<PAGE>

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003

                        (COMMISSION FILE NUMBER: 0-27423)

                              GOLDEN TELECOM, INC.
             (Exact name of registrant as specified in its charter)

        DELAWARE                                    51-0391303
(State of incorporation)                (I.R.S. Employer Identification No.)

                 REPRESENTATION OFFICE GOLDEN TELESERVICES, INC.
                             1 KOZHEVNICHESKY PROEZD
                              MOSCOW, RUSSIA 115114
                     (Address of principal executive office)

                              (011-7-501) 797-9300
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

         Indicate by checkmark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

         At November 3, 2003 there were 28,790,972 outstanding shares of common
stock of the registrant.

================================================================================

<PAGE>

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                        PAGE
                                                                                        ----
<S>                                                                                     <C>
PART I.  FINANCIAL INFORMATION

Item 1   Condensed Consolidated Financial Statements of
         Golden Telecom, Inc. (unaudited).........................................

         Condensed Consolidated Balance Sheets as of December 31, 2002 and
         September 30, 2003.......................................................

         Condensed Consolidated Statements of Operations for the Three and Nine
         Months Ended September 30, 2002 and 2003.................................

         Condensed Consolidated Statements of Cash Flows for the Nine Months
         Ended September 30, 2002 and 2003........................................

         Notes to Condensed Consolidated Financial Statements.....................

Item 2   Management's Discussion and Analysis of Financial Condition and Results
         of Operations *..........................................................

Item 4   Controls and Procedures..................................................

PART II. OTHER INFORMATION

Item 6   Exhibits and Reports on Form 8-K.........................................

Signatures........................................................................
</TABLE>

   * Please refer to the special note regarding forward-looking statements in
                                  this section.

                                                                               2

<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF GOLDEN TELECOM, INC.

                              GOLDEN TELECOM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS OF US$, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                             DECEMBER 31,   SEPTEMBER 30,
                                                                2002            2003
                                                             -----------    -------------
                                                              (AUDITED)      (UNAUDITED)
<S>                                                          <C>            <C>
                                     ASSETS

CURRENT ASSETS

  Cash and cash equivalents ..............................    $ 59,625        $ 54,908
  Accounts receivable, net ...............................      42,226          53,327
  VAT receivable .........................................       3,998          11,539
  Prepaid expenses .......................................       7,811           8,314
  Other current assets ...................................      13,794          17,030
                                                              --------        --------

TOTAL CURRENT ASSETS .....................................     127,454         145,118

Property and equipment, net of accumulated depreciation of
$99,541 and $122,251 at December 31, 2002 and September
30, 2003, respectively ...................................     166,121         188,781

Goodwill and intangible assets:

  Goodwill ...............................................      71,703          71,703
  Intangible assets, net of accumulated amortization
     of $14,418 and $20,687 at December 31, 2002 and
     September 30, 2003, respectively ....................      55,965          62,218
                                                              --------        --------
       Net goodwill and intangible assets ................     127,668         133,921

Restricted cash ..........................................       1,515           1,138
Other non-current assets .................................      13,052          10,019
                                                              --------        --------

TOTAL ASSETS .............................................    $435,810        $478,977
                                                              ========        ========
</TABLE>

            See notes to condensed consolidated financial statements.

                                                                               3

<PAGE>

                              GOLDEN TELECOM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS OF US$, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                DECEMBER 31,     SEPTEMBER 30,
                                                                                    2002             2003
                                                                                 ----------       ----------
                                                                                  (AUDITED)       (UNAUDITED)
<S>                                                                             <C>              <C>

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable and accrued expenses ....................................      $   43,870       $   49,635
 VAT payable ..............................................................           4,398            8,801
 Debt maturing within one year ............................................           8,988            1,250
 Current capital lease obligation .........................................           1,775            2,281
 Due to affiliates and related parties ....................................           1,999            2,256
 Other current liabilities ................................................           9,950           12,748
                                                                                 ----------       ----------

TOTAL CURRENT LIABILITIES .................................................          70,980           76,971

Long-term debt, less current portion ......................................          24,111              624
Long-term capital lease obligation, less current portion ..................           5,621            4,178
Long-term deferred tax liability ..........................................          12,406           12,357
Other non-current liabilities .............................................          13,047           15,874
                                                                                 ----------       ----------

TOTAL LIABILITIES .........................................................         126,165          110,004

Minority interest .........................................................           2,187            2,468

SHAREHOLDERS' EQUITY

 Preferred stock, $0.01 par value (10,000,000 shares authorized;
   none issued and outstanding at December 31, 2002 and
   September 30, 2003) ....................................................              --               --
 Common stock, $0.01 par value (100,000,000 shares authorized;
   27,021,415 shares issued and outstanding at December 31, 2002
   and 28,782,421 shares issued and outstanding at September 30, 2003) ....             270              288
 Additional paid-in capital ...............................................         446,215          468,083
 Accumulated deficit ......................................................        (139,027)        (101,866)
                                                                                 ----------       ----------

TOTAL SHAREHOLDERS' EQUITY ................................................         307,458          366,505
                                                                                 ----------       ----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................................      $  435,810       $  478,977
                                                                                 ==========       ==========
</TABLE>

            See notes to condensed consolidated financial statements.

                                                                               4

<PAGE>

                              GOLDEN TELECOM, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (IN THOUSANDS OF US$, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED          NINE MONTHS ENDED
                                                             SEPTEMBER  30,              SEPTEMBER  30,
                                                        -----------------------     ------------------------
                                                            2002        2003         2002         2003
                                                        ----------    ----------    ----------    ----------
<S>                                                     <C>           <C>           <C>           <C>
REVENUE:
  Telecommunication services ........................   $   43,132    $   89,714    $  113,596    $  248,153
  Revenue from affiliates and related parties .......        3,244           381         8,347         1,080
                                                        ----------    ----------    ----------    ----------

TOTAL REVENUE .......................................       46,376        90,095       121,943       249,233

OPERATING COSTS AND EXPENSES:
  Access and network services (excluding depreciation
     and amortization) ..............................       21,617        44,883        54,543       121,618
  Selling, general and administrative (excluding
     depreciation and amortization) .................       10,792        15,764        30,716        42,587
  Depreciation and amortization .....................        7,318        11,135        19,568        32,082
                                                        ----------    ----------    ----------    ----------

