jsc svyazinvest on telecommunications market. 2 forward-looking statements _certain statements in...

JSC SVYAZINVESTON TELECOMMUNICATIONS MARKET

2

FORWARD-LOOKING STATEMENTS

_Certain statements in this presentation are not historical facts and represent “forward-looking” statements. Example of such forward-looking statements include, but are not limited to: _projections or expectations of revenues, profit (or loss), earnings (or loss) per share, dividends, capital structure, other financial indicators or ratios; _statements of our plans, objectives or goals, including those related to products or services; _statements of future economic indicators; _statements of prerequisites underlying such statements._Words such as “believes”, “expects”, “supposes”, “plans”, “is going to” and “intends”, as well as similar expressions, are intended to identify forward-looking statements but for all that are not the exclusive means of identifying such statements._By their very nature, forward-looking statements imply some inherent risks and uncertain points, both general and specific, and there is some risk that the plans, expectations, forecasts and other forward-looking statements will not be realized. You should remember that owing to a number of important factors, actual results might substantially differ from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements, including our ability to execute our restructuring and cost reduction programme ._When relying on forward-looking statements, you should carefully analyze the foregoing factors and other uncertainties and events which are not clear, especially in light of the political, economic, social and legal environment in which the Company operates . Such forward-looking statements are valid only as of the date on which they are published, and the Company does not undertake any obligation to update or revise any of them whether as a result of new information, new events or otherwise. The Company does not make any statement, does not provide any affirmation and does not publish any forecast that the results anticipated by such forward-looking statements will be achieved. Such forward-looking statements represent only one of many possible scenarios of situation and should not be considered as the most likely or standard course of events.

3

_SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT INDICATORS

_IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF SVYAZINVEST GROUP

_UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND FOR SVYAZINVEST GROUP

_PROSPECTS FOR SVYAZINVEST GROUP

4

RUSSIA TODAY

1

2

3

4

5

6

7

Worls USA EU Russia

2005 2006 2007(e)

13

26

41

1

6

11

16

21

26

31

36

41

46

2005 2006 2007(e)

High and sustainable pace of growth of Russian economy

Pace of growth of Russian economy, % * Growth of Real Wage in Russia, % *

Direct foreign investment in Russian economy, USD bln *

12.6

13.312.8

10,0

10,5

11,0

11,5

12,0

12,5

13,0

13,5

14,0

14,5

15,0

2005 2006 2007(e)

Russian economy is becoming more attractive in the eyes of foreign partners

Growth of common welfare and consumer's demand

*- source: Ministry for Economic Development and Trade of the Russian Federation

55

SVYAZINVEST: STRUCTURE AND COVERAGE

Sibirtelecom4.7 mln lines in serviceMarket cap equals USD 1,815 mln*

Dalsvyaz1.5 mln lines in serviceMarket cap equals USD 684 mln*

State75% - 1 share

MGTS Finance7.69%

Svyazinvest

7 RTOs

Rostelecom MGTSOther

Controlling stake

Blocking stake

_Foundation of Svyazinvest – September 18, 1995 _Sale of the company’s blocking stake to Mustcom - July 1997_Corporate integration: 72 telecom companies were consolidated into 7 interregional companies throughout 2000-2002

South Telecom4.1 mln lines in serviceMarket cap equals USD 783 mln* VolgaTelecom

5.0 mln lines in serviceMarket cap equals USD 1,903 mln*

CenterTelecom6.7 mln lines in serviceMarket cap equals USD 1,796mln*

Uralsvyazinform8.3 mln lines in serviceMarket cap equals USD 2,522 mln*

North-West Telecom4.4 mln lines in serviceMarket cap equals USD 2,011mln*

* - market caps as of November 9, 2007

Comstar-UTS17.31% + 1 share

_Rostelecom owns a powerful backbone network spreading across almost all the territory of Russia. The Company’s network is around 200,000 km long. The level of Company’s market capitalization equals $7,746mln. _At present, the estimated capitalization of Svyazinvest is some $9.8 bln.

