SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                             ----------------------

                                    FORM 6-K

                        REPORT OF FOREIGN PRIVATE ISSUER

                    Pursuant to Rule 13a-16 or 15d-16 of the
                         Securities Exchange Act of 1934

                             Date: December 17, 2002

                         Commission file number 1-14748

                           OPEN JOINT STOCK COMPANY OF
                         LONG DISTANCE AND INTERNATIONAL
                          TELECOMMUNICATIONS ROSTELECOM
                          Doing Business as Rostelecom
                 (Translation of registrant's name into English)

                             THE RUSSIAN FEDERATION
                         (Jurisdiction of organization)

                         14 1ST TVERSKAYA-YAMSKAYA STR.
                              125047 MOSCOW, RUSSIA
                    (Address of principal executive offices)

          Registrant's telephone number, international: +7 095 973 9940

     Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.

                          Form 20-F   X             Form 40-F
                                     ---                      ---

     Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

                          Yes                       No   X
                              ---                       ---

     If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-________
<PAGE>

     On  December  9,  2002,  Open Joint  Stock  Company  of Long  Distance  and
International   Telecommunications  Rostelecom  (the  "Company")  announced  its
operating  and unaudited  financial  results for the first nine months and third
fiscal  quarter  of  2002.  A copy  of the  Company's  operating  and  unaudited
financial results for the first nine months and third fiscal quarter of 2002, as
amended, is attached hereto as Exhibit 1.

     A  copy  of  the  full  version  of the  Company's  unaudited  consolidated
financial  statements  prepared  in  accordance  with  International   Financial
Reporting  Standards ("IFRS") for the first nine months and third fiscal quarter
of 2002 (the "Interim Financial Statements") is attached hereto as Exhibit 2.

     The Company's financial results and Interim Financial  Statements contained
in this Form 6-K have been  prepared in  accordance  with IFRS.  IFRS differs in
certain significant  respects from generally accepted  accounting  principles in
the United States ("U.S. GAAP").  Therefore, the Company's financial results and
Interim  Financial  Statements  contained in this Form 6-K may materially differ
from comparable financial information and statements prepared in accordance with
U.S.  GAAP.  For a discussion of the  differences  between IFRS and U.S. GAAP as
they apply to the Company's  financial  statements,  see Note 32 of the notes to
the Company's  audited annual  consolidated  financial  statements for the three
year period ended December 31, 2001 contained in the Company's  Annual Report on
Form 20-F for the year ended  December  31, 2001 filed with the U.S.  Securities
and Exchange Commission on August 30, 2002.

     In  addition,   the  Company's  financial  results  and  Interim  Financial
Statements  contained in this Form 6-K are unaudited  but, in the opinion of the
Company's  management,  include  all  adjustments  (consisting  only of normally
recurring  adjustments) necessary for a fair presentation thereof. The Company's
financial  results  for  the  nine  months  ended  September  30,  2002  are not
necessarily  indicative of the Company's  financial results that may be expected
for the full year 2002 or for any future interim period.

     The Company's financial results and Interim Financial  Statements contained
in this Form 6-K should be read in conjunction with the Company's audited annual
consolidated financial statements for the year ended December 31, 2001 contained
in the Company's Annual Report on Form 20-F for the year ended December 31, 2001
filed with the U.S. Securities and Exchange Commission on August 30, 2002.

                                                                               2

<PAGE>
     On December 11, 2002, OJSC Rostelecom (the "Company") filed two "Reports on
Material Facts (Events and Actions) Affecting Financial and Economic Activity of
the Issuer" (the "Material Facts  Reports") with the Russian Federal  Commission
for the  Securities  Market  ("FCSM") as  required  by the Russian  Federation's
securities  legislation.  A copy of the  Company's  Material  Facts  Reports  is
attached hereto as Exhibit 3.

     The  requirements  for the  contents  of the  Material  Facts  Reports  and
criteria for the  information  to be disclosed in the Material Facts Reports are
established  by the laws and  regulations  of the  Russian  Federation  and,  in
particular, the requirements of the FCSM. Such requirements and criteria for the
information disclosure may, therefore,  materially differ from the reporting and
disclosure  requirements under the U.S.  securities laws to which the Company is
subject,  including the reporting and disclosure  requirements applicable to the
Annual Report on Form 20-F.

     As a consequence of such  differences,  the Material Facts Reports includes
information based on unaudited  unconsolidated statutory financial statements of
the Company prepared in accordance with Russian  accounting  standards  ("RAS").
RAS differs in significant respects from International  Accounting Standards and
from generally accepted accounting  principles in the United States.  Therefore,
the results  disclosed  in the  Material  Facts  Reports are prepared on a basis
different from the Company's audited annual  consolidated  financial  statements
included in its Annual Report on Form 20-F.

     Terms used in the Material  Facts Reports have the meaning given to them by
the laws  and  regulations  of the  Russian  Federation,  which  meaning  may be
different from the meaning given to the same terms by the U.S.  securities  laws
and reporting and disclosure requirements including the reporting and disclosure
requirements, applicable to the Annual Report on Form 20-F.

     For any questions  concerning  the Material  Facts Reports  contact Olga V.
Mokhoreva,  head of the  Securities  Department  of the Company,  by phone at +7
(095)   973-9940,   by  facsimile   at  +7  (095)   787-2850  or  by  e-mail  at
mokhoreva@hq.rt.ru.



                                                                               3
<PAGE>

                                    SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

Date:    December 17, 2002               By: /s/ Vladimir I. Androsik
                                            ---------------------------------
                                            Name: Vladimir I. Androsik
                                            Title:   Deputy General Director -
                                                     Finance Director

                                                                               4
<PAGE>

                                  EXHIBIT INDEX

The following exhibits have been filed as part of this Form 6-K:

Exhibit Number                      Description

1.                  English  translation  of the  press-release  announcing  the
                    Company's  operating and unaudited financial results for the
                    first nine months and third fiscal quarter of 2002.

2.                  English  translation  of the full  version of the  Company's
                    unaudited  consolidated  financial  statements for the first
                    nine months and third fiscal quarter of 2002.

3.                  English  translation  of the Material Facts Reports filed by
                    the Company with the Russian  Federation  Commission for the
                    Securities Market.

                                                                               5
<PAGE>

                                                                       Exhibit 1

PRESS RELEASE                                                         ROSTELECOM
--------------------------------------------------------------------------------

Moscow,   December   9,   2002:   Rostelecom,    largest   Russia's   fixed-line
telecommunications  operator,  releases its  operating and financial IAS results
(unaudited) for the first nine months and third quarter of 2002.

--------------------------------------------------------------------------------

o    During the first nine months of 2002 domestic  long-distance traffic volume
     grew by 13.4%, international outgoing - by 11.2% and international incoming
     - by 7.5% compared to the same period a year ago;

o    Consolidated  revenue*  for the  first  nine  months  of  2002  was up 3.5%
     year-on-year in dollar terms, reaching USD 622.8 mn;

o    Net revenue  (revenue less payments to operators) for the first nine months
     of 2002 surged by 10.7% year-on-year to USD 464.2 mn.

o    Consolidated  operating  profit  totaled  USD 101.2 mn,  increasing  almost
     twofold compared to the first nine months last year;

o    Nine  months  EBITDA  reached  USD  268.6  mn,  showing  a  26.6%  increase
     year-on-year.  EBITDA  margin was 43.1%  versus 35.3% for the same period a
     year ago.

o    Consolidated net profit was up 3.2% year-on-year, amounting to USD 94.9 mn.
--------------------------------------------------------------------------------

Please note that accompanying  consolidated  financial  statements for the third
quarter  and nine  months  ended  September  30,  2002  comprise  the  financial
statements of Rostelecom as well as its subsidiaries:

     1.   RTC-Leasing
     2.   RosTelecomLeasing S.A., Switzerland
     3.   RTDC Holdings Inc., USA
     4.   CJSC "Russian Industrial Bank"
     5.   CJSC "Westelcom"
     6.   OJSC "RTComm.RU"

In 2001 Rostelecom did not consolidate in its consolidated  financial statements
the above  mentioned  companies  except for  RTC-Leasing,  as they  either  were
purchased or began their activities in 2002. Thus,  comparable indicators of the
consolidated financial statements for the first nine months and third quarter of
2001 include results of Rostelecom itself and RTC-Leasing only.

---------------
*    All  absolute  numbers  of the profit and loss  statement  and the  balance
     sheet,  included in the text of the  press-release  as well as Appendix II,
     are in US dollars  (USD).  To  calculate  USD  amounts of the  consolidated
     financial  statements,  inflated  rubles as reported in the full version of
     the interim  consolidated  financial statements attached hereto as Appendix
     III,  were  deinflated  and  translated  into USD using  average  inflation
     indices and exchange  rates (for P&L items) and  end-of-the-period  indices
     and exchange rates (for balance sheet items) except for non-monetary  items
     (PP&E  and  depreciation,   long-term  investments,   inventory,   minority
     interest,  deferred taxes, share capital and retained earnings), which were
     translated into USD using respective  historical rates. Amounts included in
     Appendix I of the non-consolidated quarterly P&L statements were translated
     into USD using the same principles.

     For your  convenience we have included  indices and exchange rates used for
     translation  of  monetary  items into USD in each table for the  respective
     period  or date.

                                                                               6

<PAGE>

In  order  to  present  Rostelecom  performance  net of  consolidation  effects,
Appendix I hereto  contains  non-consolidated  profit and loss statement for the
three quarters and nine months of 2002.

