1

Prospects and objectives

Vladimir I. RybakinGeneral Director

February 2003

2

Moscow

Consolidated company of Urals region

Territory 2 mln sq. kmPopulation 15 mlnNatural resources 65% of Russian oil, 90% of gas, gold, diamonds

Industrial output in 2001 USD37,4 bln. (18,5% of industrial output of RF)

Average annual USD rate of exchange as of 2002 – RUR31,5

September 30, 2002 highlights the completion of merger of Urals region telecoms and

JSC UralsvyazinformPerm regionSverdlovsk regionChelyabinsk region Kurgan regionTyumen regionKhanty-Mansi Autonomous DistrictYamalo-Nenetski Autonomous District

As of January 1, 2003 • Lines – 3,9 mln• Subscribers – 3,4 mln• Emloyees – 37,8 thous.

Perm

Khanty-Mansyisk

Yamal

EkaterinburgTyumen

Chelyabinsk Kurgan

Kazakhstan

Kara Sea

3

• Disclosure of consolidated financial report under Russian accounting standards (April 2003);

• Auditor’s opinion under Russian and international accounting standards (June 2003).

Merger completion schedule

4

Svyazinvest41%

Nominees25%

Individuals17%

Federal Property Fund5%

Legal Entities6%ADR

6%

Shareholder’s equityas of February 25, 2003

USD Rate of exchange – RUR 31,84

Book Capital USD 151 mln Number of shares 40 134 723 306 Share of preferred stock 19,5%Number of stockholders 23 379Market capitalization USD 603,2 mln

5

2001 2002

Population Businesses Population Businesses

International/Domestic Long-Distance telephony

92 % 89 % 92 % 89%

Local Telephony 86 % 57 % 86 % 57 %

Internet 57 % 56 % 57 % 57 %

Mobile Telephony GSM900/1800

30 % 30 % 57 % 57 %

Paging 29 % 31 % 31 % 30 %

Market position of consolidated Uralsvyazinformin Urals region

6

Capital investment schedule

2001

Introduced 2002 2003E

Fixed-line network, thous. lines 3 112 332 327

Mobile network, thous. lines 261 242 554

Intrazone/trunk fiber optical links, thous. km 1,4 1,4 2,3

Intrazone/trunk radio microwave links, thous. km

2,0 0,08 0,9

Automatic ILD/DLD exchange station, lines - 9 410 11 344

7

Overall CAPEX

88,5

165,8

200,0

144,7

218,2

0,0

100,0

200,0

2001 2002 2003E 2004E 2005E

US

D m

ln

8

Investment Sources

47%

36%

42%

35%

51%

53%

3%

15%

15%

53%

33%

49%

7%

11%

1%

36%

13%

2001

2002

2003E

2004E

2005E

Depreciation Profit Credits Bonds

9

Investment Priorities

• Capacity extension and network upgrade:– digital switches;– optical access netwoks;– intrazone digital transport networks;– wireless loop;

• Mobile telephony of GSM-900/1800 standard;• Packet switching network:

– multiservice network build-up;– Internet;

• Intelligent network;• Cable TV.

10

Number of lines per employee

74,284,6

93,0

149,6

125,0

0

20

40

60

80

100

120

140

160

2001 2002 2003E 2004E 2005E

Lin

es

11

Digitalization

49%

62%66%

70%

19%

90%

57% 55%

37%

27%

0%

20%

40%

60%

80%

100%

2001 2002E 2003E 2004E 2005E

Switching Systems Intrazone Lines

12

Wire-line penetration(telephones per 100 inhabitants)

18,219,3

20,9

23,2

25,3

0

5

10

15

20

25

30

2001 2002E 2003E 2004E 2005E

• Waiting list as of January 1, 2003 – 537 143

13

Digital transport network development

Salekhard

Perm

Khanty-Mansyisk

Chelyabinsk

Kurgan

Tyumen

Ekaterinburg

Existing lines

Planned lines

14

Domestic and international long-distance traffic

1,2

1,5

1,9

2,3

2,7

0

1

2

3

2001 2002E 2003E 2004E 2005E

bln

. m

inu

tes

15

TBB introduction plan for 2002 - 2003

• Sverdlovsk region

• Chelyabinsk region

• Kurgan region

• Khanty-Mansyisky autonomous district

• Yamalo-Nenetski autonomous district

Time-based billing

TBB is introduced in:

• Perm region - 87,5% of installed capacity

• Tyumen region - 75,0% of installed capacity

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Thousand subscribers a

«Uralsvyazinform» 157

«South-Urals Cellular Phone» 156,9

«Ermak RMS» 82,9

TOTAL 396,8

Екатеринбург

Perm

Khanty-Mansyisk

Chelyabinsk

Kurgan

Salekhard

Ekaterinburg

Tyumen

GSM-900/1800 NetworkAs of January 1, 2003

17

GSM900/1800 Network Development

261

539

1232

2325

31

0

200

400

600

800

1000

1200

1400

2001 2002 2003E

0

5

10

15

20

25

30

35

Installed capacity ARPU

18

Subscribers

«Uralsvyazinform» Perm Division 14 354

«UralWestCom» 20 889

«Kurgan Cellular Phone» 400

Total 35 643

Екатеринбург

Tyumen

Perm

Ekaterinburg

Khanty-Mansyisk

ChelyabinskKurgan

Salekhard

NMT – 450 Networkas of January 1, 2003

Prospects – transition to digital standard

19

Intelligent Network setup in Urals Region

Max. Virtual network capacity is 12 mln. numbers

PSTN PSTN PSTN PSTN PSTNPSTNEkaterinburg Tumen Chelyabinsk Kurgan Yamal Khanty-Mansiysk

Perm SMP

SCPSSPToll Exchange

INAP - RSSP

Toll Exch.

