Moscow, Russia – February 24, 2012 – Rostelecom OJSC (MICEX & RTS: RTKM, RTKMP; OTCQX: ROSYY) (“the Company”), Russia’s national telecommunications operator, today announces that the Company has signed a strategic cooperation memorandum with Mobile TeleSystems OJSC (“MTS” - NYSE: MBT) to jointly develop fixed and mobile networks. 

The agreement will help both companies to optimise their capital and operational expenses and to enhance the coverage of fixed and mobile networks to improve the quality of telecommunications services.

According to the memorandum, the companies intend to share each other’s existing infrastructures, such as fibre optic network resources, technological equipment sites, power supply stations, antenna towers and antenna feeder stations. As part of the signed agreement, Rostelecom and MTS will also jointly develop and maintain the transport network and base station infrastructure, and also develop network monitoring software systems. 

Ivan Zima, Vice President and Chief Technology Officer of Rostelecom commented: ”The agreement is a significant breakthrough and the subsequent technological cooperation with MTS, enables us to organise a joint backup of our networks, to use sites for base stations, and also to split investments into the construction of antenna towers for base stations. The joint efforts of our two companies will also enable us to control costs and improve our services which will be made affordable to millions of Russian people.”  

Andrei Ushatskiy, Vice President and Chief Technology Officer of MTS, added: “We are on the threshold of introducing LTE networks, as well as actively developing fixed broadband technologies in an effort to reduce the digital gap in Russia. This means that Russian operators, both individually and jointly, are responsible for the development of more optimal, reliable and high quality mobile and fixed networks. This strategic partnership will enable us to significantly reduce the time required to build infrastructure, to introduce innovative services more quickly, increase network capacity and provide our customers with high quality modern telecommunications services.”   

As part of the agreement, Rostelecom and MTS have also expanded peer-to-peer fixed networks interconnectivity. As a result, the total connection capacity of existing and new interconnection points in Moscow, St. Petersburg, Yekaterinburg, Novosibirsk and Rostov has been increased by 2.5 times up to 50 Gbit/s.