Golden Telecom Buys Sibchallenge

MOSCOW -- Golden Telecom, Inc. (NASDAQ:GLDN) announced that it has finalized the acquisition of 100% of OOO Sibchallenge Telecom, the leading alternative wireline operator in Krasnoyarsk. OOO Sibchallenge Telecom owns 100% of the ownership interests in ZAO Tel, an Internet service provider, also based in Krasnoyarsk.

On August 6, 2003 Golden Telecom signed a share purchase agreement to acquire 100% of OOO Sibchallenge Telecom. After the receipt of regulatory approval and satisfaction of conditions precedent the deal was closed on August 27, 2003. The price of the acquisition was $15 million.

Sibchallenge Telecom has constructed and operates 100,000 telephone numbers in Krasnoyarsk. It has an independent network in Krasnoyarsk, with an Electronic Worldwide Search Digital (EWSD) switch, 127 km of fiber-optic cable, 170 km of copper cable, and more than 30 points of presence in the city. It also has a Code Division Multiple Access (CDMA) wireless license, with approximately 8,000 users. ZAO Tel estimates that it controls 50% of the dial-up Internet market in Krasnoyarsk.

The consolidated revenue for OOO Sibchallenge Telecom in 2003 is expected to be between $10 million and $12 million, calculated according to Russian Accounting Standards (RAS).

Golden Telecom Inc.