1. Svyazinvest: 2003 results and 2004 key objectives April 2004 Evgeny Yurchenko, Deputy Director General Svyazinvest

2. 2 APRIL 2004, LONDON Svyazinvest holds a leading position in the Russian fixed-line market CompanyJSC Svyazinvest Foreign shareholders Other CenterTelecom51%8%41% North-West Telecom51%14%35% VolgaTelecom51%17%32% South Telecom51%10%39% Uralsvyazinform53%13%34% Sibirtelecom51%7%42% Dalsvyaz51%16%33% Rostelecom51%27%22% State 75% - 1 share Mustcom 25% + 1 share JSC Svyazinvest 7 mega-regionals JSC Rostelecom MGTS Other Controlling stake Blocking stake Company profile: Svyazinvest foundation – 18 September, 1995 Sale of Svyazinvest stake to Mustcom – July 1997 Consolidation of companies – 72 regional telecom operators were merged into 7 mega-regionals in 2000- 2002 Share capital (voting stock)

3. 3 APRIL 2004, LONDON JSC North-West Telecom 3.4 m lines in service market cap. $561 mn JSC CenterTelecom 5.8 m lines in service market cap. $782 mn JSC South Telecom 3.4 m lines in service market cap. $376 mn JSC Dalsvyaz 1.1 m lines in service market cap. $157 mn JSC Sibirtelecom 3.5 m lines in service market cap. $761 mn JSC Uralsvyazinform 3.3 m lines in service market cap. $1 518 mn JSC VolgaTelecom 4.0 m lines in service market cap. $970 mn Consolidation of telecom operators enabled Svyazinvest to create economically viable, competitive companies In the result of consolidation, mega-regionals:  became more investor attractive  reduced the cost of borrowed funds  optimized equipment purchase

4. 4 APRIL 2004, LONDON 20022003 (estimate) Revenue per line, RUR, th4,2795,06+18,6% Revenue per employee, RUR, th330,1430,3+30,4% Lines per employee7785+9,9% Profit per line, in thousands of RUR1,181,32+18,2% Domestic/international traffic per line, min445,9488,2+9,5% Profit margin, %35,7 2003 Svyazinvest major economic indicators 30,8 39,5 31,3 21,7 35,7 92,2 70,5 119,8 88,5 151,0 111,6 2001 20022003 (estimate) 200120022003 (estimate) Revenue Costs Sales profit, RUR bn Profit margin, % RUR bn Revenue and costs* Sales profit* 26,9 28,2 Average number of lines 29,8 200120022003 (estimate) Lines mn * data include JSC MGTS figures

5. 5 APRIL 2004, LONDON The holding company’s investment activity in 2003 Capital investments Lines installed Domestic / international channels deployed Transmission lines rolled out RUR, bn Lines, mn Chan- nels, th Km, th Digitalization level – 43.1% against 37.46% in 2002. Installed capacity – 33.4 mn lines against 31.26 mn lines in 2002. Increase in main telephone lines – 1.5 m against 1.34 m in 2002. Rural telephony: 302.3 thousand lines installed compared to 214.4 thousand lines in 2002. Automatic exchanges upgrade – 676.5 thousand lines. 20022003 (estimate)20022003 (estimate) 46,4 27,4 41,7 22,0 3,5 2,6 53,0 63,9 14,3 9,5 Roll-out of capital assets RUR, bn

6. 6 APRIL 2004, LONDON Corporate reform During 2003: 1. Svyazinvest in conjunction with the consulting firm developed a comprehensive Corporate Restructuring Program (CRP). The master plan of this program was approved by Svyazinvest management board in December 2003. 2. CRP Management Centers were set up at mega-regional companies; a number of meetings between Svyazinvest working group specialists, the consulting firm and specialists from every mega-regional company were held; development of master plans was launched. Under the Corporate Restructuring Program, at every mega-regional company a CRP master plan based on the standard structure and recommendations on implementing Svyazinvest methodical documents will be developed. Implementation of CRP master plans will improve asset management, reduce current costs, as well as enhance competitiveness and market capitalization of mega-regional companies.

