Moscow, December 22, 2004. We would like to draw your attention to the fact that starting January 1, 2005 all CenterTelecom subscribers, including those entitled for social discounts for payments for telecommunication services, will be fully billed for communication services, and must pay those bills in full.

Pursuant to the Federal law as of 22.08.2004 N 122-FZ (Federal law) "Concerning amendments to the Legislative Acts of the Russian Federation and recognition of certain Legislative Acts of the Russian Federation stale due to acceptance of the Federal Laws "On amending the Federal law "On the general principles of organization of legislative (representative) and executive bodies of the government of the subjects of the Russian Federation" and "On the general principles of organization of the local governments in the Russian Federation" social discounts for communication services will be provided in the monetary form.

The aforementioned law also introduces changes in the following legislative acts that provide discounts for payments for communication services:

• The Law of the Russian Federation dated 18.10.91 N 1761-I "On rehabilitation of the victims of political repressions".
• The Law of the Russian Federation dated 15.05.91 N 1244-I "On social protection of the citizens suffered from radiation exposure during the Chernobyl atomic power station disaster".
• The Federal law dated 12.01.95 N 5-FZ "On veterans".
• The Federal law dated 24.11.95 N 181-FZ "On social protection of the handicapped in the Russian Federation".
• The Federal law dated 26.11.98 N 175-FZ "On social protection of the Citizens of the Russian Federation suffered from radiation exposure during the accident at Mayak factory in 1957 and dump of radioactive waste products in the river Techa".
• The Resolution of the Supreme Soviet of the Russian Federation dated 27.12.91 N2123-I "Concerning extension of coverage of the Law of Russian Soviet Federative Socialist Republic "On social protection of the citizens suffered from radiation exposure during the accident at Chernobyl atomic power station" to the special risk citizens".
• The Decree of the President of the Russian Federation dated October 15, 1992 N 1235 "Concerning the granting of discounts to the former juvenile prisoners of concentration camps, ghettos and other retention facilities created by the Fascists and their allies during the Second World War".

The aforementioned statutory acts are amended so that the 50% social discount off the subscriber telephone fee is abolished. The concept of social discount itself is being eliminated and replaced in the context of the Law with the concept of "means of social support". This means that the categories of citizens mentioned in the aforementioned list of legislative acts are losing the right for not only benefits in kind as far as communication services are concerned, but also for their monetary form, since the social support comprises providing a uniform social package without discrimination of the amounts for their designated purposes.

The benefits concerning payment for communication services to the categories of the citizens listed in the Law of the Russian Federation as of 15.01.1993 N 4301-1 "Concerning the status of Heroes of the Soviet Union, Heroes of the Russian Federation and Full Chevaliers of the Order of Glory, the Federal law as of 09.01.1997 N 5-FZ "Concerning granting of social guarantees to the Heroes of Socialist Labor and the Full Chevaliers of the Order of Labor Glory", as well as those mentioned in the Decree of the President of the Russian Federation as of 07.02.2000 N 306 "Concerning the support of activity of the Constitutional Court of the Russian Federation and granting the state social guarantees to the Judges of the Constitutional Court of the Russian Federation and the members of their families" are still preserved, but will be provided in the monetary form.

This means that the subscriber will have to pay 100 % of the communication fees with the subsequent receipt of targeted compensation at the territorial bodies of the Pension Fund of the Russian Federation in the order determined by the Ministry of Health and Social Development of Russia. This order corresponds to Paragraph 2 of Article 47 FZ "On communications" that stipulates that the categories of subscribers entitled for social discounts must pay in full for the services provided with subsequent compensation from the budgets of the corresponding level.

We further inform you that according to the disposition of the Government of the Russian Federation as of November 19, 2004 N 1498-r between December 01 and March 31, 2005 a hot line will be available at 8 800 200 01 22 to provide clarifications of the basic provisions of the Federal law as of 22.08.2004 N 122-FZ.

22.12.2004

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