Golden Telecom, Inc. INVESTOR ROADSHOW March 2003 Agenda Investment Highlights Golden Telecom Business Overview and Strategy Golden Telecom Financial Overview Appendix 2 Investment Highlights Unique growth proposition Growth rate of an alternative operator with the profitability of an incumbent Standard & Poor’s gave Golden Telecom an issuer credit rating of BB-/Stable, one notch below the sovereign rating and higher than any other rated telecom operator in Russia Solid and growing market share with attractive corporate customer base in an expanding economy Corporate incumbent of choice with blue chip customers and widest geographic reach #1 in corporate market in key cities of Moscow, Kiev, N. Novgorod, #2 in St. Petersburg Continued expansion of Russian economy will stimulate further demand Profitable, cash generative business model with modest capex needs Operating cash flow positive since 1998 Net income positive throughout 2002 Modest capex needs of $55-65mm for 2003, at approx. 18% of sales Poised for significant growth both organically and through consolidation 2003 Revenue expected to be $320-340mm 2003 EBITDA expected to improve to $100-120mm Well positioned to play consolidator role in fragmented market which will further solidify market share Strong management team and committed shareholders Shareholders include Russian and foreign strategic and financial investors, committed to maximising shareholder value 3 Agenda Introduction Golden Telecom Business Overview and Strategy Golden Telecom Financial Overview Appendixes 4 Golden Telecom: The Facts GTI largest independent provider of fixed-line telecommunication services in Russia and CIS More than 10 years of operating history Market leader (#1 or #2) in core markets Blue chip customer base $289 million in pro-forma combined revenues in 2002 Pro-forma combined EBITDA of $97 million in 2002 Consolidated revenues of $198.7 million in 2002, consolidated EBITDA - $61.4 Profitable since 1Q02: consolidated net income of $29.8 million in 2002 Publicly traded on NASDAQ since 1999 Nasdaq: GLDN Market capitalization as at May 12, 2003: $521mm Closing price as at March 12, 2003: $19.20 5 Operating and Ownership Structure Ownership Structure – As of September 30, 2002 Operating Structure Golden Telecom, Inc. and affiliates Capital International 8% Sovintel 100% Golden Telecom (Ukraine) SA Telcom (Kazakhstan) 100% 50% 58% TeleRoss’s Regional JVs ING Baring Affiliates 10% ADS (N.Novgorod) EBRD 11% Alfa Group 40% Public and others 16% 100% Rostelecom 15% 6 Golden Telecom’s success model: creation of corporate incumbent The three elements of successful conversion of an alternative into incumbent Lack of adequate infrastructure in the market – still only 30% of infrastructure is digital Lack of adequate telecom infrastructure in Russia sparked accelerated growth of facilities-based alternative operators Combellga, 3.9% Comstar, 4.8% Golden Telecom, 15.7% Equant, 10.0% Weak incumbents – alternatives command 40% share in industry revenues Weak incumbents were, and still are, slow in adjusting operations to market conditions and highly competitive environment Market Shares in Moscow, 2001 Building own customer access Golden Telecom consistently puts highest priority on development of its own local access infrastructure to preserve high degree of independence from incumbents and therefore high sustainable margins Other, 13.2% Rostelecom, 26.8% MTU, 6.3% MGTS, 19.3% Source: RosBusiness Consulting: Telecom Report, 2001 Golden Telecom’s strong competitive position and customer base, its sustainable high margins and superior service offering make it the best positioned fixed-line operator in Russia 7 Continuing economic expansion drives demand for modern digital communications Russian economic growth Fifth consecutive year of growth Stable political environment Progress with tax and judicial reform Slowing inflation Trade surplus and stable currency CB forex reserves are at all time high levels 2% of GDP for telecom industry is considerably below 4-5% average for developed countries Low penetration levels: fixed line penetration is 21%, mobile penetration is 12%, internet penetration is 3% Weak incumbents