OJSC Rostelecom (NYSE: ROS; RTS and MICEX: RTKM, RTKMP), Russia’s national telecom operator and a company of Svyazinvest group has announced the launch of a submarine cable system, the Russia-Japan Cable Network (‘RJCN’). The new system links Russia and Japan by a direct high-speed path along two geographically diverse routes.

The RJCN employs digital Dense Wave Division Multiplexing (DWDM) equipment with a planned throughput upgrade. The new cable system has a full ring protection ensuring Rostelecom has the capability to reliably transmit the growing level of international traffic volumes of the Europe-Asia transit market alongside the primary Russia-Japan route.

Rostelecom and its partner in this venture, KDDI, a leading Japanese telecommunications company, have entered into a Construction and Maintenance Agreement . Rostelecom and KDDI have long-standing and productive partnerships such as in the Europe-Asia Transit (TEA) project, and the companies jointly use the capacity in Russia-Japan-Korea cable system that has been in operation for several years.

NEC Corporation was the principle contractor for the construction of the RJCN. The system was deployed to meet stringent requirements of circuit reliability using state-of-the-art technology and equipment.

“Rostelecom and KDDI have an outstanding business relationship built up over many years and honed in providing together the Russia-Japan-Korea (RJK) cable with scarce failure history,”- points out Mr. Tadashi Onodera, KDDI President. This record of success led me to make the decision to construct this new cable, RJCN, together with Rostelecom. The combination of TEA with the full ring protection of RJCN will, I am sure, strike a chord with those customers searching for low latency, highly resilient connections between Europe, Russia and Asia.”

Svyazinvest CEO Mr. Alexander Kiselev says: “Launch of the high-speed Russia-Japan Cable Network is an essential component of the strategic cooperation of Svyazinvest Group with telecom operators of the Asian region. Over recent years, Euro-Asian traffic has been growing 20-30% annually, driven by development of economic ties between the regions. The traffic volume is expected to triple by 2010. In this context RJCN and Rostelecom transport network will enable transmission of huge data volumes between Europe and Japan on the shortest route, bypassing submarine cable systems laid on the seabed of the Pacific and Indian Oceans. We are quite confident that resources of the new cable system will enjoy high demand both in Europe and Asia.”

“Rostelecom is bringing into operation a direct, high-speed and fully protected interconnection of telecommunications networks in Russia and Japan and this will invariably attract a bulk of the traffic on this route,” - Rostelecom’s General Director Konstantin Solodukhin commented. The new RJCN system will also act as another direct route to Europe for traffic from Japan. The project is a fruit of our successful and promising cooperation with KDDI and will certainly contribute to the development of business partnership ties between Russia and Japan”.

Construction of the high-speed Russia-Japan Cable Network is an essential part of Rostelecom strategic thrust. Currently the Company possesses high-speed paths to Europe with Points of Presence in London, Stockholm, Helsinki, New York, Frankfurt and Hong Kong. Owing to its powerful nationwide network, Rostelecom has put in place unique capabilities to transmit huge traffic volumes between Europe and Asia. The transcontinental route offered by the Company is the shortest and most reliable land-based path.