Krasnodar, July 26, 2004: International rating agency Moody’s Investors Service assigned South Telecommunications Company (STC) [(RTS: KUBN, KUBNP; OTS USA: STJSY)] a primary rating of B3. Moody’s also assigned STC’s prior unsecured liabilities a primary Caal rating with a stable outlook.

STC’s management believes that the rating will help consolidate the company’s reputation in financial markets and reduce the cost of borrowed capital. The credit rating serves as an aid in achieving the Company’s goals in the field of financing investments with developing STC’s communication network and increasing the income from new clients and implementation of value-added services.

For more details on the rating assigned to STC, see Moody’s Web site: www.moodys.com.