Alternative operators are the locomotive of fixed line telecom growth GDP per capita ($ at PPP) 8.3% 4,980 Russia’s credit rating upgraded by S&P to “BB” and by Moody’s to “Ba2” in December 2002 Telecom industry in Russia poised to grow quicker than economy GDP growth in Russia Incumbent operators continue to lag behind technologically, operationally and financially Social burden of servicing residential customers at prices below cost The need to upgrade legacy analog networks to digital standard with no incremental revenue 5,400 5,720 6,080 6,500 4.0% 4.0% 4.2% 4.4% 2002E 2003E 2004E 2005E 5.0% 2000A 2001A Real GDP growth 7,450 6,980 4.0% 2006E Source: Economist Intelligence Unit, August 2002 Historic penetration levels in Russia Fixed Line Penetration Internet Penetration 25% 20% 15% Mobile Penetration 17% 18% 19% 0% 21% 12% 10% 5% 21% 20% 6% 1% 0% 1997 1% 0% 1998 1% 1% 1999 2% 2% 2000 2% 2001 3% 2002 Source: Pyramid Research 8 Services by Product Lines and Customer Segments Product lines Voice Customer segments Business customers Operators Consumers Local, DLD & International Telephony Data Internet Dedicated Private Lines Frame Relay and ATM based services Dedicated Internet access Virtual Private Networks Digital network “Value Added Services” Equipment sales & maintenance Call center services Local numbering Capacity Resale Voice over IP Termination Local traffic termination Outbound DLD & International voice Global partnership with international carriers without presence in Russia Broadband IP Connectivity Inbound DLD & International voice termination Prepaid calling cards Dial-up Internet Access 9 How Do Various Businesses Fit Together? Business Customers: Core Why business customers? High and stable growth High gross margin, although substantial SG&A Low customer turnover Ability to differentiate ourselves Negates commoditization Customer “ownership”: profits can be protected against migration up the supply chain (for example to MGTS or to Rostelecom) Golden Telecom leverages its business services network into operator and consumer markets, hence diversifying revenue streams and improving profitability through scale and scope economies Operators: Bulk Revenues at Low Incremental Cost Why operators? Consumer Internet: Anticipation of Rapid Growth Why dial-up Internet? Improved profitability through better capacity utilization: economies of scale and scope Further capacity utilization: filling the network during night hours Lower gross margin, but very low SG&A Very stable revenue flows from cellular operators for local access and numbering, although other wholesale revenues are more volatile Wide geographic coverage by POPs provides excellent technological platform for building unique nation-wide brand Very low Internet penetration (1.5%) in Russia: high potential for exponential growth ROL content provides excellent marketing platform, differentiation attribute and market development stimulant Active participation in VoIP traffic – capturing revenues which bypass traditional voice channels 10 Business Services: Customer Base and Product Mix MNC and large Russian enterprises are the main customers of managed network solutions and account for over three quarters of all business customer segment revenues Business customers Clients that spend more than $2,000/month; access through fiber optic Clients that spend less than $2,000/month; access through direct access (fiber/copper), MGTS copper, indirect access, WLL Enterprises SME/SOHO Business centers & hotels Moscow corporate Russia MNC 2003 business services: revenue by customers Pre-paid & Residential 4% Business customers Residential & elite apartments Prepaid phone cards 2003 business services: revenue by product Business Services: 61% of total 2003 revenue Internet 19% Voice 59% SME/SOHO 19% Data 17% Large Enterprises 77% Prepaid Cards 5% Source: Golden Telecom forecast 11 Business Services: market position in voice services Voice market shares of alternative operators in Moscow, 2001 Equant 8% Other 13% Golden Telecom 32% Telmos 5% Combellga 12% Comstar 13% MTU 17% The size of the corporate voice services market exceeded US$500mm in 2001 (excluding incumbent providers) Market