1. Growth outlook for Svyazinvest on completion of its restructuring September 2003 Valeriy N. Yashin, General director JSC Svyaznivest

2. Click to edit Master subtitle style Click to edit Master title style 2 Svyazinvest holds leading positions in the Russian fixed-line market CompanySvyazinvestForeign investorsOthers Center Telecom 51%8%41% Northwest Telecom 51%14%35% Volga Telecom 51%17%32% South Telecom 51%10%39% Uralsvyazinform 53%13%34% Siberia Telecom 51%7%42% Far East Telecom 51%16%33% Rostelecom 51%37%49% State 75% - 1 share Mustcom 25% + 1 share Svyazinvest 7 mega-regionals Rostelecom MGTS Others Controlling stake Blocking stake History Svyazinvest Creation – 18 September, 1995 Sale of the stake to Mustcom – July 1997 Sector consolidation – 72 companies were merged into 7 mega-regionals in 2000-02 Shareholder Structure (voting shares)

3. Click to edit Master subtitle style Click to edit Master title style 3 Northwest Telecom Lines in service: 3.4 mn M.Cap. $303 mn Center Telecom Lines in service: 5.7 mn M.Cap. $620 mn South Telecom Lines in service: 3.3 mn M.Cap. $338 mn Far East Telecom Lines in service: 1.1 mn M.Cap. $126 mn Siberia Telecom Lines in service: 3.5 mn M.Cap. $444 mn Uralsvyazinform Lines in service: 3.2 mn M.Cap. $932 mn Volga Telecom Lines in service: 3.9 mn M.Cap. $647 mn Svyazinvest has consolidated its regional subsidiaries into seven mega-regional fixed telephony operators

4. Click to edit Master subtitle style Click to edit Master title style 4 1Н 20021H 2003 Average number of lines, m27.8329.37 Revenue per line, in thousands of RUR1.642.19 Lines per employee74.983.2 Domestic LD/international traffic per line, min212.5237.4 In 2003 Svyazinvest companies continued to demonstrate sustainable growth and rising financial and operating indicators Holding company, total

5. Click to edit Master subtitle style Click to edit Master title style 5 4.6 0.5 5.4 0.5 1.8 6.4 0.6 3.2 0 1 2 3 4 5 6 7 1H 20011H 20021H 2003 Domestic long-distance traffic International traffic Internet dial-up connections bn min Increased traffic driving growth of Svyazinvest companies 222 429 0 100 200 300 400 500 1H 20021H 2003 Data traffic through Internet Tbyte

6. Click to edit Master subtitle style Click to edit Master title style 6 Svyazinvest: 2002 Results 1.Completion of the Holding’s formal (legal) reorganization 2.Telecommunication companies’ profitability and profits up due to increases in service volumes and tariffs 3.Budget and investment planning systems introduced, cost management scheme launched 4.ABC accounting implemented in test mode 5.ALIS volumes increased, targets set in the “Concept for the Development of the telecommunication sector in Russia” achieved 6.Pilot Project for the Intellectual Network in Russia launched

7. Click to edit Master subtitle style Click to edit Master title style 7 The reorganization resulted in Svyazinvest’s capitalization more than doubllng from US$ 1,100 mn at the beginning of the reorganization in January 2001 to US$ 2,700 mn after the companies’ merger Change in ROCs’ capitalization as compared to the RTS index and communication companies that did not take part in the reorganization ROCs’ capitalization NASDAQ index AKM-Svyaz index The reorganization had a positive effect on Svyazinvest’s capitalization MGTS’s capitalization 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 04.01.0104.06.0104.11.0104.04.0204.09.0204.02.0304.07.03 X 3.1 X 1.7 X 0.7 X 2.3

8. Click to edit Master subtitle style Click to edit Master title style 8 Tariff reform 2. … rental fee growth generally outpaces inflation… 3. … legal basis for raising tariffs*… UrbanRural Population22.9%29.8% Budgetary institutions21.7%22.2% Commercial firms21.0%20.6% CPI (7 month 2003)8.7% Growth of the rates for local telephone communication services in 2003 (as of 01.08.2003) 1. In Russia, tariffs still remains low compared to European telecommunication companies … 7.7 4.0 9.6 9.9 8.4 04812 Svyazinvest average TPSA (Poland) Matav (Hungary) CeskyTelecom Lietuvos Telekomas Average rate USD per month 1.Developing methodological for calculating economically justified costs and profit 2.Approving methodology for calculating economically justified costs and profit 3.Raising tariffs to the level of economically justified costs 4.Transition to the regulating tariffs under the price cap method *Decree of the Government of the Russian Federation No.715 of October 11, 2001 ‘On Improving the Mechanism for Government Regulation of Communication Services Rates’ 4. … our stance in negotiations with the Anti-Monopoly Ministry 3.4 0 3 6 9 20022003200420052006 Svyazinvest average tariff, USD$ per month Plan Factual (01.08.2003) 4.0 8

