Moscow, Russia – August 3, 2012 – Rostelecom OJSC (MICEX - RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces that it has signed an agreement to acquire a 100% stake in Chita-on-Line Ltd. (“Chita-on-line”), one of the largest alternative operators in Chita. As part of the deal, AMT CJSC (“AMT”) and Westelecom JSC (“Westelecom”), wholly-owned subsidiaries of Rostelecom, will acquire 100% of Chita-on-Line shares from private investors. The deal for both operators will not exceed RUB 140 million (approximately US$ 4.3 million[1]), and part of the payment will be deferred.

Chita-on-Lineprovides FTTB and ETTH broadband access and pay TV services, along with other telecom services. The company operates its own optical network of over 228.8 km covering the entire city area. It has also minor network intersections with Rostelecom’s branch in Chita.

Chita-on-Linehas demonstrated high growth rates in its operational and financial results. The operator had 8,100 broadband and 4,900 pay TV subscribers as at May 31, 2012, up 18% and 22%, respectively, compared to December 31, 2011. The operator has a local broadband market share of approximately 11% and 10% of the pay TV market share in Chita[2]. The company generated revenue of RUB 61.7 million with an average 2009-2011 CAGR of 33%. EBITDA increased by 26% year on year to RUB 16.6 million in 2011.

[1]Central Bank of Russia exchange rate as at August 2, 2012

[2]Company’s estimates