Rostelecom is a long-distance telecommunications operator in Russia. The Company owns and operates a nationwide trunk telecommunications network. Throughout Russia, Rostelecom renders domestic and international long-distance (ILD) telecommunications services to end users, and provides traffic throughput services to Russian operators, including each of Russia's seven inter-regional companies (IRCs) and alternative operators. In addition, the Company provides telecommunications services to various government-funded entities and government ministries across Russia and ensures the operation of the ground-based network of television and radio broadcasting channels. In April and September 2005, the Company acquired a 19% stake in OJSC Svyazintek. In April 2006, Rostelecom acquired a 74.57% stake in CJSC Globus-Telecom. In April 2006, the Company also acquired a 100% stake in LLC TelecomCenter, which directly controls a 20.33% stake in CJSC Globus-Telecom. As a result, Rostelecom owns directly and indirectly a 94.92% stake in CJSC Globus-Telecom. In June 2006, the Company acquired a 99.99% stake in CJSC Zebra-Telecom. In March 2005, Rostelecom sold its 20% interest in CJSC Telmos. In March 2005, the Company sold its 0.036% interest in OJSC Dal Telecom International. In March 2005, Rostelecom sold its 45% interest in CJSC Telecom-Center. In October 2005, the Company sold its 44% interest in CJSC Teleport-TP. In February 2006, Rostelecom sold its 10% interest in CJSC Telecross. In March 2006, the Company sold its 17% interest in LLC Artelecom-Service. In March 2006, Rostelecom sold its 90% interest in LLC RTC-Sibir. In May 2006, the Company sold its 77% interest in OJSC A-Svyaz. Rostelecom's primary network consists of trunk cables linked to the IRCs' networks and to its international switching centers (ISCs) for connections with foreign operators, as well as a satellite communications network. As of December 31, 2005, the Company's digital network comprised 42,094 kilometers, including 28,662 kilometers of fiber optic lines (FOLs) and 13,432 kilometers of digital radio-relay lines. Rostelecom has installed international FOLs accessing Finland, Denmark, Turkey, Italy, Bulgaria, Japan, Korea, China, Estonia, Kazakhstan, Ukraine, Georgia and Belarus. Switches As of December 31, 2005, the Company owned 13 ISCs and international trunk exchanges (ITEs), which allow for ILD traffic management, including four in Moscow, two in St. Petersburg (Lyuban) and one each in Rostov-on-Don, Samara, Ekaterinburg, Novosibirsk, Khabarovsk, Kaliningrad and Murmansk. The combined capacity of these switches was 162,000 channels as of December 31, 2005. In addition, Rostelecom had eight automatic switching nodes (ASNs), which allow for domestic long-distance (DLD) traffic management, and which are interconnected by digital channels and six automatic trunk exchanges (ATEs) that provide access to DLD service to local users, including five in Moscow and one in Pavlov Posad. As of December 31, 2005, the Company's DLD trunk network consisted of 205,200 digital and 4,700 analog channels. Subscriber units in 77 Russian regions and nine retail outlets are connected to Rostelecom's open network of multimedia communications. Submarine Cables Rostelecom utilizes submarine cables to establish traffic links between Russia and other countries. The Company is the terminal party and a major capacity owner in five international fiber optic cable systems: Denmark-Russia 1, Russia-Japan-Korea, Italy-Turkey-Ukraine-Russia, Novorossiysk-Varna-Odessa and Novorossiysk-Sochi-Poti (Russia-Georgia). Rostelecom's ownership stakes in these cable systems range from 9% to 67%. The remainder is controlled by various international operators. In order to provide access to these systems and to establish direct international lines to remote sites of the world, the Company participates in the construction of, and acquire capacity in, international cable systems. As of December 31, 2005, Rostelecom had interests in 30 cable systems, including global cable systems project

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