6

KEY PERFORMANCE INDICATORS OF SVYAZINVEST GROUP *

6.965.90

1.240.720.64

* - hereinafter (unless otherwise indicated) : a) aggregated indicators are given according to RAS; b) Svyazinvest Group includes the following companies:Rostelecom, 7 RTOs, Central Telegraph, Dagsvyazinform

Russian Accounting Standards

9.338.046.82

2007 F20062005

REVENUE[USD, bln]

17.9%7.726.55

EXPENSES[USD, bln]

OPERATING INCOME[USD, bln]

EBITDA[USD, bln]

NET PROFIT[USD, bln]

International Accounting Standards16.0%

3Q2006 3Q2007

17.9%

20062005

17.9%

0.70 0.89

6.835.84

1.701.37

5.264.53

3.212.271.97

1.961.611.55

7.376.435.27

0.330.25

2.321.862.471.89

1.040.70

2007 F20062005 3Q2006 3Q2007 20062005

2007 F20062005 3Q2006 3Q2007 20062005

2007 F20062005 3Q2006 3Q2007 20062005

2007 F20062005 3Q2006 3Q2007 20062005

15.9%21.9% 14.6%

4.1% 21.9% 24.4%

15.0% 41.4% 30.6%

13.6% 71.6% 47.7%

16.9%

26.9%

24.7%

32.1%

7

MARKET SHARE OF SVYAZINVEST GROUP OF COMPANIES *

17%

83%

LOCAL TELEPHONY MARKET

INTRA-ZONAL TELEPHONY MARKET

* - as of the end of 1H2007

** - on the licensed coverage area of 7 RTOs

4%

96%

MOBILE TELEPHONY MARKET

92%

8%

67%

33%

TELECOMMUNICATIONS MARKET

DATACOM MARKET

46%

54%LD / ILD MARKET

16%

84%**

- Share of Svyazinvest group (Rostelecom + 7 RTOs)

- Share of other providers

8

KEY INFRASTRUCTURE INDICATORS OF SVYAZINVEST GROUP

60.163.3

67.7

20

30

40

50

60

70

80

DIGITALIZATION

200520062007 (target)

31.331.7

32.3

15

19

23

27

31

35

INSTALLED CAPACITY

200520062007 (target)

-1% +5%

INSTALLED CAPACITY, mln lines DIGITALIZATION RATE, %

9

INVESTMENT POLICY: DYNAMICS AND STRUCTURE OF CAPITAL INVESTMENT

27%29%40%

39%

32%23%

22%

29%24%

12%

10%13%

0

0,5

1

1,5

2

2,5

2005 2006 2007 (forecast)

Traditional telephony Development of infrastructure

New services and IT-technologies

Other

1.53 1.40

1.93

INVESTMENT, USD, bln

10

89

102

124

144

0 50 100 150 200

2004

2005

2006

2007*

KEY OPERATIONAL INDICATORS OF SVYAZINVEST GROUP

LINES PER EMPLOYEE, unit REVENUE PER EMPLOYEE, USD thousand

29

23

19

38

0 10 20 30 40 50 60

2004

2005

2006

2007*

* - forecast

NUMBER OF EMPLOYEES, employees, thousand

+22%

+ 16%+ 30%

+ 23%

+ 30%

+15%

243

273

300

316

0 100 200 300 400 500

2004

2005

2006

2007*

-9.0%

- 10.9%

-5.0%

11

86 86 82

14 14 18

0

20

40

60

80

100

as of Jan 1, 2006 as of Jan 1, 2007 as of Jan 1, 2008 *

ruble-denom inated currency

49%45% 47%

29%

27%30%

22%

28%23%

0

3

6

9

12

15

as of Jan 1, 2006 as of Jan 1, 2008 as of Jan 1, 2008 *

equity capital long-term liabilities short-term liabilities

$ 10.4 bln.$ 12.2 bln.

$ 14.2 bln.

