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Rostelecom OJSC: ROSTELECOM’S BROADBAND SUBSCRIBER BASE EXCEEDS 9 MILLION USERS



  Rostelecom OJSC: ROSTELECOM’S BROADBAND SUBSCRIBER BASE EXCEEDS 9 MILLION
  USERS

UK Regulatory Announcement

MOSCOW

        ROSTELECOM’S BROADBAND SUBSCRIBER BASE EXCEEDS 9 MILLION USERS

Moscow, Russia – November 13, 2012 – Rostelecom OJSC (the “Group”) (MICEX -
RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications
operator, today announces that its broadband subscriber base now exceeds 9
million users as at the beginning of November 2012. Rostelecom remains the
leader of the Russian broadband market with a 40% market share^1, which is
almost 4 times more than its nearest competitor.

Growth in Rostelecom’s broadband subscriber base is being driven by an
increase in the number of broadband subscribers using high-throughput
broadband services. These services utilise FTTH and FTTP technology and the
number of broadband subscribers using this technology is doubling on an annual
basis.

Rostelecom intends to expand its broadband consumer offering by upgrading its
main package with new features so that customers are offered the most
competitive bundles both in terms of price and content. The Company plans to
carry out a number of promotional activities, which includes offering tariff
plans on trial periods to test Rostelecom’s higher-speed services, and
includes offering promotional rates when a user subscribes to a set of
services or additional options. The Group also plans to launch additional
packages that are tailored to users’ preferences. A variety of new services
will be added to Rostelecom’s content offerings, including new TV channels,
video and music content, built-in communications and e-commerce programmes.

Furthermore, a new loyalty programme, which will be launched in 2013, will
enable subscribers to earn bonus points which they can use to pay for
Rostelecom’s services or to subscribe to new services and offers.

Pavel Zaytsev, Senior Vice President of Rostelecom, commented: “A great deal
of thought and investment has gone behind the development of this strategic
business segment. We are currently modernising our ‘last mile’ infrastructure,
moving to fibre-optic access technologies to connect our customers. This
enables us to offer subscribers the most advanced packages around, which
includes Interactive TV and other content services.”

                                    * * *

For more information please visit www.rt.ru/en or contact:

Investor Relations Department

Tel. +7 (499) 995 97 80

ir@rt.ru

Rostelecom (www.rostelecom.ru) is Russia’s largest national universal
telecommunications operator. Rostelecom has the largest domestic backbone
network and a unique ‘last mile’ infrastructure to access millions of
subscribers across Russia. The Company holds licences to provide a wide range
of telecommunications services, including fixed and mobile telephony,
broadband Internet access, pay TV and cloud solutions, to residential,
corporate and governmental subscribers and third party operators across all
regions of the Russian Federation. Rostelecom continues to lead in delivering
high-quality internet services. The total capacity of its clients’ connections
exceeds 2.3 Tb / s, which is a record among Russian operators. Rostelecom
cooperates with 600 national and international fixed line and mobile
operators, which gives the Group direct access to over 150 operators’ networks
in 70 countries. Rostelecom also jointly operates international submarine
cable networks.

Rostelecom’s ordinary and preferred shares are traded on the MICEX-RTS (RTKM,
RTKMP) stock exchange, and its depository receipts are traded over-the-counter
in the United States on the OTCQX under the symbol ‘ROSYY’. Rostelecom was
assigned a ‘BBB-’ and ‘BB+’ international credit ratings by Fitch Ratings and
Standard&Poor’s respectively, both with a ‘Stable’ outlook. Rostelecom had
27.8 million local fixed-line voice subscribers, 12.9 million mobile voice
subscribers, 8.6 million fixed-line broadband subscribers and 6.2 million
pay-TV subscribers at the end of 2Q 2012. The Group generated RUB 159.9
billion of consolidated revenues, RUB 64.7 billion of OIBDA (40.5% of
revenues) and RUB 23.4 billion of net income for the six months ended June 30,
2012.

                                    * * *

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.

^1 Source: ACM-Consulting

Contact:

Rostelecom OJSC
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