OREANDA-NEWS . September 4, 2012. Rostelecom OJSC (the “Group”) (MICEX - RTS: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announced its key operating and financial results for the second quarter and six months ended June 30, 2012.

SIX MONTHS FINANCIAL HIGHLIGHTS

Consolidated revenues up 11% year-on-year to RUB 159.9 billion

OIBDA up 16% year-on-year to RUB 64.7 billion with OIBDA margin of 40.5% compared to 39.0% for the same period of 2011

Net income up 22% year-on-year to RUB 23.4 billion

Capital expenditure of RUB 41.7 billion, representing 26.1% of consolidated revenues

Net debt of RUB 185.1 billion with a net debt / annualisedOIBDA ratio of 1.5x as at June 30, 2012.

SECOND QUARTER FINANCIAL HIGHLIGHTS

Consolidated revenues up 6% year-on-year to RUB 75.5 billion

OIBDA[1] up 3% year-on-year to RUB 29.9 billion with an OIBDA margin of 39.7%

Net income up 3% year-on-year to RUB 8.8 billion

Capital expenditure[2] of RUB 21.4 billion, representing 28.3% of consolidated revenues

KEY OPERATING HIGHLIGHTS

Total number of households passed reached 33.1 million[3], of which 14.8 million (45%) were passed using Rostelecom’s FTTx technology

Total broadband subscriber base up 13% year-on-year to 8.6 million

Total Pay TV subscriber base increased by 10% year-on-year to 6.2 million, of which 1.0 million are interactive TV subscribers.

Alexander Provotorov, President of Rostelecom, commented: “Growth achieved during the second quarter and half year periods demonstrates that we are delivering on our five-year strategy. We continue to increase the number of households passed using Rostelecom’s FTTx technology, which strengthens our ability to sell broadband and pay TV services. This has enabled us to grow our broadband subscriber base by 13% year-on-year to 8.6 million users, and our total interactive TV subscriber base now amounts to 1 million users due to a higher level of interest in IPTV. Rostelecom’s achievements have been further enhanced by our acquisition of Sky Link and the granting of federal LTE licence to Rostelecom.”

Anton Khozyainov, Senior Vice President and Chief Financial Officer of Rostelecom, added: “We are pleased to report strong growth in our consolidated revenues, OIBDA and net income for the first six months of 2012. Despite the high volatility of the financial markets, we significantly improved our debt structure in the second quarter of 2012 by increasing the share of long-term liabilities which now represent two-thirds of our debt portfolio. However, our net debt position, and its average cost of service, remained stable. During 2011-2013, Rostelecom’s investing activities are at their peak as we roll-out the Company’s multi-standard mobile network. We are currently installing new equipment and actively promoting our brand to incentivise sales of existing products and new mobile data services which will be soon available through our 3G networks. Our CAPEX programme is ambitious, and any consequent short-term pressure on our financial performance is temporary. As we invest in income and margin enhancing initiatives, 20 of which have been launched recently to improve operational efficiency, we expect them to have a positive impact on margins as well as the Company’s net profit in the medium term.”

[1] Here and below, please refer to Attachment 1 of this statement for a full definition of OIBDA

[2] Here and below, capital expenditure (“CAPEX”) comprises cash spent on purchase of property, plant and equipment and intangible assets

[3] It is calculated as the sum of total number of households passed by xDSL, FTTx and xPON technologies, excluding technologies intersections.