9 months 2002 Financial Highlights (consolidated)

<TABLE>
<CAPTION>
---------------------------------------- -------------------- ---------------------- ----------------------------
PROFIT & LOSS STATEMENT
Consumer price index                                1,2285                1,0368
USD/RUR exchange rate                              28,9600               31,2100              %
USD million                                      9 months 01           9 months 02          change
---------------------------------------- -------------------- ---------------------- ----------------------------
<S>                                                  <C>                    <C>              <C>
Revenue                                                601,6                  622,8           3,5%
Operating expenses                                    (549,5)                (521,5)         -5,1%
   Depreciation                                       (159,9)                (167,4)          4,6%
EBITDA                                                 212,1                  268,6          26,6%
Operating profit                                        52,2                  101,2          94,0%
Non-operating profit                                    38,0                   44,6            n/a
   Income from Sovintel sale                             -                     56,5            n/a
   Income before tax and minority interest              90,1                  145,9          61,8%
   Income tax benefit/(charge)                           5,5                  (40,1)           n/a
     Deferred tax beneift/(charge)                      70,2                   20,5          -70,9%
   Minority interest                                    (3,7)                 (10,8)           n/a
Net income                                              91,97                  94,9            3,2%
---------------------------------------- -------------------- ---------------------- ----------------------------
EBITDA Margin, %                                        35,3%                  43,1%
EBIT Margin, %                                           8,7%                  16,3%
Net Margin, %                                           15,3%                  15,2%
---------------------------------------- -------------------- ---------------------- ----------------------------
Dividends for the previous period                        7,67                  12,14          58,4%
---------------------------------------- -------------------- ---------------------- ----------------------------
</TABLE>
<TABLE>
<CAPTION>

BALANCE SHEET
Consumer Price Index                          1,10422                1,00000
USD/RUR exchange rate                          30,14                 31,6800                  %
USD million                                 31.12.2001               30.09.2002             change
---------------------------------------- ------------------ ---------------------- ----------------------------
ASSETS
---------------------------------------- ------------------ ---------------------- ------------------------------
<S>                                                  <C>                    <C>              <C>
Non-current assets                                   1 862                  1 856            -0,3%
    Property, plant & equipment                      1 806                  1 715            -5,1%
Current assets                                         422                    580            37,2%
    Cash and cash equivalents                           64                    124            93,2%
---------------------------------------- ------------------ ---------------------- ------------------------------
Total Assets                                         2 284                  2 436             6,7%
---------------------------------------- ------------------ ---------------------- ------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
---------------------------------------- ------------------ ---------------------- ------------------------------
Shareholders' equity                                 1 405                  1 487             5,8%
Minority Interest                                       56                     65            16,9%
Current liabilities                                    456                    529            16,1%
    Current portion of interest bearing loans          193                    207             6,9%
Non-current liabilities                                367                    355            -3,3%
    Interest bearing loans (net of current portion)     31                     17           -45,4%
    Deferred tax liability                             324                    332             2,4%
---------------------------------------- ------------------ ---------------------- ------------------------------
Total liabilities                                      823                    884             7,3%
---------------------------------------- ------------------ ---------------------- ------------------------------
Total shareholders' equity, minority interest
and liabilities                                      2 284                  2 436             6,7%
---------------------------------------- ------------------ ---------------------- ------------------------------
Net debt                                               102                    -49              n/a
---------------------------------------- ------------------ ---------------------- ------------------------------
</TABLE>

                                                                               7
<PAGE>

Revenues

Domestic Long-Distance (DLD) Services
DLD revenues  for the first nine months of 2002  totaled USD 205 mn,  surging by
26.8% year-on-year. DLD traffic increased by 13.4% compared to the same period a
year ago to 5 095 mn min.

Third  quarter  DLD  revenues  amounted  to USD 71 mn,  showing a growth of 4.5%
versus second quarter of 2002. DLD traffic in the third quarter grew to 1 812 mn
min, a 10.3% increase compared to 1 643 mn min of the second quarter.

DLD revenue  from  end-users  for the nine months of 2002  increased  by 2.9% in
dollar terms over the same period a year ago to USD 77 mn while DLD traffic from
subscribers during the same period decreased by 6% to 814 mn min.

Compared to the second  quarter this year in the third  quarter DLD traffic from
end-users  surged by 10.2% to 273 mn min.  Revenues from  end-users in the third
quarter increased by 3.2% quarter-on-quarter in dollar terms to USD 26 mn.

Nine  months 2002  revenues  from  Russian  operators  for DLD  traffic  transit
amounted  to USD 128 mn, an  increase of 47.4%  year-on-year.  DLD traffic  from
operators  reached 4 281 mn min growing by 18% compared to the first nine months
of 2001.  Growth in DLD revenue  from  operators  is  explained  by both traffic
growth and increases in the settlement  rate with regional  operators (by 25% in
July 2001 and by another 25% in January 2002).

International  Long-Distance  (ILD) services offered to Russian  subscribers and
operators

Outgoing ILD revenues  from Russian  operators  and end-users for the first nine
months of 2002 amounted to USD 192 mn, decreasing by 8.6% year-on-year in dollar
terms  (remaining  almost flat in ruble  terms).  Nine months 2002  outgoing ILD
traffic surged by 11.2% to 924 mn min.

In the third quarter of 2002  outgoing ILD revenues  increased by 3.4% in dollar
terms compared to the second quarter same year (to USD 64 mn),  accompanied by a
4.6% traffic  growth  (outgoing ILD traffic in the third quarter of 2002 reached
319 mn min).

ILD revenues from subscribers  during the nine months of 2002 decreased by 23.2%
in dollar terms (17% in ruble terms) year-on-year to USD 79 mn. Nine months 2002
ILD traffic  from  subscribers  decreased by 15.9% versus the same period a year
ago to 257 mn min.  In the third  quarter of 2002 ILD traffic  from  subscribers
grew by 2.2%  quarter-on-quarter  to 87 mn min, accompanied by revenue growth of
1% in dollar terms (ILD revenues from  subscribers  in the third quarter of 2002
totaled USD 26 mn).

ILD revenues  from Russian  operators for the first nine months of 2002 amounted
to USD 112 mn, a 5.5% increase in dollar terms compared to the first nine months
of 2001. ILD traffic from Russian operators during the same period surged by 27%
year-on-year  to 667 mn min. In the third  quarter of 2002  outgoing ILD traffic
from  operators  grew by 5.5% compared to the second quarter to 233 mn min while
revenues were up 5% (USD 38 mn).

                                                                               8
<PAGE>

Revenues from international operators

Due to a more active work with  international  operators in 2002 aimed at mutual
optimization of international  settlement rates, during the first nine months of
2002 incoming  international  traffic surged by 7.5% to 682 mn min versus 634 mn
min for the nine months of 2001.

As a result of nine months work  Rostelecom  reduced  its  settlement  rates for
international  operators on average by 17% in dollar terms. At the same time, an
average  settlement rate paid by Rostelecom to  international  operators for the
outgoing  ILD  traffic  decreased  on average by 21%.  Thus,  while nine  months
revenues  from  international  operators  for the incoming  traffic  termination
decreased  by  11.2%  (to  USD 98  mn),  Rostelecom  payments  to  international
operators decreased by 12% to USD 122 mn.

<TABLE>
<CAPTION>
                                             9 months 2002  9 months 2002   % change    Abs. Change
----------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>           <C>          <C>
Outgoing ILD traffic, mn min                      831            924           11,2%        93,38
Payments to international operators, USD mn       139            122          -12,0%       -16,71

Incoming ILD trafic, mn min                       634            682            7,5%        47,56
Revenues from international operators
  for traffic termination, USD mn                  111             98          -11,2%       -12,30
----------------------------------------------------------------------------------------------------
</TABLE>

Compared  to  the  second  quarter  of  2002,  in  the  third  quarter  incoming
international  traffic grew by 19.5%  accompanied  by revenue  growth of 2.9% in
dollar terms (to USD 33 mn).

Consolidation effects on revenue

Total effect on revenue from consolidation of subsidiaries' financial statements
amounted  to USD 19.6 mn,  with USD 12.7 mn out of which  being net effect  from
consolidation  of RTComm.  Other revenue from  consolidated  subsidiaries in the
amount of USD 6.9 mn includes revenues of RTC-Leasing and Westelcom from sources
other than Rostelecom and RTComm.

Rostelecom non-consolidated revenues and traffic dynamics

<TABLE>
<CAPTION>

Consumer price index (CPI)                   1,0646      1,02571     1,006004                1,03211    1,2285    9 mo 02 vs.
USD/RUR exchange rate                        30,79       31,28       31,56       Q3 vs Q2      28,96     31,21     9 mo 01

                                             Q1 02       Q2 02       Q3 02       % change    9 mo 01    9 mo 02   % change
--------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>         <C>         <C>         <C>        <C>         <C>
Domestic Long-Distance traffic
--------------------------------------------------------------------------------------------------------------------------
   Traffic, mn min                           1 640       1 643       1 812        10,3%      4 495      5 095        13,4%
   Revenues, USD mn                             67          67          71         4,5%        162        205        26,8%
--------------------------------------------------------------------------------------------------------------------------
Subscribers
   Traffic, mn min                             293         248         273        10,2%        866        814        -6,0%
   Revenues, USD mn                             26          25          26         3,2%         75         77         2,9%
Russian operators
   Traffic, mn min                           1 347       1 395       1 539        10,3%      3 629      4 281        18,0%
   Revenues, USD mn                             42          42          45         5,3%         87        128        47,4%
--------------------------------------------------------------------------------------------------------------------------
Outgoing International Long-Distance traffic
--------------------------------------------------------------------------------------------------------------------------
   Traffic, mn min                             299         305         319         4,6%        831        924        11,2%
   Revenues, USD mn                             65          62          64         3,4%        210        192        -8,6%
--------------------------------------------------------------------------------------------------------------------------
Subscribers
   Traffic, mn min                              86          85          87         2,2%        306        257       -15,9%
   Revenues, USD mn                             27          26          26         1,0%        103         79       -23,2%
Russian operators
   Traffic, mn min                             213         221         233         5,5%        525        667        27,0%
   Revenues, USD mn                             38          36          38         5,0%        107        112         5,5%
--------------------------------------------------------------------------------------------------------------------------
International operators
--------------------------------------------------------------------------------------------------------------------------
   Traffic, mn min                             211         214         256        19,5%        634        682         7,5%
   Revenues, USD mn                             33          32          33         2,9%        111         98       -11,2%
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                                                               9
<PAGE>

Operating expenses
Operating expenses in the consolidated  financial  statements for the first nine
months of 2002 totaled USD 521.5 mn, a reduction of 5.1% year-on-year.

The main reason for the decline in operating  expenses was reduction in payments
to operators and a decrease in taxes other than income tax.

As we have mentioned above, payments to international operators decreased by 12%
to USD 122.3 mn due to reduction in international  settlement  rates.  Effective
settlement rate paid to international operators decreased on average by 21%.

Payments to Russian operators  amounted to USD 36.2 mn for the first nine months
of 2002,  a decrease  of 15.9%  year-on-year.  Decrease  in  payments to Russian
operators  is  partially   explained  by  elimination  of  settlements   between
Rostelecom and Westelcom.

Staff costs in the first nine months totaled USD 80.6 mn compared to USD 77.8 mn
in the first nine months of last year. An increase of 3.5% is explained by staff
reduction and respective  redundancy  payments as well as key specialists' wages
indexation in December 2001 and February 2002.

As a  result,  nine  months  2002  operating  profit  amounted  to USD 101.2 mn,
increasing almost twofold compared to the same period a year ago.

