Svyazinvest

Information Department

119121 Moscow, Ul. Plyushikha, 55 str. 2, tel.: (095) 727-0418,

fax: (095) 727-0475; pr@svyazinvest.ru

July 31, 2003 ãîäà                                                                                                    Moscow

Svyazinvest (hereinafter referred to as the Company) held a board of directors meeting on July 31, which was attended by the following:

L.D. Reiman - Communication Minister of the Russian Federation;

B.D. Antonyuk - first vice Communication Minister of the Russian Federation;

A.V. Anoshkin - assistant to the Head of the Administration of the Russian Federation;

S. Yu. Vyazalov - first vice Minister of Finance of the Russian Federation;

N.A. Gusev - vice Minister of Property Relations of the Russian Federation;

David Giovannis - representative of Mustcom Limited;

S.V. Mitrofanov - vice general director of FAPSI - head of chief administration department;

Stewart G. Paperin - executive vice president of the Soros Charity Fund;

V.P. Fatikov - vice chairman of the Russian Federal Property Fund.

The main issue  on the agenda of the board meeting were as follows: election of the chairman of the board of directors of the company, approval of the work plan by the board for the second half of 2003, the company's 1H 2003 financial results, an analysis of trends in key performance indicators of Uralsvyazinform, an examination of transactions related to the introduction of ERP Oracle E-Business Suite at subsidiaries of Uralsvyazinform, and issues concerning the internal affairs of the company.

Following a discussion of the above agenda issues the Board of Directors adopted the following decision:

1. To elect L.D. Reiman as Chairman of the Board of Directors
2. To approve the work plan for 2H 2003
3. To take note of the preliminary results of the company's operations in 1H 2003 Revenues and expenses associated with regular types of business activity in 1H 2003 totaled Rub 61,5 billion; profit from regular types of activity was Rub 8.7 billion; net profit (retained profit from the reporting period) was Rub 8.7 billion (all data reported do not include MGTS).
4. To take note of the main trends in the key performance indicators of Uralsvyazinform.
5. To take note of information concerning the introduction of the ERP software at subsidiaries of the company.  The executive board of the Company shall subsequently be required to provide complete and timely information to shareholders (or their designees), the Board of Directors and the investment community on decisions adopted by the executive bodies of the Company and which have a material impact on the activity of subsidiaries.  Moreover, at the next meeting of the Board of Directors presentations shall be heard by two general directors of the mega-regional companies concerning the issue of phasing in Oracle E-Business Suite ERP software at their companies.

The holding structure of Svyazinvest includes seven mega-regional telecom companies (MRCs) - Central Telecom, North Western Telecom, Volga Telecom, Southern Telecommunications, Uralsvyazinform, Siberia Telecom and Far East Telecom, as well as national long-distance operator Rostelecom , six telecom operators which did not take part in the mega-merger process, and telecom industry research institute Giprosvyaz.  The company holds licenses and provides local, long-distance and international telecom, data transmission, Internet, ISDN, wireless subscriber access and mobile communication in GSM, NMT-450 and DAMPS standards.  All in all, Svyazinvest employs a staff of over 364,000.

       In 2002 Svyazinvest completed the process of merging 72 regional telecom operators into seven mega-regional companies.  At present, the main focus of the top management of Svyazinvest is focused on implementing a corporate restructuring program, the purpose of which is to set in place management systems at MCRs capable of ensuring efficient performance and dynamic development of the merged telecom operators.  The core component in the corporate restructuring plan is to implement projects involving the introduction of information systems at the mega-regional companies.