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March 30, 2011

The Boards of Directors of Rostelecom and regional telecoms operators approve the contribution of treasury shares to the share capital of mobitel

Moscow – March 30, 2011 – OJSC Rostelecom (the “Company”) (RTS, MICEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces that as of March 30, 2011, the Boards of Directors of OJSC Rostelecom, OJSC CentreTelecom, OJSC SibirTelecom, OJSC Dalsvyaz, OJSC Uralsvyazinform, OJSC VolgaTelecom, OJSC North-West Telecom and OJSC Southern Telecommunications Company (the “companies subject to reorganisation”) approved the contribution of their treasury shares to the share capital of LLC Mobitel (“Mobitel”). The affected treasury shares have been repurchased from minority shareholders who voted against the merger with Rostelecom.

During the summer of 2010, the companies subject to reorganisation repurchased the shares tendered by shareholders who did not support the reorganisation at the Annual General Meetings of each respective company. The total consideration of the combined shares acquired during the repurchase process amounted to RUB 14 billion, and these shares will represent 2.7% of OJSC Rostelecom ordinary shares and 28.8% of preferred shares, following the conversion procedure.

In accordance with current legislation, own shares held by companies undergoing mergers are due to be cancelled at the time of merger. In order to preserve the repurchased shares, the respective Boards of Directors of the companies subject to reorganisation have approved the contribution of these shares to the share capital of LLC Mobitel, controlled by Svyazinvest.

When the contribution of the treasury shares to the share capital of Mobitel is completed, the shares in Mobitel are expected to be distributed as follows: 8.8% to OJSC CentreTelecom; 7.6% to OJSC North-West Telecom; 5.5% to OJSC Uralsvyazinform; 10.1% to OJSC SibirTelecom; 17.2% to OJSC VolgaTelecom; 6.7% to OJSC Dalsvyaz; and 2.7% to OJSC Southern Telecommunications Company (the ‘RTOs’) and 41.4% to OJSC Rostelecom. Following the merger of the RTOs with and into OJSC Rostelecom, the Company is expected to hold 99.99% of Mobitel, while Mobitel will hold 2.7% of OJSC Rostelecom ordinary shares and 28.8% of preferred shares. The merger is expected to be completed on April 1, 2011. On December 30, 2010, the Federal Antimonopoly Service of the Russian Federation approved the acquisition of 99.99% of shares in Mobitel by the RTOs and Rostelecom.




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