Nine months 2002  consolidated EBITDA grew by 26.6% to  USD 268.6 mn with EBITDA
margin reaching 43.1% versus 35.3% for the nine months of 2001.

Other income/loss
During the first nine  months of 2002  Rostelecom  saw an  increase  of interest
income due to a surge in short-term  deposits.  Interest expense decreased owing
to  reduction  in the  outstanding  debt and interest  rates.  As a result,  net
interest expense for the nine months of 2002 decreased by 57.4% to USD 11.3 mn.

In September 2002 Rostelecom  closed the sale of 50% stake in Sovintel to Golden
Telecom  group of  companies.  In  exchange,  Rostelecom  received  USD 10 mn, a
promissory  note with a par value of USD 46 mn,  which was  redeemed in December
2002 and 15% of Golden  Telecom  shares,  which are  reported as  investment  in
associate in the nine months consolidated financial statements. Income from this
deal in the amount of USD 56.5 mn was reported among other non-operating income.

The  difference  between income from Sovintel sale reported in the RAS financial
statements (USD 95.7 mn) and IAS financial statements (USD 56.5) mn is explained
by the method of accounting of investment in Sovintel prior to the deal closure.
While in RAS  financial  statements  the book  value  of 50%  stake in  Sovintel
amounted to  approximately  USD 20 (historical  denominated cost of Rostelecom's
charter  contribution),  in IAS  statements  it was USD  39.2 mn  (share  in net
assets).

Net income was negatively  affected by foreign  exchange losses in the amount of
USD 15.3 mn, which are explained by Japanese Yen and Euro strengthening  against
USD in the first half of 2002.

Income Tax
Current tax charge for the first nine months of 2002 remained  almost  unchanged
year-on-year,  showing a decline of 0.8%.  Positive effect from the reduction of
the corporate tax rate from 35% to 24% was offset by the tax paid on income from
Sovintel sale in the amount of USD 23 mn.

Deferred  tax gains  decreased by 70.9% to USD 20.5 mn. While in 2001 the income
was due to the change in the tax rate, in 2002 gains resulted from the write-off
of deferred tax on investment in Sovintel and a decrease in fixed assets value.

                                                                              10
<PAGE>

Net Income
Consolidated  net income for the first nine months of 2002  equaled USD 94.9 mn,
an  increase  of 3.2% in dollar  terms  compared  to the net profit for the nine
months of 2001.

Appendices:

     1.   Non-consolidated profit and loss statement of Rostelecom for the three
          quarters and nine months of 2002 in USD;

     2.   Consolidated  profit and loss  statement of  Rostelecom  for the first
          nine months of 2002 in USD;

     3.   Full  version  of  the  unaudited   interim   consolidated   financial
          statements of Rostelecom in accordance  with  International  Financial
          Reporting  Standards as of  September  30, 2002 and for nine and three
          months then ended (in a separate file).

--------------------------------------------------------------------------------

Certain statements in this press-release are "forward-looking statements" within
the meaning of the U.S.  federal  securities laws and are intended to be covered
by the safe harbors created thereby.

These forward-looking  statements are subject to risks,  uncertainties and other
factors,  which  could  cause  actual  results to differ  materially  from those
expressed or implied by these forward-looking statements.

These risks  include the risk of changes the Company's  operations  and business
prospects,  the  general  financial  and  economic  circumstances,  relating  to
regulation   of  the  Russian   telecommunications   industry  and  the  Russian
legislation; the competition and other risks.

For a more  detailed  discussion of these and other  factors,  see the Company's
Annual Report on Form 20-F for its most recently  completed  fiscal year and the
Company's other public filings with The U.S. Securities and Exchange Commission.
Many of these  factors are beyond the  Company's  ability to control or predict.
Given these and other  uncertainties,  the Company  cautions  not to place undue
reliance on any of the forward-looking statements contained herein or otherwise.

The Company does not undertake any obligation to release  publicly any revisions
to these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the  occurrence  of  unanticipated  events,  except as
maybe required under applicable the U.S. federal securities laws.


--------------------------------------------------------------------------------
For further details please contact

Dmitry Chukseyev                                         Anna Kareva
Head of PR Department                                    Head of IR
Tel.:+7 095 973 9973                                     Tel.: + 7 095 973 9920
Fax. +7 095 787 2850                                     Fax:  + 7 095 787 2850
e-mail: chukseyev@hq.rt.ru                               e-mail: kareva@hq.rt.ru

                                                                             11
<PAGE>

Appendix I

Non-consolidated profit and loss statement of  Rostelecom for the three quarters
and nine months of 2002 in USD;*

<TABLE>
<CAPTION>
USD million                        Q1 2002        Q2 2002        Q3 2002       Q3 vs Q2          9 mo 02
   Consumer price index             1,0646         1,0257         1,0060          %
   USD/RUR exchange rate             30,79          31,28          31,56        change
------------------------------------------------------------------------------------------------------
<S>                                <C>             <C>            <C>            <C>           <C>
Revenues from subscribers            53,08           51,00          52,06          2,1%         156,14
  ILD                                27,33           25,80          26,07          1,0%          79,20
  DLD                                25,75           25,20          25,99          3,2%          76,94
  Internet                            0,00            0,00           0,00           n/a           0,00
Revenues from Russian operators     101,97          101,32         107,15          5,8%         310,43
  ILD                                37,87           36,32          38,14          5,0%         112,33
  DLD                                41,52           42,29          44,53          5,3%         128,33
  Other                              22,58           22,71          24,49          7,8%          69,77
Revenues from international
 operators                           38,82           37,63          38,65          2,7%         115,11
  Telephone                          33,08           32,08          33,02          2,9%          98,18
  Telex, telegraph, etc.              3,91            3,57           3,81          6,6%          11,29
  Leased lines                        1,84            1,98           1,83         -7,6%           5,64
Other                                 8,63            6,13           6,69          9,0%          21,45
------------------------------------------------------------------------------------------------------
TOTAL REVENUE                       202,50          196,07         204,55          4,3%         603,13
  Payments to international
   operators                        (40,14)         (38,93)        (43,25)        11,1%        (122.31)
  Payments to local operators       (10,61)         (11,14)        (15,34)        37,7%         (37,08)
  Depreciation                      (51,89)         (51,94)        (50,34)        -3,1%        (154,16)
  Wages, salaries, other benefits
   and payroll taxes                (24,83)         (25,89)        (24,29)        -6,2%         (75,01)
  Administrative and other costs    (22,08)         (20,88)        (22,24)         6,5%         (65,20)
  Taxes other than on income         (4,98)          (4,84)         (4,50)        -7,0%         (14,32)
  Repairs and maintenance            (4,28)          (3,41)         (3,93)        15,0%         (11,61)
  Bad debt recovery/(expense)        (2,67)           (,57)         (2,74)       376,8%          (5,98)
  Loss on sale of property,
   plant and equipment               (1,75)           (,19)          (,97)       419,6%          (2,90)
-------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES           (163,21)        (157,79)       (167,58)         6,2%        (488,58)
-------------------------------------------------------------------------------------------------------
Net revenue                         151,76          146,01         145,97          0,0%         443,73
-------------------------------------------------------------------------------------------------------
Gross Margin, %                      74,9%           74,5%          71,4%         -4,2%          73,6%
-------------------------------------------------------------------------------------------------------
EBITDA                               91,18           90,23          87,31         -3,2%         268,71
-------------------------------------------------------------------------------------------------------
EBITDA Margin, %                     45,0%           46,0%          42,7%         -7,2%          44,6%
-------------------------------------------------------------------------------------------------------
EBIT                                 39,29           38,29          36,97         -3,4%         114,55
------------------------------------------------------------------------------------------------------
EBIT Margin, %                       19,4%           19,5%          18,1%         -7,4%          19,0%
-------------------------------------------------------------------------------------------------------
(Loss)/gain from associates           1,47            1,43          10,86        657,3%          13,76
  Interest income/(expense)         (19,47)         (18,80)        (17,81)        -5,3%         (56,08)
  Profit from Sovintel sale            ,00             ,00          56,49          n/a           56,49
  Foreign exchange gain/(loss)       (2,30)         (12,51)          (,95)       -92,4%         (15,76)
  Other non-operating income/(loss)   1,00             ,67            ,35        -48,0%           2,02
Total non-operating income          (20,77)         (30,64)         38,08       -224,3%         (13,33)
Income before tax and minority
 interest                            19,98            9,08          85,91        845,8%         114,97
  Current tax charge                (13,87)          (3,42)        (32,45)       849.5%         (49,74)
  Deferred tax benefit/(charge)       5,67            6,05          14,28        135,9%          26,00
  Share in income taxes of
   associates                          ,30            (,33)          (,23)       -30,5%          (0,25)
Income tax benefit/(expense)         (7,90)           2,31         (18,40)      -897,0%         (23,99)
Income/(loss) after taxation         12,08           11,39          67,51        492,7%          90,98
  Minority interest                    ,00             ,00            ,00            0%            ,00
-------------------------------------------------------------------------------------------------------
NET INCOME/(LOSS)                    12,08           11,39          67,51        492,7%          90,98
-------------------------------------------------------------------------------------------------------
</TABLE>

*    All  absolute  numbers  of the above  profit and loss  statement  are in US
     dollars (USD).  To calculate USD amounts,  corresponding  items in inflated
     rubles  were  deinflated  and  translated  into USD  using  period  average
     inflation  indices and exchange rates except for  non-monetary  items (PP&E
     depreciation,  inventory cost, deferred tax benefit (expense), etc.), which
     were translated into USD using respective historical rates.

     For your  convenience  in the  table  above we have  provided  indices  and
     exchange  rates used for  translation  of  monetary  items into USD for the
     respective periods.

