VLADIVOSTOK, April 4, 2005 – Open Joint Stock Company “Far East Telecommunications Company” (RTS: ESPK, MICEX: DLSV, OTC ADR: FEEOY), the leader of telecommunication market of the Russian Far East Federal District, today announces un audited results under Russian Accounting Standards for 2004, ended December 31, 2004.

Operating revenues increased up to 8 938 455 thousand rub. or 130.6% compared to 2003 (6 846 740 thousand rubles). The additional increase in total revenue (2 053 046 thousand rub.) was driven by development of local telephone service, growth of service number and net development (1 825 123 thousand rub.), by changing service tariffs (227 923 thousand rub.) including 181 235,5 thousand rub. from regulated tariff income.

Revenue per worker increased 131% compared to 2003 (375 thousand rub.) to 492 thousand rub. Revenue per 1 line increased 121% compared to 2003 (6,1 thousand rub.) to 7,3 thousand rub.

FETEC reported total operating expenses of 7 750 610 thousand rubles in 2004 (5 928 890 thousand rub. in 2003). This increase of 130.7% was primary driven by changing accounting structure with “Rostelecom” OJSC and amortization expenses increasing. Account payable to Rostelecom increased to 1 192 019 thousand rubles, or 145% compared to 2003. New equipment putting into operation and using accelerated amortization are the reasons of amortization double increasing (199.2%). Amortization in 2004 increased up to 626 795 rubles rub.

Compared to 2003 FETEC’s net income increased by 6 times up to 1 144 189 thousand rubles. Mobile and non-specified assets selling drove this result. Asset selling in 2004 added 1 159 044 thousand rub to revenue (FETEC net income includes 839 893 thousand rub. from assets selling). Net income from operating increased by 66% (without asset selling) and reached 304 296 thousand rubles (182 785 thousand rub. in 2003).

EBITDA increased by 3.5 times to 2 431 489 thousand rub. (697 944 thousand rub. in 2003). Operation profitability is 15.3%.

Capital expenditures increased to 3 107 322 thousand rub. Their growth is 154% compared to 2003 (2 012 309 thousand rub.). The growth of capital expenditures was driven by net development and modernization.

FETEC revenue structure changed in 2004. The revenue share from new services and data transmission increased to 5.8% (4.8% in 2003).

According to the company’s policy on expanding and modernization of basic capacities, the installed capacity of the network for the last year increased to 1 508 117 numbers or by 13% compared to 2003 (1 330 698 numbers). Utilized capacity of the network increased to 1 258 936 numbers or by 10% compared to the figures of 2003 (1 142 461 numbers).

Level of digitalization increased significantly. This increase equaled 61.7% in 2004 (48.3% in 2003).

Growth in the quantity of phone devices was 115 702 numbers. Phone density for 100 inhabitants was 24 units in 2004 (20.5 units in 2003).

In the revenue structure of new services Internet (dial-up access) forms 62%, Internet (dedicated channel, including DSL) – 33%.

Revenues from new services and data transmission of the Far East Telecommunication Company in 2004 equaled 524 million rubles. The increase in revenues was 161% as compared with 2003 (325 million rub.).

Quantity of the Internet users via dial-up access increased by 10% compared to 2003 (115 364 customers) and equaled 126 518. The quantity of DSL users in 2004 increased by 5.4 times (6 447 customers) and equaled 7 915.

Revenues from cellular communication increased by 73.6 times up to 331.7 million rubles compared to the 2003 (191 million rubles). Quantity of cellular service customers increased 2.6 times in 2004 and totaled 32 098, 20 360 of which are from the Kamchatka region and 11 738 from the Magadan region.

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