share of 32% in Moscow, leading positions in St. Petersburg (#2), Nyzhny Novgorod (#1), Kiev (#1) among alternative providers Historically development focused on higher end of the market – large corporate customers Growth priorities: SME/SOHO market segment, sales to government Growth expectations of around 10% p.a. Voice services will remain the biggest revenue and EBITDA contributor in the next 3 – 4 years Distribution and local numbering capacity are key drivers of business growth Source: Golden Telecom With its leadership position in Moscow, Golden Telecom is the largest independent fixed-line voice services provider in Russia and the CIS 12 Business Services: market position in corporate data & Internet Golden Telecom is the #2 corporate network solutions provider in Russia Corporate networks market share Russia, 2001 Other 15% Golden Telecom 35% Global One 50% The size of the corporate network market exceeded US$200mm in 2001 (excluding incumbent providers) Market share of 35% nationwide (Russian Federation) Market share in IP/data of 24% in Moscow (Equant 36%, Golden Line 9%) Only one major competitor nationwide: Equant (50%); one upcoming competitor: TTK Growth expectations of around 30-40% p.a. Complex business with high barriers to entry (geographical spread, integrated services) High margin business (limited competition) Predatory growth opportunity (Equant difficulties) Russian & CIS networks Source: Golden Telecom Given its strong market position in the corporate network market, Golden Telecom capitalizes on the growth potential of a highly profitable and sustainable segment of the telecom sector 13 Carrier Services: Customer base and product mix Carrier Customers Voice Services Cellular Operators - Local numbering - Local, DLD, ILD outbound voice traffic Domestic Operators - Local numbering - DLD, ILD outbound voice traffic Data & Internet Services International Carriers 2nd and 3rd Tier ISPs - Termination of inbound voice traffic - IP transit 2003 carrier services revenue by customers Intl. Carriers – Data 7% Intl. Carriers – Voice 11% ISPs 2% VoIP Operators 15% Domestic Carriers 14% Source: Golden Telecom forecast VoIP Operators - Termination of inbound VoIP traffic International Carriers - FR distribution for MNCs customers of international carriers - SDH bandwidth between Russia and RoW 2003 carrier services revenue by product Internet 2% Data 7% Carrier Services: 24% of total 2003 revenue Cellular Operators 51% Voice 91% 14 Carrier Services: market position Wholesale market share Russia, 2001 The size of the Wholesale market equaled US$1. 5bn in 2001 (including incumbent providers) Market share GTI < 5 % Major competitors: incumbents Other 34% Rostelecom 45% Rostelecom, Svyazinvest, MGTS Ukrtelecom, Kazakh Telecom, etc. Other players in Russia International operators: C&W, Telia, Sonera Local LD operators: Transtelecom, Equant, ComBellga, Teleport-TP, Andrew Local alternative operators: MTU, PTT Golden Telecom 4% Svyazinvest 17% Source: Golden Telecom Carrier Services provide excellent synergies with Business Services, thus improving capacity utilization rates and return on investment 15 Carrier Services: A stable combination of businesses with different fundamentals Cellular Operators Since 1993 GTI provides local (numbering capacity), DLD and ILD access Service offering expanded into system integration activities such as construction of base station networks, building call center ring across 14 cities, etc. All cellular operators are customers ~ 50% of Carrier Services in revenue (12% of total GTI revenue estimate for 2003) High margins, very low customer churn (no number portability) Growth rates = 10% and regional expansion may bring this higher Limited competition (MTU Inform) Voice Carrier Services Data Networking GTI distributes FR service to MNCs – customers of GTI’s global partners, provides IP backbone access to small ISPs, sells excess SDH capacity GTI terminates inbound international voice and VoIP traffic from international carriers and provides DLD and ILD access to local fixed line operators interconnected with GTI network 10% of Carrier Services revenue (2% of total revenue estimate for 2003) ~ 