North-West North-West TelecomTelecomKey Business Objectives

April 2005

10 regional branches

4, 5 mln. subscribers

34 ths employees

Revenue 2004 530 MUSD

Revenue 2005F 680 MUSD

NWT today

•NWFD is a large market with significant investment potential

•NWFD has the 3rd largest per capita income level among Russian regions

•NWT is characterized by the highest telephone density (30 telephone sets/100 inhabitants) in Russia

2

The leading integrated telecom provider in the North-Western Federal District

Region Telephone density Europe 60 Russia 28,8 NWFD 35

St.Petersburg 41,9

International ratings

Issuer

Credit Rating

CorporateGovernanc

e score

International National

Standard&Poor's Fitch Standard&Poor'sStandard&Poor'

s(1-10)

Russia BBB-/Stable BBB-/ Stable

ruAAA

Uralsvyazinform B+/Stable BB-/Stable - 6.0

North-West Telecom B-/Positive - ruBBB+ 5.0

Centertelecom CCC+/Stable В-/Negative ruBB+ 4.8

UTK CCC+/Negative - ruBB 4.4

Volgatelecom B+/Stable - ruA+ 5.1

Dalsvyaz - B/Positive - 4.8

Sibirtelecom - B+/Positive - 4.7

S&P Transparency Index of North-West Telecom grew to 62% from 44% in 2003

It is the 8th among 50 largest Russian companies

3

Legal entities40%

Individuals60%

Russian legal entities

38%

Foreign legal entities

6%

Individuals5% Svyazinvest JSC

51%

Share capital structure

According to our estimations, foreign investors own 30% of ordinary shares4.4% of ordinary shares is converted into ADR 1st Level and are traded in the USA Over-The-Counter market (NWTEY), Berlin- & Frankfurt Stock Exchange

Free float is estimated as 23%

ORDINARY SHARES PREFERRED SHARES

(прогноз)

4

Net profit distrubuted as dividends, MUSD

4.311.7

2.4

2002 2003 2004

+79%+172%

Dividend Yield (D/P)

Ordinary shares

Preferred shares

NWT 1.35% 3.74%

Telecom sector average

0.48% 3.77%

% Net Profit 23% 16% 24%

58,47% 58,37%

23,32%

8,40%

0,26% 0,22% -10,44% -16,67% -25,01%

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In 2004 NWT was the leader in capitalization growth among Russian Regional Telecom

Operators

Share & Bond market

5

• Price of ordinary shares increased by

29%

• Price of preferred shares increased by

42%

• Trade volume of ordinary shares grew

by 93%

• Trade volume of preferred shares grew

by 113%

Share & Bond market

Capitalization of the company grew 2.5 times since merger in November 2001

Trade Volume

0

10

20

30

40

50

60

2002 2003 2004 1Q2005М

ln s

hare

s

PrefCom

+102%

+35%

6

Market Capitalization

0

100

200

300

400

500

600

700

800

МU

SD

+175%

Jan 2002 Apr 2005

Share & Bond market According to the latest researches, upside potential of ordinary shares is

44%, preferred shares – 80%

Analyst Target

price, USD Recommendation Upside, % Date

UFG 1,3 Sector Underperform 114,88 30.03.05Brunswick UBS 0,92 Buy 52,07 02.03.05NIKoil IBG Bank 0,9 Buy 48,76 04.03.05Renaissance Capital 0,867 Buy 43,31 10.12.04ING Group 0,86 Buy 42,15 14.03.05Web-invest Bank 0,778 Buy 28,6 17.03.05Aton Capital 0,75 Buy 23,97 16.02.05Troika Dialog 0,58 Sell -4,13 07.02.05Mean Recommendation 0,869 Buy 44

Analyst Opinion (common share)

7

Share & Bond market

NWT Corporate bonds track record

The 3rd corporate bond issue was placed on March 3rd, 2005.

The issue was 2.5 times oversubscribed.

Significant demand originated from foreign investors.

  Volume, MUSD

Yield

2002 10 20.8%

2003 50 14.4%

2005 110 9.58%

8

Develop share and corporate bond markets

Strengthen market position in corporate and

Value

Added Services (VAS) segments

Improve financial performance

Develop sound long-term corporate strategy

Key business objectives

9

Strategic Goals

Raise investment attractiveness & securities liquidity

Implement corporate governance approach fit to requirements of

International

Investment Banking professionals

Improve reputation management quality

Planned in 2005Issue of Level I ADRs for preferred shares

Developing ADR trading on European stock markets (Frankfurt & Berlin

Stock

Exchanges)