TOTAL OPERATING COSTS AND EXPENSES ..................       39,727        71,782       104,827       196,287
                                                        ----------    ----------    ----------    ----------

INCOME FROM OPERATIONS ..............................        6,649        18,313        17,116        52,946

OTHER INCOME (EXPENSE):
  Equity in earnings (losses) of ventures ...........        3,294           (25)        3,781           (54)
  Interest income ...................................          365           254         1,207           859
  Interest expense ..................................         (498)         (182)       (1,425)       (1,760)
  Foreign currency gain (losses) ....................         (119)         (177)         (626)           36
  Minority interest .................................         (182)         (127)         (409)         (342)
                                                        ----------    ----------    ----------    ----------

TOTAL OTHER INCOME (EXPENSE) ........................        2,860          (257)        2,528        (1,261)
                                                        ----------    ----------    ----------    ----------
Income  before income taxes .........................        9,509        18,056        19,644        51,685
Income taxes ........................................        1,630         5,550         3,779        14,524
                                                        ----------    ----------    ----------    ----------

Income before cumulative effect of
     a change in accounting principle ...............        7,879        12,506        15,865        37,161
Cumulative effect of a change in accounting
     principle, net of tax effect of $0 .............           --            --           974            --
                                                        ----------    ----------    ----------    ----------

NET INCOME ..........................................   $    7,879    $   12,506    $   16,839    $   37,161
                                                        ==========    ==========    ==========    ==========

Basic earnings per share of common stock:
     Income before cumulative effect of
          a change in accounting principle ..........   $     0.32    $     0.44    $     0.69    $     1.35
     Cumulative effect of a change in
          accounting principle ......................           --            --          0.04            --
                                                        ----------    ----------    ----------    ----------

      Net income per share - basic ..................   $     0.32    $     0.44    $     0.73    $     1.35
                                                        ==========    ==========    ==========    ==========
Weighted average common shares - basic ..............       24,251        28,157        23,152        27,570
                                                        ==========    ==========    ==========    ==========

Diluted earnings  per share of common stock:
     Income before cumulative effect of
          a change in accounting principle ..........   $     0.32    $     0.43    $     0.67    $     1.32
     Cumulative effect of a change in
          accounting principle ......................           --            --          0.04            --
                                                        ----------    ----------    ----------    ----------

      Net income per share - diluted ................   $     0.32    $     0.43    $     0.71    $     1.32
                                                        ==========    ==========    ==========    ==========
Weighted average common shares - diluted ............       24,666        29,072        23,603        28,251
                                                        ==========    ==========    ==========    ==========
</TABLE>

            See notes to condensed consolidated financial statements.

                                                                               5

<PAGE>

                              GOLDEN TELECOM, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (IN THOUSANDS OF US$)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED SEPTEMBER 30,
                                                                    -------------------------------
                                                                          2002           2003
                                                                        --------       --------
<S>                                                                     <C>            <C>
OPERATING ACTIVITIES
  Net income ....................................................       $ 16,839       $ 37,161
Adjustments to Reconcile Net Income to Net Cash Provided by
  Operating Activities:
  Depreciation ..................................................         15,655         24,798
  Amortization ..................................................          3,913          7,284
  Equity in (earnings) losses of ventures, net of dividends .....         (3,781)            54
received
  Foreign currency (gain) losses ................................            626            (36)
  Cumulative effect of a change in accounting principle .........           (974)            --
  Other .........................................................          1,101           (528)
  Changes in assets and liabilities:
     Accounts receivable ........................................         (2,996)       (10,195)
     Accounts payable and accrued expenses ......................           (944)         2,164
     VAT, net ...................................................           (877)        (3,036)
     Other changes in assets and liabilities ....................            279          5,455
                                                                        --------       --------

NET CASH PROVIDED BY OPERATING ACTIVITIES .......................         28,841         63,121

INVESTING ACTIVITIES
  Purchases of property and equipment and intangible assets .....        (16,575)       (42,838)
  Acquisitions, net of cash acquired ............................         (5,357)       (15,345)
  Cash received from escrow account .............................          3,000             --
  Restricted cash ...............................................          1,884            377
  Proceeds from investments available for sale ..................         10,976             --
  Purchases of investments available for sale ...................         (2,000)            --
  Loan received from equity investee ............................          9,973             --
  Other investing ...............................................          4,044          2,105
                                                                        --------       --------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES .............          5,945        (55,701)

FINANCING ACTIVITIES:
  Repayments of debt ............................................         (9,020)       (31,123)
  Net proceeds from exercise of employee stock options ..........          3,786         20,327
  Other financing ...............................................         (1,199)        (1,357)
                                                                        --------       --------

NET CASH USED IN FINANCING ACTIVITIES ...........................         (6,433)       (12,153)

Effect of exchange rate changes on cash and cash equivalents ....           (230)            16
                                                                        --------       --------
Net increase (decrease) in cash and cash equivalents ............         28,123         (4,717)
Cash and cash equivalents at beginning of period ................         37,404         59,625
                                                                        --------       --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD ......................       $ 65,527       $ 54,908
                                                                        ========       ========
</TABLE>

         See notes to condensed consolidated financial statements.

                                                                               6

<PAGE>

                              GOLDEN TELECOM, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. FINANCIAL PRESENTATION AND DISCLOSURES

         Golden Telecom, Inc. ("GTI", "Golden Telecom" or the "Company") is a
provider of a broad range of telecommunications services to businesses, other
telecommunications service providers and consumers. The Company provides these
services through its operation of voice, Internet and data networks,
international gateways, local access and various value-added services in the
Commonwealth of Independent States ("CIS"), primarily in Russia, and through its
fixed line and mobile operation in Ukraine.

         The financial statements included herein are unaudited and have been
prepared in accordance with generally accepted accounting principles in the
United States of America ("US GAAP") for interim financial reporting and United
States Securities and Exchange Commission ("SEC") regulations. Certain
information and footnote disclosures normally included in complete financial
statements prepared in accordance with US GAAP and SEC rules and regulations
have been condensed or omitted pursuant to such US GAAP and SEC rules and
regulations. In the opinion of management, the financial statements reflect all
adjustments of a normal and recurring nature necessary to present fairly the
Company's financial position, results of operations and cash flows for the
interim periods. These financial statements should be read in conjunction with
the Company's 2002 audited consolidated financial statements and the notes
related thereto. The results of operations for the three and nine months ended
September 30, 2003 may not be indicative of the operating results for the full
year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES

Goodwill and Intangible Assets

         Effective January 1, 2002, GTI adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
In accordance with SFAS No. 142, GTI discontinued the amortization of goodwill
as of such date. The Company also reclassified to other intangible assets
approximately $1.3 million previously classified as goodwill. Upon the adoption
of SFAS No. 142, the Company recorded a cumulative effect of a change in
accounting principle for negative goodwill (deferred credit) arising on the
Company's equity method investments in the amount of $1.0 million.

