Ekaterinburg – January 20, 2005 – Uralsvyazinform (RTS and MICEX: URSI/URSIP) the leading carrier of fixed-line and mobile services in Urals region reports on the increase of its stake in ZAO "Ermak-RMS" to 100% and its becoming the sole participant in OOO "TyumenRusCom". The purchase of shares aligns with the recent decision by the Board to consolidate mobile business of Uralsvyazinform.

In July, 2004 the Board of Directors took a decision to consolidate the company’s mobile assets, following which Uralsvyazinform’s mobile subsidiaries ZAO "Ermak-RMS", OOO "South Urals Cellular Phone" and OOO "TyumenRusCom" are subject to consolidation with Uralsvyazinform until the end of 1Q 2005. The assets of joining companies and Uralsvyazinform’s own GSM division will present a basis for a unified inter-regional mobile division.

In October, 2004 the Board of Directors approved the Schedule ("Master-Plan") for mobile business consolidation, which contains a list of necessary corporate actions.

ZAO "Ermak-RMS"

As of the date of the Board’s decision to consolidate mobile business, Uralsvyazinform’s stake in Ermak-RMS was 90%.

In December, 2004 the Board of Directors approved the purchase of 10% stake in Ermak-RMS from OAO "Yugra-Telecom" at the price of RUR 114.4 mln. The transaction was affirmed by Federal Anti-Monopoly Service as required by Russian legislation. The transaction has been completed.

Ermak-RMS is one of the two largest subsidiaries of Uralsvyazinform. The company offers GSM-900/1800 services throughout the territory of Tyumen region, including Khanty-Mansyisky AD and Yamalo-Nenetsky AD.
As of 01/01/2005 the subscriber base totaled 668.8 thous, a 93% up over 2004. The company’s market share is about 48% in Tyumen region.

OOO "TyumenRusCom"

As of the date of the Board’s decision to consolidate Uralsvyazinform’s mobile business, the shareholder structure of TyumenRusCom was as follows: Uralsvyazinform held 51%, OOO "Informational, Analytics and Communications Center INANKOcenter" – 46% and ZAO "Rustel" – 3%.

As of October, 2004 following the above decision by the Board of Directors, Uralsvyazinform purchased the 3% stake from ZAO "Rustel" valued at RUR 1.7 mln. The transaction is now complete.

In November, 2004 OOO "INANKOcenter" applied for withdrawal from OOO "TyumenRusCom". Therefore, Uralsvyazinform became the sole participant in OOO "TyumenRusCom".

To date, Uralsvyazinform received an approval of Federal Anti-Monopoly Service to increase its stake in the charter capital of TyumenRusCom, as required by Russian legislation.

OOO "TyumenRusCom" (previously ZAO "TyumenRusCom") was established in 1995. It holds licenses for DAMPS-800 services and GSM-1800 services in the territory of Tyumen region.
As of December 31, 2004 TyumenRusCom had 11 thous. subscribers of DAMPS-800 services in the south of Tyumen region, which stands for 3% of regional market share of mobile services.

Commentary from the CEO

Acting CEO Anatoly Ufimkin noted that "the recent actions to increase Uralsvyazinform’s stakes in ZAO "Ermak-RMS" and OOO "TyumenRusCom" were possible due to significant preparation. Earlier in 2002, the company increased to 100% its share in another mobile subsidiary OOO "South Urals Cellular Phone". As a result, Uralsvyazinform has become the sole shareholder (participant) in the three mobile subsidiaries which facilitates the consolidation process and brings downs the risks. Essentially, the main goal of consolidation is to push manageability and economic efficiency of the mobile business, thanks but not limiting to the unified purchase, marketing and sales policies, including the launch of a single mobile brand. The next stage of consolidation is the Extraordinary General Meeting of Uralsvyazinform, where the shareholders will consider consolidation of subsidiaries with the parent company".