Krasnodar, August 9, 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 9, 2006 the Company paid out in full the 5th coupon on UTK’s 02-series bond (UTK-02commons, ISIN RU000A0UUT0). The total amount of the fifth coupon yield to be paid out at the 10.5% rate, established by the Company’s Board of Directors (Minutes ? 23 dated January 20, 2006), was 78,540,000 rubles. A Rub 52.36 coupon yield was paid per bond. The list of persons eligible to receive bond coupon was composed as of July 28, 2006. AKB Rosbank acts as the payment agent for UTK’s 02-series bond issue.

Information about the bond issue:

The issue of UTK 02-series non-convertible interest bearing documentary pay-to-bearer bonds is for a total of Rub 1,5 billion. The bonds are payable in three years (1,092 days), with a half-year coupon period (182 days). The issue provides for 2 call options: in 1 and 2 years after the placement (the first call option was exercised in full on February 16, 2005 through a buyout of 1,092.657 papers, the second call option was exercised in full on February 15, 2006 through a buyout of 217,530 papers). The interest rate for coupons 1-2 was set at 9.25% during the placement (February 11, 2004 on MICEX). Effective yield to maturity during the placement amounted to 9.46%. The secondary circulation on MICEX started on April 8, 2004. The interest rate for the third and fourth coupons stood at 12% per annum. The rate for coupons 5-6 was fixed at 10.5% (Minutes ? 23 dated January, 20, 2006). The bond issue was registered with the state registration authority under entry 4-06-00062-A as of November 28, 2003. The issue trade codes are UTK-02commons, ISIN RU000A0UUTO. OAO AKB Rosbank acts as the arranger, underwriter and Payment agent of UTK 02-series bond issue. Financial consultant of the issue is AVK Investment company.