40% of Carrier Services revenue (10% of total GTI revenue estimate for 2003) Lower margin: pricesensitive commoditized service High margins, very low churn (IT directors don’t want to switch network providers, expensive to have two providers as compared to having two voice providers) Growth rates = 15% For international FR connectivity, limited competitors (C&W and other international carriers won’t connect with Equant due to global competition). IP Transit and SDH have 5 competitors Organic outbound traffic is leveraged to receive and retain inbound streams Many competitors 60% of Carrier Service revenue is a stable and predictably growing with solid margins 16 Golden Telecom is the only nationwide ISP in Russia ROL brand subscriber/revenue organic growth Count in ‘000 US$’000 1,800 1,600 Access Revenues (left axis) Subscribers (right axis) 1,400 1,200 1,000 800 600 400 200 0 Jan-99 Oct-99 Jul-00 Apr-01 Jan-02 Oct-02 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 Market Share: 24% in the Russian Federation; 40% in Moscow Competition Mass market product Moscow: MTU – Inform Regions: local providers Nationwide: none Distribution as opposed to direct sales Low margins necessitate high volumes Market is poised for region-driven growth +40% growth p.a., largely driven by regions Access driven – lack of infrastructure in Russia guarantees sustainable market shares for facilities based ISPs In 2001 Moscow accounted for 45% of ISP market-wide revenues. In 2002, the figure is estimated at 35% Note: excludes Cityline brand subscribers to exhibit organic growth rates; Source: Golden Telecom The growing ISP market offers attractive synergies with the core business of GTI and a high standalone growth potential 17 A winning strategy Under new management, Golden Telecom pursues a focused growth strategy based on core competencies Core resources Leading market position High market shares in the largest Russian and Ukrainian cities Blue chip customer base - including Grow $ base in core markets: Moscow, St. Petersburg Grow in line with the market Capitalise on new consolidated position: cross selling opportunities between Sovintel & TeleRoss Coca-Cola, Pepsi, Mars, Nestle Ford, Renault UBS Warburg, Citibank, Renaisance Capital, Bank Menatep TNK, Caspian Pipeline Consortium Superior service offering Unmatched breadth and depth of service offering in all customer segments Growth strategy Businesses Operators Consumer Access to Capital Significant cash resources on balance sheet Unused debt capacity Access to international financial markets Expand to new markets and new market segments Expand regionally replicating Moscow model (MANs with high degree of independence from incumbents) Expand aggressively in SME Tap into sales to Government market Growth through acquisitions Pursue consolidation opportunities in Moscow and St. Petersburg Leverage regional presence into market dominance in the largest regional cities through potential acquisitions of existing MANs Strict acquisition criteria and conservative financial approach 18 Formulation of regional strategy Goal: replicate successful Moscow model in economically strong regional centers Keys to success: focus on corporate market, independence from incumbents Focus on high margin corporate market Ability to develop independently from incumbent protects margins Independence is secured through obtaining sufficient interconnect with local PSTN and building own access network Three alternative approaches of regional development: green field, acquisition, building on existing presence All approaches are feasible and decision to use one or another is based on local circumstances 19 Acquisitions of ADS and KIS as an example of regional acquisition strategy Market Share of ADS Merged in Nyzhny Novgorod Other 2% GTI (ADS Merged) 16% Volga Telecom 82% Reasons for choosing acquisition approach: ADS maintains working relationship with Volga Telecom It has sufficient local numbering capacity and sufficient interconnect with incumbent The company operates almost entirely on its own infrastructure It has experience in services to business customers The market is poised for growth in business services It is