                                                                             12
<PAGE>

Appendix II

Consolidated  profit and loss  statement of Rostelecom for the first nine months
of 2002 in USD*

<TABLE>
<CAPTION>
                                                          9 months       9 months
USD million                                                of 2001        of 2002         Change
--------------------------------------------------------------------------------------------------
  Consumer price index (CPI)                                1,2285         1,0321              %
--------------------------------------------------------------------------------------------------
  USD/RUR exchange rate                                     28,960         31,210
--------------------------------------------------------------------------------------------------
<S>                                                        <C>             <C>            <C>
Revenues from subscribers                                   177,82         174,47          -1,9%
  ILD                                                       103,07          79,20         -23,2%
  DLD                                                        74,74          76,92           2,9%
  Internet                                                    0,00          18,35           n/a
Revenues from Russian operators                             268,97         310,75          15,5%
  ILD                                                       106,50         112,30           5,4%
  DLD                                                        87,08         128,25          47,3%
  Other                                                      75,39          70,20          -6,9%
Revenues from international operators                       132,95         115,16         -13,4%
  Telephone                                                 110,55          98,25         -11,1%
  Telex, telegraph, etc.                                     10,43          11,28           8,2%
  Leased lines                                               11,97           5,63         -53,0%
Other                                                        21,90          22,38           2,2%
--------------------------------------------------------------------------------------------------
TOTAL REVENUE                                               601,64         622,77           3,5%
--------------------------------------------------------------------------------------------------
  Payments to international operators                      (139,03)       (122,31)        -12,0%
  Payments to local operators                               (43,09)        (36,23)        -15,9%
  Depreciation                                             (159,94)       (167,37)          4,6%
  Wages, salaries, other benefits and payroll taxes         (77,83)        (80,59)          3,5%
  Administrative and other costs                            (68,89)        (78,73)         14,3%
  Taxes other than on income                                (34,52)        (15,93)        -53,9%
  Repairs and maintenance                                   (13,77)        (11,61)        -15,7%
  Bad debt recovery/(expense)                                (3,20)         (5,87)         83,1%
  Loss on sale of property, plant and equipment              (9,19)         (2,90)        -68,4%
--------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES                                   (549,47)       (521,54)         -5,1%
--------------------------------------------------------------------------------------------------
Net revenue                                                 419,52         464,22          10,7%
Gross Margin, %                                              69,7%          74,5%
EBITDA                                                      212,11         268,60          26,6%
EBITDA Margin, %                                             35,3%          43,1%
EBIT                                                         52,17         101,23          94,0%
EBIT Margin, %                                                8,7%          16,3%
(Loss)/gain from associates                                   0,51          14,31        2728,6%
  Interest income/(expense)                                 (26,59)        (11,33)        -57,4%
  Profit from Sovintel sale                                   0,00          56,49           n/a
  Foreign exchange gain/(loss)                               66,14         (15,30)       -372,2%
  Other non-operating income/(loss)                          (2,08)          0,47        -122,4%
Non-operating income                                         37,47          30,32         -19,1%
Income before tax and minority interest                      90,14         145,86          61,8%
  Current tax charge                                        (60,83)        (60,35)         -0,8%
  Deferred tax benefit/(charge)                              70,22          20,46         -70,9%
  Share in income taxes of associates                        (3,85)         (0,25)        -93,6%
Income tax benefit/(expense)                                  5,54         (40,14)       -824,9%
Income/(loss) after taxation                                 95,68         105,72          10,5%
  Minority interest                                          (3,71)        (10,80)        191,2%
--------------------------------------------------------------------------------------------------
NET INCOME/(LOSS)                                            91,97          94,92           3,2%
--------------------------------------------------------------------------------------------------
</TABLE>

*    All  absolute  numbers  of the above  profit and loss  statement  are in US
     dollars (USD).  To calculate USD amounts,  corresponding  items in inflated
     rubles  were  deinflated  and  translated  into USD  using  period  average
     inflation  indices and exchange rates except for  non-monetary  items (PP&E
     depreciation,  inventory  cost,  minority  interest  expense,  deferred tax
     benefit  (expense),  etc.), which were translated into USD using respective
     historical rates.

                                                                             13
<PAGE>

                                                                      Exhibit 2

OAO Rostelecom
CONSOLIDATED BALANCE SHEETS
(In  millions  of Russian  Rubles in terms of  purchasing  power of the Ruble at
December 31, 2001)
--------------------------------------------------------------------------------

         OAO "ROSTELECOM"

         UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
         PREPARED IN ACCORDANCE WITH
         INTERNATIONAL FINANCIAL REPORTING STANDARDS

         AS OF SEPTEMBER 30, 2002 AND
         FOR THE 9 MONTH ENDED SEPTEMBER 30, 2002

                                                                             14
<PAGE>

OAO Rostelecom
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In  millions  of Russian  Rubles in terms of  purchasing  power of the Ruble at
September 30, 2002, unless otherwise stated)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                September 30, 2002    December 31, 2001
                                                     Notes             (unaudited)         (audited)(1)
---------------------------------------------------------------------------------------------------------
<S>                                                   <C>                  <C>                  <C>
ASSETS
Property, plant and equipment                          4                    56,867               60,117
Long-term investments                                  6                     3,063                1,188
Deferred tax asset                                                               5                    -
Goodwill                                               7                        22                    -
Negative goodwill - net of current portion             7                      (284)                   -
Lease receivables                                                            1,674                  648
---------------------------------------------------------------------------------------------------------
Non-current assets                                                          61,347               61,953
---------------------------------------------------------------------------------------------------------
Inventory                                                                      434                  637
Accounts receivable                                    8                     8,846                8,184
Investments                                            9                     5,841                3,106
Negative goodwill - current portion                    7                      (659)                   -
Cash and cash equivalents                              10                    3,920                2,131
---------------------------------------------------------------------------------------------------------
Current assets                                                              18,382               14,058
---------------------------------------------------------------------------------------------------------
Total assets                                                                79,729               76,011
=========================================================================================================
SHAREHOLDERS' EQUITY, MINORITY
INTEREST AND LIABILITIES
Share capital                                          11                       96                   96
Retained earnings                                                           48,941               46,667
---------------------------------------------------------------------------------------------------------
Total shareholders' equity                                                  49,037               46,763
---------------------------------------------------------------------------------------------------------
Minority interest                                      12                    2,157                1,851
---------------------------------------------------------------------------------------------------------
Accounts payable and accrued expenses                  13                    5,225                5,623
Taxes payable                                                                3,079                1,985
Current portion of interest bearing loans              14                    6,548                6,435
Short-term borrowings                                  15                    1,107                1,155
Amounts owed to customers - current portion                                    798                    -
---------------------------------------------------------------------------------------------------------
Current liabilities                                                         16,757               15,198
---------------------------------------------------------------------------------------------------------
Interest bearing loans - net of current portion        14                      544                1,047
Non-current accounts payable                                                   171                  363
Deferred tax liability                                 16                   11,024               10,789
Amounts owed to customers - net of current portion                              39                    -
---------------------------------------------------------------------------------------------------------
Non-current liabilities                                                     11,778               12,199
---------------------------------------------------------------------------------------------------------
Total liabilities                                                           28,535               27,397
---------------------------------------------------------------------------------------------------------
Total shareholders' equity, minority interest and                           79,729               76,011
liabilities
---------------------------------------------------------------------------------------------------------
Commitments and contingencies                          24                        -                    -
---------------------------------------------------------------------------------------------------------
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.
____________________
(1) Comparative  numbers as of December  31, 2001 have been  restated  using the
    inflation index from December 31, 2001 to September 30, 2002.
--------------------------------------------------------------------------------
                                       1
<PAGE>

OAO Rostelecom
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In  millions  of Russian  Rubles in terms of  purchasing  power of the Ruble at
September 30, 2002)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                                                 9 month ended                   3 month ended
                                                            September 30,   September 30,    September 30,     September 30,
                                                                    2002            2001             2002              2001
                                                 Notes        (unaudited)     (unaudited)      (unaudited)       (unaudited)
-------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>             <C>            <C>               <C>
Revenue
Local operators                                                10,010           9,569          3,409             3,872
Subscribers                                                     5,620           6,326          1,850             2,148
Foreign operators                                               3,710           4,730          1,227             1,637
Other                                                             721             779            218                38
-------------------------------------------------------------------------------------------------------------------------------
Total revenue                                      17          20,061          21,404          6,704             7,695
-------------------------------------------------------------------------------------------------------------------------------
Operating expenses
Wages, salaries, other benefits and
  payroll taxes                                                (2,596)         (2,769)          (922)           (1,253)
Depreciation                                                   (5,564)         (5,690)        (1,850)           (1,895)
Charges by network operators - international                   (3,940)         (4,946)        (1,375)           (1,627)
Charges by network operators - national                        (1,167)         (1,533)          (474)             (670)
Administration and other costs                                 (2,536)         (2,453)          (720)             (553)
Taxes other than on income                                       (513)         (1,228)          (160)             (775)
Repairs and maintenance                                          (374)           (490)          (125)             (142)
Bad debt expense                                                 (189)           (114)           (82)             (114)
Loss on sale of property, plant and equipment                    (116)           (327)           (42)             (228)
-------------------------------------------------------------------------------------------------------------------------------
Total operating  expenses                                     (16,995)        (19,550)        (5,750)           (7,257)
-------------------------------------------------------------------------------------------------------------------------------
Operating profit                                                3,066           1,854            954               438
-------------------------------------------------------------------------------------------------------------------------------
Gain from associates (excluding related tax)                      461              18            142                49
-------------------------------------------------------------------------------------------------------------------------------
Interest expense                                                 (688)         (1,052)          (244)             (423)
Interest income                                                   323             106            105                63
Income from sale of Sovintel                                    1,770               -          1,770                 -
Other non-operating income/(expense), net        19                15             (74)           (39)              (41)
Foreign exchange gain/(loss), net                                (736)            200              4              (237)
Monetary gain/(loss)                                               92           2,153            (54)              333
-------------------------------------------------------------------------------------------------------------------------------
Income before tax and minority interest                         4,303           3,206          2,638               182

Current tax charge                                             (1,944)         (2,164)        (1,153)             (760)
Deferred tax benefit                             16               659           2,498            356             1,610
Share in income taxes of associates                                (8)           (137)            (7)               (68)
-------------------------------------------------------------------------------------------------------------------------------
Income tax benefit /(expense)                                  (1,293)            197           (804)               782
-------------------------------------------------------------------------------------------------------------------------------
Income after taxation                                           3,010           3,402          1,834               964
Minority interest                                12              (348)           (132)          (110)              353
-------------------------------------------------------------------------------------------------------------------------------
Net income /(loss)                                              2,662           3,270          1,724             1,317
===============================================================================================================================
Earnings per share - basic and diluted, Rubles                   3.65            4.49           2.36               1.81
===============================================================================================================================
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.
--------------------------------------------------------------------------------
                                       2
<PAGE>

OAO Rostelecom
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(In  millions  of Russian  Rubles in terms of  purchasing  power of the Ruble at
September 30, 2002)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                         9 month ended
------------------------------------------------------------------------------------------------------------------
                                                                                September 30,     September 30,
                                                                                     2002              2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>              <C>
Cash flows from operating activities
Net income before taxation and minority interests                                         4,303            3,206
Adjustments to reconcile income to cash generated
 from operations:
Depreciation                                                                              5,564            5,690
Bad debt expense                                                                            189              114
Share in income of associates                                                              (461)             (18)
Net interest loss                                                                           365              946
Gain on sale of Sovintel                                                                 (1,770)               -
Other gain/loss                                                                             (77)              74
Loss on disposal of property, plant, equipment and other assets                             116              327
Foreign exchange (gain)/loss                                                                736             (200)
Gain on net monetary position                                                               (92)          (2,153)

