A meeting between Director General of JSC North-West Telecom Vladimir Akulich and Head of Republic of Karelia S.L. Katanandov took place in Petrozavodsk on December 7, 2004. As the result of this meeting, the Agreement between the Government of Republic of Karelia and OJSC North-West Telecom for Mutual Cooperation was signed.

Based on the understanding of mutual benefit and existing relations, taking into account the interest in the further development and extension of cooperation on the long-term and stable footing, the parties identified the most important lines of cooperation:

• implementation of state programs for the development of telecommunications services,
• development of Karelia’s communications network infrastructure with the objective of forming a unified information and telecommunications space in Russia,
• maximum satisfaction of the needs of the population, enterprises and public authorities for up-to-date communications services,
• interaction and information exchange for public security,
• assistance in combat against terrorist manifestations.

During the period of the previous agreement, the branch of OJSC North-West Telecom, Elektrosvyaz of Republic of Karelia, implemented capital investments for more than 430 million rubles, put into operation fixed assets worth over 290 million rubles. The number of basic telephone sets in Karelia reached nearly 205 thousand by December 2004.

The annual introduction of new numbers ranges from 19 to 21 thousand. The annual allocations of the company to the republican and local budgets amounted to 70 million rubles in 2003, 60 million rubles in January-September 2004 and allocations to the Pension Fund to 56 and 51 million rubles respectively.

In 2004 the branch Elektrosvyaz of Republic of Karelia implemented the following projects:

• put into operation digital telephone exchanges in Loukhi, Pudozh, townships of Pindushi, Ladva, Ladva-Vetka, Pai, Kizhi, Sheltozero, Rybreka, Verkhruchey, Matrosy, Kulikovo;
• built the radio relay line Sheltozero-Pudozh;
• created a multi-service network covering Petrozavodsk, Belomorsk, Loukhi, Kondopoga, Pitkjaranta, Olonts, Sortavala, Suojarvi, Segezha, Pudozh;
• expanded the line and center capacity in Petrozavodsk and Sortavala;
• installed 99 telephones under the program of granting priority access to communications to the Great Patriotic War (World War II) veterans and invalids.

In 2005, in Karelia OJSC North-West Telecom plans to put into operation digital telephone exchanges in Suojarvi, Kem, Babguba, Rabocheostrovsk, Voinitsa; build an optical fiber communications line Pryazha-Suojarvi (with a potential for the further line construction towards Pitkjaranta, Sortavala, Lahdenpohja). Next year the multi-service network will cover all cities and district centers of Karelia. The company will continue to develop the Internet and a comprehensive information security system, expand the line and center capacity in Petrozavodsk, Sortavala and in the Prionezhsky District. 37 telephones are to be installed before the end of the 1st quarter of 2005 in remote rural communities (the installation expenses will be more than 3 million rubles).