operating cash flow positive Golden Telecom has controlling interest of 58% Source: Golden Telecom Created the leading alternative provider in the third largest Russian city with growth rate of 30% in 2002 20 Agenda Introduction Golden Telecom Business Overview and Strategy Golden Telecom Financial Overview Appendix 21 Group Financial Characteristics High and consistent revenue growth High EBITDA growth with expanding margins High earnings growth High cash flow generation Modest capex needs Strong balance sheet with positive net cash position and unused debt capacity 22 Strong Historical Growth and Track Record Acquisition of the remaining 50% stake in Sovintel in September 2002 has a major positive impact on consolidated results Consolidated Revenue Consolidated EBITDA US$ mm US$ mm Margins, % 198.7 30.1% 140.0 19.6% 113.1 97.9 1999 16.8% 2000 2001 2002 14.8% 16.4 16.7 27.4 1999 2000 2001 61.4 2002 ¹ Revenue CAGR based on 1999-2002 period ² EBITDA CAGR based on 1999-2002 period 23 Trended quarterly income statement 2001-3 (unaudited) GOLDEN TELECOM, INC. 1Q 2001 (US$,000) Total Revenue 2Q 2001 $32,320 Growth -1% Total Cost of Sales Gross Margin % Selling, general and administrative SG&A % EBITDA % Depreciation Amortization (including Goodwill) Impairment charge Operating income/(loss) Equity in earnings (losses) of ventures Interest income (expense),net Foreign currency loss Income/(loss) before Taxes & MI Provision for income taxes Minority interests Cum. effect of change in acctg principle 15% 20,664 10,642 29% 7,357 9,687 27% 11,293 13% 1% 27% 31% 4,426 5,954 0 4,863 5,650 0 5,322 5,430 31,291 4,982 1,021 0 (4,826) (5,268) (3,156) (32,021) 583 851 (295) 2,159 414 (13) 2,441 (23) (53) 2,972 (465) (286) (3,687) (2,708) (791) (29,800) (223) (0) (823) (3) (1,039) (43) 183 (71) 0 0 $ (3,534) 0 $ (1,873) 21,661 58% 4,075 5,678 0 $ (3,910) 3Q 2002 3% 10,022 36% 20% 20,980 2% 56% 12,787 34% 44% 2Q 2002 4Q 2002 1Q 2003 $36,350 $39,217 $46,376 $76,784 $78,376 -1% 8% 18% 66% 2% 16,096 15,370 17,556 21,617 36,646 37,299 3% 54% 5,112 4% 15% 20,144 12,799 38% 4,927 Growth 8% 16,923 12% 1Q 2002 $36,760 -1% 53% 12,707 39% EBITDA $37,067 17,911 2% 55% 4Q 2001 9% 15,980 17,634 Growth 4% Net income/(loss) $33,891 5% 14,686 Gross Margin 3Q 2001 0 $ (29,688) 24,759 14% 55% 53% 10,237 26% 13,438 17% 24,707 77% 30% 52% 15,431 20% 13,967 22% 41,077 2% 52% 10,792 23% 11,424 29% 40,138 62% 27,639 12% 32% 35% 5,035 1,212 0 5,638 1,680 0 7,905 2,488 0 8,024 2,381 5,290 5,177 6,649 14,314 17,234 1,710 (61) (325) (1,223) (24) (182) 3,294 (133) (119) 6,614 3,748 9,691 (1,316) (66) (833) (161) (1,630) (182) 594 (449) (548) 13,911 (848) (118) 974 0 0 0 $ 6,206 $ 2,754 $ 7,879 $ 12,945 119 (398) 190 17,145 (4,233) (92) $ 12,820 24 Trended Quarterly Balance Sheet (1) GOLDEN TELECOM, INC. As at the end of Q1 2001 (US$ ,000) ASSETS Current assets Cash and cash equivalents Investments available for sale Accounts receivable, net Restricted cash Prepaid expenses Other assets Total current assets $ Property and equipment, net Investments in and advances to ventures Goodwill and intangible assets, net Restricted cash and other noncurrent assets TOTAL ASSETS $ 103,521 $ 18,158 97 4,595 5,564 Q2 2001 70,586 $ 19,763 97 6,175 6,594 Q3 2001 Q4 2001 Q1 2002 Q2 2002 42,983 $ 20,049 97 5,833 6,472 37,404 $ 8,976 21,875 6,356 10,124 47,219 $ 5,025 26,757 5,522 8,762 51,679 $ 1,998 24,514 6,275 10,151 Q3 2002 65,527 $ 47,026 8,388 13,656 Q4 2002 Q1 2003 59,625 46,224 7,811 13,794 69,294 51,054 7,439 16,449 131,935 103,215 75,434 84,735 93,285 94,617 134,597 127,454 144,236 89,109 51,106 64,994 5,035 92,580 53,793 88,988 6,476 106,413 53,753 83,580 6,938 98,590 45,981 57,146 13,932 98,133 49,358 56,220 10,901 98,278 46,447 53,403 10,199 162,878 754 127,270 11,587 166,121 721 127,669 13,845 167,834 437,086 $ 435,810 451,732 342,179 $ 345,052 $ 326,118 $ 300,384 $ 307,897 $ 302,944 $ 127,293 12,369 25 Trended Quarterly Balance Sheet (2) GOLDEN TELECOM, INC. As at the end of Q1 2001 (US$ ,000) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ Debt maturing within one year Due to affiliates Short-term capital lease obligation Other current liabilities Total current liabilities Long-term