SOURCE: Golden Telecom

March 16, 2006 05:31 ET

Golden Telecom FOCL Builds a Link to Broadband Access

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

MOSCOW -- (MARKET WIRE) -- March 16, 2006 -- Golden Telecom, Inc. ("Golden Telecom" or the "Company") (NASDAQ: GLDN), a leading independent provider of integrated telecommunication services operating in Russia and other countries of the Commonwealth of Independent States (CIS) 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.

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 metropolitan overlay network in major cities including Moscow, Kiev, St. Petersburg, Nizhny Novgorod, Samara, Kaliningrad, Krasnoyarsk, Almaty, and Tashkent, and via intercity fiber optic and satellite-based networks, including approximately 259 combined access points in Russia and other countries of the CIS. The Company offers cellular communication services in Kiev and Odessa.

Statements made in this press release are forward looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements include those on our development of our fiber optic cable network, expected completion of future sections of our fiber optic network and the expected benefits of such network, the expected growth of the broadband and fixed line markets, and the Company's growth strategy. It is important to note that such statements involve risks and uncertainties, which may cause outcomes to differ materially from those set forth in these statements. Such risks and uncertainties include, but are not limited to, the possibility that we are not able to develop our fiber optic network in the manner in which we anticipate, that the expected benefits of our fiber optic network and broadband strategy do not materialize, or that the Company's growth strategy does not materialize in the manner expected or that the markets in which we operate do not grow as we expect. Additional information concerning factors that could cause results to differ materially from those in the forward looking statements is contained in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's quarterly reports on Form 10-Q, current reports on Form 8-K filed during 2005 and 2006, and the Company's annual report on Form 10-K for the year ended December 31, 2004.

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