* - forecast

CAPITAL STRUCTURE, USD bln RATIO BETWEEN CURRENCY AND RUBLE-DENOMINATED LOANS

DEBT OVERVIEW

AVERAGE COST OF CREDIT RESOURCES, %

9.19.3

11.412.0

6

7

8

9

10

11

12

13

14

as of Jan 1, 2006 as of July 1, 2006 as of Jan 1, 2007 as of Jan 1, 2008 *

ruble-denominated loans

In 2006 – 2007, major changes were made to the structure,

cost and amount of the debt portfolio of the companies in

Svyazinvest Group. Changes in the cost of attracting credit

resources are due both to the upgrade of the RTOs’ credit

ratings and to the general market correction.

12

BOND ISSUES

Company SeriesDate of issue

Nominal value*Maturity

dateOffer / other conditions

Interest rate

Uralsvyazinform07 21.03.06 Rub 3 bln ($109 mln) 6 years In 3 years 8.4% for 3

years

Central Telegraph 03 05.04.06 Rub 700 mln ($25 mln) 3 years No offer 9.75%

Sibirtelecom 07 24.05.06 Rub 2 bln ($74 mln) 3 years No offer 8.65%

DalsvyazD2 07.06.06 Rub2 bln ($75 mln) 6 years In 4 years 8.85% for

4 years

Dalsvyaz D3 07.06.06 Rub 1.5 bln ($56 mln) 3 years No offer 8,6%

CenterTelecom05 05.09.06 Rub 3 bln ($112 mln) 5 years In 2 years 8.09% for

2 yearsVolgaTelecom VT-4 12.09.06 Rub 3 bln ($112 mln) 7 years In 3 years 7.99% for

3 yearsNorth-West Telecom 04 14.12.06 Rub 2 bln ($76 mln) 5 years Call option in 2 years at 102% 8.1%

South Telecom 05 06.06.07 Rub 2 bln ($77 mln) 5 years In 3 years 7.55% for 3 years

_Total volume of placement in 2006-2007 was Rub 19.2 bln (USD 716 mln)

* Estimated average USD rate was based on the exchange rate quoted by the CBR as of the placement date

13

SVYAZINVEST GROUP: DYNAMICS OF CAPITALIZATION CALCULATED COMPARED WITH THE RTS INDEX, 2006-2007

4 000

5 000

6 000

7 000

8 000

9 000

10 000

Jan-

06

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

US

D, m

ln

1 000

1 200

1 400

1 600

1 800

2 000

2 200

2 400

poin

ts

Svyazinvest

RTS index

14

Residents (legal entities)Individuals

JSC Svyazinvest

Non-residents (legal entities)

