• Revenue for the first half of 2007 increased by 7.1% to RUB 30,743.1 million.
• Domestic long-distance traffic rose 5.9%* year on year. Outgoing international traffic grew by   6.8 % and incoming international traffic increased 29.6%.
• EBITDA** rose by 33.5% to RUB 7,311.1 million, representing an EBITDA margin of 23.8%. 
• First half 2007 net profit amounted to RUB 4,691.1 million.

Moscow – August 1, 2007 – Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national long-distance telecommunications operator, today announced unaudited first half 2007 results in accordance with Russian accounting legislation (RAS).

Rostelecom’s first half 2007 revenues totaled RUB 30,743.1 million - a year-on-year increase of 7.1%. 

Domestic long-distance (DLD) traffic for the first six months 2007 grew by 5.9% to 5,051.4 million minutes. First half 2007 DLD revenues increased by 1.2% and totaled RUR 15,410.9 million.

Outgoing international long-distance (ILD) traffic rose 6.8% to 963.6 million minutes. ILD revenues from Russian operators and subscribers amounted to RUB 6,311.9 million, down 0.6% year on year.

First half 2007 incoming ILD traffic totaled 1,411.3 million minutes - a year-on-year increase of 29.6%. Rostelecom increased its share of incoming international traffic, as the Company continued to leverage its strong market position. Revenues from international operators for incoming ILD traffic transit and termination rose 25.8% year on year to RUB 2,580.8 million.

Revenue from other business segments increased by 26.8% compared to the first half 2006 to RUB 6,439.5 million, reflecting the growth of new products and services. Rostelecom delivered solid increases in revenues from leased lines, intelligent network services and customer equipment servicing. For the first six months of 2007, revenues from leased line services grew 14.0% to RUB 3,931.4 million compared to the same period last year.

Rostelecom’s operating expenses for the first half 2007 amounted to RUB 25,305.3 million – a year-on-year increase of 2.1%.

Depreciation increased 20.4% year on year to RUB 1,873.3 million for the first six months of 2007 as a result of significant additions of property, plant and equipment in 2006.
 
Thus, EBITDA for the first half 2007 grew by 33.5% year on year to RUB 7,311.1 million, representing an EBITDA margin of 23.8%.

Operating profit amounted to RUB 5,437.8 million, up 38.7% compared to the same period last year.

The result from other activities for the first six months 2007 totaled RUB 833.0 million compared to RUB (244.5) million a year ago. The increase was mainly driven by a revaluation of the Company’s financial investments. Rostelecom recorded a RUR 826.8 million net revaluation gain for the first half 2007 compared to a RUB (185.1) million net revaluation loss for the same period last year.

Rostelecom’s net profit for the first half 2007 rose 71.5% and totaled RUB 4,691.1 million compared to RUB 2,735.6 million a year ago.