Rostelecom, Russia’s national long-distance telecommunications operator, today announced that it has received a decision on tax claims relating to the Company’s 2003 tax filing. This follows an inspection undertaken by the Federal Tax Service of Russia’s ? 7 Interregional Inspectorate for the largest taxpayers.

As a result of the inspection, which took place from October 3, 2005 to April 27, 2006, Rostelecom has received a tax claim for the fiscal year 2003 (Resolution of the Interregional Inspectorate of the Federal Tax Service). The total amount claimed by the tax authorities is 3,474 million rubles, of which 2,181 million rubles represents additional taxes owed by the Company plus 1,293 million rubles in fines and penalties.

Rostelecom contests the conclusions and claims of the tax authorities and will defend its position in the courts in accordance with current Russian tax legislation. The Company is a lawful taxpayer and believes it will be able to demonstrate that the claims presented by the tax authorities are without merit.