Rostelecom OJSC: Rostelecom Completes the First Stage of Establishing a Joint Venture with Tele2 Russia

  Rostelecom OJSC: Rostelecom Completes the First Stage of Establishing a
  Joint Venture with Tele2 Russia

UK Regulatory Announcement

MOSCOW

  ROSTELECOM COMPLETES THE FIRST STAGE OF ESTABLISHING A JOINT VENTURE WITH
                                 TELE2 RUSSIA

Moscow, Russia – March 28, 2014 –Rostelecom OJSC (MOEX: RTKM, RTKMP; OTCQX:
ROSYY), Russia’s national telecommunications operator, today announces that it
has completed the first stage of the deal to establish a joint venture with
Tele2 Russia, which will operate as LLC T2 RTK Holding.

As a result of completing the first stage of the deal, Rostelecom has
contributed the shares of its mobile subsidiaries to the JV, including CJSC
Sky Link, as well as the assets of its start-up regions which include Moscow
and St Petersburg among other regions. Debt obligations amounting to RUB 37
billion were simultaneously transferred to the JV.

By closing the first stage of the deal, Rostelecom has received a 45% voting
interest and a 26% economic interest in the JV.

The second stage of the deal, which will involve transferring all of the
Company’s integrated mobile assets into the JV, is scheduled to be completed
by the end of this year. CJSC RT-Mobile, a 100% subsidiary of Rostelecom, is
expected to be registered on 1 April, 2014. Rostelecom’s integrated mobile
assets will be transferred to RT-Mobile as part of the reorganisation process.

This deal is a key event in the implementation of Rostelecom’s mobile
strategy. By possessing a stake in a large and fast-growing mobile operator,
Rostelecom will significantly strengthen its presence in Russia’s rapidly
developing mobile data market and successfully compete with the main market
players.

Sergey Kalugin, President of Rostelecom commented: “We are on track to
complete the deal to create this important JV and we are pleased to have
finalized the first phase on schedule. The JV is now able to launch its
integration process and work on its detailed business plan and strategy. The
second stage of the deal will see Rostelecom merge its integrated mobile
assets into the JV, a process which begun as soon as shareholders approved the
spin-off and officially establish the company. We still have a number of
significant steps to make before licences are reissued and RT-Mobile is
transferred into the JV. We expect the second stage of the deal to complete by
the end of the year.”

                                    * * *

For more information please visit http://www.rostelecom.ru/en/ir 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

ir@rt.ru

                                    * * *

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 10.6 million fixed-line broadband subscribers and over 7.5 million
pay-TV subscribers. 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 325.7 billion of consolidated revenues, RUB
113.3 billion of OIBDA (34.8% of revenues) and RUB 24.1 billion of net income
for the 12 months ended December 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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