1

September 4, 2003

Inter-Regional Telecommunication Company VolgaTelecomInter-Regional Telecommunication Company VolgaTelecom

Share in total Russian industrial production

Automotive 85%Aircraft Construction 65%Petrochemicals 40%Agricultural 25%

Total 24%

Territory – 665,000 sq.km

Population – 21 million

Population density – 31.6 people per sq. km

Urban population – 70%

GDP per Capita – US$2,270

Disposable income – US$105 per month

VolgaTelecom offers:VolgaTelecom offers:

Traditional telecommunication services:• Local (city and rural) telephony• DLD, ILD• Document transmission (fax)• Broadcasting

New telecommunication services:• Internet and data transmission• ISDN• IP-telephony• Intelligent communications network services • Mobile communication• Paging

20,6%

19,5%

18,6%

2001 20032002

Fixed line penetration in Volga

8.6%

Average cost of fixed line telecom services as % of

disposable income

Urban penetration 2003 - 24.7%

3

JSC “VolgaTelecom” was created by merging 11 regional operators JSC “VolgaTelecom” was created by merging 11 regional operators of Volga macro-region on 30 Novemberof Volga macro-region on 30 November 200 20022

Increase in Market Cap.

Increase of investment attractiveness

Since the merger was completed and the stocks begin trading on RTS (end of March, 2003) the market cap. of the consolidated company increased by more than 40%

Improvements inMarketing The ability to offer a full range of telecom services in the Volga macro-region

The ability to undertake large scale network modernization and development of new services investment projects, due to more favorable conditions for raising funds

Cost cuttingIncreasing efficiency of cost management via the introduction of a single accounting policy, unified investment and marketing strategy, separate cost accounting, and better corporate governance and strategy

Improvements in corporate governance

& transparency

IAS financial results, improvements in IR- and PR, increasing management efficiency. The work on increasing Corporate Governance Rating – currently rated as 5.8 by Standard and Poor’s

4

VolgaTelecom – the combined company today isVolgaTelecom – the combined company today is::

The largest fixed line network in Volga macro – region

The largest fixed line operator (89% market share) and Internet - provider (70% market share)

Modern telecommunication technologies

Stable growth of revenues, and room for more efficient cost management

Effective management technologies

The parent company (100% consolidation) of “N. Novgorod Cellular Communications”- the number one mobile operator in Nizhny Novgorod and the seventh largest in Russia

5

Charter capital – US$51,590,245 or327,952,994 sharesNominal value per share – US$ 0.16

common shares245,969,590

75%

Preferred Shares81,983,404

25%

Including common shares underlying

ADRs9,231,838

(2.8 %)

Charter capitalCharter capitalMajor shareholders

Shareholders

Holdings in Charter Capital

01.01.2003

Holdings in voting shares

01.01.2003

PJSC "Svyazinvest" 38.0% 50,7%

CJSC "ING Bank (Eurasia)" 14.8% 15,6%

CJSC "DKK" 9.7% 7,0%

CJSC "Brunswick UBS Warburg Nominees"

4.6% 3,0%

CJSC KB "J.P. Morgan Amro Bank International"

3.7% 3,7%

CJSC "ABN Amro Bank A.O." 2.2% 0,9%

LINDSELL ENTERPRISES LIMITED

2.1% 1,7%

WAKEMAN ENTERPRISES LIMITED

2.1% 2,8%

TELERUS LIMITED 1.4% 0,9%

PJSC "RTK-Lizing" 1.1% 1,4%

Other stockholders 20.3% 12.3%

6

$0,00

$0,50

$1,00

$1,50

$2,00

$2,50

average price, common average price, preffered

VolgaTelecom Share Price dynamicsVolgaTelecom Share Price dynamics VolgaTelecom Historical Market CapVolgaTelecom Historical Market Cap. .

0,0230,010,0090,005

0,058

0,0310,036

0,0200,20,40,60,8

1999 2000 2001 2002

Common shares Preferred shares

Dividend History, USD Dividend History, USD

• 2002 dividend yields - 4% for prefs and 1% for commons**

• We will pay 10% of net profit for common shares and 10% for preferred shares going forward

Volga Telecom Dividend PolicyVolga Telecom Dividend Policy

The announcement of the swap ratios

The consolidation of regional operators in

Volga region is finalized

$

$85

$455

$648

01.04.200301.10. 2002 01.09.2003

*

* - USD85 mln Market Cap is capitalization of NizhegorodSvyazinform prior to consolidation

** - calculated based on share prices as of 03.09.2003

7

RAS,

US$ mln

IAS

US$ mln

Change, %

Revenues 349,9 421.1 20.3

Operating Expenses 248,7 347.7 39.7

Operating Profit 101,1 73.5 -27.4

Profit Before Tax 63,4 72.3 14.0

Net Income 46,9 29.2 -37.8

EBITDA 133,2 134. 3 0.8

EBITDA Margin, % 38% 32%

Property, Plant & Equipment 390 525,6 545 161.6 39.6

Long- & Short-term Debt (excluding liabilities)

41 350,6 80 247.3 94.1

Cash Flows From Operating Activity 126 016.6

Cash Flows From Investment Activity (110 311.4)

Cash Flows From Financial Activity (8 909.6)

VolgaTelecom 2002 IAS Financial Results & VolgaTelecom 2002 IAS Financial Results & RAS ComparisonRAS Comparison

8

The increase in revenues will be a result of:

- An increase in local monthly tariffs by 25-30%

- DLD and ILD tariff rebalancing

- Growth in demand for phone installations (in 2003 we expect subscriber additions of 221,000)

- Growth in DLD and ILD traffic (yearly growth in traffic is 20%)

