Krasnodar, June 24, 2005: Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reported that on 23 June 2005 the international rating agencyMoody’s Investors Service affirmed the B3 senior implied rating of "Southern Telecommunications Company" PJSC  with Stable outlook in connection with the application of Moody’s new rating methodology for government-related issuers (GRIs).

Moody`s new rating methodology describes the extension of joint-default analysis (JDA) to government-related issuers.  It explicitly accounts for 1) the GRI’s baseline, or stand-alone, risk assessment ; 2) the supporting government’s rating; 3) an estimate of default correlation between the two entities; 4) the degree of government support.

In accordance with Moody’s Government-Related Issuers Rating Methodology, the B3 senior implied rating of "Southern Telecommunications Company" PJSC reflects the combination of the following inputs:

- Baseline credit assessment of 6 (within a scale ranging between 1 and 6),

- Baa3 local currency rating of the Russian government,

- Medium level of dependence,

- Lowsupport.

UTK’smanagementbelievesthatthis refined approach to GRI’s rating methodology and the assigned rating will be a more transparent and helpful tool in the Company’s communications with the market. 

Additional information about Moody`s new rating methodology and UTK’s credit rating can be viewed on the website www.moodys.com.

For any further information please contact:

UTK IR Team

phone + 7 861 253 20 30, fax + 7 861 253 19 69, e-mail: pmaleev@mail.stcompany.ru

UTK PR Team

phone + 7 861 259 56 99, fax + 7 861 259 56 99, e-mail: dali@mail.stcompany.ru

Southern Telecommunications Company PJSC, or UTK, is the principal provider of fixed line telecommunications for Russia’s Southern Federal District, a region covering 520 ths sq km with population of 18.7 million people. "UTK" PJSC  provides various telecom services of local and long-distance telephony, broad range of value-added services (VAS) (services of Internet, IP-telephony, ISDN, VPN, CTV and others).  Total revenue of "UTK" PJSC for the year 2004 is up 24% to RUR 16.8 bln, EBITDA is up 25%  to RUR 4.3  bln (RAS). Number of basic telephone sets operated by "UTK" PJSC makes 4 million units. During 2004 UTK increased its market share of local fixed- line services  to 83%, value-added services – to 44%.

UTK is a subsidiary of Svyazinvest holding which owns 38% of the Company’s authorized capital. UTK shares are traded in the Classic Market of NP “RTS SE” (KUBN; KUBNP), OJSC “RTS” (KUBNG; KUBNPG)), in   the stock section of the Moscow Interbank Currency Exchange (MICEX) (UTEL; UTELP). One unit of American Depositary Receipt of "UTK" PJSC  represents 50 common shares of the Company. UTK ADRs are traded in the US over-the-counter market (STJSY), and quoted in the over-the counter market of Frankfort and Berlin Stock Exchanges (KUE) and NEWEX (KUE).

Additional information about the Company  can be accessed on the website atwww.stcompany.ru, in the Information Disclosure System  SKRIN Issuer, in KUBN_RU of the systems Bloomberg and Reuters as well as on the web-portal Rustocks.com.