Krasnodar, September 27, 2005 – Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal telecommunications provider for Russia’s Southern Federal District, reports that on 26th September 2005 Standard & Poor's revised its outlook on "UTK" PJSC to Stable from Negative due to the Company’s ability to stabilize its financial profile shown in first-half-2005. At the same time Standard & Poor’s affirmed its «???+» long-term corporate credit rating and “ruBB” Russia national scale and senior unsecured debt ratings on the Company.

According to Standard & Poor’s analysts, outlook revision reflects UTK’s showing noticeable improvements in its operating and financial performance during 2005 as the Company stuck to its promised focus on cost control, much reduced capital spending and profitability enhancements. The ratings, however, remain constrained by the Company’s low liquidity position, significant debt levels, limited business diversification, and uncertainties associated with industry restructuring. These risks are moderated by UTK’s solid market position, its improving operations, progress in the regulation of local tariffs, and growth potential.

Stable outlook reflects Standard & Poor’s expectation that UTK’s continuing focus on stringent cost and cautious approach to capital investments – combined with increasing EBITDA and cash flow generation will help the Company to stabilize its financial profile.