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Moscow – Nizhny Novgorod Fiber-Optic Communication Line (FOCL) Construction is Completed and Ready for Commercial Launch

16 марта 2006
Golden Telecom, Inc. announces it has completed construction and started operation of its fiber-optic communications line (FOCL) between Moscow and Nizhny Novgorod.

In January 2004, Golden Telecom and Vimpelcom began joint construction of their own fiber-optic communication line between Moscow and Nizhniy Novgorod. The construction was completed in November 2005, and on January 1, 2006, the Moscow to Nizhny Novgorod FOCL was fully prepared for certification by the RosSvyazNadzor commission. Operation of the Moscow – Nizhny Novgorod FOCL was officially authorized on March 14, 2006.

The construction of its own FOCL facilitates the implementation of Golden Telecom’s long term broadband strategy to be Russia's leading provider of broadband Internet access to consumers and businesses as well as the offering of services by Golden Telecom under its long distance license. The demand for IP Bandwidth in Russia has doubled annually since 2003. It is expected that the number of the users of broadband Internet access in Russia will also double annually and will increase up to 7.9 million users by 2010. This will further accelerate the demand for bandwidth.

Jean-Pierre Vandromme, Chief Executive Officer of Golden Telecom, commented: “Focusing on the providing of broadband Internet access as our mid-to-long term strategy, we are migrating from a traditional Time Division Multiple (TDM) network to a New Generation Network, Broadband and VOIP (Voice over Internet Protocol) which will enable us to offer, in the first stage, high quality services such as broadband Internet access and voice services over broadband all over Russia and the CIS. In the next stage, we plan to pursue an expansion of our broadband Internet access strategy to provide services to a wider consumer market.”

The construction of the FOCL is still underway on the Nizhny Novgorod to Kazan to Ufa segment, completion of which is scheduled for the fourth quarter of 2006. In 2007, the Company will begin construction of a fiber-optic communication line on the Kazan to Naberezhniye Chelny to Perm to Ekaterinburg segment, whereas construction of the Ufa to Samara to Saratov segment will be completed by the end of 2007. In addition, Golden Telecom has partnered also with Vimpelcom to construct a fiber-optic communication line on the Moscow to Voronezh to Rostov-on-Don to Krasnodar segment.

In November 2005, Golden Telecom also acquired an ownership interest in Antel Rascom, Limited which owns essential broadband Internet infrastructure and facilities linking Moscow, St. Petersburg and then crossing the Russian border into Finland.

This acquisition complements Golden Telecom’s FOCL and provides an opportunity to expand services that require considerable trunking capacity, such as broadband Internet access and the deployment of the Company's Federal Transit Network (FTN).

Such breadth of the FOCL coverage will allow Golden Telecom to reach highly potential regions with the population of 63.4 mln people which is approximately 45% of the entire population of Russia. The fixed line market volume in the regions covered by FOCL amounts to $ 4.4 bln. The GRP (Gross Regional Product) of these regions constitutes 54.4% of the total GDP (Gross Domestic Product) of Russia.


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