OREANDA-NEWS. Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District, today announced its 1Q2007 financial results compiled in accordance with Russian Accounting Standards (RAS).

UTK generated 2006 total revenue of RUR 17,570.6 million, representing a 3.1%-decrease over 2005. Revenue from telecommunications services decreased 7.3% to RUR 16,561.5 million. Revenue structure showed a stable trend in revenue share growths from local telephony and value-added services. Based on 2006 results revenue from local telecommunication services grew by 7.2% to 50.8%, from value-added services by 4.6 percentage points to 11.2% of the Company’s telecom revenue.

2006 EBITDA increased 17.1% to RUR 6,304.3 million. EBITDA margin was up 6.2 percentage points to 35.9%. Operating income grew by 14.5% over 2005 to RUR 4,785.0 million.

The net profit for 2006 has made 1 184,4 million roubles, or 288,1% more than parameter for 2005.

The volume of capital investment for 2006 has made 2 053,9 million roubles, or 36,1% less than parameter for 2005.