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RTS : ESPK MICEX : DLSV Over-the-Counter Market USA : FEEOY

Far East Telecommunications Company The First Nine Months Financial Results November, 2004. RTS : ESPK MICEX : DLSV Over-the-Counter Market USA : FEEOY. Investor Relations. Safe Harbor.

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RTS : ESPK MICEX : DLSV Over-the-Counter Market USA : FEEOY

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  1. Far East Telecommunications CompanyThe First Nine Months Financial ResultsNovember, 2004 RTS: ESPKMICEX: DLSV Over-the-Counter Market USA: FEEOY Investor Relations

  2. Safe Harbor The forward-looking information , which is included in this presentation, are the statements, made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. The presentation contains information about the future events and financial results, estimated by the Company in the future. These statements involve a number of risks and uncertainties. Among the factors that could cause future results include: deterioration of economy; changes of the laws, which are currently in force; increase in dependence on “Rostelecom”,OJSC, concerning the questions of proportion establishment, according to which the payment for international and long-distance traffic is divided: changes in rate of currency exchange; changes in percentage rates; changes in prices for raw materials and services, used by the issuer; changes in political situation in the country; military conflicts and cases of emergency; impossibility to continue the license for carrying out activity. The more detailed description of risks and uncertainties of the company you can find in the quarterly accounts and annual reports of “DALSVYAZ”, OJSC. The majority of the mentioned factors are beyond the control or the possibility of prognostication on the Company’s behalf. Taking onto consideration all the above-mentioned information, the Company does not recommend to rely upon any forward-looking statements, included into this presentation. The Company does not commit itself to disclosing any changes to this presentation with the aim to show the events or circumstances, which took place after the date of this presentation, or with the aim o show the unforeseen events, with the exception of the cases when this disclosure is required in accordance to the Private Securities Litigation Reform Act of 1995. All the financial results, included in this presentation, were accounted according to Russian Accounting Standards. 1

  3. Welcome Dear Shareholders, Investors and Analysts, Thank you for your interest to the Public Joint Stock Company “Far East Telecommunications Co”. Let me tell you about its fiscal third quarter results. In the third quarter we increased twice the revenue growth rate and made important decisions regarding increasing corporate governance quality. The Board of Directors ratified the conditions and formed 4 committees, including the Corporate Governance Committee, Human Resources, Motivation and Compensation Committee, Audit Committee, and Strategic Management Committee. The Board of Directors also made a decision to liquidate FETEC’s Jewish Autonomous Regional branch and to reorganize it into communications Hub of JAR. It will allow the company to decrease operational expenses by reduction of the administrative staff and fee (salary) fund. Igor V. Zabolotny Chief Executive Officer 2

  4. Contents • Financial Summary • Financial Results of the 9 Months 2004 • Financial Results Dynamics of the 9 Months 2004 • FETEC at the Capital Markets • Dynamics of 2004 Quarter Results • Guidance for 2004 3

  5. Financial Summary (9 months 2004) • The Leader of the Far East Telecommunications Market FETEC’s market share 59.5% 72% Internet market 87% Local telecommunications market 81% Long-distance telecommunications market100% Mobile market in Magadan Region and 50% in Kamchatka Region. • Strong Growth Potential (compared 9 months 2003) Installed network capacity increased13% Revenue increased to 31%; Net Income 2.6 times; Increased Revenue from:mobile service - 72% (234 million rubles.) other operators connection - 4 times (637 million rubles) new services (Internet, IP, ISDN) –54% (355 million rubles) local service – 31% (2,2 billion rubles) long-distance and international telecommunications– 12% (2,4 billion rubles) Staff amount decreased to 316 people; Market Cap increased to $140 million or 15%; EBITDA increased 2,6 times. 4

  6. Contents • Financial Summary • Financial Results of the 9 Months 2004 • Detailed Financial Results the 9 Months 2004 • Dynamics of 2004 Quarter Results • FETEC at the Capital Markets • Guidance for 2004 5

  7. Net Income Increased 2.6 times up to the 1 billion rubles 9 months 2003 9 months 2004 Income Statement Thousand rubles Revenue 4 828115Operational Expenses3 984 530Income 843 585 Net Income 402 162 EBITDA 804000 EBITDA to Revenue 17% Income statement Thousand rubles Revenue 6 338 702 Operational Expenses 5 391 815 Income 946 887 Net Income 1 062 224 EBITDA 2 100 000 EBITDA to Revenue 33% Growth 31% 35% 12% 164% 161% 124% Growth of served telephones - 74 415 units. Growth of served telephones - 33 278 units. 6

