Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia's national long-distance telecommunications operator, today announced that it has signed an agreement with China Telecom on construction of a cable system between Russia and China.

The solemn ceremony of signing has taken place today, July 15, 2004, at the China Telecom central office in Beiging. Among those who participated, there were Guohua Xi, Vice- minister of Ministry of Information Industry of the People’s Republic of China, Dmitry Yerokhin, Rostelecom's CEO, and Deqiang Zhou, the President of China Telecom.

Rostelecom's CEO Dmitry Yerokhin said in his speech: « By signing the agreement on construction of a cable system between Russia and China, we make a new step towards integrating communications networks of our countries into the global telecommunications space. The conclusion of our agreement goes in line with the decision of the Russian-Chinese Intergovernmental Commission, and we are grateful to the Ministry of Information Industry of the People's Republic of China and the Ministry of Information Technologies and Communications of the Russian Federation for supporting our cooperation with China Telecom based on mutual benefit.

The construction of a new cable system will enable our companies to become stronger players in the international market: we can offer high-speed Europe-Asia transit of outstanding quality — thanks to high organizational level of our networks and an advantageous geographical location of both Russia and China providing the shortest route for traffic transmission between European and Asian countries. In addition, by the direct connection of China Telecom and Rostelecom's networks, our companies will have more opportunities for launching new services and strengthening cooperation in various telecommunication fields».

The planned throughput capacity of the cable system will amount 2.5 Gbps to be further expanded up to 300 Gbps.