RTOs AND ROSTELECOM SHAREHOLDER CAPITAL STRUCTURE

NORTH-WEST TELECOM

40%

11%

37%

CENTERTELECOM

9%

38% 42%

VOLGATELECOM

9%

39%38%

38% 38%

13%

SOUTH TELECOM

41% 25%

12%

URALSVYAZINFORM SIBIRTELECOM

10%

38% 39%

DALSVYAZ

12%

36%38%

ROSTELECOM

9%

17%38%

12% 11% 14%

11% 22% 13%

14% 36%

15

RTOs AND ROSTELECOM CREDIT RATINGS

Company Rating Outlook Agency

North-West Telecom BB-/ВВ- Stable / Stable S&P/Fitch

South Telecom В- Credit Watch Positive S&P

CenterTelecom B+/B Positive / Positive S&P/Fitch

VolgaTelecom BB- Stable S&P

Dalsvyaz В+ Stable Fitch

Uralsvyazinform BB-/B+ Stable / Stable S&P/Fitch

Sibirtelecom B+ Stable Fitch

Rostelecom BB- Stable S&P

16





17

IN 2007, THE RUSSIAN TELECOM MARKET HAS DEVELOPED ACCORDING TO GENERAL INTERNATIONAL TENDENCIES

HOWEVER, IT HAS ALSO BEEN CHARACTERIZED BY A NUMBER OF SPECIFIC FEATURES

GENERAL TENDENCIES SPECIFIC TENDENCIES

– Mobile traffic replacing fixed traffic1

– Development of broadband Internet access

2

– Liberalization of LD market3

– Switch to new system of tariff plans1

– Introduction of “Calling Party Pays“ principle

2

– Introduction of new interconnect rules3

– Convergence of telecom services4

ALL THESE FACTORS HAVE A DIFFERENT IMPACT

COMPANIES OF SVYAZINVEST GROUPKEEP THEIR MARKET POSITIONS

18

LIBERALIZATION OF LD MARKET

32 LICENCES HAVE BEEN ISSUED TO DATE

SEVERAL PROVIDERS ARE ACTUALLY OPERATING ON THE LD MARKET: ROSTELECOM, GOLDEN TELECOM, MTT, TRANSTELECOM

SINCE JANUARY 1, 2006 LD MARKET HAS BEEN LIBERALIZED

MARKET POSITION OF ROSTELECOM ON ILD MARKET, ESTIMATED TRAFFIC (1H 2007)

91%

Source: iKS-consulting, internal accounts of Svyazinvest

MARKET POSITION OF ROSTELECOM ON LD MARKET, ESTIMATED TRAFFIC (1H2007)

89%

- Share of Rostelecom

- Share of other operators

19

INTRODUCTION OF “СALLING PARTY PAYS” PRINCIPLE

74

223

active inactive inactive after introduction of fees

F2M REVENUE, [USD MLN]MOU F2M, [MIN / MONTH]

SUBSCRIBERS ACTIVITY FOR F2M CALLS AS OF JUNE, 2007, %

72

19

10

positive neutral

negative

SUBSCRIBERS ATTITUDE TO THE INTRODUCTION OF CPP, %

Source: Research by ROMIR, June 2007Source: Research by ComCon, March 2007

22

12

25

17

46

26

182427

14

28

20

41

2923 26

Center NWT Volga STC USI Sibir DSV RTOs

2H2006 1H2007

+19%

+24%

+12%

+14%

+9%+31%

+9%

-

11%

238 279

RTOs

11

42

52

26

40

17

50

14

47

58

32

47

20

62

Center NWT Volga STC USI Sibir DSV

2H2006 1H2007

+24%

+17%

+16%

+21%

+11%

+12%

+32% +17%

20

4.8 4.8 4.8

3.2

0

3

6

9

12

15

18

Subscriber Combined Time-based

11 *

16 *

0

3

6

9

12

15

18

Tariff limit Tariff offered by RTOs

¢ 0.7

¢ 0.9

11

368 min16*

8 *

SWITCH TO NEW SYSTEM OF TARIFF PLANS (1)

4.25.8 6.7

8.1

5.7

10.08.7

7.8

0

3

6

9

12

15

18

01.01.04 01.01.05 01.01.06 01.02.07

indiv iduals organisations

TARIFF PLANS (PSTN, average for RTOs), USD

CURRENT TARIFFS (PSTN as of date below, average for RTOs), USD

SUBSCRIBER TARIFF PLAN (PSTN, average for RTOs), USD

- 32%**

**

ACCORDING TO RF CIVIL CODE, THE CURRENT PAYMENT SYSTEM REMAINS EFFECTIVE FOR THOSE WHO FAIL TO

SELECT A TARIFF PLAN

FORMATION OF TRANSITIONAL PERIODMASS PR CAMPAIGN CONDUCTED

** - Tariff for regions where it is not technically possible to introduce tariff plans* - Total fee incl. line rental

-Cost per minute of connection- Payment for line

-Payment for base number of connections -Payment for maximum number of connections

21

SWITCH TO NEW SYSTEM OF TARIFF PLANS (2)

