Press release Ukrtelecom

Due to several factors including the global credit crisis, the lack of liquidity in the Ukrainian banking market, the depreciation of the exchange rate of the UAH versus the USD and the as yet undefined strategic goals with its main shareholder, the financial condition of Ukrtelecom has deteriorated and it has consequently entered into an agreement (the "Deferral Agreement") with Credit Suisse International, Deutsche Bank AG and Standard Bank Plc who are each lenders under a US$500,000,000 facility agreement (the "Facility") on 26 February 2010 to defer payment of principal in an amount equal to USD 41,655,555.56, such amount representing a portion of principal due and payable under the terms of the Facility on 25 February 2010, to 25 May 2010. The Deferral Agreement binds all lenders under the Facility.

Ukrtelecom has retained Mosaic Securities as its financial advisor to assist it in this process.