Revenues increased by 7.7%, net profit up 19.0%

 - Revenue for the first nine months of 2005 amounted to RUR 29,762.2 million - a year-on-year increase of 7.7%.

 - Domestic long-distance traffic rose 5.4% ¹ year on year. Outgoing international traffic grew by 13.1% and incoming international traffic increased by 13.6% ².

 - EBITDA ³ for the first nine months of 2005 rose 5.1% to RUR 11,618.6 million, representing an EBITDA margin of 39.0%.

 - Net profit for the first nine months of 2005 amounted to RUR 7,843.8 million, a year-on-year increase of 19.0%.

Moscow – November 2, 2005 – Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia's national long-distance telecommunications operator, today announced unaudited results for the first nine months of 2005 in accordance with Russian accounting legislation (RAS).

In total, Rostelecom's revenues for the first nine months of 2005 amounted to RUR 29,762.2 million – a year-on-year increase of 7.7%.

Domestic long-distance (DLD) traffic for the first nine months of 2005 totaled 7,034.4 million minutes - a 5.4% increase compared to the same period a year ago. First nine months 2005 DLD revenues grew by 4.3% year on year to RUR 13,348.9 million.

Outgoing international long-distance (ILD) traffic rose 13.1% to 1,291.0 million minutes. ILD revenues from both Russian operators and subscribers for the first nine months of 2005 totaled RUR 6,921.0 million – a 3.8% increase over the same period last year.

Incoming ILD traffic grew 13.6% year-on-year to 1,218.8 million minutes. Revenues from international operators for incoming ILD traffic termination decreased by 2.3% to RUR 3,084.9 million.

Total revenues from Moscow subscribers decreased 8.4% in the first nine months of 2005. The total amount of long distance traffic from Moscow subscribers was down 5.8% compared to the same period last year.

Rostelecom's operating expenses for the accounting period amounted to RUR 20,079.5 million. The 10.4% increase compared to the first nine months of 2004 is mainly due to increases in staff costs and higher payments to operators on the back of long-distance traffic growth.

Depreciation for the first three quarters of 2005 amounted to RUR 1,935.9 million. The increase of 21.8% compared to the same period last year is a result of significant additions of property, plant and equipment in 2004.

Thus, EBITDA for the first nine months of 2005 grew 5.1% year on year to RUR 11,618.6 million, representing an EBITDA margin of 39.0%.

Operating profit grew by 2.3% over the first nine months of 2004 and totaled RUR 9,682.8 million.

The result from other operating activities for the first nine months of 2005 totaled RUR 1,418.6 million compared to RUR (295.3) million a year ago. This improvement is mainly due to the positive effect of the revaluation of the Company's financial investments and a sharp increase in gains on the sale of investments. Rostelecom recorded a RUR 780.5 million net revaluation gain in the first three quarters of 2005 compared to a RUR 89.9 million gain a year ago. Rostelecom recorded a RUR 298.2 million gain on the sale of investments in the first nine months of 2005 – reflecting the sale of Rostelecom's interest in Telmos and a gain from the sale of bonds of the Ministry of Finance – compared to RUR 34.4 million for the first nine months of 2004. In addition, net interest income for the first nine months of 2005 totaled RUR 420.9 million, compared to RUR 142.7 million a year ago.

The result from other non-revenue activities for the first nine months of 2005 amounted to RUR (579.2) million compared to RUR (398.0) million a year ago.

Rostelecom's net profit for the first nine months of 2005 totaled RUR 7,843.8 million - a year-on-year increase of 19.0% - raising the net margin to 26.4%.

¹ All traffic data provided in the press release is preliminary.

² Incoming ILD traffic for the first nine months of 2004 has been revised.

³ EBITDA is calculated as total revenues less operating costs excluding depreciation.