9. Click to edit Master subtitle style Click to edit Master title style 9 Investments Centralizing equipment purchases, leading to economies of scale Reducing equipment prices given falling demand and stagnation in the global telecommunications sector 1. Reduced investment costs … 2. … leads to relatively low cost of installing a new fixed line … 3. …high demand Large equipment discounts Number of applications for phone installation, ‘000* $200 - 400 per line 0 600 1200 1800 Center Telecom Northwest Telecom Volga TelecomSouth Telecom Uralsvyazinform Siberia Telecom Far East Telecom * As of January 1, 2003 The main sources of investment are own funds, as well as credit resources and debt capital. Entry into equity capital markets through an IPO is not planned. 9

10. Click to edit Master subtitle style Click to edit Master title style 10 Business restructuring 2. … estimated results … 1. Increased market orientation and introduction of target operational architecture … 3. …restructuring schedule. Developing business process automation and expanding use of digital technologies. Reducing personnel costs. Increasing in the share of value- added services. The key measures will be complicated within 2003-2004 2002200320042005 Development and approval of master plans for Svyazinvest and pilot ROCs (Volga and Urals) Development of master plans for 5 other ROCs Implementation of restructuring plan at Volga and Urals Implementation of restructuring plan at other ROCs Centralized projects and general coordination of the restructuring The Master Plan consists of 8 programs including 53 projects: Corporate management strategy Control over changes Efficient economic service Restructuring purchases IT-infrastructure Organizational structure and personnel management Control of network Development of commercial opportunities Based on example of Volga Telecom 0 10 20 30 40 50 60 1st year2nd year3d year4th year5th year According to conservative estimates, the effect of Volga Telecom’s restructuring is approximately US$ 71 mn over 5 years. $ mn effects costs 10

11. Click to edit Master subtitle style Click to edit Master title style 11 Svyazinvest companies are increasing their market share of value-added and unregulated services 1. Cellular business Mega-regional companies account for a large cellular market share, namely: Volga: nearly 480,000 subscribers and about 60% of the regional market; Urals: nearly 503,000 subscribers and about 68% of the regional market; Siberia: nearly 211,000 subscribers and about 70% of the regional market; Far East: nearly 71,000 subscribers and about 77% of the regional market. 3. Data transmission and value-added services 2. Multiservice networks Multiservice networks ensure reliable transmission of any multimedia data, including high-speed Internet, IP-telephony, telemetry, digital TV. In the first half of 2003 the following networks were built: Center Telecom - Moscow region; South Telecom - Rostov-on-Don, the Rostov region and Stavropol krai; Siberia Telecom - Novosibirsk and the Novosibirsk region. In the first half of 2003 Internet dial-up connections rose by 62.1% against the first half of 2002; Data traffic through Internet grew by 74.5% against the first half of 2002; IP-telephony traffic soared by 164.3% against the first half of 2002.

12. Click to edit Master subtitle style Click to edit Master title style 12 Corporate restructuring goals, 2003-2005 2. Measures to enhance mega- regionals’ integration and to increase their efficiency 3. Improvements in strategic management system 4. Maintenance of effective scheme to manage change 1.Introduction of target operational structure of mega-regionals

13. Click to edit Master subtitle style Click to edit Master title style 13 Major tasks for 2003 1.Corporate restructuring, including a united technical strategy, medium-term development strategy for the merged companies 2.Cost-saving measures, continued growth of revenues above costs 3.Increasing profitability of the mega-regionals 4.Decreasing payables through restructuring credit lines with major suppliers 5.Improving the basis for tariff calculation 6.Optimizing DLD tariffs and introducing time-based billing

14. Click to edit Master subtitle style Click to edit Master title style 14  Gross income per employee – RUR 399,000 (up 120.9% from 2002)  Gross income per line – RUR 4,700 (up 109.3% from 2002)  Number of lines per employee – 84 (up 109.1% from 2002)  Installation of new telephone capacity – 3.0 mn lines (2.6 mn lines in 2002)  Increase in subscriber's main stations will be 1.7 mn (against 1.34 mn lines in 2002)  Expenses as a proportion of gross income were 71.8% (73.7% in 2002) 120.3 140.6 88.7 100.9 10.8 13.0 123456 bn RUR 200220032002200320022003 Gross incomeExpenses relating to ordinary services Sales revenues Svyazinvest target performance indicators for 2003

15. Click to edit Master subtitle style Click to edit Master title style 15 Thank you! Any statement made or opinion expressed in the presentation by Svyazinvest, including any slides shown, are those of Svyazinvest only and not Brunswick UBS. Brunswick UBS was not involved in the preparation of these materials and Brunswick UBS assumes no responsibility for that presentation. September 2003