debt, less current portion Related party long-term debt Long-term capital lease obligation Taxes and other non-current liabilities TOTAL LIABILITIES Minority Interest SHAREHOLDERS' EQUITY Common stock Treasury stock Additional paid-in capital Accumulated deficit TOTAL SHAREHOLDERS' EQUITY Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 26,513 $ 2,923 8,643 30,141 $ 8,583 6,250 9,003 34,314 $ 3,833 6,250 1,392 8,284 27,327 $ 9,869 1,597 9,932 30,183 $ 8,256 1,643 9,737 31,505 $ 1,747 1,694 7,556 52,847 $ 1,747 15,492 1,734 10,439 48,268 8,988 1,999 1,775 9,950 48,572 16,488 3,236 1,816 9,861 38,079 53,977 54,073 48,725 49,819 42,502 82,259 70,980 79,973 9,933 6,250 4,955 4,297 7,003 4,197 6,484 7,183 3,337 7,453 14,058 3,289 7,112 13,540 2,612 6,529 12,983 2,439 30,000 6,081 21,895 24,111 5,621 25,453 16,463 59,217 65,277 71,937 73,573 73,760 64,626 142,674 126,165 127,556 3,337 3,238 4,456 5,967 6,033 4,761 2,076 2,187 2,279 5,151 25,969 246 413,095 (133,716) 246 413,541 (137,250) 246 (25,000) 413,602 (139,123) 248 (25,000) 414,407 (168,811) 249 (25,000) 415,460 (162,605) 251 (25,000) 418,157 (159,851) 291 (25,000) 469,017 (151,972) 270 446,215 (139,027) 447,832 (126,207) 279,625 276,537 249,725 220,844 228,104 233,557 292,336 307,458 321,897 342,179 $ 345,052 $ 326,118 $ 300,384 $ 307,897 $ 302,944 $ 437,086 $ 435,810 451,732 272 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 26 Consolidated Results by Line of Business (unaudited) Continuing growth, improving margins Golden Telecom Key Consolidated Financials Revenues CLEC Data and Internet Long distance Mobile services Eliminations Total revenues Growth, % 3Q01 12.2 16.5 4.9 3.7 (0.2) 37.1 8% 4Q01 10.8 18.6 4.2 3.5 (0.4) 36.7 -1% 1Q02 10.7 18.2 4.3 3.3 (0.1) 36.4 -1% EBITDA CLEC Data and Internet Long distance Mobile services Corporate Total EBITDA EBITDA Margin 6.0 3.0 0.4 1.3 (3.3) 7.4 20% 4.9 5.4 0.1 1.1 (1.5) 10.0 27% 5.4 6.2 0.1 1.2 (1.6) 11.3 31% 2Q02 11.4 20.0 4.6 3.3 (0.1) 39.2 8% 5.2 6.0 (0.2) 1.6 (1.2) 11.4 29% 3Q02 19.7 19.2 4.6 3.3 (0.5) 46.3 18% 8.2 5.5 1.8 (1.5) 14.0 30% 4Q02 49.7 21.5 5.2 3.1 (2.7) 76.8 66% 18.9 5.3 0.4 1.6 (1.5) 24.7 32% 1Q03 51.2 21.0 5.0 3.2 (2.0) 78.4 2% 20.4 6.4 1.8 (1.0) 27.6 35% 27 Pro-Forma Combined Results by Line of Business (unaudited) Continuing growth, improving margins Golden Telecom Key Pro-Forma Combined Financials Revenues CLEC Data and Internet Long distance Mobile services Eliminations Total revenues Growth, % 3Q01 40.2 16.5 4.9 3.7 (1.9) 63.4 8% 4Q01 40.0 18.6 4.3 3.5 (1.1) 65.3 3% 1Q02 40.6 18.2 4.5 3.3 (1.0) 65.6 0% 2Q02 42.7 20.0 4.7 3.3 (0.6) 70.1 7% 3Q02 49.9 19.2 5.0 3.3 (1.2) 76.2 9% 4Q02 49.7 21.5 5.1 3.1 (2.7) 76.7 1% 1Q03 51.2 21.0 4.9 3.2 (2.0) 78.3 2% EBITDA CLEC Data and Internet Long distance Mobile services Corporate Total EBITDA EBITDA Margin 16.8 3.0 0.9 1.3 (3.3) 18.7 29% 16.1 5.4 0.5 1.1 (1.5) 21.6 33% 16.1 6.2 0.6 1.2 (1.6) 22.5 34% 16.4 6.0 0.3 1.6 (1.2) 23.1 33% 19.8 5.5 0.2 1.8 (1.5) 25.8 34% 18.9 5.3 0.7 1.6 (1.5) 25.0 33% 20.4 6.4 0.3 1.8 (1.0) 27.9 36% 28 Agenda Introduction Golden Telecom Business Overview and Strategy Golden Telecom Financial Overview Appendixes 29 Sovintel Network in Moscow SOVINTEL PABX NETWORK SCHEME '2002 (MOSCOW REGION) Sheremetyevo Soleans Cargo N-W_Region OneximBank Tykhvinsky Kaliningrad V.Novgorod Pskov St.Peterburg EWSD BIC IMB-2 ShternCement-1 Stoleshniki IMB (Dmitrovka) Astoria OneximBank (Porivaevoy) OneximBank (Czepkina) Interros Estate Trast Credit DHL CQG FinAkad (Prospekt Mira) Sputnik Investment Tzerit China Bank Telf Hilti Klobex Unibest SOVINTEL M-10 ZAO Orlikov-5 Avikos West Call MMCS DMS 300 Baskin Robbins SilverWood ZenitInter DMS 100i TransAtlanticLine IAS BashKreditBank IBS DMS 100e Iteranet Rosital Sovlink CO 202 NCI-4 CO 197 PTT Teleport City Bank Art Hotel ItarTASS Tsentr Elcode VYMPELCOM Vympelcom NETWORK GVC-GA InaIndustrya Chapaevskij Dupont STS Moscow Credit Bank CO 212 WestBridge Microsoft 3Com Intel BMW Soleans MIRT Aeroflot ShneiderElectric RevicoRussia CityBank(Igarskiy) EricsoonVolvo ISTC Elsat TelecomPremier Aerostar Reuters Almaz Telecom Baring Vostok Nortel MorganStanley Conoco VISA IDV S.G.Baker Norilskkiy Nikel Boston Consulting Group