Increase in accounts receivable                                                          (1,354)          (1,548)
Increase in payables and accruals                                                           471              240
Decrease in inventories                                                                     155               45

Cash generated from operations                                                            8,145            6,723
------------------------------------------------------------------------------------------------------------------
Interest paid                                                                              (706)            (851)
Interest received                                                                           308               54
Income tax paid                                                                          (1,570)          (2,128)
------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                 6,177            3,798
------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Purchase of property, plant and equipment                                                (1,167)          (1,174)
Proceeds from sale of property, plant and equipment                                          27               12
Increase in lease receivable                                                             (1,087)            (153)
Acquisition of subsidiaries                                                              (1,176)               -
Cash acquired with subsidiaries                                                              94                -
Proceeds from sale of Sovintel                                                              316                -
Purchase of investments                                                                    (372)          (1,145)
Other investing activity                                                                    447              838
------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                    (2.918)          (1,622)
------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Drawdown of interest bearing loans                                                        3,208              618
Repayment of interest bearing loans                                                      (4,144)          (2,092)
Other financing activity                                                                     16                -
Dividends paid                                                                             (273)               -
------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities                                                    (1,193)          (1,474)
------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents                                 25               (4)
------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash equivalents                                      2,091              698

Monetary effects on cash                                                                   (302)              (7)

Cash and cash equivalents at beginning of period                                          2,131            1,513
------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at  the end of period                                           3,920            2,204
------------------------------------------------------------------------------------------------------------------
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

--------------------------------------------------------------------------------
                                       3
<PAGE>

OAO Rostelecom
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In  millions  of Russian  Rubles in terms of  purchasing  power of the Ruble at
September 30, 2002)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                              Note     Share capital          Retained                Total
                                                                              earnings
--------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                 <C>                  <C>
Balance as at December 31, 2000 (audited)                           96                 42,504               42,600

Dividends for the year 2000                                                              (258)                (258)
Net income for the period                                                               3,270                3,270
--------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2001 (unaudited)                           96                 45,516               45,612
--------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2001  (audited)                             96                 46,667               46,763
--------------------------------------------------------------------------------------------------------------------
Dividends for the year 2001                    11                                        (388)                (388)
Net income for the period                                                               2,662                2,662
--------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2002 (unaudited)                           96                 48,941               49,037
--------------------------------------------------------------------------------------------------------------------
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

--------------------------------------------------------------------------------
                                       4
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

1.   REPORTING ENTITY

     These  consolidated  financial  statements  are presented by OAO Rostelecom
     ("Rostelecom"  or "the  Company"),  and  its  subsidiaries  (together  "the
     Group"),  which are  incorporated  in the  Russian  Federation  ("Russia"),
     United States of America (USA) and Switzerland.  The principal  activity of
     the   Group   is   the   provision   of   intercity    and    international
     telecommunications  services to the  Government,  businesses  and people of
     Russia. The Group operates the main intercity network and the international
     telecommunications  gateways of the Russian  Federation,  carrying  traffic
     that originates on other national and international  operators' networks to
     other national and international operators for completion.

     These  consolidated  financial  statements  incorporate  the results of the
     Company and its subsidiaries and associates, as detailed in Notes 5 and 6.

     Rostelecom was  established as an open joint stock company on September 23,
     1993 in  accordance  with  the  Directive  of the  State  Committee  on the
     Management  of State  Property of Russia  number  1507-r,  dated August 27,
     1993.  As of September 30, 2002 the  Government  of the Russian  Federation
     controlled indirectly 50.67% of the voting share capital of the Company, by
     virtue  of its  75%  less  one  share  direct  holding  in OAO  Svyazinvest
     ("Svyazinvest"), the parent company of Rostelecom (see also Note 23).

2.   BASIS OF PRESENTATION

     These  consolidated  financial  statements have been prepared in accordance
     with and comply with International  Financial Reporting  Standard,  IAS 34,
     "Interim Financial Reporting", as published by the International Accounting
     Standards Board.

     Some of the notes to the financial  statements were reduced or not included
     into these financial  statements according to the IAS 34 "Interim Financial
     Reporting".  The  Management  of the Group  believes  that the Notes to the
     financial  statements  are sufficient to exclude the misleading of users of
     these financial  statements.  To the opinion of the Management of the Group
     the  business  is not  subject to  material  seasonal  fluctuations,  which
     require disclosure in these consolidated financial statements.

     The Financial  Statements  for the submitted  interim  period should not be
     necessarily  indicative for financial results for any later interim periods
     or for the whole year.

     The  consolidated  financial  statements  have been prepared using the same
     accounting policies as for the period ended December 31, 2001.

     The  consolidated   financial  statements  have  been  prepared  using  the
     historical  cost  convention,  restated  for the effects of  inflation  and
     modified by the initial  valuation of property,  plant and  equipment.  The
     functional  currency  of the Group  and the  reporting  currency  for these
     financial statements is the Russian Ruble (Rbl).

     Corresponding figures as of December 31, 2001 and December 31, 2000 and for
     9 and 3 months ended  September 30, 2001 have been restated by applying the
     rates of inflation between that date and September 30, 2002.

--------------------------------------------------------------------------------
                                       5
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

     The  preparation  of  financial  statements  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     operating costs during the reporting period. The most significant estimates
     relate to the realizability  and depreciable  lives of property,  plant and
     equipment,  allowance for doubtful  accounts,  valuation of investments and
     deferred taxation. Actual results could differ from these estimates.

3.   OPERATING ENVIRONMENT OF THE COMPANY

     General

     In  Russia   substantial   political,   economic  and  social  changes  are
     undergoing.  As an  emerging  market,  Russia  does  not  possess  a  fully
     developed business and regulatory infrastructure that would generally exist
     in a more mature market economy.

     Furthermore,  the  Government  has not yet fully  implemented  the  reforms
     necessary to create banking,  judicial and regulatory  systems that usually
     exist in more  developed  markets.  As a result,  and as  reflected  in the
     Government's  debt default and Ruble  devaluation  in 1998,  operations  in
     Russia  involve  risks  that are not  typically  associated  with  those in
     developed  markets.  Such risks  persist in the  current  environment  with
     results that include but are not limited to, a currency  that is not freely
     convertible  outside  of  the  country,   various  currency  controls,  low
     liquidity levels for debt and equity markets, and continuing inflation. The
     Group may continue to be affected,  for the  foreseeable  future,  by these
     risks  and  their  consequences.   As  a  result,   there  are  significant
     uncertainties that may affect future operations,  the recoverability of the
     Group's  assets,  and the ability of the Group to maintain or pay its debts
     as they mature.  The accompanying  financial  statements do not include any
     adjustments  that  may  result  from  the  future  clarification  of  these
     uncertainties.  Such  adjustments,  if any, will be reported in the Group's
     financial  statements  in the  period  when  they  become  known and can be
     reasonably estimated.

     Currency exchange and control

     Foreign currencies, in particular the US Dollar, play a significant role in
     the  underlying  economics of many  business  transactions  in Russia.  The
     following  table  summarizes  the exchange rate of the Ruble to 1 US Dollar
     for the years ended December 31, 2001, 2000 and 1999, as established by the
     Central Bank of Russia.

                                                           Exchange
        At December 31                                         rate
                                                    ---------------
              2001                                            30.14
              2000                                            28.16
              1999                                            27.00

     The exchange  rate of the Ruble to 1 US Dollar as of September 30, 2002 was
     31.68, as established by the Central Bank of Russia.

     The Group's  principal foreign currency exchange rate risks is the exposure
     to currency  exchange losses and the ability to repay its foreign  currency
     denominated obligations.

     The  Central  Bank  of  Russia  has  established  strict  currency  control
     regulations  designed to promote the  commercial  utilization of the Ruble.
     Such regulations place restrictions on the conversion of

--------------------------------------------------------------------------------
                                       6
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

     Rubles into foreign  currencies and establish  requirements  for compulsory
     conversion of foreign currency sales to Rubles.

     Inflation

     The Russian  economy has been  characterized  by  relatively  high rates of
     inflation.  The following table summarizes the annual rate of inflation for
     the past three years according to the State Statistics Committee of Russian
     Federation:

                                                               Annual
     For the years ended December 31                        inflation
                                                      ---------------
              2001                                              18.8%
              2000                                              20.2%
              1999                                              36.5%

     For the period  from  January  1, 2002 to  September  30,  2002 the rate of
     inflation was 10.4%.

     The Group's principal inflation rate risk relates to the Group's ability to
     raise tariffs for services in line with the growth of expenses,  as well as
     to  recover  the  investments  in  non-monetary  assets,   specifically  in
     property,  plant and  equipment.  In the  event  high  levels of  inflation
     continue,  the Group  could  have  financial  difficulties  accompanied  by
     deterioration in its results of operations and liquidity position.

     Taxation

     Russia  currently  has a number of laws related to various taxes imposed by
     both  federal  and  regional  governmental  authorities.  Applicable  taxes
     include value added tax, corporate income tax (profits tax), turnover based
     taxes,  and payroll (social) taxes,  together with others.  Present Russian
     laws related to these taxes have not been in force for significant periods,
     in contrast to more developed market economies. Therefore, the government's
     interpretation   and   implementation   of  these   regulations   is  often
     contradictory. Tax declarations, together with other legal compliance areas
     (as examples,  customs and currency control matters), are subject to review
     and  investigation  by a number of  authorities,  who are enabled by law to
     impose extremely severe fines,  penalties and interest charges. These facts
     create tax risks in Russia  substantially  more  significant than typically
     found in countries with more developed tax systems.

     In recent years,  the Russian  government  has  initiated  revisions of the
     Russian tax system.  Effective  January 1, 1999,  the first part of the Tax
     Code was  enacted.  Effective  January 1, 2001,  the second part of the Tax
     Code was enacted.  The new tax system is  generally  intended to reduce the
     number of taxes and,  thus,  the overall tax burden on  businesses,  and to
     simplify the tax laws.

