The importance of strengthening strategic telecom alliances

Rostelecom at a glance Key Numbers Revenue (2009) USD 2,1B Market capitalization, ( ) USD 4,08B Employees22,000 Backbone150,000 km Customers40M Traffic volumes per month 1,2B min 51 PB Shares controlled by the State 51% Rostelecom market share, breakdown by services, 2009

Rostelecom key national projects E-Government backbone network development and operation within the national program ‘Digital Russia ( )’ Development of telecom infrastructure for the Winter Olympic Games – Sochi 2014 The unique infrastructure of Rostelecom and long-term partnership relations with domestic, regional, and global Telcos help us to carry out telecom projects of national scale.

Rostelecom prepares its network to meet growing demand for bandwidth New line The global demand for telecom services is growing, the ability to meet that market demand is a challenge 150,000 km backbone Increase the capacity – up to 3.2 Tbps 100% reservation (construction of reserve line between Chelyabinsk and Khabarovsk is finished)

Data traffic growth increases the demand for capacity IP services developed dramatically and significantly changed telecom market landscape – IP traffic dominates (VoIP, video conferencing, gaming, audio streaming, webcam usage, video, IPTV, realtime P2P, etc.) Operators can increase their revenues by integrating 3rd-parties and offering own integrated services Telcos prepare themselves to increase penetration and optimize costs to save cash flows Limited capacity = poor quality of service Wholesale network demand will remain strong

Guaranteed bandwidth High backbone reservation due to Distributed topology 100% ring reservation of backbone network Capacity up to Tb Continuous investments into infrastructure, and strong partnership alliances TECHNOLOGY LEADERSHIP BASIS READY TO MEET THE GROWING TRAFFIC VOLUMES

Global connectivity Rostelecom network as part of global telecommunications infrastructure

Eurasian transit project development - ТЕА TEA makes a transcontinental ‘Europe through Asia’ link in Rostelecom global carrier cooperation chain. The link is the shortest route for delay sensitive applications for Asian and European countries. In 2008 Rostelecom expanded its presence in Asia- Pacific region. In close cooperation with KDDI we launched the Russia-Japan Cable Network (RJCN). This system has two geographically diverse submarine-cable routes with a total length of 1,800 kilometers and capacity of six times 10 gigabits a second. TEA provides further integration of the Russian public network with networks of the countries of the Asia- Pacific region.

Bilateral carrier agreements with market leading telcos POPs in the main Telehouses Interconnections with all main national operators Active participation in all major international telecom communities The most extensive countrywide network in Russia Growth of demand on transit capacity from Europe to Asia Big potential of local market growth in the CIS countries Relatively low rate of competition at the switched transit market in the CIS countries Globalization process NEW GEOGRAPHICAL MARKETS Countries of CIS, Europe, Middle East, and Asia-Pacific CAPABILITIES RESOURSES Rostelecom growing its international presence

Backbone connectivity West South East Cross-border link Over 10 direct cross-border links with neighboring countries: Estonia, Latvia, Lithuania, Finland, Ukraine, Belarus, Georgia, Azerbaijan, Kazakhstan, China and Japan for transit services to Europe, South-East, Middle East, and Japan. Partners’ infrastructure for connectivity to Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, Armenia, Iran.

TEA evolution – new alliances Caspian Region Connection to United Arab Emirates and Arabian Peninsula via Iran and Azerbaijan Connection to Turkmenistan, Uzbekistan via partners infrastructure European IP transit via terrestrial route through Russia and Azerbaijan, IP port in Europe International leased line services

Russia – China (with China Telecom) Russia – Kazakhstan «Northern Connection» Russia - Kazakhstan «Western Connection» Russia - Azerbaijan (with Delta Telecom) Russia – Georgia Russia – Finland (Kingisepp – Kotka) Russia – Finland (Vyborg - Lapperanta) Russia – Belarus Russia – Latvia Russia - Lithuania Further investments to meet the growing capacity demand West South East CROSS BORDER LINKS UPGRADE

Our plans for 2010 $180M will be invested into network upgrade Network expansion : Upgrade existing POPs Build new POPs Open commercial representations Network evolution: 3G transformation FrankfurtStockholmHong KongLondonAmsterdam Today Rostelecom has POPs in Europe and Asia

OJSC Rostelecom 14, 1st Tverskaya-Yamskaya St., Moscow, , Russia Phone Fax