         The total gross carrying value and accumulated amortization of the
Company's intangible assets by major intangible asset class is as follows:

<TABLE>
<CAPTION>
                                                    AS OF DECEMBER 31, 2002     AS OF SEPTEMBER 30, 2003
                                                   -------------------------    -------------------------
                                                                       (IN THOUSANDS)
                                                                ACCUMULATED                  ACCUMULATED
                                                     COST       AMORTIZATION      COST       AMORTIZATION
                                                   --------     ------------    --------     ------------
<S>                                                <C>          <C>             <C>          <C>
Amortized intangible assets:
  Telecommunications service contracts ......      $ 48,022       $ (6,775)     $ 61,498       $(11,693)
  Contract-based customer relationships .....         8,322           (811)        8,322         (1,982)
  Licenses ..................................         3,167         (1,249)        3,659         (1,881)
  Other intangible assets ...................        10,872         (5,583)        9,426         (5,131)
                                                   --------       --------      --------       --------
    Total ...................................      $ 70,383       $(14,418)     $ 82,905       $(20,687)
                                                   ========       ========      ========       ========
</TABLE>

         Other intangible assets include software, Internet software and related
content, as well as other intangible assets.

Comprehensive Income

         Comprehensive income is defined as the change in equity of a business
enterprise during a period from non-owner sources. For the three and nine months
ended September 30, 2002 and 2003, comprehensive income for the Company is equal
to net income.

                                                                               7

<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

Stock-Based Compensation

         The Company follows the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation," for its Equity Participation Plan. SFAS No. 123
establishes a fair value method of accounting for employee stock options and
similar equity instruments. The fair value method requires compensation cost to
be measured at the grant date based on the value of the award and to be
recognized over the service period. SFAS No. 123 generally allows companies to
either account for stock-based compensation under the fair value method of SFAS
No. 123 or under the intrinsic value method of Accounting Principles Board
("APB") No. 25, "Accounting for Stock Issued to Employees." The Company has
elected to account for its stock-based compensation in accordance with the
provisions of APB No. 25 and present pro forma disclosures of results of
operations as if the fair value method had been adopted.

         In December 2002, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure," which amends SFAS No. 123, "Accounting for Stock-Based
Compensation", to provide alternative methods of transition to SFAS No. 123's
fair value method of accounting for stock-based employee compensation. SFAS No.
148 also amends the disclosure provisions of SFAS No. 123 and APB No. 28,
"Interim Financial Reporting", to require disclosure in the summary of
significant accounting policies of the effects of an entity's accounting policy
with respect to stock-based employee compensation on reported net income and
earnings per share in annual and interim financial statements. While the
Statement does not amend SFAS No. 123 to require companies to account for
employee stock options using the fair value method, the disclosure provisions of
SFAS No. 148 are applicable to all companies with stock-based employee
compensation, regardless of whether they account for that compensation using the
fair value method of SFAS No. 123 or the intrinsic value method of APB No. 25.
SFAS No. 148 disclosure provisions are effective for years ending after December
15, 2002. The Company has adopted the amendments to SFAS No. 123 disclosure
provisions required under SFAS No. 148 but will continue to use the intrinsic
value method under APB No. 25 to account for stock-based compensation. As such,
the adoption of SFAS No. 148 did not have an impact on the Company's
consolidated financial position or results of operations.

         The effect of applying SFAS No. 123 on the net income as reported is
not representative of the effects on reported net income in future years due to
the vesting period of the stock options and the fair value of additional stock
options in future years.

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED         NINE MONTHS ENDED
                                                          SEPTEMBER 30,             SEPTEMBER 30,
                                                          -------------             -------------
                                                        2002         2003         2002         2003
                                                     ----------   ----------   ----------   ----------
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                  <C>          <C>          <C>          <C>
Net income, as reported ..........................   $    7,879   $   12,506   $   16,839   $   37,161
Deduct:  total stock-based employee compensation
  expense determined under fair value based method
  for all awards, net of related tax effects .....        2,263          885        6,763        2,621
                                                     ----------   ----------   ----------   ----------
Pro forma net income .............................   $    5,616   $   11,621   $   10,076   $   34,540
                                                     ==========   ==========   ==========   ==========

Net income  per share:
  Basic - as reported ............................   $     0.32   $     0.44   $     0.73   $     1.35
  Basic - pro forma ..............................         0.23         0.41         0.44         1.25
  Diluted - as reported ..........................         0.32         0.43         0.71         1.32
  Diluted - pro forma ............................         0.23         0.40         0.43         1.22
</TABLE>

Asset Retirement Obligations

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This statement provides the accounting for the cost of
legal obligations associated with the retirement of long-lived assets. SFAS No.
143 requires entities to record the fair value of a legal liability for an asset
retirement obligation in the period it is incurred. This cost is initially
capitalized and amortized over the remaining life of the asset. Once the
obligation is ultimately settled, any difference between final cost and the
recorded liability is recognized as a gain or loss on disposition. The Company
reviewed the requirements under SFAS No. 143 and has determined that no material
legal obligations to remove long-lived assets exist. SFAS No. 143 is effective
for years beginning after June 15, 2002. The adoption of SFAS No. 143 did not
have a material impact on the Company's consolidated financial position or
results of operations.

                                                                               8

<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

Exit or Disposal Activities

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which requires that a liability
for a cost associated with an exit or disposal activity be recognized when the
liability is incurred. This statement nullifies Emerging Issues Task Force No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)," which required that a liability for an exit cost be recognized
upon the entity's commitment to an exit plan. SFAS No. 146 is effective for exit
or disposal activities that are initiated after December 31, 2002. The adoption
of the provisions of SFAS No. 146 did not have an impact on the Company's
results of operations or financial position.

