Krasnodar, December 20, 2004: Southern Telecommunications Company (“UTK”) (RTS: KUBN; OTC: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, today reported that on December 16, 2004 it had ended its participation in “Mobilcom” CJSC through liquidation of “Mobilcom” CJSC. "UTK" PJSC held a 35% interest in the share capital of “Mobilcom” CJSC in the form of 35 ordinary registered non-documentary shares to the amount of RUR 7,000.

The decision on termination of UTK’s participation in “Mobilcom” CJSC through liquidation of “Mobilcom” CJSC was approved by the Board of Directors of "UTK" PJSC on July 20, 2004 (Minutes ?3) in the context of the Company’s policy on subsidiary business and non-profile assets management and on the basis of the economic analysis of the Company’s operations. Extraordinary General Shareholders' Meeting of “Mobilcom” CJSC held on July 28, 2004 approved by a solid vote the decision on the voluntary liquidation of the company. The decision agrees with the development strategy of Svyazinvest holding. Reduction of non-profile and inefficient assets will enable UTK to further focus its efforts and financial resources on the development of new telecommunication services having great potential.