995-97-80 [email protected]

ATTACHMENTS: 1. Reconciliation of OIBDA; 2. Statement of Comprehensive Income for the nine months, ended 30 September, 2011 3. Statement of Cash Flows for the nine months, ended 30 September, 2011 4. Statement of Financial Position as at 30 September, 2011

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ATTACHMENT 1 Reconciliation of OIBDA

OIBDA is a non-U.S. GAAP and non-IFRS financial measure, which the Company defines as operating income before depreciation and amortization. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt. OIBDA should not be considered in isolation as an alternative to net income, operating income or any other measure of performance under U.S. GAAP or IFRS.

% % RUB million 3Q 2011 3Q 2010 change, 9M 2011 9M 2010 change, y-o-y y-o-y Operating income 15,287 15,068 1% 44,100 44,042 0.1% Add: Depreciation and amortization 14,190 11,987 18% 41,417 37,483 10% OIBDA 29,477 27,055 9% 85,517 81,525 5% OIBDA margin, % 39.9% 39.5% 39.3% 40.1%

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ATTACHMENT 2 Statement of Comprehensive Income for the 3 quarter and 9months, ended September 30, 2011

Nine month period ended Three month period ended 30 Sept 2011 30 Sept 2010 30 Sept 2011 30 Sept 2010 (unadited) (unadited) (unadited) (unadited)

Revenue 217,458 203,287 73,860 68,574 Operating expenses Wages, salaries, other benefits and payroll taxes (58,265) (53,426) (18,038) (18,215) Depreciation and amortisation (41,417) (37,483) (14,189) (11,987) Interconnection charges (29,441) (28,306) (11,376 ) (9,980 ) Materials, utilities, repairs and maintenance (21,112) (18,950) (7,316) (6,381) (Loss)/gain on disposal of property, plant and equipment (308) 33 0 (79) Bad debt expense (391) (749) (496) (263) Other operating income 10,034 10,530 2,833 3,641 Other operating expenses (32,458) (30,894) (9,991) (10,244)

Total operating expenses, net (173,358) (159,245) (58,573) (53,508)

Operating profit 44,100 44,042 15,287 15,066

Income from associates 2,531 157 983 60 Finance costs (9,778) (8,612) (3,131) (2,623) Other investing and financial (loss)/gain 1,551 2,174 1,147 875 Foreign exchange gain, net (323) (387) (1,064) (185)

Profit before income tax 38,081 37,374 13,222 13,193

Income tax expense (8,684) (8,489) (2,937) (3,044)

Profit for the year 29,397 28,885 10,285 10,149

Other comprehensive income Revaluation gain on available-for-sale investments (174) 7 (456) 87 Income tax in respect of other comprehensive income (loss) items 35 (2) 92 (17) Other comprehensive income for the year, net of tax (139) 5 (364) 70

Total comprehensive income for the year 29,259 28,890 9,921 10,219

Profit attributable to: Equity holders of the Group 29,551 28,992 10,463 10,166 Non-controlling interests (154) (107) (178) (17)

Total comprehensive income attributable to: Equity holders of the Group 29,412 28,997 10,099 10,236 Non-controlling interests (154) (107) (178) (17)

Earnings per share attributable to equity holders of the Combined entity – basic (in RUB) 10.11 9.18 3.58 3.28 Earnings per share attributable to equity holders of the Combined entity – diluted (in RUB) 9.93 9.13 3.52 3.26

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ATTACHMENT 3 Statement of Cash Flows for the 9 months, ended September 30, 2011

Nine-month periods ended

September 30, 2011 September 30, 2010 Cash flows from operating activities Profit before income tax 38,081 37,374 Adjustments to reconcile profit before ta х to cash generated from operations: Depreciation, amortization and impairment losses 41,417 37,483 Loss/(gain) on disposal of property, plant and equipment and intangible assets 308 (33) Bad debt expense 391 749 Income from associates (2,531) (157)

Finance costs excluding finance costs on pension and other long-term social liabilities 8,776 8,159 Other investing and financing gain (1,551) (2,174) Share based payment expenses 513 2,774 Foreign exchange loss 323 387 Changes in net working capital: Increase in accounts receivable (4,469) (4,574) Increase in employee benefits 1,029 812 Increase in inventories (1,521) (627) Decrease in accounts payable, provisions and accrued expenses (4,720) (1,418) Increase/(decrease) in other assets and liabilities 2,626 (20) Cash generated from operations 78,672 78,735 Interest paid (9,212) (8,525) Income tax paid (8,981) (6,910)

Net cash provided by operating activities 60,479 63,300 Cash flows from investing activities Purchase of property, plant and equipment and intangible assets (40,940) (35,128) Proceeds from sale of property, plant and equipment and intangible assets 751 402 Acquisition of financial assets (5,455) (2,165) Proceeds from disposals of financial assets 8,041 20,255 Interest received 1,472 1,650 Dividends received from associates 193 175 Purchase of subsidiaries, net of cash acquired (32,285) (3,687) Acquisition of associates (3,640) (26,000)

Net cash used in investing activities (71,863) (44,498)

Cash flows from financing activities Purchase of treasury shares (6) (25,156) Proceeds from bank and corporate loans 163,848 87,811 Repayment of bank and corporate loans (146,902) (57,731) Proceeds from bonds 12 1,359 Repayment of bonds (8,398) (9,767) Proceeds from promissory notes 13,490 3,820 Repayment of promissory notes (14,095) (3,042) Repayment of vendor financing payable (323) (762) Proceed from /(Repayment of) other non-current financing liabilities 54 (24)

