Moscow, March 3, 2010 – Fitch Ratings, an international rating agency, upgraded CenterTelecom OJSC from ‘B+’ to ‘BB’.  The company's National Long-term rating has been upgraded from ‘A (rus)’ to ‘AA- (rus)' (Outlook Stable).

The rating reflects CenterTelecom's significantly improved liquidity and lower refinancing risks, as well as the fact that the company's financial and operating performance remains robust. According to Fitch Ratings CenterTelecom's net debt/EBITDA is lower than 1.5x which is strong for its rating category.

As Fitch Rating's experts say, CenterTelecom demonstrated stable operating and financial performance in the downturn. The company's revenues were growing, margins were improving, while the company's subscriber base and telecommunication services usage remained steady. The telecommunications operator demonstrated an impressive flexibility to significantly cut capex, which allowed it to dramatically improve free cash flow generation and source cash for debt service.

Fitch Rating's analysts add: "Overall 4-6% revenue growth appears the most likely scenario for the company. This growth profile is shaped by three main factors. Firstly, it is rapidly rising broadband penetration across the country. Secondly, stable voice usage and fixed-line subscriber base with regulatory tariff increases on local service projected in the range of 7-9% (slightly below CPI) and voice revenues correlating to this; and finally, declining interconnect and intra-zone traffic and revenues. CenterTelecom's market share remains strong, particularly as smaller players were harder hit by the financial crisis."