RJR Reinolds Renaissance Strachovanie TEK Loreal Poljot AMT CIBA Honeywell Grey GOLDEN TELECOM NETWORK EastLine (Sadovo-Chern.) (Lubyanka) Societe General Reuters AlfaCapital Brok Kraft& Jakobs GlobalTel NewTrinity Investment Inst.Pravov. Economy Kuif (Gazetniy) Detkovo MES Rhinocerus Key Stone Monetchikov (New) EastLine Pyatnitskaya HrunichevTelecom CO 927 CTU CO 940 CO 230 CommerceBank FreshFields M+B Zander CO 241/258 SBS Yakimanka MBB Podolskoe KLM MTU-Inform (Smolenskaya) Philips Radio Page Sokol Offices (Kulneva st.) DialogBank (Smolenskaya) Toko Tower Crudex Lucent AT&T TranscomEra /Lukoil RGC DX 200 VostokZapad Sputnic Eng. Niderland Embassy Vnesh TorgBank (Plushiha) Krest Russian Capital Ugol Telecom Codest CO 245 MES Ksenyinskiy Arhangelskoe,10 CO 201 Darin MarkRich Stupino TV Tower NikoloUrupino Katron Pepsico Holding Leocadia DX 200 MTU-Inform NETWORK Domodedovo EastLine MorSviaz Molcom AS_Patriarch Zukovsky Nestle President Golden Keys RossBusiness Consulting Almenda Severstal OneximBank (Veresaeva) Transstal Komet CO 235 MFBK FCC Mosenka-3 Solomon Brothers Clifford Chance SovFraht SovMor CO 915 Paveletsk.Plaza1 Nestle Castrol J.P.Morgan BPAmoco FMCG Abert Sovintel (Shluzovaya) SlavNeft Paveletsk.Plaza2 HupoFerainsBank Gillette Tangens Medsystems MTS Telmos Moskva NETWORK NETWORK Ramenka-5 ABK Group Deeline (Mitino) EFES 34 20 HUB 327 309 Ramenka (Kashirskoe) Ramenka (Mitino) Ramenka (Yartsevskaya) Ramenka (Sheremetyevo) TEK Eniro RUS_M KOMKOR Paribas NETWORK Convers Telenet Smart Call Runicom TN-4 COMBELLGA KOMET NETWORK 6 Mega Sputnik Investment Alitalia ZolotoeKoltso TN-16 Mosenka-2 Stepton&Jonson Tusrif Linklaters &Pains Deutsche Bank SterlingHealth ArturAnderssen Chadbourne&Parke AndersenConsulting TCM DX 200 RCI HP GarantiBank Dresdner Itera Impex MARS Sitenka TransAero AirHotel AlterEgo Promotion KalitaGrad DialogBank (Levshinsky) Stupino CO 7 Avaya PW NCR Cisco Canon Astelit SAPAG Kalijn CO 952 MMCS Transammonia Benckiser Brunswick Mitsubishi FinArtist Rose Inter National SEYO Invest Sberbank Severstal OccidentalCIS RossAxim Bank Sovincenter MARS Luzniki TranscomEra GLAXO Wellcome Credit Suisse TzentroBank MFBC Sidanko -Vostok OON Chak Assienda Sun Group RedHills AgioRus Herbert Smith-2 Swiss Embs Star CO 135 Hogan &Hurston Japan Labneftemash Joint Tefal Redisson (Slavyanskaya) ARZ3 Alcoa Azbuka McDonalds SHH Boeing Pererabotchik Tetra PakHO Shell AgenstvoIntellect ResourseGroup GOLDEN TELECOM EWSD M-9 Felix Rosinka CreditSuisse Noble Pelican Amro Bank CO 265 Trojka PromStroyBank (Lubyanka) Savatsky Metropol West LB Bank SobinBank2 RFBS Partiya Sumsung Venture Impex Continental Beverage CO 243 NETWORK Macomnet CIA SterlingGroup Geolink Nosta (Sevashskaya) Geolink Avon Oninen MAN_2 Unikon MosOtis West Technics TNT IMB (Prechistenka) DMB&B Diona Holding ENKA-3 (Chaplygina) Regent Pacicfic Regent Pacicfic_2 TeleRoss Slavyanskaya Nikfi DirectStar Rusbel E-Business Savoj CO 252 DionaHolding-2 CO 253 IBM-1 (Bahrushina) Office Club Fintest Treiding ENKA-1 (Poslednij) MACOMNET KTK Gorbi Fund Admin Alko Aviatechn. Mosenka-6 Hotel Isolator Bank Euro Finance OBI Bank BNR Dukat MFK Fund-2 Prim-Tzentr PLM LuisDreifus EBRD CSI ChaseManhattan Bank-4 InterInvest Holding Compaq DowChamical Procter& Gamble Ratmir Mark Rich Renessans Bank StolichniyBank Sovetskaya Hotel Mosenka-4 Grand Hotel CO 250 ENKA-2 Inturist Mosenka-5 DialogBank British Airways Petro Alyans BAT Tverskaya Hotel Novinskiy Bulvar InvestPro Interantenna CO 973 PARUS Rostelekom (Tverskaya) EastLine (Nikitskaya) SBS Smolnaya SBS (Basmannaya) CO 207 Access Industries Nikulino CO 198 OneximBank (Shepkina) NII Neirohirurgii Drofa Afisha Oktyabrskaya Smolnaya Hoffmann Scala Desert Rostelekom Rutsog Maersk Bank Vozhrozdenja Tyson CIS PhilipMorris (Tverskaya) Leningradskaya Hotel CSS Dostoevskogo Mobile Telecom Gamma Telecom Wrigley Allen&Overy Republic NationalBank Allen&Overy (new) Herbalife Vvedenskogo FinAkad (Kibalchicha) Kurkino Kommersant Scadden Arps Cargill Myasnitskaya Polishelk Mosoblalko Shtern Cement 2 30 ADS Network in Nizhny Novgorod Fiber optic channels Coverage Nodes 31 Current network - MAN and Local Access (US$mm) Moscow Nyzhny Nov. St. Petersburg Ukraine