Ladies and Gentlemen!

Year 2005 was particularly important for our company and for the whole telecommunication industry;  we saw major transformations cardinal reform of regulatory and legal framework in the telecommunication industry. These market transformations of the telecommunication industry had influence on the operation of JSC Central Telegraph. In order to cope

with the new environment, the company as fast as possible analyzed all legal aspects, made changes in the billing systems, introduced new business processes, etc.
Last year for the company was marked by the development of NGN and implementation of new services. Launching to the mass market and successful sales of VNO and MVNO- products "baza" ("baza office" and "baza mobile") was the main achievement of the company. Together with our subsidiary ZAO Centel we started the first stage of a major project on implementation of the Unified Multiservice Network of the Moscow Region using Metro Ethernet technologies. This project was promoted at three exhibitions: "Svyaz-Expocomm-2005", "Infocom-2005" and "Moscow Region 2005". 
In order to improve operational efficiency of projects implementation and coordination of activities in different areas, the company performed reorganization aimed at the improvement of its organizational structure. After this reorganization, following units were created: Marketing Department, Video Service Center, Corporate Sales Division of the Sales Department and Training Center.
Corporate culture arisen in the company combines the values of our enterprise, standards of high requirements to the results of work and to the quality of decisions taken, standards of corporate behavior. Last year we elaborated the Code of corporate behavior of the company. The keystones of our success are the one-hundred-and-fifty-year history and rich traditions of Central Telegraph, the team of highly qualified professionals and creative approach to the work.
As a result, in March 2005 JSC Central Telegraph received the international quality management certificate ISO 9001:2001 for telecommunication services, and in October the company received the diploma of the Russian Fund for Protection of Consumer Rights for active participation in the development of civilized consumer market in Russia.
We are proud that by the results of 2005 JSC Central Telegraph became one of the winners of the All-Russia contest "Russian organization of high social activity" and became the third in the main nomination "Remuneration and social payments".
 Year 2005 was marked by a new step of the development of our subsidiaries. For ZAO Open Communication this year was marked by launching a whole range of new informational and entertainment services: the first Russian service of a virtual telephone exchange for individual customers called "My telephone station", various content solutions for mobile operators.
ZAO Centel successfully implements the project for the creation of a unified modern broadband access network in Moscow. By the end of the previous year the network covered 25 districts of Moscow, and the customer base increased almost in four times and amounted to 40 thousand subscribers!
Stable position of JSC Central Telegraph on the telecommunication market in 2005 allows to expect further growth of our customer base during the next year.
The nearest plans of the company comprise further development of the multiservice network on the basis of the NGN technology and start of the provision of digital TV services, further development of services and provision of convergent networks and Triple Play services for individual and corporate customers.
I would like to thank our customers, partners and investors for their confidence in our company. I am sure that JSC Central Telegraph will retain its competitive strength, will increase considerably its customer base and ensure stable revenues, will launch new innovative products to the market and will make considerable contribution to the development of Russian telecommunication market!

V.Martirosian
General Director
of JSC Central Telegraph