Krasnodar, August 18, 2006:  Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District reports that on August 18, 2006 Expert RA Rating Agency ("RID-Expert R?") revised upward its national rating of corporate governance to "Southern Telecommunications Company" PJSC from “B++” to “A”.

According to the methodology of the national rating of corporate governance, rating “A” reflects rather high level of the Company’s corporate governance practice. The Company  does not break the requirements of the Russian legislation in the sphere of corporate management and follows the main recommendations of the Russia Code of corporate conduct.

The Company tries to stick to advanced corporate governance standards. "UTK" PJSC operates in strict conformity with statutory acts of the Russian legislation. The important step in corporate governance improvement was quicker preparation of the financial statements under International Financial Reporting Standards (IFRS). According to monitoring results, the Company has become one of the leaders in Russia with respect to corporate governance quality.