SSP

Toll Exch.

SSP

Toll Exch.

SSP

Toll

Exch.

SSP

Toll

Exch.

SSP

Toll Exch.

Uralsvyazinform

Services

Freephone; Premium access; Account card access; Pre-paid card access; Televote; Pre-paid access to Internet; Pre-paid access to mobile network; Personal number service; Virtual private networks.

INAP - R INAP - R INAP - R INAP - R INAP - R

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Multi-Service Network General Structure

Optical AccessNetwork

Content-Providers

PSTN

InternetManagementSub-Systems

ServiceSelectionGateway

IP Backbone

Corportion AOffice 1 Corportion B

Office 2

Corportion BOffice 2

Corportion AOffice 1

Corporate VirtualPrivate Networks

High- speedInternetAccess

Small office

InternetAccess Virtual

PrivateNetwork

OLT

Exchange

21

2,4 - 64 kbpsnx64 kbps

Optical access network

ОПТС

10/100 ВТ

ADSL

COAX

POTS /ISDN

OLT

ONU 6ONU 4

ONU 3

ONU 2

ONU 5

ONU 1

PC

TV

ISDN

IPnetwok

VODServer

Cable TV

Cable TV/Internet

УПАТС

Е1

VPN

STB

Video ondemand

ADSL

Optical access network build-up

22

max 1000N

ОК

С №

7

V5.2, EDSS1

EDSS1, CAS

ОПТС

SSP

ST

M-1

/4

Local RTN

Local RTN

LocalRTN

City boundaries

Intrazone Network

Local ATS

ONU

ONU ONU

ONU

Accessnetwork

BS

Local hub configuration

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Financial results

469,4

568,0

295,6

346,8

396,0

68,6

122,6

169,1

364,2

0

100

200

300

400

500

600

2001 2002 2003E

US

D m

ln

Revenues

Expenses

Operating profit

24

31%

33%

32% 41%

48%

53%

16%

10%

6%

4%

2%

1%

7%

7%

9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2001

2002

2003E

Urban Telephone Network ILD/DLD Exchange

Mobile Telephony New Services (DSL Network, Intelligent Network)

Other (Data transmission, ISDN, TV & Radio, IS)

Revenue structure

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Expenditure structure

42%

44%

40% 30%

30%

30% 16%

14%

17% 13%

12%

12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2001

2002E

2003E

Operating expenses Wages Depreciation Taxes & deductions

26

EBITDA and Net Profit

20,525,4

45,2

85,6

101,6

144,6

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

2001 2002 2003E

US

D m

ln

Net profit EBITDA

27

Debt

192201

5341 37

214

0

50

100

150

200

250

01.01.2002 01.01.03E 01.01.04E

US

D, m

ln

Liability as of beginning of the year in foreign currency

USD exchange rate as of 01.01.02 - RUR30,14 ; 01.01.03 - RUR32,86; 01.01.04 - RUR33,54; 01.01.05 - RUR37,06; 01.01.06 - RUR37,34

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• IAS accounting since 1995

• Annual international audit since 1995

• Level 1 ADR Program

• Fitch credit rating at “B”

• Standard & Poor’s credit rating at “B-”

• Corporate governance score of Standard & Poor’s at «6,0»Prospects

• Additional share issuance

• Level 3 ADR program

• Shares are traded at:

- RTS, MICEX

- Berlin, Frankfurt Stock Exchange

- USA Over-the-counter market

Investor Relations

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Market capitalization of Uralsvyazinform

0%

50%

100%

150%

200%

250%

300%

350%

03.0

1.20

01

03.0

2.20

01

03.0

3.20

01

03.0

4.20

01

03.0

5.20

01

03.0

6.20

01

03.0

7.20

01

03.0

8.20

01

03.0

9.20

01

03.1

0.20

01

03.1

1.20

01

03.1

2.20

01

03.0

1.20

02

03.0

2.20

02

03.0

3.20

02

03.0

4.20

02

03.0

5.20

02

03.0

6.20

02

03.0

7.20

02

03.0

8.20

02

03.0

9.20

02

03.1

0.20

02

03.1

1.20

02

03.1

2.20

02

03.0

1.20

03

Market Cap RTS Index АКМ Telecoms Index

MAP affirms reorganization

Shares of merging companies are swapped

30

Contacts:

ph.: +7 3422 341 200

fax: +7 3422 343 336

e-mail: investor@usi.ru

www.uralsviazinform.ru

www.uralsviazinform.com

Ticker symbols:

Russian Trading System - URSI

ADR - UVYZY