SOURCE: Golden Telecom

August 03, 2006 09:05 ET

Golden Telecom Inc. Targets Broadband and Triple Play User Growth in the Krasnodar Region Through Its Acquisition of Kubtelecom

MOSCOW -- (MARKET WIRE) -- August 3, 2006 -- In a further sign of its commitment to expand in the Russian regions with broadband services, Golden Telecom, Inc. ("Golden Telecom" or the "Company") (NASDAQ: GLDN) today announces the acquisition of a controlling interest in Kubtelecom LLC ("Kubtelecom"). Kubtelecom is comprised of three telecom service providers operating in the largest cities in the Krasnodarsky region of Russia. The Krasnodarsky region of Russia is the number one region in terms of Gross Regional Product in the Southern Federal District and is the eleventh largest region in Russia in terms of Domestic Regional Product.

In addition to modern services provided to business customers, operators and residential market, such as broadband Internet access, digital switched voice and data, Kubtelecom also provides fast growing cable TV services and wireless Code Division Multiple Access ("CDMA") access. Kubtelecom is well poised to begin to provide triple play services to Krasnodar mass market consumers. Kubtelecom operates fiber optic and copper networks covering Krasnodar, Anapa, Novorossiysk, Temryuk, Gelendzhik and Timashevsk. There are 1.5 million permanent residents in these cities to whom Golden Telecom will offer services through Kubtelecom and its branches. In addition, Golden Telecom will focus on offering services to an estimated 7-10 million tourists and visitors who visit the region each year.

This acquisition strengthens Golden Telecom's position in the region by complementing its branches in Krasnodar and Novorossyisk, and Sochi Telecom, a wholly owned local service provider, of Golden Telecom.

Established in 1996, Kubtelecom is now the largest facilities based alternative operator of telecommunication services in the Krasnodarsky region. Kubtelecom provides telecommunication services in Krasnodar, Anapa, Novorossiysk, and Temryuk. Kubtelecom has ownership interests in Spektr LLC, which operates in Gelendzhik, and Krasnodar-based Kubintersvyaz JSC.

Kubtelecom provides broadband services based on wireline access to more than 40,000 households in Krasnodar, using the following access approaches:

--  ADSL
--  Cable TV
--  FTTH (fiber to the home)
Using its CDMA network, Kubtelecom rapidly installs high quality communication services to locations which lack basic telecom infrastructure. Kubtelecom has a large base of customers with over 50,000 numbers already in use. More than 5,000 clients already subscribe to its cable TV services. In addition to this strong business and consumer client base and a broad access network, Kubtelecom has acquired scarce resources for further development of its business:
--  over 100,000 voice numbers are allocated within Krasnodarsky Region
--  an existing zonal microwave network to large cities of Krasnodar
    region with capacity of up to 155Mbit/s
Commenting on the acquisition Jean-Pierre Vandromme, Golden Telecom's Chief Executive Officer, noted: "The acquisition of Kubtelecom will not only reinforce our current position in the Krasnodar region but will allow us to capitalize on Golden Telecom's resources in an active and efficient way to focus on the implementation of our strategy of broadband access in promising regional economies.

We will achieve considerable growth in our position on the broadband access market by bundling the local loop and the zonal network of Kubtelecom with Golden Telecom's long distance facilities. As a result we will have a complete set of facilities to provide affordable and competitive broadband access services in the cities of the Krasnodarsky region."

About "Golden Telecom" (

"Golden Telecom, Inc." (NASDAQ: GLDN) is a leading facilities-based provider of integrated telecommunications and Internet services in major population centers throughout Russia and other countries of the Commonwealth of Independent States ("CIS"). The Company offers voice, data and Internet services to corporations, operators and consumers using its overlay network in major cities including Moscow, Kiev, St. Petersburg, Nizhniy Novgorod, Samara, Kaliningrad, Krasnoyarsk, Alma-Ata, and Tashkent, and via intercity fiber optic and satellite-based networks, including approximately 278 combined access points in Russia and other countries of the CIS. The Company offers cellular communication services in Kiev and Odessa.

Statements contained herein are forward-looking and are made in compliance with safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements include those on the services we expect to provide customers following the acquisition of Kubtelecom and the expected benefits and growth from such service offerings and our assessment of the services that we provide customers. It should be born in mind that these statements are subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such risks and uncertainties include, without limitation, the possibility that we will not be able to offer the services that we expect to offer or that the services will not provide the expected growth or benefits or that we will not be able to take advantage of our broadband strategy as we anticipate. For additional information about the factors that may lead to significant discrepancies between the final results and those predicted in forward-looking statements, please refer to corporate reports submitted to the United States Securities and Exchange Commission, including 10-Q quarterly and 8-K current reports submitted in 2006, as well as the 10-K annual corporate report for the fiscal year that ended on December 31, 2005.

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