62%

34%43%31%

50%

8%7%17%

45%31%

63%

21%

19%

14%

8%

25%

30%25%

26%40%

26%

47%24%

19%11%14%

24%11% 18%

5%3%1%

DSV NWT USI Center Volga Sibir ST C RT Os

Combined TP

Time-based TP

Unlimited TP

Subscriber TP

BREAKDOWN OF INDIVIDUAL SUBSCRIBERS BY TARIFF PLAN (IN REGIONS WHERE IT IS TECHNICALLY POSSIBLE TO INTRODUCE TARIFF PLANS), AS OF OCTOBER 1, 2007

BREAKDOWN OF INDIVIDUAL SUBSCRIBERS BY TARIFF PLAN (TAKING INTO ACCOUNT THE REGIONS WHERE IT IS NOT TECHNICALLY POSSIBLE TO INTRODUCE TARIFF PLANS), AS OF OCTOBER 1, 2007

48%33%

76%

42%27% 24% 21%

37%

46%66%

45%

57%

52%51%26%

23%17%15%

25%16%

31%

12%6%1%

DSV NWT USI Center Volga Sibir STC RTOs

Combined TPTime-based TPUnlimited TP

22





23

GROWTH ON DATACOM MARKET

5 5 6 6 6 73 3 3 3 3 3

1315 17 19 20 2234

55 6

7

2006 07 08 09 10 2011

EARNINGS FORM DATACOM SERVICES, USD BLNGROWTH FORECAST FOR TELECOM MARKET, USD BLN

0%5%

10%15%20%25%30%

2005 2006 2007 2008 2009 2010 2011 2012 2013

BIA penetration, % Internet penetration, %

INTERNET PENETRATION AND BIA IN RUSSIA (SUBSCRIBERS), %

annual average

Local voice

LD services

Mobile communications

Internet and datacom

+ 11%

+ 8%

0%

+ 11%

+23%

СAGR%

1 2 2 2 3 31

23

33

4

2006 07 08 09 10 2011

Individuals

Organisations 17%

+30%

СAGR%

annual average + 23%

Source:McKinsey Source:McKinsey

Source:UralSib

_Datacom will be the fastest growing market segment. Most expansion will come from broadband Internet access.

_ The penetration of broadband Internet access (BIA) will grow in line with disposable income, computerization, network upgrades and cost reduction.

24

GROWTH POTENTIAL OF SVYAZINVEST GROUP IN THE NEW SERVICES SEGMENT, USD mln *

912

542

353212

9.8%

6.7%

5.2%

3.6%

0

300

600

900

1200

2004 2005 2006 2007(forecast)

0%

3%

6%

9%

12%

Revenue from unregulated servicesShare of revenue from unregulated services in total revenue

75%

14%

5%4% 2%

InternetDigital datacom networksTVIntelligent telecom networksIP telephony

DYNAMICS OF INVESTMENTS IN THE DEVELOPMENT OF NEW SERVICES AND IT TECHNOLOGIES, USD mln *

REVENUE FROM NEW SERVICES IN TOTAL REVENUE OF SVYAZINVEST GROUP, USD mln*

+ 70 %

BREAKDOWN OF REVENUE FROM UNREGULATED SERVICES IN 2007 (FORECAST)

140236

360447

753

0

100

200

300

400

500

600

700

2003 2004 2005 2006 2007(forecast)

* - not incl. cellular communication

_Based on our forecast, Internet and datacom will achieve revenue growth of 70% in 2007.

25

65%58%

46%

59%

43%

65%

54%55%

67%65%

37%

60%

48%53%

63%57%

Center NWT Volga STC USI Sibir DSV RTOs

2006 1H2007

BROADBAND ACCESS SERVICES

235214

255

132

238

152 133

0

50

100

150

200

250

300

CenterTelecom NWTVolgaTelecom South TelecomUralsvyazinform SibirtelecomDalsvyaz

Company ARPL, $ Brand

CenterTelecom 26 DomolinkNorth-West Telecom 22 Avangard

South Telecom 39 DISELVolgaTelecom 25 J

Uralsvyazinform 34 UtelSibirtelecom 31 Webstream

Dalsvyaz 35 Disly

KEY REGIONAL BRANDS AND ARPL (3Q2007)

24%40%

MARKET SHARE OF DATACOM SERVICES, % NUMBER OF xDSL ANF ETTH PORTS ENABLED AS OF OCTOBER 1, 2007, TH.