Financial Guarantees

         In November 2002, the FASB issued FASB Interpretation No.
45,"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" ("FIN No. 45"). FIN No. 45
requires that upon issuance of a guarantee, the guarantor must recognize a
liability for the fair value of the obligation it assumes under that guarantee.
The disclosure provisions of FIN No. 45 are effective for financial statements
of annual periods that end after December 15, 2002. The provisions for initial
recognition and measurement are effective on a prospective basis for guarantees
that are issued or modified after December 31, 2002. The adoption of the FIN No.
45 did not have an impact on the Company's results of operations or financial
position.

Consolidation of Variable Interest Entities

         In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest Entities". FIN No. 46 defines the concept of "variable interest" and
requires existing unconsolidated variable interest entities to be consolidated
into the financial statement of their primary beneficiaries if the variable
interest entities do not effectively disperse risks among the parties involved.
FIN No. 46 applies immediately to variable interest entities created after
January 31, 2003. It applies in the first fiscal year or interim period
beginning after June 15, 2003, to variable interest entities in which an
enterprise holds a variable interest that it acquires before February 1, 2003.
If it is reasonably possible that an enterprise will consolidate or disclose
information about a variable interest entity when FIN No. 46 becomes effective,
the enterprise must disclose information about those entities in all financial
statements issued after January 31, 2003. There were no such entities created
after January 31, 2003. The interpretation may be applied prospectively with a
cumulative-effect adjustment as of the date on which it is first applied or by
restating previously issued financial statements for one or more years, with a
cumulative-effect adjustment as of the beginning of the first year restated. In
October 2003, the FASB deferred the effective date of FIN No. 46 to the fourth
quarter of 2003 for variable interests acquired before February 1, 2003. The
adoption of the remaining provisions of FIN No. 46 did not have an impact on the
Company's results of operations or financial positions.

Derivative Instruments and Hedging Activities

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. The new guidance amends SFAS No. 133 for decisions made: (a) as part of
the Derivatives Implementation Group process that effectively required
amendments to SFAS No. 133, (b) in connection with other Board projects dealing
with financial instruments, and (c) regarding implementation issues raised in
relation to the application of the definition of derivative. The amendments set
forth in SFAS No. 149 improve financial reporting by requiring that contracts
with comparable characteristics be accounted for similarly. SFAS No. 149 is
generally effective for contracts entered into or modified after June 30, 2003.
The adoption of the provisions of SFAS No. 149 did not have an impact on the
Company's results of operations or financial position.

                                                                               9

<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

Financial Instruments

         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity". SFAS
No. 150 requires certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity to be classified
as liabilities. The provisions of SFAS No. 150 are effective for financial
instruments entered into or modified after May 31, 2003 and to all other
instruments that exist as of the beginning of the first interim financial
reporting period beginning after June 15, 2003. The Company does not have any
financial instruments that meet the provisions of SFAS No. 150, therefore,
adopting the provisions of SFAS No. 150 did not have an impact on the Company's
results of operations or financial position.

Use of Estimates in Preparation of Financial Statements

         The preparation of these condensed, consolidated financial statements,
in conformity with US generally accepted accounting principles, requires
management to make estimates and assumptions that affect amounts in the
financial statements and accompanying notes and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.

Comparative Figures

         Certain 2002 amounts have been reclassified to conform to presentation
adopted in the current period.

3. NET EARNINGS PER SHARE

         Basic earnings per share at September 30, 2002 and 2003 is computed on
the basis of the weighted average number of common shares outstanding. Diluted
earnings per share at September 30, 2002 and 2003 is computed on the basis of
the weighted average number of common shares outstanding plus the effect of
outstanding employee stock options using the "treasury stock" method. The number
of stock options excluded from the diluted earnings per share computation,
because their effect was antidilutive for the three months ended September 30,
2002 and 2003 was 452,456 and 10,000 stock options, respectively. The number of
stock options excluded from the diluted earnings per share computation, because
their effect was antidilutive for the nine months ended September 30, 2002 and
2003 was 322,317 and 154,261 stock options, respectively.

         The components of basic and diluted earnings per share were as follows:

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED     NINE MONTHS ENDED
                                                                SEPTEMBER 30,         SEPTEMBER 30,
                                                                -------------         -------------
                                                               2002       2003       2002       2003
                                                             --------   --------   --------   --------
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                          <C>        <C>        <C>        <C>
Income before cumulative effect of a change in
     accounting principle ................................   $  7,879   $ 12,506   $ 15,865   $ 37,161

Weighted average outstanding of:
  Common stock ...........................................     24,251     28,157     23,152     27,570

Dilutive effect of:
  Employee stock options .................................        415        915        451        681
                                                             --------   --------   --------   --------

Common stock and common stock equivalents ................     24,666     29,072     23,603     28,251
                                                             ========   ========   ========   ========

Earnings per share before cumulative effect of a change in
  accounting principle:
  Basic ..................................................   $   0.32   $   0.44   $   0.69   $   1.35
                                                             ========   ========   ========   ========
  Diluted ................................................   $   0.32   $   0.43   $   0.67   $   1.32
                                                             ========   ========   ========   ========
</TABLE>

                                                                              10
<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

4. INVESTMENT TRANSACTIONS

         In August 2003, the Company completed the acquisition of 100% of OOO
Sibchallenge ("Sibchallenge"), telecommunications service provider in
Krasnoyarsk, Russia. The total purchase price of approximately $15.4 million
consisted of cash consideration of approximately $15.0 million and approximately
$0.4 million in direct transaction costs, including an investment banking fee of
$0.3 million paid to Belongers Limited, an affiliate of Alfa Telecom Limited, a
shareholder of the Company. The acquisition of Sibchallenge establishes GTI's
presence in the Krasnoyarsk region. In addition, Sibchallenge has numbering
capacity and interconnect agreements. The Company intends to use the assets of
Sibchallenge in the manner in which they were previously used. The impact of
this acquisition on the operating results of the Company for the three and nine
months ended September 30, 2002 and 2003, respectively, if presented on a
pro-forma basis, would not have been material.