--------------------------------------------------------------------------------
                                       7
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

4. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>

                                              Buildings and           Cable and trans-       Other     Construction in    Total
                                              Site services           mission devices                      progress
                                              -------------           ----------------       -----     ---------------    --------
<S>                                              <C>                   <C>                  <C>             <C>            <C>
Cost or Valuation
At December 31, 2001 (audited)                   23,306                 122,627             21,357          3,694          170,984
Additions                                             -                       -                  -          1,279            1,279
Addition as part of acquisition of
subsidiaries                                          -                   1,670                111             44            1,825
Disposals                                          (142)                   (719)              (257)             -           (1,118)
Transfers                                            65                     840                610         (1,515)               -
------------------------------------------------------------------------------------------------------------------------------------
At September 30, 2002 (unaudited)                23,229                 124,418             21,821          3,502          172,970
------------------------------------------------------------------------------------------------------------------------------------

Accumulated Depreciation
At December 31, 2001 (audited)                   14,951                  83,763             12,153              -          110,867
Depreciation expense                                391                   3,483              1,690              -            5,564
Addition as part of acquisition of
subsidiaries                                          -                     605                 23              -              689
Disposals                                          (107)                   (678)              (171)             -             (956)
------------------------------------------------------------------------------------------------------------------------------------
At September 30, 2002 (unaudited)                15,235                  87,173             13,695              -          116,103
------------------------------------------------------------------------------------------------------------------------------------

Net book value at December 31, 2001
(audited)                                         8,355                  38,864              9,204          3,694           60,117
====================================================================================================================================

Net book value at September 30, 2002
(unaudited)                                       7,994                  37,245              8,126          3,502           56,867
====================================================================================================================================
</TABLE>

--------------------------------------------------------------------------------
                                       8
<PAGE>

5.   SUBSIDIARIES

     The accompanying  consolidated  financial  statements include the financial
     statements of Rostelecom and its subsidiaries:

                                                      Share of the Group
                                                  (share of subsidiaries is
                                                        included in full)
                                                  ---------------------------
   OAO "RTC-Leasing" ("RTC-Leasing")                          43%
   RosTelecomLeasing S.A., Switzerland ("RTCL S.A.")         100%
   RTDC Holdings, Inc., USA ("RTDC")                          95%
   ZAO "Russian Industrial Bank" ("RIB")                     100%
   ZAO "Westelcom" ("Westelcom")                             100%
   OAO "RTComm.RU" ("RTComm")                                 65%

     The  principal  counterparty  as lessee to finance  leases  entered into by
     RTC-Leasing is Rostelecom. Rostelecom performs lease through RTC-Leasing to
     use  the  advantages  of  taxation  of  lease  operations.   Finance  lease
     transactions  between  RTC-Leasing  and Rostelecom  have been eliminated in
     consolidation.

     In  February  2002,  RTC-Leasing  increased  its share  capital  by issuing
     3,964,714 ordinary shares with par value of 10 rubles each.  Rostelecom has
     acquired for par value the proportionate  share in additional issue to keep
     its own share on the level of 27%. 16% of the shares have been acquired for
     par value by RIB, which then has been acquired by RTC-Leasing.

     In the opinion of the  directors of both  Rostelecom  and  RTC-Leasing  the
     Company  continues to exercise control of the management,  policies and day
     to day  operations of  RTC-Leasing  since it has the ability to control the
     composition of the Board of Directors of RTC-Leasing. Furthermore, based on
     the  above,  for  financial   accounting  purposes   management   considers
     RTC-Leasing  the  special  purpose  vehicle.   The  Company   continues  to
     consolidate the results and financial position of RTC-Leasing.

     RTCL S.A. is a 100%  subsidiary of  RTC-Leasing  established  in 2000 under
     legislation of Switzerland.  The company was established to develop leasing
     activities of  RTC-Leasing,  to  communicate  with foreign  vendors and for
     financial activity. The results of RTCL S.A. activity are consolidated from
     January 1, 2002,  since prior  results and net assets of RTCL S.A. were not
     material.

     In April 2002 RTCL S.A. has acquired for 33 mln. US$ (1,046 at the exchange
     rate  at   September   30,   2002)  95%  of  the   shares   of  RTDC,   the
     telecommunication  holding,  registered in the state of Delaware, USA. RTDC
     has significant investments into several Russian cellular telecommunication
     operators,  which are reflected in the financial  statements as investments
     in associates (refer to Note 6) or available-for-sale investments (refer to
     Note 9),  depending on management  intentions.  The cost of acquisition has
     been fully paid in cash.

     At the date of  acquisition  RTDC  held 50% of  Westelcom  shares.  Earlier
     Rostelecom  held 50% of Westelcom  shares and the company was treated as an
     associated company as the Group did not control over the finance, operation
     and economic activity of Westelcom. From April, 2002 the Group has obtained
     the control over Westelcom,  and its results from April, 2002 to September,
     2002 and the financial position as of September 30, 2002 were included into
     these consolidated financial statements.

--------------------------------------------------------------------------------
                                       9
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

     In March 2002,  RTC-Leasing  has  acquired  80% of RIB shares for 88, fully
     paid in cash. In July 2002,  RTC-Leasing  has acquired the remaining 20% of
     RIB shares for 10. The purpose of acquisition was to diversify activity and
     to  expand  the  volume  and  the  range  of  lease  services  provided  by
     RTC-Leasing.

     In 2001,  RTComm has  commenced to provide  internet  services.  25% of the
     RTComm shares are held by Rostelecom,  40% of the RTComm shares are held by
     RTC-Leasing. The results of RTComm's activity are consolidated from January
     1, 2002, since prior results and net assets of RTComm were not material.

6.   LONG-TERM INVESTMENTS

     Long-term investments as of indicated dates comprised the following:

<TABLE>
<CAPTION>
                                                                               Effective             Carrying amount
                                                       % of shares held    shareholding of the
                                                         by the Group         Group, as of
                                                        as of September    September  December     September  December
                                                           30, 2002        30, 2002   31,  2001    30, 2002   31,  2001
                                                                                                 (unaudited)   (audited)
 -----------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                <C>         <C>       <C>         <C>          <C>
 Investments in associates, including                                                              2,343       1,188
 ------------------------------------
                      Telecommunication
    Westelcom         services               Russia                 -          -         50            -         593
                      International
    Telmos            telecommunications     Russia                20         20         20          226         191
    Moscow Cellular   Mobile
    Communications    telecommunications     Russia              45.5         33       23.5          192          99
                      Telecommunication
    Golden Telecom    services               USA                   15         15          -        1,655           -
                      Mobile
    Delta Telecom     telecommunications     Russia              42.5       17.4          -          169           -
                      Satellite
    GlobalTel         telecommunications     Russia                51         51         51            -           -
    Other             Various                Russia                 Various                          101         305
 Investments in other companies, including                                                           244           -
 -----------------------------------------
                      Telecommunication
    Globus Telecom    services               Russia              15.3        6.6          -          111           -
    Electrosvyaz of   Telecommunication
    Orenburg region   services               Russia              16.9        7.3          -          133           -
 Long-term loans and credits to the                                                                  269           -
 companies
 Long-term notes                                                                                     136           -
 Other                                                                                                71           -
 -----------------------------------------------------------------------------------------------------------------------
 Total                                                                                             3,063       1,188
 -----------------------------------------------------------------------------------------------------------------------
</TABLE>

     The  carrying  amount  of  investments  in  associates  in these  financial
     statements is equal to the Group's  share of  underlying  equity in the net
     assets of investee  companies,  which all have a December 31 balance  sheet
     date.

     The  Group  owns  45.5% of the  shares of  Moscow  Cellular  Communications
     ("MCC"),  23.5% of which are held by  Rostelecom  and 22% are held by RTDC.
     Fair  value of  Group's  investments  in MCC as of  December  31,  2001 was
     determined  as 99.  During the year the Group did not revise the fair value
     of  investments  in MCC  continuing  to  account  for the  Group  share  in
     financial  results  of MCC.  The value of the MCC  shares  held by RTDC was
     estimated  using  the same  principles  as  those  used  for  valuation  of
     Rostelecom share as of December 31, 2001.

--------------------------------------------------------------------------------
                                       10
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

7.   GOODWILL AND NEGATIVE GOODWILL

     Goodwill  arose with regard to  acquisition of RIB and equals to the excess
     of the  contribution  paid over the fair value of  identifiable  net assets
     acquired.

     Negative  goodwill  arose with regard to  acquisition of RTDC and equals to
     the excess of the fair value of  identifiable  net assets acquired over the
     contribution paid.

     Goodwill and negative goodwill are amortized over two years period. Part of
     negative  goodwill  attributable to available for sale  investments will be
     amortized  in full upon sale of those  investments.  This part of  negative
     goodwill was identified  proportionately  to the share of those investments
     in the total value of acquired  non-monetary assets of RTDC and is included
     into current portion of negative goodwill in the amount of 563.  Management
     of the Group believes that such method of amortization of negative goodwill
     is the most relevant considering the nature of future transactions with the
     acquired non-monetary assets (refer to Note 9).

8.   ACCOUNTS RECEIVABLE

     Accounts receivable as of indicated dates comprised the following:

<TABLE>
<CAPTION>
                                                                September 30,     December 31,
                                                                         2002             2001
                                                                  (unaudited)        (audited)
------------------------------------------------------------------------------------------------
<S>                                                                    <C>              <C>
Trade accounts receivable for telecommunication services                8,379            7,996
Less: allowance for doubtful accounts                                  (1,777)          (1,750)
------------------------------------------------------------------------------------------------
Trade accounts receivable, net                                          6,602            6,246
Prepayments                                                               617              540
Prepaid taxes                                                             443              485
Other accounts receivable                                               1,184              913
------------------------------------------------------------------------------------------------
Total accounts receivable                                               8,846            8,184
================================================================================================
</TABLE>
   Trade accounts  receivable,  net of allowance for doubtful accounts,  include
   amounts  totaling  1,662 (2001:  1,522) due from  foreign  telecommunications
   operators   which  are   denominated  in  foreign   currencies,   principally
   represented by Special  Drawing  Rights  ("SDR") and US dollars,  and amounts
   totaling  2,213  (2001:  2,960) due from  local  telephone  operators.  As of
   September 30, 2002 the carrying value of trade  accounts  receivable is equal
   to their fair value.

--------------------------------------------------------------------------------
                                       11
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

9.   INVESTMENTS

     Fair value of short-term  investments as of indicated dates is included the
     following:

                                                  September 30,    December 31,
                                                           2002            2001
                                                    (unaudited)       (audited)
--------------------------------------------------------------------------------
Golden Telecom notes receivable                           1,457               -
Other notes receivable                                    1,622           1,263
Loans to credit institutions                                440               -
Loans to customers                                          186               -
VEB bonds (US$ denominated)                                 162             165
Investments held for sale                                 1,624           1,532
   Sovintel                                                   -           1,432
   Giprosvyaz                                                 -             100
   Baikalwestcom                                            348               -
   Dontelecom                                               237               -
   Nizhegorodskaya Cellular Communications                  633               -
   Yeniseytelecom                                           364               -
   Uralwestcom                                               42               -
Other                                                       350             146
--------------------------------------------------------------------------------
Total                                                     5,841           3,106
--------------------------------------------------------------------------------

     Investments  held for sale are stated at fair  value,  which  equals to the
     expected sale price based on the management estimates.  Management believes
     that these  investments  will be sold during 2003 for contribution not less
     than included into these financial statements.

