On December 22, 2006, the NWT Board of Directors approved the Company’s budget for 2007.

The budget of North-West Telecom was generated on the basis of the approved “NWT Development Forecast for 2007 – 2010(12)” with regard to the adopted “NWT Financial Strategy for 2007 – 2009” (See Press Release of 05.10.06).

According to the budget, the Company’s receipts by the results of 2007 will be RUR 21921 million, which is 8.2% higher than the expected receipts by the results of 2006. Nevertheless, the expenditure will increase by 9% to make RUR 16700 million.

Main indicators of the NWT business efficiency according to the 2007 budget:

• EBITDA will grow by 11% to RUR 7473 million
• The sales income will grow by 5% to RUR 5221 million
• The EBITDA rate of return will be 34.1%
• The net profit rate of return will be 10.4%.

In 2007, North-West Telecom intends to invest RUR 5753 million, which makes 26.2% of its receipts. The plans of NWT have been strongly influenced by its investments as part of federal target programs (“Universal Communication Service”, “Internet To Schools” etc.) It is intended to allocate RUR 2844 million to NWT’s commitments under these programs.

As in 2006, the priority of NWT’s investment program is development of new services, where the investments will amount to RUR 1237 million. To meet the high demand for the broadband Internet access by individuals, the Company intends to connect over 254,000 subscribers in 2007 (in 2006, 73,000 subscribers). Thus, the number of customers using the broadband Internet access will exceed 337,000 by the end of 2007 (83,000 by the end of 2006.) The earnings from new services will grow by 40% to reach RUR 2479 million by the end of 2007, making 11.3% of the Company’s receipts. The network’s digitization rate will reach 58% by the end of 2007.

Despite the large scope of the planned investments, the financial standing of North-West Telecom will remain at a high level, as the Company intends to fund most of the investments out of its own assets. The equity ratio will be 0.53 by the end of 2007; and the net debt to EBITDA ratio, 1.79.

For more detailed information, comments, and replies to your questions please visit the «NWT Internet Conference» on the Company’s website from 14:00 till 16:00, December 26.