         The acquisition of Sibchallenge was accounted for as a purchase
business combination in accordance with SFAS No. 141, "Business Combinations".
The following is the condensed balance sheet of Sibchallenge as of August 31,
2003 reflecting preliminary purchase price allocation to the net assets
acquired:

<TABLE>
<CAPTION>
                                                                            AUGUST 31, 2003
                                                                            ---------------
                                                                             (IN THOUSANDS)
<S>                                                                         <C>
ASSETS:
  Current assets ..............................................                $    1,792
  Property and equipment ......................................                     7,723
  Telecommunications service contracts
     intangible assets ........................................                    10,509
                                                                               ----------
    Total assets ..............................................                $   20,024
                                                                               ==========

LIABILITIES:
  Current liabilities .........................................                $    1,519
  Non-current liabilities .....................................                     3,121
                                                                               ----------
    Net assets ................................................                $   15,384
                                                                               ==========

Consideration and acquisition costs:
  Cash consideration ..........................................                    15,000
  Direct transaction costs ....................................                       384
                                                                               ----------
Total purchase consideration and transaction costs ............                $   15,384
                                                                               ==========
</TABLE>

         The Company's interim financial statements reflect the preliminary
allocation of the purchase price based on a preliminary fair value assessment of
the assets acquired and liabilities assumed and, as such, the Company has
assigned approximately $10.5 million to telecommunications service contracts
intangible assets. These identified intangible assets will be amortized over a
period of 10 years. The purchase price allocation will be finalized upon the
completion of intangible assets valuation. There was no goodwill recorded as a
result of this transaction. The results of operations of Sibchallenge have been
included in the Company's consolidated operations since August 31, 2003.

         In August 2003, the Company entered into a share exchange agreement
with Nye Telenor East Invest AS ("Telenor") to acquire 100% of the issued and
outstanding shares of capital stock in OAO Comincom ("Comincom") held by
Telenor. Upon closure, Telenor will be issued GTI common stock such that Telenor
will hold 19.5% of the outstanding common shares of GTI on the date of closing.
The consummation of the transaction is conditioned upon, among other things,
financial performance covenants for both parties, approval of GTI's shareholders
and the Board of Directors of Telenor, and the receipt of all necessary
regulatory approvals in the United States and Russia, which have been received.
Upon consummation of the transaction, GTI will own 100% of Comincom. The
transaction is expected to close before the end of 2003. The acquisition of
Comincom requires the Company to obtain the approval of GTI's shareholders and
as such, the Company filed a definitive proxy statement with the SEC in October
2003.

                                                                              11
<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

5. CONTINGENCIES

Tax Matters

         The Company's policy is to accrue for contingencies in the accounting
period in which a liability is deemed probable and the amount is reasonably
determinable. In this regard, because of the uncertainties associated with the
Commonwealth of Independent States taxes ("CIS Taxes"), the Company's final CIS
Taxes may be in excess of the estimated amount expensed to date and accrued at
September 30, 2003. It is the opinion of management that the ultimate resolution
of the Company's liability for CIS Taxes, to the extent not previously provided
for, will not have a material effect on the financial condition of the Company.
However, depending on the amount and timing of an unfavorable resolution of any
contingencies associated with CIS Taxes, it is possible that the Company's
future results of operations or cash flows could be materially affected in a
particular period.

Russian Environment and Current Economic Situation

         The Russian economy, while deemed to be of market status beginning in
2002, continues to display certain traits consistent with that of a market in
transition. These characteristics have in the past included higher than normal
historic inflation, lack of liquidity in the capital markets, and the existence
of currency controls which cause the national currency to be illiquid outside of
Russia. The continued success and stability of the Russian economy will be
significantly impacted by the government's continued actions with regard to
supervisory, legal, and economic reforms.

Financial Guarantees

         As of September 30, 2003, the Company has guaranteed $0.8 million of
long-term debt for certain Russian registered equity investee ventures.
Management estimates the fair value of these guarantees to be immaterial.

Other Matters

         During 2002, Golden Telecom (Ukraine) ("GTU") was involved in a number
of commercial disputes with Ukrtelecom and Ukrainian regulatory authorities. The
most significant disputes include routing of traffic and GTU's lease rights of
Ukrtelecom's technical premises. By the end of the first quarter of 2003, GTU
had resolved these issues with Ukretelecom, but it is possible that commercial
disputes with Ukrtelecom and the Ukrainian authorities could resurface in the
future.

         On March 1, 2002, the Company became aware the Kiev City Prosecutor's
Office had initiated an investigation into the activities of the Company's
management in GTU. GTU received a letter dated July 17, 2002 from the General
Prosecutor of Ukraine stating that effective July 9, 2002 the Prosecutor's
Office withdrew all charges against management due to the absence of grounds on
which to prosecute. On October 7, 2002, the Kiev City Prosecutor's Office
notified GTU that the previous decision to close the investigation had been
revoked. In subsequent discussions with the Kiev City Prosecutor's Office, the
investigators advised the management of GTU that the Prosecutor's Office is
reviewing internal procedural requirements with the intent to close the
investigation again.

         In the ordinary course of business, the Company may be party to various
legal and tax proceedings, and subject to claims, certain of which relate to the
developing markets and evolving fiscal and regulatory environments in which the
Company operates. In the opinion of management, the Company's liability, if any,
in all pending litigation, other legal proceeding or other matters, will not
have a material effect upon the financial condition, results of operations or
liquidity of the Company.

                                                                              12
<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

6. SEGMENT INFORMATION

         The Company operates in four segments within the telecommunications
industry. The four segments are: (1) Business and Corporate Services; (2)
Carrier and Operator Services; (3) Consumer Internet Services; and (4) Mobile
Services. The following tables present financial information for both
consolidated subsidiaries and equity investee ventures, segmented by the
Company's lines of businesses for the three and nine months ended September 30,
2002 and 2003, respectively. Transfers between lines of businesses are included
in the adjustments to reconcile segment to consolidated results. The Company
evaluates performance based on the operating income (loss) of each strategic
business unit, among other performance measures. Prior to the completion of the
acquisition of the remaining 50% ownership interest in Sovintel and the
subsequent merger of TeleRoss into Sovintel in April 2003, the Company managed
business segments based on telecommunications products the Company provided. In
April 2003, the Company re-designed the business segments around customer
characteristics, and in accordance with SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information", the Company has presented
the following four segments consistent with the information used by the chief
operating decision maker to manage the operations for purposes of making
operating decisions and allocating resources. The Company has restated segment
information for prior periods to conform to the presentation adopted in the
current period.