     Investment  into Sovintel as of December 31, 2001  represents  50% share of
     the Group in net assets of Sovintel.

     In September  2002 the sale of 50% of Sovintel to the Golden  Telecom Inc.,
     USA has been  completed.  The Group has received in exchange cash of US$ 10
     million (317 at the exchange rate as of September  30, 2002),  note for US$
     46 million (1,457 by the exchange rate as of September 30, 2002) receivable
     within 90 days and 15% of shares of Golden  Telecom,  which are included to
     investments in associates. The gain on the transaction of 1,770 is included
     in non-operating income. In November 2002 two representatives of Rostelecom
     have been elected into the Board of Directors of Golden Telecom.

     Management believes that the Group has the ability to exercise  significant
     influence on the  financial and  operating  activities  of Golden  Telecom,
     through  representation  in its  Board of  Directors.  Based on the  above,
     investments  into  Golden  Telecom  are  accounted  for by using the equity
     method of accounting (refer to Note 5).

--------------------------------------------------------------------------------
                                       12
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

10.  CASH AND CASH EQUIVALENTS

     Cash and cash equivalents as of indicated dates include the following:

                                                September 30,     December 31,
                                                         2002            2001
                                                  (unaudited)       (audited)
--------------------------------------------------------------------------------
Cash on hand                                                8                2
Cash at bank - Rubles                                   1,962              862
Cash at bank - Foreign currencies                         416              396
Short term deposits                                       135              858
Cash with the Central bank of Russia                    1,392                -
Other cash                                                  7               13
--------------------------------------------------------------------------------
Total cash and cash equivalents                         3,920            2,131
================================================================================

11.  SHAREHOLDERS' EQUITY

     Share capital

     The  authorized  share  capital of the  Company is  1,634,026,541  ordinary
     shares of Rbl 0.0025  par value and  242,836,981  non-redeemable  preferred
     shares of Rbl 0.0025 par value.  The Board of  Directors of  Rostelecom  is
     authorized under its Charter to issue additional  ordinary shares up to the
     total of the authorized share capital without further shareholder approval.

     As of September  30, 2002 and December 31, 2001 the issued and  outstanding
     share capital was as follows:

<TABLE>
<CAPTION>
                                                                    Number          Nominal            Indexed
                                                                of  Shares            Value              Value
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                   <C>                    <C>
Ordinary Shares, Rbl 0.0025 par value                          728,696,320            1.821                 72
Preferred Shares, Rbl 0.0025 par value                         242,831,469            0.608                 24
----------------------------------------------------------------------------------------------------------------

Total                                                          971,527,789            2.429                 96
================================================================================================================
</TABLE>

     The share capital of the Company on its incorporation has been indexed,  to
     account for the effects of inflation  from that date.  The share capital in
     the Russian statutory  accounts at September 30, 2002 and December 31, 2001
     amounted to 2,428,819 Rubles.

     Ordinary shares carry voting rights with no guarantee of dividends.

     Distributions

     Preferred  shares  have  priority  over  ordinary  shares  in the  event of
     liquidation  but carry no voting  rights except for  resolutions  regarding
     liquidation or reorganization of the Company, changes to dividend levels of
     preferred  shares,  or the issuance of  additional  preferred  stock.  Such
     resolutions  require  two-thirds  approval of preferred  shareholders.  The
     preferred shares have no rights of conversion or redemption.

--------------------------------------------------------------------------------
                                       13
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

     Preferred shares carry guaranteed  dividends amounting to the higher of 10%
     of the net income after taxation of the Company as disclosed in the Russian
     statutory  accounts and the dividends  paid on ordinary  shares.  Owners of
     preferred  shares have the right to  participate  in and vote on all issues
     within the  competence of general  meetings  following  the annual  general
     meeting at which a decision  not to pay (or to pay part only)  dividends on
     preferred shares has been taken.

     Treasury Shares

     In  accordance  with the  Company's  Charter,  Rostelecom  is  permitted to
     repurchase,  on the open market,  ordinary and preferred  shares as long as
     90% of  the  nominal  value  of  its  issued  Charter  Capital  remains  in
     circulation.  Repurchased  shares must either be sold or eliminated  within
     one year of being purchased.

     Dividends

     Dividends payable to holders of preferred and ordinary shares in respect of
     the year ending December 31, 2001 were as follows:

   --------------------------------------------------------------------
   Dividends - preferred shares                                   228
   Dividend - ordinary shares                                     160
   --------------------------------------------------------------------
                                                                  388
   ====================================================================

                                                                  Rbl
Dividend per preferred share                                0.9195237
========================================================================
Dividend per ordinary share                                 0.2144961
========================================================================

     The dividends  for the year ended  December 31, 2001 approved at the annual
     shareholders  meeting held on June 1, 2002 are  reflected in the  financial
     statements  for the period  ended  September  30, 2002 as  distribution  of
     retained earnings.

12.  MINORITY INTEREST

                                                        9 months ended September
                                                                       30, 2002
   -----------------------------------------------------------------------------
   At beginning of year (audited)                                          1,851
   Acquisition of  subsidiaries                                              235
   Effect of treasury shares purchased with RIB                            (173)
   Share of net income of subsidiaries                                       348
   Dividends on preferred shares of RTC-Leasing                            (104)
   -----------------------------------------------------------------------------
   At the end of period (unaudited)                                       2,157
================================================================================

     In 2001 the Group  has  estimated  the fair  value of  preferred  shares of
     RTC-Leasing  issued to individuals which related parties to the Group based
     on future  cash flows from  operating  activity of  RTC-Leasing  and future
     proposed  dividends  on  preferred  shares.  The value of these  shares was
     included in minority  interest  liability in amount of 267. During 9 months
     ended  September  30, 2002 the  dividends in the amount of 104 were paid to
     the preferred shareholders of RTC-Leasing.

--------------------------------------------------------------------------------
                                       14
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

13.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts  payable  and  accrued  expenses  as of  indicated  dates were the
     following:

<TABLE>
<CAPTION>
                                                                 September 30,           December 31,
                                                                 2002                    2001
                                                                 (unaudited)             (audited)
   -------------------------------------------------------------------------------------------------
   <S>                                                                      <C>              <C>
   Trade accounts payable                                                   2,845            3,227
   Accrued expenses and other accounts payable                              1,987            2,090
   Compensation related accruals                                               94              229
   Notes payable                                                                -               55
   Dividends payable                                                          299               22
   -------------------------------------------------------------------------------------------------
                                                                            5,225            5,623
   =================================================================================================
</TABLE>

     Trade accounts payable as of September 30, 2002 include amounts totaling to
     2,133 which are denominated in foreign currencies,  principally represented
     by Special Drawing Rights and US dollars (2001: 2,107).

14.  INTEREST BEARING LOANS

     The interest bearing loans as of indicated dates were the following:

<TABLE>
<CAPTION>
                                                                   September 30,     December 31,
                                                                           2002             2001
                                                                    (unaudited)        (audited)
   -------------------------------------------------------------------------------------------------
   <S>                                                                      <C>              <C>
   Current portion of interest bearing loans                                6,548            6,435
   -------------------------------------------------------------------------------------------------

   Between one to two years                                                   544              764
   Between two to three years                                                   -              283

   Total long-term loans                                                      544            1,047
   -------------------------------------------------------------------------------------------------

   Total interest bearing loans                                             7,092            7,482
   =================================================================================================
</TABLE>

     Interest  bearing loans,  which are mostly  denominated in foreign currency
     are summarized as follows:

<TABLE>
<CAPTION>
                                                                     September 30,     December 31,
                                                                             2002             2001
                                                                      (unaudited)        (audited)
   ----------------------------------------------------------------------------------------------------
   <S>                                                                      <C>              <C>
   US Dollars (US$)                                                         2,808            2,094
   EURO                                                                     1,060            1,082
   Japanese Yen (JPY)                                                       3,044            3,034

   ------------------------------------------------------------------------------------------------
   Total in foreign currency                                                6,912            6,210

   Russian Ruble denominated loans                                            180            1,272

   Total interest bearing loans                                             7,092            7,482
   ================================================================================================
</TABLE>

--------------------------------------------------------------------------------
                                       15
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

15.  SHORT-TERM BORROWINGS

     In October 2001, RTC-Leasing issued 1,000,000 bonds with par value of 1,000
     Rubles  each,  payable on October 25, 2002 and bearing  interest of 23% per
     annum.  As of September 30, 2002, the bonds together with accrued  interest
     were included in short-term  borrowings  in the  accompanying  consolidated
     balance sheet in amount of 1,100 (2001: 1,155).

16.  DEFERRED TAX LIABILITY


     The components of net deferred tax assets and  liabilities at September 30,
     2002, and the movement during 9 months of 2002, were as follows:

<TABLE>
<CAPTION>
                                                         December 31,           Movement       September 30,
                                                                 2001         during the                2002
                                                            (audited)             period         (unaudited)
-------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>                 <C>
Tax effects of future tax deductible items (temporary differences):

Accounts payable                                                  856              (538)                 318

Gross deferred tax asset                                          856              (538)                 318
-------------------------------------------------------------------------------------------------------------

Tax effects of future taxable items (temporary
differences):
Property, plant and equipment                                   8,270                114               8,384
Accounts receivable                                               859              (405)                 454
Investment valuation difference                                   416                540                 956
Finance leasing arrangements                                    1,866              (570)               1,296
Other                                                             234                 18                 252
-------------------------------------------------------------------------------------------------------------
Gross deferred tax liability                                   11,645              (303)              11,342
-------------------------------------------------------------------------------------------------------------
Net deferred tax liability                                     10,789                 235             11,024
-------------------------------------------------------------------------------------------------------------
</TABLE>

     Differences between IFRS and statutory  accounting and taxation regulations
     give rise to certain  temporary  differences  between the carrying value of
     certain assets and  liabilities  for financial  reporting  purposes and for
     profits tax purposes.  Deferred tax assets and  liabilities are offset when
     there is a legally  enforceable right to set off current tax assets against
     current tax  liabilities,  and the deferred  income tax assets and deferred
     income tax liabilities relate to the income taxes levied by the same fiscal
     authority on the same taxable entity.

