Rostelecom OJSC: Rostelecom Launches Its 3G Plus Network in St Petersburg

  Rostelecom OJSC: Rostelecom Launches Its 3G Plus Network in St Petersburg

UK Regulatory Announcement

MOSCOW

             ROSTELECOM LAUNCHES ITS 3G+ NETWORK IN ST PETERSBURG

Moscow, Russia – August 6, 2013 – Rostelecom OJSC (the “Group”) (MICEX - RTS:
RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator,
today announces that it has commercially launched the first segment of its 3G+
mobile network in St Petersburg. Rostelecom’s new mobile network complements
the services that the Company already offers in St Petersburg, which currently
are fixed telephony, broadband and interactive TV.

In light of the growing demand for mobile data transfer services, Rostelecom’s
3G+ network was installed using the modern HSPA+ technology. This technology
provides data transfer speeds of up to 21MB/s, compared to speeds of just
3.6MB/s provided by the first 3G networks. Rostelecom’s customers in St
Petersburg now benefit from new mobile internet speeds, and have access to
modern, interactive services via smartphones, tablets and USB-modems. The
Company plans to upgrade its network to reach the maximum speed of up to
42MB/s in the future.

Rostelecom is steadily growing the number of base stations the Group has in St
Petersburg over the coming years, which will eventually allow the Company to
achieve a high level of penetration in the region. It is important to note
that the construction of Rostelecom’s mobile network is based on its powerful,
high-capacity fibre-optic network, which allows the Company to fully unlock
the capabilities of HSPA+ technology.

Larisa Tkachuk, Senior Vice President and Commercial Director of Rostelecom,
commented: “Launching a 3G+ network in St Petersburg, the birthplace of
Russian mobile communications, is a significant event for Rostelecom. These
are of course only the first steps, but we plan to dramatically improve
coverage in the northern capital in the future. We look forward to receiving
feedback from our first subscribers to help us to improve the network’s
performance. We have placed a strong emphasis on data services when developing
Rostelecom’s mobile business, since the majority of modern services are
connected to the internet, including online shopping. Millions of St
Petersburg residents actively use Rostelecom’s various household services, and
we are now showcasing Rostelecom as a mobile phone operator.”

As of August 2013, Rostelecom has already built and tested 3G networks in 22
regions. The Company plans to establish more than 8,000 base stations across
the country. Ericsson and Huawei are providing technical equipment and
solutions for the project.

Rostelecom and its subsidiaries, NCC CJSC, BWC CJSC, ETK CJSC, Sky Link CJSC,
Volgograd-GSM CJSC, AKOS CJSC and Wireless Information Technologies LLC,
provide mobile services to 13.6 million subscribers.

                                    * * *

Rostelecom (www.rostelecom.ru) is Russia’s largest national telecommunications
operator with presence in all Russian regions. The Group is a universal
operator and undisputable leader of broadband and pay-TV markets in Russia
with over 9.5 million fixed-line broadband subscribers and over 6.8 million
pay-TV subscribers. As Rostelecom develops its mobile data networks, its
position as a major mobile operator is growing with over 13.5 million
currently subscribed to Rostelecom’s mobile voice services. The Group is also
an important innovator that provides solutions in the field of medicine,
E-Government, cloud computing and education.

Rostelecom was assigned a ‘BBB-’ and ‘BB+’ international credit ratings by
Fitch Ratings and Standard & Poor’s respectively, both with a ‘Stable’
outlook. The Group generated RUB 77.1 billion of consolidated revenues, RUB
28.8 billion of OIBDA (37.4% of revenues) and RUB 6.4 billion of net income
for the first three months ended March 31, 2013.

                                    * * *

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.

Contact:

Rostelecom OJSC
 
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