<TABLE>
<CAPTION>
                                                                                                            ADJUSTMENTS TO RECONCILE
                                                                                                              BUSINESS SEGMENT TO
                                                                                                              CONSOLIDATED RESULTS
                                                                                                              --------------------
                             BUSINESS  CARRIER                                      BUSINESS                  EQUITY
                               AND       AND     CONSUMER    MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED    METHOD    AFFILIATE
                            CORPORATE  OPERATOR  INTERNET   SERVICES  ELIMINATIONS   TOTAL      RESULTS      VENTURES  ADJUSTMENTS
                            ---------  --------  --------   --------  ------------   -----      -------      --------  -----------
                                                                      (IN THOUSANDS)
<S>                         <C>        <C>       <C>        <C>       <C>           <C>       <C>           <C>        <C>
THREE MONTHS ENDED SEPTEMBER 30,
2002

Revenue from external
  customers ..............   $ 38,685  $ 29,038  $  5,155   $  3,303    $     --    $ 76,181    $ 46,376     $(34,713)  $  4,908
Intersegment revenue .....        360       323        --         --        (683)         --          --           --         --
Operating income (loss) ..      8,783     8,626    (1,337)     1,100      (1,191)     15,981       6,649       (9,332)        --
Identifiable assets ......    164,507   190,788    40,736      8,700      35,967     440,698     437,086       (3,612)        --
Capital expenditures .....      7,818     3,745       409         35          79      12,086       6,541       (5,545)        --
</TABLE>

<TABLE>
<CAPTION>
                                                                                                            ADJUSTMENTS TO RECONCILE
                                                                                                              BUSINESS SEGMENT TO
                                                                                                              CONSOLIDATED RESULTS
                                                                                                              --------------------
                             BUSINESS  CARRIER                                      BUSINESS                  EQUITY
                               AND       AND     CONSUMER    MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED    METHOD    AFFILIATE
                            CORPORATE  OPERATOR  INTERNET   SERVICES  ELIMINATIONS   TOTAL      RESULTS      VENTURES  ADJUSTMENTS
                            ---------  --------  --------   --------  ------------   -----      -------      --------  -----------
                                                                      (IN THOUSANDS)
<S>                         <C>        <C>       <C>        <C>       <C>           <C>       <C>           <C>        <C>
THREE MONTHS ENDED SEPTEMBER 30,
2003

Revenue from external
  customers ..............  $  46,470  $ 32,796  $   7,215  $  3,649   $      --    $ 90,130   $  90,095    $ (1,241)   $   1,206
Intersegment revenue .....         78       146         --        --        (224)         --          --          --           --
Operating income (loss) ..     12,495     7,031       (835)    1,679      (1,937)     18,433      18,313        (120)          --
Identifiable assets ......    166,776   154,824     43,983     7,004     110,141     482,728     478,977      (3,751)          --
Capital expenditures .....      8,863     5,649        522        83          22      15,139      15,022        (117)          --
</TABLE>

                                                                              13
<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

<TABLE>
<CAPTION>
                                                                                                            ADJUSTMENTS TO RECONCILE
                                                                                                              BUSINESS SEGMENT TO
                                                                                                              CONSOLIDATED RESULTS
                                                                                                              --------------------
                             BUSINESS  CARRIER                                      BUSINESS                  EQUITY
                               AND       AND     CONSUMER    MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED    METHOD    AFFILIATE
                            CORPORATE  OPERATOR  INTERNET   SERVICES  ELIMINATIONS   TOTAL      RESULTS      VENTURES  ADJUSTMENTS
                            ---------  --------  --------   --------  ------------   -----      -------      --------  -----------
                                                                      (IN THOUSANDS)
<S>                         <C>        <C>       <C>        <C>       <C>           <C>       <C>           <C>        <C>
NINE MONTHS ENDED SEPTEMBER 30,
2002

Revenue from external
  customers ..............  $ 110,128  $ 76,516  $ 15,332   $  9,854  $      --     $211,830   $ 121,943    $(104,709)  $  14,822
Intersegment revenue .....        587       578        --         --     (1,165)          --          --           --          --
Operating income (loss) ..     27,508    21,725    (3,487)     2,633     (4,533)      43,846      17,116      (26,730)         --
Identifiable assets ......    164,507   190,788    40,736      8,700     35,967      440,698     437,086       (3,612)         --
Capital expenditures .....     22,350    11,144     1,586        137        123       35,340      16,575      (18,765)         --
</TABLE>

<TABLE>
<CAPTION>
                                                                                                            ADJUSTMENTS TO RECONCILE
                                                                                                              BUSINESS SEGMENT TO
                                                                                                              CONSOLIDATED RESULTS
                                                                                                              --------------------
                             BUSINESS  CARRIER                                      BUSINESS                  EQUITY
                               AND       AND     CONSUMER    MOBILE   CORPORATE &   SEGMENT   CONSOLIDATED    METHOD    AFFILIATE
                            CORPORATE  OPERATOR  INTERNET   SERVICES  ELIMINATIONS   TOTAL      RESULTS      VENTURES  ADJUSTMENTS
                            ---------  --------  --------   --------  ------------   -----      -------      --------  -----------
                                                                      (IN THOUSANDS)
<S>                         <C>        <C>       <C>        <C>       <C>           <C>       <C>            <C>       <C>
NINE MONTHS ENDED SEPTEMBER 30,
2003

Revenue from external
  customers ..............  $128,478   $ 89,093  $ 21,437   $ 10,413    $     --    $249,421    $249,233     $ (3,526)  $  3,338
Intersegment revenue .....       647        612        --         --      (1,259)         --          --           --         --
Operating income (loss) ..    36,562     19,306    (1,895)     4,254      (5,069)     53,158      52,946         (212)        --
Identifiable assets ......   166,776    154,824    43,983      7,004     110,141     482,728     478,977       (3,751)        --
Capital expenditures .....    26,243     14,617     1,950        292          52      43,154      42,838         (316)        --
</TABLE>

GEOGRAPHIC DATA

         Revenues are based on the location of the operating company providing
the service.

         The following tables present financial information segmented by the
Company's geographic regions for the three and nine months ended September 30,
2002 and 2003.