     The following factors influence the change of deferred tax liability:

Deferred tax benefit                                               (659)
Deferred tax with acquired subsidiaries                             894

------------------------------------------------------------------------
Total change in deferred taxes                                      235
========================================================================

--------------------------------------------------------------------------------
                                       16
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

17.  REVENUE

     Revenue comprised the following:

<TABLE>
<CAPTION>
                                                          9 month ended                   3 month ended
------------------------------------------------------------------------------------------------------------------
                                                      September        September      September    September 30,
                                                       30, 2002        30, 2001        30, 2002             2001
                                                    (unaudited)      (unaudited)      (unaudited)   (unaudited)
------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>             <C>             <C>
Revenue from local operators
Telephone - international                                 3,618           3,789           1,211            1,464
Telephone - national                                      4,131           3,098           1,414            1,218
Other income from local operators                         2,261           2,682             784            1,190
------------------------------------------------------------------------------------------------------------------
                                                         10,010           9,569           3,409            3,872
------------------------------------------------------------------------------------------------------------------
Revenue from subscribers
Telephone - international                                 2,551           3,667             828            1,208
Telephone - national                                      2,478           2,659             825              940
Internet service                                            591               -             197                -
------------------------------------------------------------------------------------------------------------------
                                                          5,620           6,326           1,850            2,148
------------------------------------------------------------------------------------------------------------------
Revenue from foreign operators
Telephone                                                 3,164           3,933           1,048            1,328
Telex, telegraph and other                                  364             371             121              174
Leased lines                                                182             426              58              135
------------------------------------------------------------------------------------------------------------------
                                                          3,710           4,730           1,227            1,637
------------------------------------------------------------------------------------------------------------------
Other revenue                                               721             779             218               38
------------------------------------------------------------------------------------------------------------------
Total Revenue                                            20,061          21,404           6,704            7,695
==================================================================================================================
</TABLE>

18.  SEGMENT INFORMATION

     The Group has  operated in the  following  business  segments  during the 9
     month of 2002:

<TABLE>
<CAPTION>
                                    Segment                                           Revenue        Net income
                                                                                    (unaudited)      (unaudited)
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>               <C>
Telecommunication services                                                                 19,953            2,655
Finance lease                                                                                  53               10
Banking services                                                                               32                7
Consulting services                                                                            23             (10)
-------------------------------------------------------------------------------------------------------------------
Total                                                                                      20,061            2,662
-------------------------------------------------------------------------------------------------------------------
</TABLE>

     Substantially  all of the Group assets are located  within the territory of
     the Russian Federation.

--------------------------------------------------------------------------------
                                       17
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

19.  OTHER NON-OPERATING INCOME /(EXPENSE), NET

     Other  non-operating  income and expenses  consisted of the following for 9
     months ended September 30, 2001 and September 30, 2002:

                                                 September 30,     September 30,
                                                         2002             2001
                                                   (unaudited)      (unaudited)
--------------------------------------------------------------------------------
Unrealized gain on available-for-sale
  investments                                              18               36
Other non-operating gain                                   (3)            (100)

--------------------------------------------------------------------------------
Total                                                      15              (74)
================================================================================

20.  EMPLOYEES

     The average numbers of employees was 30,737 as of September 30, 2002 (2001:
     35,410).  In prior years the Group has agreed with the Central Committee of
     the Telecommunications Trade Union of Russia to make payments on retirement
     to employees with fifteen or more years service amounting to no less than 2
     months' salary as at the date of retirement.  Further,  the Company, at its
     discretion, makes payments to employees with less than 15 years service, on
     retirement,  or who  otherwise  leave the  employment  with the  Group.  An
     accrual of 69 (2001: 143), representing the net present value of the future
     benefits  the Group  expects  to pay,  has been  included  in  compensation
     related accruals as of September 30, 2002.

21.  EARNINGS PER SHARE

     The  calculation of basic and diluted  earnings per ordinary share is based
     on net profit for the period attributable to ordinary  shareholders divided
     by the weighted  average number of ordinary shares  outstanding  during the
     year of 728,696,320.

22.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     Fair value of a  financial  instrument  is the amount at which a  financial
     instrument  could be exchanged  in a current  transaction  between  willing
     parties, other than in a forced sale or liquidation,  and is best evidenced
     by a quoted market price.

     For monetary  assets,  the carrying amounts  approximate  their fair value.
     Fair  value of  balance  sheet  items  denominated  in  foreign  currencies
     approximates  their ruble equivalent  translated at appropriate  period end
     exchange rates.

     The carrying amounts of cash and other financial assets  approximate  their
     respective fair values due to their short-term nature and negligible credit
     losses.

--------------------------------------------------------------------------------
                                       18
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

23.  RELATED PARTY TRANSACTIONS

     (a)  The Government and OAO Svyazinvest as shareholder

     As  indicated  in Note 1, the  immediate  parent  company  of the  Group is
     Svyazinvest  which holds 50.67% of the voting  capital of the Company,  and
     its  representatives  comprise a majority  of the Board of  Directors.  The
     Government  of the  Russian  Federation  in turn  holds  75% of the  voting
     capital of Svyazinvest and therefore is the ultimate owner of the Group. It
     is a matter of Government  policy to retain a controlling  stake in sectors
     of the economy, such as telecommunications, that it views as strategic.

     (b)  Interest of the  Government  in the  telecommunications  sector in the
          Russian Federation and the protection of that interest

     Effective  telecommunications and data transmission are of great importance
     to Russia for various reasons  including  economic,  social,  strategic and
     national security  considerations.  The Government  therefore has exercised
     and may be expected to exercise  significant  influence over the operations
     of  the  telecommunications   sector  and  consequently,   the  Group.  The
     Government,  acting through the Ministry of Communications  and Information
     and the Anti  Monopoly  Committee,  has the general  authority  to regulate
     domestic  tariffs,  and does  regulate  tariffs  to a limited  extent.  The
     Ministry of  Communications  has control over the licensing of providers of
     telecommunications services.

     The  Government  may by law  require  the Group to provide  services to the
     Government in connection with national security and the detection of crime.

     (c)  Transactions with the Svyazinvest Group

     The Svyazinvest Group uses the Group's network to carry traffic between its
     regional and other operators and to and from these regional  operators from
     and to international operators.

     The Group uses the regional  networks of the Svyazinvest  Group to complete
     calls  and  other  traffic  including  that  originating  from  its  direct
     subscribers in the city of Moscow.

     (d)  Transactions with the Government

     Other  state  bodies  ('Budget  Organizations'),  such as the  Ministry  of
     Defense  and  entities  affiliated  to  the  Government,   primarily  state
     controlled  TV and  radio  companies,  use the  Group's  network  to  carry
     communications  traffic and to broadcast across the country. In some cases,
     the  service is in the nature of leased  lines for which the Group  charges
     below market rates.

--------------------------------------------------------------------------------
                                       19
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

     The revenues arising from the services provided to the Government of Russia
     and to the Group Svyazinvest were as follows:

<TABLE>
<CAPTION>
                                                                                September 30,      September 30,
                                                                                         2002   2001 (unaudited)
                                                                                  (unaudited)
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>                <C>
Revenues                                                                                6,976              5,823
Expenses  related to operators of the  Svyazinvest
Group                                                                                      99                104
</TABLE>

     The amounts of receivables due from such organizations were as follows:

<TABLE>
<CAPTION>
                                                                                September 30,       December 31,
                                                                                         2002   2001 (unaudited)
                                                                                  (unaudited)
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>                <C>
Accounts receivable, net                                                                1,968                848
</TABLE>
     There are no payables due to such organizations.

     (e)  Transactions with Investees

     The Group also  transacts a wide  variety of  business  with  entities  and
     companies in which it has investments,  including  associates over which it
     exerts  significant  interest.  Such business  includes  telecommunications
     services,  banking  and  finance  lease  services.  In the  opinion  of the
     Directors,  such  business is  conducted at arms' length terms and at rates
     prevailing in the open market.

24.  CONTINGENCIES

     a)   Legal proceedings

     The Group is  subject to a number of  proceedings  arising in the course of
     the normal conduct of its business.  Management  believes that the ultimate
     resolution of these matters will not have a material  adverse effect on the
     results of  operations  or the  financial  position  of the  Company or the
     Group.

     b)   Licenses

     Substantially  all of  Rostelecom's  revenues are derived  from  operations
     conducted  pursuant to licenses  granted by the Russian  Government.  These
     licenses expire in various years ranging from 2003 to 2007. The Company has
     no reason to  believe  that the  licenses  will not be  renewed or that any
     license will be suspended or terminated. However, suspension or termination
     of the Company's  main licenses or any failure to renew any or all of these
     main  licenses  could  have a  material  adverse  effect  on the  financial
     position and operations of the Company and the Group.

     c)   Restructuring

     During the negotiations  regarding inclusion of Russia into the World Trade
     Organization (WTO) the Government have confirmed that the Group's status of
     the  monopoly   provider  of  international   and  domestic  long  distance
     telecommunication  services is not  expected to change at least for 6 years
     after inclusion of Russia into WTO.

--------------------------------------------------------------------------------
                                       20
<PAGE>

OAO Rostelecom
Notes to  unaudited  consolidated  Financial  Statements  for the 9 month  ended
September 30, 2002
(In millions of Russian  Rubles in terms of purchasing  power of the Ruble as of
September 30, 2002)
--------------------------------------------------------------------------------

25.  SUBSEQUENT EVENTS

     In October  2002,  Rostelecom  has  acquired for US$ 15 million (475 at the
     exchange  rate at September  30,  2002) 50% of Westelcom  shares from RTDC.
     After  completion of the  transaction the share of the Company in Westelcom
     became 100%.

     In October  2002,  RTC-Leasing  settled bonds and paid the second coupon in
     full amount.

     In  October  2002,   RTCL  S.A.  has   concluded  an  agreement   with  the
     International  Finance  Corporation  to purchase the remaining 5,1% of RTDC
     shares for US$ 1 million (32 at the exchange rate at September 30, 2002).

     In November 2002,  RTC-Leasing has issued 1,500,000 interests bearing bonds
     with par value of 1,000  Rubles each and sold them at par value.  The bonds
     mature in November  2004 with earlier  redemption to be offered in November
     2003.  Interest is accrued and paid  semi-annually at 18% and 16% per annum
     during the first and the second years of placement, respectively.

     In December 2002, the Golden Telecom group has settled the promissory  note
     to the Group of US$ 46 million in full amount.

--------------------------------------------------------------------------------
                                       21