Krasnodar, July 26, 2004: Southern Telecommunications Company (“UTK”) [(RTS: KUBN, KUBNP; OTC: STJSY)], the principal telecommunications provider for Russia’s Southern Federal District, today announced that it has been assigned a B3 senior implied credit rating from Moody’s Investor Service. Moody’s also assigned a Caa1 senior unsecured issuer rating to the Company. The rating outlook is stable.

UTK’s management believe that this assigned rating from Moody’s will strengthen UTK’s profile in the financial markets and enable the Company to lower its cost of capital. The credit rating supports UTK’s goals for network investment to increase efficiency and deliver growth from new subscribers and services.