  8. Revenues by Service Shares Revenues from telecommunications services, thousand rubles. 6 242 283 Connection of other operators 4 743 757 Mobile services Connection of other operators Other services Others Services New Services Mobile Services Long-distance and international Long-distance and international 31,6% New Services Local services Local services 9 months 2004 9 months 2003 7

  9. Analysis of Expenses Operation Expenses, thousand rubles 5 391 815 (Others) (Guard Expanses) 683 291 (Information) 3 984 530 (Consulting) 422 931 (Transport) 463 944 (Staff Education) 885 894 (Maintains) 57 686 357 349 (Heat-and-Power energy) 463 997 574 112 (Tangible expenses and power) 592 760 70 213 232 878 (Rostelecom) 486 639 (Leasing payments) 1 954 487 (Amortization) 1 498 907 (Social taxes) (Salary) 9 months 2004 9 months 2003 8

  10. Contents • Financial Summary • Financial Results of the 9 Months 2004 • Detailed Financial Results of the 9 Months 2004 • Dynamics of 2004 Quarter Results • FETEC at the Capital Markets • Guidance for 2004 9

  11. Profitability Ratios Revenue to one line, thousand rubles. 5.2 4,3 9 months2003 9 months2004 Revenue to one worker, thousand rubles. 343.5 260 9 months2003 9 months2004 10 10

  12. EBITDA EBITDA, million rubles. 2 083 804 9 months2003 9 months2004 11

  13. Rural Local Services City Local Services Far East Telecom serves 7 regions of the Russian Far East Federal District. There are 80% people live in the cities. The Far East telecommunications market is still far from satiation. The amount of orders (demand) to the installation of telephone service is 201 thousand people of 3Q 2004. Revenue from Local Services Local Services Revenues, million rubles. 2 223 220 1 697 178 9 months 2004 9 months 2003 12

  14. Revenues from Long-Distance and International Services Revenues from Long-Distance and International Services, million rubles. Rent of the telecommunications equipment 2 378 394 1 884 2 123 International Service 354 1 661 Long-Distance Service 9 months 2003 9 months 2004 13 13 9 months 2003 9 months 2004

  15. Revenues from New Services Revenue shares are: The Internet – 95.6% IP –Telephony – 3.5% ISDN (digital net with integrated services) – 0.9% Revenue from New Services, million rubles. 355 231 9 months 2003 9 months 2004 14

  16. Revenues from Mobile Services Revenues from Mobile Services, million rubles. • FETEC has mobile business GSM 900/1800 in Kamchatka Region and GSM 900 in Magadan Region. • The revenue from mobile service increased 72% in 3 quarter 2004, compared to 3 quarter 2003. • The third quarter the amount of subscribers of mobile service increased to 27.8 thousand or 2.8 times compared to 3 quarter 2003. 234 136 9 months 2003 9 months 2004 15

  17. Revenues from the Connection of Other Operators Revenues from connection of other operators, 2004, million rubles. FETEC improved structure of relationship with a connected operators since 1 June 2003 by approving equal tariffs to all connected operator. This had positive influence to the connection of other operators revenue growth rate. 637 152 9 months 2003 9 months 2004 16

  18. Subscribers Increasing Amount of mobile subsidiaries, 2004, thousand people. The amount of DSL – clients, 2004, thousand people. 3,9 28 1.3 10 9 months 2003 9 months 2004 9 months 2003 9 months 2004 The amount of subscribers of local service, 2004, thousand people. 1 205 1 108 Corporate clients Personal Clients 17 9 months 2003 9 months 2004

  19. 1 350 1 196 Increasing of theInstallation and Net Digitalization The amount of installed Automotive Phone Stations, 2004. 9 months 2003 9 months 2004 18

  20. Contents • Financial Summary • Financial Results of the 9 Months 2004 • Detailed Financial Results of the 9 Months 2004 • Dynamics of 2004 Quarter Results • FETEC at the Capital Markets • Guidance for 2004 19

  21. IncludingIncome from the selling of share of Primtelefon and DVSS-900 (mobile companies) Net Income, million rubles 2004 Quarters Results Dynamics Operating Expenses, million rubles Revenue, million rubles 2 215 1 871 2 094 2 030 1 763 1 757 I Q. II Q. III Q. I Q. II Q. III Q. Income, million rubles 452 890 273 222 133 39 I Q. II Q. III Q. I Q. II Q. III Q. 20