                                                                              14
<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   CORPORATE,
                                                                     OTHER
                                                                   COUNTRIES
                                                                       AND        CONSOLIDATED
                                     RUSSIA         UKRAINE       ELIMINATIONS       RESULTS
                                     ------         -------       ------------       -------
                                     (IN THOUSANDS)
<S>                                <C>             <C>            <C>             <C>
THREE MONTHS ENDED SEPTEMBER 30,
2002
  Revenue ...............          $   37,523      $    9,199      $     (346)      $   46,376
  Long-lived assets .....             269,693          25,398             547          295,638
</TABLE>

<TABLE>
<CAPTION>
                                                                     CORPORATE,
                                                                       OTHER
                                                                     COUNTRIES
                                                                         AND        CONSOLIDATED
                                       RUSSIA         UKRAINE       ELIMINATIONS       RESULTS
                                       ------         -------       ------------       -------
                                       (IN THOUSANDS)
<S>                                  <C>             <C>            <C>             <C>
THREE MONTHS ENDED SEPTEMBER 30,
2003
  Revenue ...............            $   78,961      $   11,991      $     (857)      $   90,095
  Long-lived assets .....               302,092          23,764           2,751          328,607
</TABLE>

<TABLE>
<CAPTION>
                                                                   CORPORATE,
                                                                     OTHER
                                                                   COUNTRIES
                                                                      AND          CONSOLIDATED
                                     RUSSIA        UKRAINE        ELIMINATIONS       RESULTS
                                     ------        -------        ------------       -------
                                      (IN THOUSANDS)
<S>                                <C>             <C>            <C>              <C>
NINE MONTHS ENDED SEPTEMBER 30,
2002
  Revenue .............            $   96,528      $   26,121      $     (706)      $  121,943
  Long-lived assets ...               269,693          25,398             547          295,638
</TABLE>

<TABLE>
<CAPTION>
                                                                   CORPORATE,
                                                                     OTHER
                                                                   COUNTRIES
                                                                      AND          CONSOLIDATED
                                     RUSSIA        UKRAINE        ELIMINATIONS       RESULTS
                                     ------        -------        ------------       -------
                                      (IN THOUSANDS)
<S>                                 <C>            <C>            <C>              <C>

NINE MONTHS ENDED SEPTEMBER 30,
2003
  Revenue..................        $ 219,250       $ 31,852        $   (1,869)       $ 249,233
  Long-lived assets........          302,092         23,764             2,751          328,607
</TABLE>

7. SIGNIFICANT EQUITY METHOD SUBSIDIARY INFORMATION

         The following table presents summarized income statement information
from the Company's significant equity investee, Sovintel, for the period from
July 1, 2002 to September 16, 2002 and the period from January 1, 2002 to
September 16, 2002. Effective September 17, 2002, the Company began
consolidating the results of operations of Sovintel as a result of the
acquisition of the 50% interest not controlled previously.

<TABLE>
<CAPTION>
                                PERIOD FROM JULY 1 -    PERIOD FROM JANUARY 1 -
                                 SEPTEMBER 16, 2002       SEPTEMBER 16, 2002
                                 ------------------       ------------------
                                              (IN THOUSANDS)

<S>                             <C>                     <C>
Revenues .................          $     33,581             $    101,261
Gross Margin .............                15,146                   45,248
Income from operations ...                 9,079                   25,875
Net income ...............                 5,944                   17,908
</TABLE>

                                                                              15
<PAGE>

                              GOLDEN TELECOM, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

8. SHAREHOLDERS' EQUITY

         The Company's outstanding shares of common stock increased by 1,099,003
and 1,761,006 shares issued in connection with the exercise of stock options in
the three and nine months ended September 30, 2003, respectively.

9. DEBT

         In June 2003, the Company settled early $30.0 million of outstanding
debt plus accrued interest under a credit facility with ZAO Citibank. There was
no penalty for the early settlement of this debt however an additional $0.2
million of previously capitalized financing costs was recognized as interest
expense which was previously being recognized over the life of the facility.

10. SUBSEQUENT EVENTS

         On October 27, 2003, our equity investee, MCT Corp. declared a cash
dividend of $1.90 per common share to holders of record as of October 27, 2003.
The Company's portion of this cash dividend is approximately $4.7 million.

                                                                              16
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The following discussion and analysis relates to our financial
condition and results of operations of the Company for the three and nine months
ended September 30, 2003 and 2002, respectively. This discussion should be read
in conjunction with the Company's Condensed Consolidated Financial Statements
and the notes related thereto appearing elsewhere in this Report.

OVERVIEW

         We are a leading facilities-based provider of integrated
telecommunications and Internet services to businesses and other high-usage
customers and telecommunications operators in, 149 combined access points in
Moscow, Kiev, St. Petersburg, Nizhny Novgorod, Krasnoyarsk and other major
population centers throughout Russia and other countries of the Commonwealth of
Independent States ("CIS"). We organize our operations into the four business
groups, as follows:

         -        BUSINESS AND CORPORATE SERVICES. Using our fiber optic and
                  satellite-based networks in major metropolitan areas of
                  Russia, Ukraine and other countries of the CIS, we provide
                  business and corporate services including voice and data
                  services with corporate clients across all geographical
                  markets and all industry segments, except other
                  telecommunications operators;

         -        CARRIER AND OPERATOR SERVICES. Using our fiber optic and
                  satellite-based networks in and between major metropolitan
                  areas of Russia, Ukraine and other countries of the CIS, we
                  provide a range of carrier and operator services including
                  voice and data services with foreign and Russian
                  telecommunications and mobile operators;

         -        CONSUMER INTERNET SERVICES. Using our fiber optic and
                  satellite-based network, we provide dial-up Internet access
                  and web content offered through a family of Internet portals
                  throughout Russia; and

         -        MOBILE SERVICES. Using our mobile networks in Kiev and Odessa,
                  Ukraine, we provide mobile services with value-added features,
                  such as voicemail, roaming and messaging services on a
                  subscription and prepaid basis.

         We offer all of our integrated telecommunication services under the
Golden Telecom brand and our consumer Internet services under the ROL brand in
Russia.

         Additionally, we hold a minority interest in MCT Corp. ("MCT"), which
in turn has ownership interests in 19 mobile operations located throughout
Russia and in Uzbekistan and Tajikistan. We treat our ownership interest in MCT
as an equity method investment and are not actively involved in the day-to-day
management of the operations.

         In August 2003, MCT concluded a binding agreement with OJSC Mobile
TeleSystems on the sale of five of its cellular operators. OJSC Mobile
TeleSystems acquired these five cellular operators from MCT for $70.0 million
and assumed certain guarantees as part of the transaction.

         Most of our revenue is derived from high-volume business customers and
carriers. Our business customers include large multi-national companies, local
enterprises, financial institutions, hotels and government agencies. We believe
that the carriers, including mobile operators, which contribute a substantial
portion of our revenues, in turn derive a portion of their business from
high-volume business customers. Thus, we believe that the majority of our
ultimate end-users are businesses that require access to highly reliable and
advanced telecommunications facilities to sustain their operations.

