UK Regulatory Announcement


                       JV WITH TELE2 RUSSIA HOLDING AB

Moscow, Russia – December 12, 2013 – Rostelecom OJSC (Moscow Exchange: RTKM,
RTKMP; OTCQX: ROSYY), Russia's national telecommunications operator
(“Rostelecom”), approve contribution of its mobile assets into a joint venture
(“T2 RTK Holding”) with Tele2 Russia Holding AB (“Tele2 Russia”), equally
owned by VTB Capital, the private equity arm of VTB, one of Russia’s largest
banks (“VTB”), and a consortium of investors.

T2 RTK Holding will become a leading player in the Russian mobile market, with
strong positions in the current regions of presence of Rostelecom and Tele2
Russia, and access to spectrum for next generation mobile services across all
federal regions of Russia. T2 RTK Holding will have a pro forma subscriber
base of approximately 38 million (Q3 2013), with pro forma 2012 revenues of
approximately RUB 101 billion.

                   Rostelecom mobile  Tele2 Russia
Regions covered¹     35                  41
Subscribers (mm)^1   14.1                23.7
Revenue (RUB bn)^2   41                  60
Market share^3       6%                  10%

^1 Number of regions with commercial mobile operations and mobile subscribers
as of Q3 2013

^2 Based on 2012 full year

^3 Based on number of subscribers

Rostelecom will contribute substantially all of its mobile assets and licences
to T2 RTK Holding, while Tele2 Russia will contribute all of Tele2 Russia’s
mobile assets.

The contribution from Rostelecom will be effected in two stages. The first
stage will see Rostelecom contributing its standalone mobile subsidiaries and
assets, including SkyLink, into T2 RTK Holding. At the end of this first
stage, Rostelecom will receive a 45% voting interest and a 26% economic
interest in T2 RTK Holding.

During the second stage, Rostelecom will spin off its integrated mobile
businesses into its new wholly owned subsidiary CJSC RT-Mobile which will be
expected to have Rostelecom’s mobile licences (including the LTE licences)
re-issued to it. Upon completion of the spin-off, Rostelecom will contribute
its whole stake in CJSC RT-Mobile into T2 RTK Holding and increase its
economic interest in T2 RTK Holding to 45%.

The combination will bring substantial benefits to both parties, as well as to
consumers and the entire Russian telecom sector. T2 RTK Holding plans to
undertake significant investments in the development of 3G/LTE network as well
as in innovative and high-quality mobile services for the benefit of Russian
consumers and businesses.

  *T2 RTK Holding will have immediate nation-wide reach and sufficient scale
    to effectively compete with existing mobile operators
  *The combination of mobile assets will allow T2 RTK Holding to capture the
    imminent data growth opportunity in the Russian telecoms market by
    capitalising on Tele2 Russia’s know-how and impressive track record in
    developing mobile operations and on Rostelecom’s wide next-generation
    spectrum holdings
  *T2 RTK Holding will command superior cash flow generation potential, to
    the extent the combination is expected to generate significant synergies
    over the medium term, particularly in respect of network roll-out and
    operation, distribution and customer service
  *T2 RTK Holding will be able to offer converged fixed-mobile products
    across the country
  *Rostelecom will additionally benefit from substantial savings of mobile
    capital expenditures and elimination of debt related to mobile operations
    albeit facing relatively minor negative impact on top line

This transaction represents a key milestone in the implementation of
Rostelecom’s mobile strategy and reinforces Rostelecom’s presence in the
mobile segment. The mobile assets of Rostelecom and Tele2 Russia offer a great
strategic fit, complementing each other in terms of footprint and allowing T2
RTK Holding to capitalise on Tele2 Russia’s know-how across the segments,
proven track record of innovation and Rostelecom’s next-generation spectrum
holdings. Rostelecom substantially enhances its exposure to Russia’s fast
growing mobile data market through its strategic interest in a larger and
faster growing operator, capable of effectively competing with the major
players in the market.

The transaction was approved by Rostelecom’s board of directors and is subject
to regulatory approvals as well as other customary conditions precedent. It is
anticipated that the first stage of the transaction will close in Q1 2014. The
second stage of the transaction will be subject to the completion of
Rostelecom reorganisation in the form of a spin-off, aimed at carving out the
integrated mobile businesses. Such reorganisation requires Rostelecom
shareholder approval, and a general meeting of Rostelecom shareholders to
approve such a reorganisation has been scheduled for December 30, 2013. The
second stage is expected to complete in the first half of 2014.

Sergey Kalugin, President of Rostelecom commented: “We are delighted to have
reached an agreement with Tele2 Russia to create a new national mobile
operator, with tremendous growth opportunities and exciting prospects. With
support from both shareholders, T2 RTK Holding is set to be a story of great

Credit Suisse and J.P. Morgan Limited acted as financial advisors to
Rostelecom on the transaction. Barclays issued a fairness opinion. Linklaters
served as counsel to Rostelecom.

VTB Capital and UBS acted as financial advisors to Tele2 Russia shareholders,
while Skadden served as counsel to Tele2 Russia.

                                    * * *

For more information please visit or contact:

“Rostelecom Investor Relations / Rostelecom IR” application is now available
to download for free from the Apple App Store and Google Play

Investor Relations Department

Tel. +7 (499) 995 97 80

                                    * * *

Rostelecom ( 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 9.8 million fixed-line broadband subscribers and over 7.0 million
pay-TV subscribers. As Rostelecom develops its mobile data networks, its
position as a major mobile operator is growing with over 14.1 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 232.3 billion of consolidated revenues, RUB
87.1 billion of OIBDA (37.5% of revenues) and RUB 24.2 billion of net income
for the first nine months ended September 30th, 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
  *the Company’s plans with respect to improving its corporate governance
  *the Company’s expectations as to its position in the telecommunications
    market and the development of the market segments within which the Company
  *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.


Rostelecom OJSC
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