Krasnodar, October 7, 2005– Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; OTC USA: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reportsthat on October 7, 2005 the Company paid out the second coupon income under UTK series 03 bonds (UTK-03?b., ISIN RU000A0DD202) in full. Total amount of the second coupon yield to be paid under all UTK series 03 bonds made 12.3% annual rate or 215, 845, 000 rubles. The coupon income under one bond amounted to 61 rubles 67 kopecks. The cut-off date of the register of the bondholders entitled to receive the second coupon income was September 27, 2005. Rosbank acted as UTK’s Payment agent for 03-series bond issue.

Information about the bond issue:

UTK’s issue of 03-series non-convertible interest-bearing documentary pay-to-bearer bonds is for a total of RUR 3.5 bln with maturity of 5 years (1830 days), semi-annual coupon periods (183 days) and a buyback option every year and a half. The interest rate of 12.3% per annum on the  first, second and third coupons was fixed at the bond placement (October 06, 2004, MICEX). The coupon rate for coupons 4–6 is to be set by the Company no later than10 business days prior to the redemption date of the third coupon. The coupon rate for coupons 7–10 is to be set by the Company no later than10 business days prior to the redemption date of the sixth coupon. The state registration number is 4-07-00062-?dated August 17, 2004, trading codes are UTK-03?b., ISIN RU000A0DD202. Arranger of series 03 bond issue is AKB Rosbank. Co–arranger of the bond issue is Promsvyazbank. Financial Consultant is  FFK. UTK-Finance Ltd. acts as UTK’s underwriter. Additional information on the issue can be obtained here.