Krasnodar, 20 January 2006: Southern Telecommunications Company (“UTK”) [(RTS: KUBN, KUBNP; OTC USA: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that its Board of Directors assigned a 10.5% interest rate to the fifth coupon of its 02-series bond issue (Minutes ?23 ?f 20 January 2006). Thus, Rub 52.36 will be paid out per bond.  The interest rate on the sixth coupon will be equal to the rate on the fifth coupon.

According to the Decision on series-02 bond issue, the fourth coupon is callable from February 2 to 8, 2006.  The option will be effective from February 9 to 15, 2006. The date of the call option shall be determined as one of the following dates that comes last: a) date of the fourth coupon payment; or b) the 5th  business day from  the day of receiving the Notification by the Issuer’s Agent (OJSC AKB “Rosbank”).

The Notification shall be sent by registered letter or express delivery service at the address: Securities Transactions Department, OJSC AKB “Rosbank”, mailbox 208, 11, Masha Porivayeva Str., Moscow, 107078. The Notification shall also be faxed to (095) 725 24 05 on any business day within the corresponding period of presenting series-02 bonds for redemption. You can familiarize yourself with the form of the Notification on the intention of the bond owner to sell to the Issuer a certain number of Bonds here.

Information about the bond issue:

The issue of UTK series 02 non-convertible interest-bearing  documentary pay-to-bearer bonds is worth RUR 1.5 billion with maturity in 3 years (1,092 days) and half-year coupon period (182 days) with an annual call option. The interest rate of 9.25% per annum on the  first and second coupons was fixed at the bond placement (February 11, 2004, MICEX). The interest rates on the third and fourth coupons were fixed at 12.0% per annum. The interest rates on the fifth and sixth coupons are to be announced by the Company no later than 10 business days prior to the date of the fourth coupon payment.  State registration number of the bond issue is 4-06-00062-A of November 28, 2003; trade codes are UTK-02ob., ISIN RU000A0AUU?0. Organizer, Underwriter and Payment agent of the series 02 bond issue is OJSC AKB "Rosbank". “Investment company “AVK” acts as Financial Consultant. You can familiarize yourself with additional information on the bond issue here.