ROSTELECOM’S BROADBAND SUBSCRIBER BASE EXCEEDS 9 MILLION USERS

MOSCOW--()--

ROSTELECOM’S BROADBAND SUBSCRIBER BASE EXCEEDS 9 MILLION USERS

Moscow, Russia – November 13, 2012 – Rostelecom OJSC (the “Group”) (MICEX - RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces that its broadband subscriber base now exceeds 9 million users as at the beginning of November 2012. Rostelecom remains the leader of the Russian broadband market with a 40% market share1, which is almost 4 times more than its nearest competitor.

Growth in Rostelecom’s broadband subscriber base is being driven by an increase in the number of broadband subscribers using high-throughput broadband services. These services utilise FTTH and FTTP technology and the number of broadband subscribers using this technology is doubling on an annual basis.

Rostelecom intends to expand its broadband consumer offering by upgrading its main package with new features so that customers are offered the most competitive bundles both in terms of price and content. The Company plans to carry out a number of promotional activities, which includes offering tariff plans on trial periods to test Rostelecom’s higher-speed services, and includes offering promotional rates when a user subscribes to a set of services or additional options. The Group also plans to launch additional packages that are tailored to users’ preferences. A variety of new services will be added to Rostelecom’s content offerings, including new TV channels, video and music content, built-in communications and e-commerce programmes.

Furthermore, a new loyalty programme, which will be launched in 2013, will enable subscribers to earn bonus points which they can use to pay for Rostelecom’s services or to subscribe to new services and offers.

Pavel Zaytsev, Senior Vice President of Rostelecom, commented: “A great deal of thought and investment has gone behind the development of this strategic business segment. We are currently modernising our ‘last mile’ infrastructure, moving to fibre-optic access technologies to connect our customers. This enables us to offer subscribers the most advanced packages around, which includes Interactive TV and other content services.”

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For more information please visit www.rt.ru/en or contact:

Investor Relations Department

Tel. +7 (499) 995 97 80

ir@rt.ru

Rostelecom (www.rostelecom.ru) is Russia’s largest national universal telecommunications operator. Rostelecom has the largest domestic backbone network and a unique ‘last mile’ infrastructure to access millions of subscribers across Russia. The Company holds licences to provide a wide range of telecommunications services, including fixed and mobile telephony, broadband Internet access, pay TV and cloud solutions, to residential, corporate and governmental subscribers and third party operators across all regions of the Russian Federation. Rostelecom continues to lead in delivering high-quality internet services. The total capacity of its clients’ connections exceeds 2.3 Tb / s, which is a record among Russian operators. Rostelecom cooperates with 600 national and international fixed line and mobile operators, which gives the Group direct access to over 150 operators’ networks in 70 countries. Rostelecom also jointly operates international submarine cable networks.

Rostelecom’s ordinary and preferred shares are traded on the MICEX-RTS (RTKM, RTKMP) stock exchange, and its depository receipts are traded over-the-counter in the United States on the OTCQX under the symbol ‘ROSYY’. Rostelecom was assigned a ‘BBB-’ and ‘BB+’ international credit ratings by Fitch Ratings and Standard&Poor’s respectively, both with a ‘Stable’ outlook. Rostelecom had 27.8 million local fixed-line voice subscribers, 12.9 million mobile voice subscribers, 8.6 million fixed-line broadband subscribers and 6.2 million pay-TV subscribers at the end of 2Q 2012. The Group generated RUB 159.9 billion of consolidated revenues, RUB 64.7 billion of OIBDA (40.5% of revenues) and RUB 23.4 billion of net income for the six months ended June 30, 2012.

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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.

1 Source: ACM-Consulting

Short Name: Rostelecom OJSC
Category Code: MSC
Sequence Number: 351636
Time of Receipt (offset from UTC): 20121113T102954+0000

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