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Repayment of finance lease liabilities (2,075) (3,086) Dividends paid to shareholders of the Group (113) (4,756) Acquisition of non -controlling interest (366) (71) Dividends paid to non-controlling shareholders of subsidiaries (303) -

Net cash provided by/(used in) financing activities 4,823 (11,405)

Effect of exchange rate changes on cash and cash equivalents (15) (336) Net (decrease)/increase in cash and cash equivalents (6,576) (7,061)

Cash and cash equivalents at beginning of the period 12,627 13,620

Cash and cash equivalents at the end of the period 6,051 20,681

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ATTACHMENT 4 Statement of Financial Position as at September 30, June 30, 2011, March 31, 2011, and 2010

30 Sept 2011 30 June 2011 31 March 2011 31 December (unadited) (unadited) (unadited) 2010

ASSETS

Non-current assets Property, plant and equipment 311,077 304,492 303,943 301,068 Investment property 333 309 292 356 Goodwill and other intangible assets 62,833 62,320 60,004 30,209 Investment in associates 32,759 32,759 28,789 27,517 Other investments 14,034 13,189 12,946 10,589 Deferred tax assets 901 805 1,127 530 Other non-current assets 4,647 6,151 6,883 3,645

Total non-current assets 426,584 420,025 413,984 373,914

Current assets Inventories 5,954 5,725 4,907 4,156 Trade and other accounts receivable 31,378 30,876 33,153 25,284 Prepayments 2,210 2,635 2,762 1,993 Prepaid income tax 1,312 2,743 2,929 1,745 Other investments 1,455 2,364 7,938 5,580 Cash and cash equivalents 6,051 8,754 8,423 12,627 Other current assets 1,103 1,303 2,580 1,512

Total current assets 49,463 54,400 62,692 52,897

Total assets 476,047 474,425 476,676 426,811

EQUITY AND LIABILITIES Equity attributable to equity holders of the Group Share capital 106 106 100 100 Additional paid-in capital 33,424 33,424 33,424 33,424 Treasury shares (25,416) (25,416) (25,416) (25,410) Retained earnings and other reserves 234,828 224,737 215,582 204,981 Total equity attributable to equity holders of the Group 242,942 232,851 223,690 213,095 Non-controlling interests 7,804 8,045 4,600 12

Total equity 250,746 240,896 228,290 213,107

Non-current liabilities Loans and borrowings 78,341 102,127 119,208 87,941 Employee benefits 17,226 16,671 16,123 16,197 Deferred tax liabilities 16,486 16,435 16,609 12,281 Accounts payable, provisions and accrued expenses 104 115 125 202 Other non-current liabilities 2,245 1,681 2,469 1,574

Total non-current liabilities 114,402 137,029 154,534 118,195

Current liabilities Loans and borrowings 67,234 48,117 51,519 50,096 Accounts payable, provisions and accrued expenses 36,992 37,994 34,625 38,935 Income tax payable 58 3,302 282 45 Other current liabilities 6,615 7,087 7,426 6,433

Total current liabilities 110,899 96,500 93,852 95,509

Total liabilities 225,301 232,529 248,386 213,704 Total equity and liabilities 476,047 474,425 476,676 426,811 11

* * * Rostelecom (www.rt.ru/en) is Russia’s national telecommunications operator and now also includes the regional incumbent telecommunications operators (CentreTelecom, SibirTelecom, , Uralsvyazinform, VolgaTelecom, North-West Telecom and Southern Telecommunications Company) and Dagsvyazinform. Rostelecom has the largest domestic backbone network (approximately 500 thousand km) and last mile connections to approximately 35 million households in Russia. The Company holds licences to provide a wide range of telecommunications services (telephony, data, TV and value-added solutions) to residential, corporate and governmental subscribers and third party operators across all regions of the Russian Federation. The Rostelecom brand is one of Russia’s ten most trusted brands (source: Romir market research).

Rostelecom’s ordinary and preferred shares are traded on the RTS (RTKM, RTKMP) and MICEX (RTKM, RTKMP) stock exchanges, and its depository receipts are traded over-the-counter in the United States on the OTCQX under the symbol ‘ROSYY’. Rostelecom is majority owned (53.2% of ordinary shares) by the Russian Government and has a free float of 40.7% of the outstanding ordinary shares and 71.1% of the outstanding preferred shares. Standard&Poor’s has assigned Rostelecom a ‘BB+’ international credit rating with a ‘Stable’ outlook. Rostelecom had 28.8 million local fixed-line voice subscribers, 12.7 million mobile voice subscribers, 7.9 million fixed-line broadband subscribers and 5.8 million pay-TV subscribers at the end of the third quarter of 2011. The Group generated RUB 275.7 billion of combined and consolidated revenues, RUB 101.4 billion of OIBDA (36.8% of revenues) and RUB 31.3 billion of net income for the twelve months ended December 31, 2010. * * * 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. Those forward-looking statements include, but are not limited to: • Management’s assessment of the Company’s future operating and financial results as well as forecasts of the present value of future cash flows and related factors; • the Company’s anticipated capital expenditures and plans to construct and modernize its network; • the Company’s expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing; • the Company’s plans with respect to improving its corporate governance practices; • the Company’s expectations as to its position in the telecommunications market and the development of the market segments within which the Company operates; • economic outlook and industry trends; • the Company’s expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company’s activity; • other statements regarding matters that are not historical facts.

Such 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, uncertainties and other factors include: • risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions; • risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies; • risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company’s services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market; • technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies; • other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company’s Annual Report and the Company’s other public filings.

Many of these factors are beyond the Company’s ability to control or predict. Given these and other uncertainties, readers are cautioned 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 (which are made as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

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