26

SVYAZINVEST GROUP ON THE MOBILE TELEPHONY MARKET

664

1, 202

1, 8872, 472

3,198

1,100

2,035

3,674

4,900

4,412

476

4,170

987

1,973

3,140

0

2000

4000

6000

2003 2004 2005 2006 2007 (target)

Volga Ural Sibir

LICENCE COVERAGE OF GSM OPERATORS OF SVYAZINVEST GROUP

MOBILE SUBSCRIBERS BASE, thousand

_In 2006, the Group’s mobile business policy was to increase the presence of RTOs on the cellular market and to consolidate assets._Svyazinvest Group companies offer mobile services in 27 regions of the Russian Federation.

27

FINANCIAL RESULTS OF CELLULAR OPERATORS OF SVYAZINVEST GROUP

206

155

98

69 81 79

564034 33

3625

1711110

50

100

150

200

250

2003 2004 2005 2006 2007 (forecast)

0

30

60

90

Revenue EBITDA Net Profit Capex

VOLGA, USD mln URAL, USD mln

SIBIR, USD mln

493422

315

162222 204

16912666

93

8272523828

0

100

200

300

400

500

600

2003 2004 2005 2006 2007 (forecast)

0

30

60

90

120

150


405

320229

76

145170

143116

4078

868671

5124

0

50

100

150

200

250

300

350

400

450

2003 2004 2005 2006 2007 (forecast)

0

30

60

90

120

150

180

210


28

TRENDLINES IN AVERAGE ARPU* AND MOU* OF MOBILE ASSETS OF SVYAZINVEST GROUP IN THE MAIN REGIONS

66710

14

18

1289

88

1113

16

20

0

5

10

15

20

25

2003 2004 2005 2006 2007 (forecast)

Volga Ural Sibir

175

198

175

120

186

220

124

151

98 98

217

144

211

275 283

80

120

160

200

240

280

320

2003 2004 2005 2006 2007 (forecast)

Volga Ural Sibir

AVERAGE ARPU TRENDLINE, USD AVERAGE MOU TRENDLINE, min.

*ARPU – average revenue per user**MOU – minutes of use per subscriber

29





30

SVYAZINVEST GROUP: PRIMARY OBJECTIVES

To boost revenue by broadening the scope of services provided (employing modern technologies) and by raising tariffs for local voice services.

To maintain strong operating efficiency with a view to revised relations between operators, liberalization of the LD market and emergence of new competitive environment.

To roll out new generation networks (NGNs) and provide a technological framework so that the company can rapidly create and provide top-notch services throughout the Russian Federation.

To take further steps towards improving the efficiency of Svyazinvest Group’s management system (to phase in ERP, to introduce a unified billing system and OSS – Operations Support System; to implement a set of actions to use human resources more effectively, etc.)

31

DEVELOPMENT OF LOCAL TELEPHONY MARKET

1. Mobile traffic replacing fixed traffic

2. Alternative operators and players from other segments entering the market

3. Switching voice traffic to datacom networks

To increase the value of subscriber line:

1. Digitalization of networks

2. Introduction of service packages

3. New communication services

4. «Unlimited» tariffs

:

Market Tendencies

Svyazinvest Initiatives

Objectives for 2012

To keep leading positions in the local telephony segment

81%Market share of Svyazinvest Group in this segment

Svyazinvest’s position in 2007

1. MOU growth in the local connections segment, [MIN / MONTH]

312 373

RTOs

1Q20072Q2007

+20%

2. Revenue growth in the local connections segment, [USD MLN] *

1,605 1,894

RTOs

3Q20063Q2007

LOCAL TELEPHONY MARKET

+18%

* - line rental and connection services

32

DEVELOPMENT OF INTRA-ZONAL TELEPHONY MARKET


2. Reduction of tariffs

3. New players entering the market

1. To provide package offers

2. To optimize tariffs

:

Market Tendencies


Objectives for 2012

To keep leading positions in the intra-zonal telephony segment

Market share of Svyazinvest Group in this segment


1. F2M revenue growth, [USD MLN]

2. F2F revenue decrease, [USD MLN]

INTRA-ZONAL TELEPHONY MARKET

92%

238 279

RTOs

2H20061H2007

+17%

225 198

RTOs

2H20061H2007

-12%

33

644 842 1,074

1,359

RTOs

DEVELOPMENT OF INTERNET AND DATACOM MARKET

340551

RTOs

3Q20063Q2007

1. Growth of demand for and speed of Internet access

2. Switching to unlimited offers

3. Competition between technologies (DSL, ETTH, Wi-Fi, Wi-Max, 3G)

4. Content becoming increasingly important

1. To develop DSL access on existing subscribers’ lines

2. To develop ETTH as soon as market saturation occurs

3. To establish partnerships with content aggregating agents

:

Market Tendencies


Objectives for 2012

To increase market share in the Internet access and datacom segment



1. Internet and datacom revenue growth, [USD MLN]

2. Rapid growth of subscriber database, [xDSL + ETTH, th. ports]

INTERNET AND DATACOM MARKET

59%As of Apr 1As of Jul 1

As of Jan 1+28%

+31%

+62%

+27%

As of Oct 1

34

DEVELOPMENT OF LD MARKET

1. New players entering the market and competition increasing

2. Voice traffic switching to datacom networks


4. Development of intelligent telecom networks

1. To protect company’s positions on the retail market

2. To develop intelligent telecom networks

3. To strengthen positions on the corporate clients market, incl. at the federal level

:

Market Tendencies


Objectives for 2012

To keep leading positions in the LD communications segment



1. Prices for services rendered are lower than competitors’ [Average Income Rate, USD MIN]

2. Market share is decreasing as a result of liberalization

LD MARKET

60%

0.160.150.21

0.12

2006 1H2007

Rostelecom Competitors

94% 89%

2006

96% 91%

1H2007

2006 1H2007

DLD ILD

35

GROWTH OF OPERATING RESULTS

Income

1. To introduce outsourcing2. To develop e-auctions3. To optimize real estate assets4. To optimize business processes and

organizational structure5. To roll out New Generation Networks6. To optimize the number of employees

Between 2008 and 2012, the

expenses CAGR will

equal 7,2%*

Good FINANCIAL RESULTS, as the

company anticipates that income will grow more than expenses

Between 2008 and 2012, the

income CAGR will

equal 8,5%*


Expenses

1. To increase the share of broadband services

2. To promote bundled services3. To increase customer loyalty4. To diversify distribution channels

and roll out a system for active agent sales

5. To increase the share of corporate clients

Svyazinvest Initiatives 2012

EBITDA margin

41,4%*

* - 7 RTOs

36

SVYAZINVEST GROUP: PROSPECTS OF KEY PERFORMANCE INDICATORS FOR 2008 *

9.22 9.97

2007 2008

REVENUE, USD bln OPERATING EXPENSES, USD bln

* - 7 RTOs + Rostelecom

7.807.28

2007 2008

OPERATING INCOME, USD bln

2.171.94

2007 2008

218

241

2007 2008

NUMBER OF EMPLOYEES, thousand

37

55 bld. 2 ulitsa Plyuschikha119121 Moscow RUSSIAPhone: +7 (495) 727 0473Fax: +7 (495) 727 0475 E-mail: [email protected] site: www.svyazinvest.ru

mailto:[email protected]

http://www.svyazinvest.ru/

jsc svyazinvest on telecommunications market. 2 forward-looking statements _certain statements in...

Documents

forwardlooking statements

statements of prerequisites

certain statements

svyazinvest group slide

activity of svyazinvest

jsc svyazinvest

russian economy pace

russian federation slide