Krasnodar, December 5, 2007: Southern Telecommunications Company (“UTK”) [(RTS: KUBN, KUBNP; ?ICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that today the Company paid out in full the first coupon income on the UTK 05-series bonds (UTK-05?b., ISIN - RU000A0JP9K1).

The first coupon interest rate of 7.55% per annum was set by Order ?00113-P of UTK’s Director General dated 6 June 2007. Total amount of the first coupon yield payable under all UTK series 05 bonds made 75,300,000 rubles. The coupon income under one bond amounted to 37.65 rubles.

The cut-off date of the register of the holders of UTK series 05 bonds entitled to receive the coupon yield was 26th November 2007.

Information about the bond issue:

The issue is for a total of Rub 2 bln. Period to maturity is 5 years.

The face value of 1 bond is Rub 1,000.

The bond issue carries 10 coupon periods, each lasting 182 days. The interest rate for the 1st coupon is set on the results of the auction held on the day of placement which is June 6, 2007. The 2nd, 3rd, 4th, 5th and 6th coupon yields equal the interest rate of the 1st coupon. The 7th through 10th coupons shall be fixed by the Issuer not later than 10 (ten) calendar days prior to the expiry date of the preceding coupon period.

The possibility of Bonds acquisition by the Issuer under the agreement with the Bonds owners or on their demand is provided for, such Bonds being available for further circulation until the repayment deadline.

The date of the bonds’ acquisition by the Issuer is determined as the third working day of the seventh coupon period or June 4, 2010. Call option period is from May, 29 till June 2, 2010 inclusive. Number of bonds to be bought out is up to 2,000,000 units inclusive. The acquisition price is 100 % of the face-value. The price does not include accumulated coupon income under bonds as of the date of bonds repurchase which is to be paid by the Issuer to the Bond owner in addition to the acquisition price at the moment of the transaction

Financial consultant of the 05 series issue is CJSC Russian Industrial Bank. OJSC AKB Svyaz-Bank acts as the arranger and payment agent of the issue. LLC UTK-Finance is the underwriter of the bond issue.