Other Regions # fiber km 2,500 150 450 300 190 # copper km 300 400 % owned local access 95% 95% 90% 90% 35% % owned backbone 95% 90% 90% 90% 40% 250,000 25,000 14,000 100,000 20,000 700 10 100 30 70 6 3 1 6 12 # local area numbers # PBXs # Exchanges • Golden Telecom focuses its network investment where maximum value is created for the customer: access and switching • Ownership of last mile also provides high degree of Golden Telecom’s independence from local incumbent operators 32 Current network - DLD and International International connectivity: STM-16 from Moscow to Stockholm: IRU with Sonera STM-4 from Stockholm to London: IRU with Sprint 45M Moscow to New York: from Sonera Domestic connectivity: STM-4(16) to St. Petersburg: IRUs from Sonera Three VC3 Links IRUs from Transtelecom: Moscow – Ekaterenburg-Novosibirsk-Irkutsk-Khabarovsk-Vladivostok; Moscow - Nyzhny Novgorod; Moscow - Voronezh - Samara - Ufa - Ekaterenburg. Intercity connection to major cities in European part of Russia: 60 E1 leases from Rostelecom and Transtelecom Leased space segment to providing connectivity for 62 owned and customer earth stations used for remote locations and as a back up for terrestrial channels(C-band – 72MHz, Ku-band-18MHz). • Prudent investment strategy: • investment is directed into demand driven access infrastructure, • highly commoditized long-distance capacity is leased on a competitive market to avoid significant one-time cash outlays into capacity with unproven demand 34 Network expansion plan objectives 30% of next year’s capex is allocated for building access infrastructure, 30% will be for maintenance and the remaining 40% - for services upgrades, switching and transport Current status The industry development over past 20-25 years has moved from focus on switching to transport and now to access Ability to access customers over own infrastructure is the key to success Move toward smaller customers in Moscow and St. Petersburg and the regions requires differentiated approach to network expansion. Renting access lines from incumbents has proven to be difficult with incumbents protecting their monopoly position and government not interfering The focus of network development going forward will be access: 1. Further expansion with fiber to large customers 2. Building own access network to smaller customers utilizing different technologies: wireless, copper and others 3. Replacing rented access lines with own network assets in a variety of technological ways 35 Special Note Regarding Forward Looking Statements Certain statements contained in this presentation or made during the meeting concerning management’s intentions, expectations or predictions are forward looking statements. Such statements include estimates of future financial and operating performance, expectations regarding future market position, geographical markets that we plan to enter, our future product offerings, our assessment of the risk factors and effectiveness of our strategic responses. It is important to note that the company’s actual results may differ materially from those projected in such forward looking statements. Factors that may cause the anticipated results not to occur include unanticipated changes in customer demand, changes in competitive product offerings, increased price competition, change in macroeconomic and political environment, changes in local regulatory regimes, or shifts in strategy of our partners. All forward looking statements are made as of today and Golden Telecom disclaims any duty to update such statements. Additional information concerning the factors that could cause actual results to differ materially from those projected in the forward looking statements is contained in the company’s annual report on Form 10K for the year ended December 31, 2001, quarterly reports on Form 10Q for quarters ended September 30, 2002 and June 30, 2002 and other filings with the U.S. Securities and Exchange Commission (SEC). Copies of these filings may be obtained by contacting Golden Telecom or the SEC. For more information contact Investor Relations: e-mail: investorrelations@gti.ru, web: www.goldentelecom.ru tel.: +7-501-797-9300; fax: +7-501-797-9332