In a bid to expand into the Russian regions with broadband services, Golden Telecom, Inc. has announced 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.