Moscow – April 27, 2011 – Rostelecom OJSC (the “Group”) (RTS, MICEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announced its unaudited combined and consolidateIFRS financial results for 2008-2010.

Full year 2010 financial highlights

Combined and consolidated revenues up 4% year on year to RUB 275.7 billion

Adjusted OIBDA up 8% year on year RUB 110.9 billion

Increased adjusted OIBDA margin of 40.2% compared to 38.8% in the same period of 2009

Adjusted Net income² up 49% year on year RUB 40.8 billion

Capital expenditure of RUB 51.8 billion represents 18.8% of combined revenues

Adjusted Free cash flow² of RUB 45.3 billion

Net debt of RUB 119.8 billion (net debt/adjusted OIBDA of x1.1)

Full year 2010 operating highlights

Total subscriber base for local telephony services remained almost flat year on year at 29.2 million

Total broadband subscriber base up 26% year on year to 6.4 million (excluding 464 thousand subscribers of NTK, acquired in February, 2011)

Total Pay-TV subscriber base up 22% year on year to 0.9 million (excluding 4.6 million subscribers of NTK)

Financial summary

1Combination of consolidated financial statements of North-West Telecom OJSC, CenterTelecom OJSC, Southern Telecommunications Company OJSC, VolgaTelecom OJSC, Uralsvyazinform OJSC, Sibirtelecom OJSC, Far East Telecom OJSC (“RTOs”), Dagsvyazinform OJSC and Rostelecom OJSC, which had been under common control of Svyazinvest OJSC and were merged on April 1, 2011.

2Here and below, please refer to Attachment 1 to this statement for a full definition and reconciliation of OIBDA, Adjusted OIBDA, Adjusted Operating and Net Income, Free Cash Flow and Adjusted Free Cash Flow

3Here and below, capital expenditure (“CAPEX”) comprises cash spent on purchase of property, plant and equipment and intangible assets

4Here and below, Net debt is calculated as the sum of long-term loans and short-term borrowings minus cash and cash equivalents and short-term investments

[full text of the press release is attached]

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For more information please contact:

IR department

Masha Eliseeva

Tel. +7 (499) 995-97-80; +7 (985) 997 08 52

ir@rt.ru

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Rostelecom (www.rt.ru/en) is Russia’s national telecommunications operator and now also includes the regional incumbent telecommunications operators (CentreTelecom, SibirTelecom, Dalsvyaz, Uralsvyazinform, VolgaTelecom, North-West Telecom and Southern Telecommunications Company) and Dagsvyazinform. Rostelecom has the largest domestic backbone network (approximately 500 thousand km) and last mile connections to  approximately  35 million households in Russia. The Company holds licences to provide a wide range of telecommunications services (telephony, data, TV and value-added solutions) to residential, corporate and governmental subscribers and third party operators across all regions of the Russian Federation. The Rostelecom brand is one of Russia’s ten most trusted brands (source: Romir market research).

Rostelecom’s ordinary and preferred shares are traded on the RTS and MICEX stock exchanges under the symbols ‘RTKM’ and ‘RTKMP’, and its depository receipts are traded over-the-counter in the United States on the OTCQX under the symbol ‘ROSYY’. Rostelecom is majority owned (53.2% of ordinary shares) by the Russian Government and has a free float of 44.5% of the outstanding ordinary shares and 71.2% of the outstanding preferred shares. Standard&Poor’s has assigned Rostelecom a ‘BB’ international credit rating with a ‘Stable’ outlook.

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Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws and are intended to be covered by the safe harbors created thereby.

Those forward-looking statements include, but are not limited to:

·         Management’s assessment of the Company’s future operating and financial results as well as forecasts of the present value of future cash flows and related factors;

·         the Company’s anticipated capital expenditures and plans to construct and modernize its network;

·         the Company’s expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;

·         the Company’s plans with respect to improving its corporate governance practices;

·         the Company’s expectations as to its position in the telecommunications market and the development of the market segments within which the Company operates;

·         economic outlook and industry trends;

·         the Company’s expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company’s activity;

·         other statements regarding matters that are not historical facts.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:

·         risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;

·         risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;

·         risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company’s services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;

·         technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;

·         other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company’s Annual Report and the Company’s other public filings.

Many of these factors are beyond the Company’s ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.