Developing share and bond markets

10

Strengthening market position in corporate and VAS segments

NWT has strong positions in both retail and infrastructure segments

Market shares in corporate (26%) and VAS (34%) segments are to be improved

Local access 73 %DLD & ILD 65 %

Data transmission & channels leasing 65 % Documentary communication 34 %

Regional Market Share – 27%by revenues

11

Strengthening market position in corporate and VAS segments

2003

0

10

20

30

40

2004 2005

14.3

24.3

33.7

+69.9%

+38.7%

forecast

•Internet access

•Data transmission

•Next Generation network services

•Intellectual network services

Revenue from VAS, MUSD

12

Improving financial performance

Financial Highlights, RASMUSD

Financial statement (IAS) is available:

www.nwtelecom.ru (Language:English)> Economic and Finance >Financial statement (according to Ineternational Accounting standards), Balance sheets

http://www.nwtelecom.ru/pubsas/test--C7740C6ECBAA11D5AE4B0050045260BB/lang--eng/index.html

20042004/2003 1Q05

1Q05/ 4Q04

1Q05/1Q04

2005 (forecast)

2005/2004

Revenue 533 33% 177 -1% 53% 676,4 27%

OIBDA 152,6 26% 59 58,00% 51% 208,7 37%

OIBDA margin 29% - 34% - - 31% -

Net Income 46,6 71% 23 144% -2% 50,7 9%

Net Income margin 8,70% - 13% - - 7,5% -

Average subscriber fee, USD

6.95.7

4.3

2

4

6

8

10

2003 2004 2005

+33%

+21%

forecast

10

forecast

Long-distance traffic, mln. min

2,015

1,5931,365

1000

1500

2000

2500

2003 2004 2005

+17%

+27%

Improving financial performance

Organic growth (24%)

2004 Revenue growth drivers

14

Non-Organic growth (9%)

Consolidation of Lensvyaz and Svyaz Komi as of October 1, 2004

Improving financial performance

37%

48%

4%

11%

DLD & LDLocal servicesInternet & VASOthers

Revenue Structure

2004

533 MUSD

676MUSD

34%

52%

5%

9% 2005(forecast)

676

MUSD

15

+27%

Improving financial performance

35%

11%20%

25%

9%

Salary and social expenses Depreciation & AmortizationRostelecomOthersNetwork maintenance expenses

35%

11%19%

26%

9%2005(forecast

)

2004

502

MUSD8%

543

MUSD

16

Cost Structure

Improving financial performance

Average number of personnel

20042003 2005forecast

15,000

20,000

10,000

5,000

35,000

30,000

25,000

225

300

150

75

375

00

37,01234,735

34,030262

420

367

45040,000

Average monthly wage

Personnel, people

Wage, USD

Personnel optimization

Key factors influencing number of personnel:

• Improving organization structure

• Implementation of business-units structure

• Network modernizationBetween 2001 and 2003 personnel was reduced

by 13%

17

Improving financial performance

CAPEX, MUSD

In 2005, subscriber base will increase by 149 ths numbers

Digitalization rate will raise from 48% to 52%

10 MUSD will be invested in VAS

1 2

+ 29%

2005(forecast)

2004

130.8

168.1

18

Improving financial performance

34%

21%

16%

5%

11%

13%

LT creditsLT bondsLeasingSuppliers' creditsST creditsOthers

In 2005 financial debt will increase by 70 MUSD to 305 MUSD 2005 funding program is aimed to refinance short-term debts and includes

the following:

• 3rd corporate bond issue (issued on March 3rd ; volume 100 MUSD;

maturity 6 years)

• Long-term bank credits (75 MUSD)

31%

49%

8%

2%

7%3%

246.4

MUSD

305MUS

D+25%

2004 2005(forecast)

19

Funding

2005forecast

2003 Average

RTOs

2004

Improving financial performance

Current ratio Equity to total assets ratio

2005forecast

2003 Average RTOs

2004

0.61

0.55

0.800.72

20

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

0

1000

2000

3000

4000

5000

6000

70000 . 6 5

0 . 5 9 0 . 5 8

0 . 4 9

0

1000

2000

3000

4000

5000

6000

70000 . 6 5

0 . 5 9 0 . 5 8

0 . 4 9

Strengthen achieved market positions & expand to new market

segments

Improve company’s economic efficiency

Modernize network infrastructure

Introduce highly efficient management systems and

procedures

Developing sound long-term corporate strategy

21

Create a strong basis

for growth of company’s

capitalization

Chairman of Board of Directors ………………..……. Valeriy Yashin

Chief Executive Officer ………………….…….……..Vladimir Akulich

Аuditor ……………………………………….………………….Ernst & Young

Registrar ………………………………………….………Registrator-Svyaz

ADR Depositary …………………………………………..……….. JP Morgan

URL………………………..…………………….…….www.nwtelecom.ru

North-West Telecom

22

Contacts:Gorokhovaya str. 14/26,

St.Petersburg, Russia+7(812) 595-45-64

E.Tomilina@nwtelecom.ru

Thank you for your attention!