  22. Contents • Financial Summary • Financial Results of the 9 Months 2004 • Detailed Financial Results the 9 Months 2004 • Dynamics of 2004 Quarter Results • FETEC at the Capital Markets • Guidance for 2004 21

  23. FETEC shares at the RTS • QUOTES • November 15, 2004 • Common shares Ticker: ESPKFace-value20 rub. Shares outstanding 95 581 421 52 weeks max. price $1.45 52 weeks min. price $0.89 52 weeks WA price $1.11 The last price $1.23Change +3.28% Trading volume 4 816508 USD Dividends 0.40 rub. • Proffered shares Ticker: ESPKPFace-value20 rub. Shares outstanding 31 168 901 52 weeks max. price $1.2052 weeks min. price $0.76 52 weeks WA price $0.95 The last price $1.20Trading volume 2 105 433 USDDividends 0.73 rub. Common shares, November 15, 2003 – November 15, 2004, USD. ESPK ESPK ESPK 1.14 1,05 22

  24. FETEC Shares at MICEX (out of list) Common shares, November, 2003 – November 15, 2004 • QUOTES • November17, 2004 • Common shares Ticker:DLSVFace-value20 rub. Shares outstanding 95 581 421 52 weeks max. price 52 rub.52 weeks min. price 26 rub. The last price 34.9 rub. Trading volume 12 146 650rub.Dividends 0.40 rub. • Proffered shares Ticker: DLVP Face-value20 rub. Shares outstanding 31 168 901 52 weeks max. price 38 rub. 52 weeks min. price 22 rub. The last price 38 rub.Trading volume 5 527 028 rub.Dividends 0.73 rub. DLSV FETEC plans to take listing at Moscow Inter Banks Currency Exchange until the end of fiscal 2004. 23

  25. ADR of FETEC is traded on OTC FEEOY • Dalsvyaz is implementing ADR program of 1 level (Pink Sheets) since 2002. • Transfer agent is • The trading is on Over the Counter Market. • 1 ADR is equal 30 common shares of Dalsvyaz OJSC. • The amount of shares outstanding is 79 406 units. • 52 weeksmax. price is $ 27.5. • 52 weeksmin. price is $ 25. • The last price is $26.1 • The company issued financial results accordingly IAS since 2002–www.dsv.ruthe IR section. • For more information visitwww.adr.com 24

  26. The trading history of FETEC ADR FEEOYJuly – October, 2004 $ 25

  27. Market Capitalization 30 September 2003 – 23 September 2004, millionUSD. • Market cap asof September 30, 2004 increased to $140 million USD or 15% compared to September 23, 2003. 157 147 145 140 133 133 126 125 120 116 115 106 Augг.04. Sep.03. Okt.03. Nov.03. Dec.03. Jan.04. Feb.04. Apr.04. May04. Jun.04. Jul.04. Sep.04. 26

  28. The Increasing of International Ratings The Rating of Corporate governance ofStandard & Poors The Credit Rating ofFitch Ratings В 5.8 В - В - 5.3 2004 2003 2004 2002 2003 • The increasing of corporate governance rating to 5.8 is because of: • - continuous increasing of quality of corporate governance of the Company; • the increasing of number of independent directors in the Board of Directors to 4 persons; • the creation four committees with Board of Directors; • the Code of corporate governance took place. Fitch Ratings increased the long run and credit ratings of Dalsvyaz from B- forecast “stable” to “B” forecast “positive”. The increasing of rating is because of: - strong position of Dalsvyaz at the Far East region; - accountability to the main shareholder Svyazinvest OJSC; - improvement of financial results. 27

  29. Contents • Financial Summary • Financial Results of the 9 Months 2004 • Detailed Financial Results of the 9 Months 2004 • Dynamics of 2004 Quarter Results • FETEC at the Capital Markets • Guidance for 2004 28

  30. IncludingIncome from the selling of share of Primtelefon and DVSS-900 (mobile companies) Guidance to 2004 Revenue, billion rubles Income, million rubles 8,9 1 260 6,8 981 932 5,3 2002 2003 2004 2002 2003 2004 Net Income, billion rubles 1.1 0.2 0.1 2002 2003 2004 29

  31. IR Contacts Questions? Investor Relations Department “Far East Telecommunications Company” OJSC Svetlanskaya St., Vladivostok, Russia 690950 Тel.: +8 (4232) 208-500, ext. 1306 IR@dsv.ru www.dsv.ru 30

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