7. 7 APRIL 2004, LONDON RUR Monthly rate for urban fixed subscribers Tariffs growth for local telephone services in 2003: Urban telephony Rural telephony Residential customers 29%30% Budget-funded institutions 22% Business organizations 21% Rebalancing of tariffs for telecom services 123 167 118 162 95 137138  In 2003 tariffs for domestic long-distance calls for budget-funded institutions, business organizations and residential customers were brought to a similar level.  In 2004 Svyazinvest will carry on increasing tariffs for local telephone services to the level of economically feasible costs, inclusive of target profitability, as well as optimizing tariffs for international calls. Average zonal tariff revision for domestic long-distance calls Residential customers Budget-funded institutions Business organizations +2,3% -14,3% +1,5% -8,3% -10,3% -25% Zones 1-4 Zones 5-7

8. 8 APRIL 2004, LONDON Tariffs for local telephone services compared to European telecom operators Average monthly rate, US$ Average monthly rate in Russia is still about 3 times lower than in Central and Eastern Europe, and is 5 times lower than in Western Europe. Average monthly rate at mega-regional companies amounts to $ 4.4 3,9 3,7 4,2 4,3 4,4 5,2 5,4 11,4 15.8 12,5 CenterTelecom South Telecom VolgaTelecom Sibirtelecom North-West Telecom Urasvyazinform Dalsvyaz Cesky Telecom TPSA Matav

9. 9 APRIL 2004, LONDON Corporate governance rating of mega-regional companies (Standard & Poor’s)  Corporate governance ratings of 4 mega-regional companies assigned by S&P were above average ( 5 points out of 10);  Corporate governance ratings of 3 companies were upgraded;  The holding company’s target for 2004 is to further improve its corporate governance, meeting international standards. CompanyRating as of early 2003 Rating as of year end 2003 Change JSC North-West Telecom5,65,90,3 JSC CenterTelecom-5,3 JSC South Telecom5,25,60,4 JSC VolgaTelecom-5,8 JSC Uralsvyazinform6,06,10,1 JSC Sibirtelecom-5,7 JSC Dalsvyaz-5,3 JSC Rostelecom-6,4

10. 10 APRIL 2004, LONDON Marketing Strategy 2004 key marketing objectives To strengthen company’s presence in the telecom market To increase market share in certain segments To increase company’s profitability by means of enhancing revenue per customer and expanding subscriber base To build sustainably growing client-base through increasing customer loyalty Work with allied operators MRC’s marketing strategiesClear-cut system of marketing planning and accounting Program of aggressive service promotion for each customer category Regular marketing researches Implementation of customer relationship management concept Improvement of client service Transfer to unified billing system Upgrade of sales and major corporate client servicing systems

11. 11 APRIL 2004, LONDON Data traffic through Internet, Tbyte Internet connections with PSTN access, min mn Development of value-added services 1,9 2,8 20022003 (estimate) RUR bn Revenues from Internet services GSM subscriber base of Svyazinvest cellular companies, thousand +47,3% 200020012002 2003 2004 479 573 211 503 673 840 1100 280 476 597 1018 4 313 6 850 2002200320022003 Internet services development the Volga region the UralsSiberia

12. 12 APRIL 2004, LONDON Credit ratings of mega-regional companies CompanyRatingOutlookAgency North-West Telecom В-StableS&P South Telecom В-NegativeS&P CenterTelecomCCC+ StableS&P VolgaTelecom ВStableS&P Dalsvyaz ВPositiveFitch Uralsvyazinform В/ВB-Stable / Stable S&P/ Fitch Sibirtelecom В+PositiveFitch Rostelecom ВPositiveS&P

13. 13 APRIL 2004, LONDON 2003 Capitalization dynamics In 2003 Svyazinvest calculated capitalization grew from $ 1.3 bn to $ 3.3 bn. In 2003 MRCs aggregate capitalization increase was over 220%. The best capitalization dynamics among Eastern European telecom companies. + 16% + 221% + 57% + 16% + 221% + 57%

14. 14 APRIL 2004, LONDON 2004 key objectives  Further increase of revenues through stepping up the amount of services offered and raising tariffs for local telephone services.  Production cost optimization, maintaining high profitability of Svyazinvest companies.  Implementation of new approaches to investment planning.  Implementing provisions of the Code of Corporate Conduct across all mega- regional companies.  Development and implementation of measures under the Corporate Restructuring Program of Svyazinvest subsidiaries to enhance company value and management efficiency.  Working out tariff plans for providing local telephone services to subscribers as a basic type of tariff setting.  Gradual increase of tariffs for local telephone services to the level of economically feasible costs, target profitability inclusive.  Continuing the revamp of the holding company’s human resources policy to meet current market challenges.

15. 15 APRIL 2004, LONDON  Revenue per line – 6.0 thousand rubles (up 19% against 2003)  Profit per line – 1.6 thousand rubles (up 18.5% against 2003)  Profit margin – 35.8% (35.7% in 2003)  Investments – 54.6 bn rubles (up 17.7% against 2003)  Lines to be installed – 4.0 mn lines (3.46 mn in 2003)  A proportion of costs in revenues – 73.6% (73.9% in 2003) RUR bn 2003 20042003200420032004 Revenue Operating costs Sales profit Svyazinvest 2004 target performance indicators*: * 2003 estimated data.

16. 16 APRIL 2004, LONDON Thank you! APRIL 2004, LONDON