- An increasing share of revenues from new services in total revenues (including mobile, internet, IP-Telephony, Intellectual network)

Revenues BreakdownRevenues Breakdown

37%

36%

11%

16%

Revenues from long distance services

Revenues from local services and lines intallation

Mobile sevices

Other revenues

9

Room to increase profitability via:

- Optimization of personal numbers

- An increase in the level of digitalization will allow us to decrease maintenance costs

- A decrease in SG&A expenses due to ongoing corporate restructuring

Operating costsOperating costs

37%

14%13%4%

18%

1%

2%11%

Wages, salaries, other benefits expenses and payroll taxes

Interconnection charges

Materials, repairs and maintenance, utilities

Taxes other than on income

Depreciation and amortization

Loss on disposal of property, plant and equipment

Bad debt expense

Other operating expenses

10

Long- distance traffic Long- distance traffic trendstrends

2001 2002 2003

DLD ILD

Th. minutes

1 355 0761 640 278

1 917 417

2001 2002 2003

Unsatisfied application Unsatisfied application forfor installation of phone setsinstallation of phone sets

913.8

764.7

545.7

2001 2002 2003

The basic telephone setsThe basic telephone sets

166.5

200.3 221.7

Investments per line installation $ 250

Investments on upgrade of analogue line to digital $ 170

E

E

E

Th. Th.

11

Network expanNetwork expanssionion

39993688

388341044242 4455

91.592.4 92.1

46.2

40.833.8

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2001 2002 2003

'000

0

10

20

30

40

50

60

70

80

90

100 %

Lines installed Lines in use Usage rate Digitalisation

E

12

Affiliated and dependent enterprises of telecommunications branchesAffiliated and dependent enterprises of telecommunications branches at least partially ownedat least partially owned by OJSC by OJSC ««VolgaTelecomVolgaTelecom» »

((holds more than 10% of the ownershipholds more than 10% of the ownership capitalcapital))

Company Standard District NNSI SubscribersNCC GSM Nizhny Novgorod 100% 248,000Ulyanovsk GSM Ulyanovsk region 51% 48,000Udmurtia GSM Udmurtia Republic 49% 44,000Orenburg GSM Orenburg region 51% 24,000

364,00042,000

458,000Total consolidated cellular subscribers

Total consolidated GSM subscribersTotal consolidated NMT subscribers

VolgaTelecom mobile exposure

Activity CompaniesCellular Communication Services 13Paging Services 3Services of Telegraph, Data Transmission Networks, Internet, New Technologies 6Local Telephony Services 4TV, Radio Broadcasting Services 2Wireless communication Services 2

13

15 743

23 913

36 470

9 14211 542

16 953

2001 2002 2003

Revenue EBITDA

Nizhnii Novgorod MobileNizhnii Novgorod Mobile

ARPU, SAC, $ARPU, SAC, $

31

22

1416 16

13

2001 2002 2003

APRU SAC

RevenueRevenue,, $ th $ th

GSМ900\1800 Standard

50% of the mobile market in Nizhniy Novgorod region

One of largest mobile operators in Russia( 7th place according to AC&M Consulting)

Number of cellular subscribers, thNumber of cellular subscribers, th

I

EE

84

156

400

65111

300

2001 2002 2003

Total subscribers Active subscribers

E

14

Development of means of communications within the Development of means of communications within the overall plan of technical upgrade of the networkoverall plan of technical upgrade of the network

Increase of the installed capacity of the network:2002 – 4 237 000 numbers; 2003 – 4 455 000 numbers

Increase utilization level of the network2002 – 91,5%; 2003 – 92,1%.

Increase network digitalization 2002 – 40,8%; 2003 – 46,2% through installation of the new lines 2002 – 400 thousand; 2003 – 420 thousand.

Increase digitalization level of the intra-regional network through building fiber optic lines, RRL, SDH.

The company is building its future relaying on:The company is building its future relaying on:

15

Development of new profitable services

Development of the mobile business. The mobile assets are been evaluated currently and we are considering re-organisation of the business including possibility of creating a united Volga region mobile operator.

Enlarging the Internet related services (access, dedicated channels, xDSL), with the aim of increasing market share through the complex of marketing events.

Creation of the inter-regional multiservice network using the existing networks of the regional subsidiaries.

Creation and development of the intelligent networks (already working in Nizhniy Novgorod). Focus will be on informational services and the IP-telephony.

The company is building its future relaying on:The company is building its future relaying on:

16

Realizing Marketing Potential

Marketing plans and actions are carried through the framework of united marketing concept of the company.

Preserving leadership in the local and long-distance communications market in the Volga region

Increasing the share in the profitable segments of the market through packaging services for the business-users in the whole Volga region

Improving the quality of services for the mass market. Personalized services to the business-users. The company already operates service-centers and VIP-centers developing complex packaged services in the traditional fixed-line and new hi-tech areas.

The company is building its future relaying on:The company is building its future relaying on:

17

Increasing the investment attractiveness

Joint PR and IR programs aimed at increasing the informational transparency of the company

Improvement of the free float and liquidity of shares. Listing of shares at different bourses

Increase of the credit ratings (rated currently «B», with “Stable” forecast*) and

corporate governance ratings (5,8 points *)•(according to «Standard and Poor’s»)

Introduction of the norms/codex of corporate governance

The company is building its future relaying on:The company is building its future relaying on:

18

The company is building its future relaying on:The company is building its future relaying on:

Investment Policies

Introduction of investment planning.

Focus on priority tasks and directions (upgrade of the telephone lines, introduction of new services).

Lowering the cost of investments through common purchasing schemes.

Personnel Policies

Optimization of headcount through corporate restructuring and modernization of the telephone lines

Creating a pool of reliable personnel cadre through upgrading the professional level of employees