Krasnodar, November 19, 2008: Southern Telecommunications Company (“UTK”) [(RTS: KUBN, KUBNP; ÌICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District reports that according to the Decision of the Company’s Board of Directors of 10 November 2008 (Minutes ¹ 11 of 10 November 2008) UTK signed a credit agreement with ORGRESBANK (Open Joint-Stock Company) for 55.5 million Euro repayable in two years. The interest rate on the loan is three-month EURIBOR + 4%.

Alexander Dobryakov, Deputy Director General –Director for Economics and Finance of Southern Telecommunications Company said that the funds raised would be forwarded to finance the Company’s current operations.