Valery Yashin Regional Quotations

I think we will observe a trend of mobile services replacing fixed-line services (in Russia). This trend would lead to the migration of long-distance traffic from regional fixed-line companies to mobile operators. In addition, competition among regional fixed-line operators for generated long-distance traffic will increase.

We assume that in some segments (rural communications) and regional markets (remote districts) we remain monopolists. But there are markets where competition with mobile and alternative fixed-line operators is very high. And these are firstly major Russian cities.

We hope that the system will not only allow us to minimize losses, but will be a major factor in the investment attractiveness of regional operators, and will create beneficial conditions to access world capital markets.