         We have traditionally competed for customers on the basis of network
quality, customer service and range of services offered. In the past several
years, other telecommunications operators have also introduced high-quality
services to the segments of the business market in which we operate. Competition
with these operators is intense, and frequently results in declining prices for
some of our services, which adversely affect our revenues. In addition, some of
our competitors do not link their prices to the dollar/ruble exchange rate, so
when the ruble devalues, their prices effectively become relatively cheaper than
our prices. The ruble exchange rate with the dollar has become relatively stable
since early 2000, has appreciated during 2003 and price pressures associated
with devaluation have eased considerably. We cannot be certain that the exchange
rate will remain stable in the future and therefore we may experience additional
price pressures.

         Since early 2000, we have witnessed a recovery in the Russian market,
but with downward pricing pressures persisting. The downward pricing pressures
result from increased competition in Russia and the global trend toward lower
telecommunications tariffs.

                                                                              17
<PAGE>

         In 2001, 2002 and during 2003, our traffic volume increases exceeded
the reduction in tariffs on certain types of voice traffic. This is a
contributory factor to the increases in our revenue in 2001, 2002 and during
2003. We expect that this trend of year over year increases in traffic volume
will continue as long as the Russian economy continues to develop at its current
pace.

         In order to handle additional traffic volumes, we have expanded and
will continue to expand our fiber optic capacity along our heavy traffic and
high cost routes to mitigate declines in traffic margins, reduce our unit
transmission costs and ensure sufficient capacity to meet the growing demand for
data and Internet services. We expect to and have continued to add additional
transmission capacity, which due to its fixed cost nature can initially depress
margins, but will ultimately allow us to improve or maintain our margins.

         In Kiev, Ukraine, we have entered into agreements to obtain sufficient
numbering capacity for our business services operations. Our ability to grow our
business services operations in Kiev may become limited if the parties who
provide our numbering capacity and other infrastructure requirements are unable
or unwilling to perform their contracts with us.

         During 2002, Golden Telecom (Ukraine) ("GTU") was involved in a number
of commercial disputes with Ukrtelecom and Ukrainian regulatory authorities. The
most significant disputes include routing of traffic and GTU's lease rights of
Ukrtelecom's technical premises. By the end of the first quarter of 2003, GTU
had resolved these issues with Ukretelecom, but it is possible that commercial
disputes with Ukrtelecom and the Ukrainian authorities could resurface in the
future.

         In February 2003, the Ukrainian Parliament overrode the President's
veto and adopted an amendment to the Ukrainian Communications law prohibiting
all telecommunications operators from charging their customers for incoming
calls, thus introducing the calling party pays' ("CPP") principle, which entered
into effect on September 19, 2003. Simultaneously, state regulated tariffs for
calls from the public switched telephone network to mobile networks have been
introduced allowing operators to receive and share revenue from calls to mobile
networks. To effect CPP settlements on our network we have entered into an
interim arrangement with Ukrtelecom on assigning of a national destination code
numbering to our mobile customers and on reallocation of our interconnect
numbering capacity in Kiev from our mobile to our fixed network. This
arrangement became effective in November 2003 and enables us to share revenue
generated when a fixed line partly calls a mobile telephone.

         On January 1, 2004, a new law on telecommunications will come into
effect in Russia. The law sets the legal basis for the telecommunications
business in Russia and defines the status that state bodies have in the
telecommunications sector. We cannot predict with any certainty how the new law
will affect us. The new law may increase the regulation of our operations and
until such time as appropriate regulations consistent with the new law are
promulgated, there will be a period of confusion and ambiguity as regulators
interpret the legislation. The new law may result in increased costs to us.

         In addition to our traditional voice and data service provision, prior
to 2002, we were actively pursuing a strategy of developing non-traditional
telecom service offerings including those related to the Internet, such as
web-hosting, web design, and vertical and horizontal Internet portal
development. In line with experience outside of Russia, we did not see the rapid
development of Internet based services that were expected. Internet based
advertising and e-commerce revenues did not develop to significant levels and we
reviewed our long term strategy for Internet based products. As a result of this
review, we evaluated the future cash flows for this business, and we recorded an
impairment charge of $20.9 million in the fourth quarter of 2001. We expect to
see some growth in Internet based advertising and will continue to offer this
service to support our dial-up Internet service and be in a position to
capitalize on any upturn in demand for this service.

         We have seen a significant year over year increase in our dial-up
Internet subscriber numbers and we expect the increase to continue, as our base
of regional subscribers expands. As additional dial-up capacity becomes
available in Moscow, we expect to increase our market share in the capital as
well. In June 2001, we completed the purchase of a leading Russian Internet
service provider, Cityline, together with Uralrelcom, another Internet service
provider and an infrastructure company, PTK, and together, these entities
allowed us to increase our regional dial-up Internet presence and increase our
numbering capacity and access lines in Moscow. The new Moscow capacity was
initially placed into service in July 2002. The Moscow numbering capacity and
some of the access lines provided by PTK are allocated to support Business and
Corporate Services and Carrier and Operator Services division end-user
customers, with the majority of the access lines being allocated to support
planned increases in dial-up Internet subscribers in our Consumer Internet
Services division.

         We have continued to integrate our acquisitions and improve operational
efficiency while at the same time controlling costs. We expect to incur further
costs in connection with overall streamlining of our operations in 2003. As of
April 15, 2003, all assets,

                                                                              18
<PAGE>

liabilities, rights and obligations of TeleRoss were transferred to Sovintel as
part of the legal merger of these two wholly-owned subsidiaries.

RECENT ACQUISITIONS

         In August 2003, we completed the acquisition of 100% ownership interest
in OOO Sibchallenge ("Sibchallenge") for cash consideration of approximately
$15.4 million, a telecommunications service provider in Krasnoyarsk, Russia and
have full operational and management control. The acquisition of Sibchallenge
establishes our presence in the Krasnoyarsk region. In addition, Sibchallenge
has numbering capacity and interconnect agreements. We intend to use the assets
of Sibchallenge in the manner in which they were previously used.

         In August 2003, we entered into a share exchange agreement with Nye
Telenor East Invest AS ("Telenor") to acquire 100% of the issued and outstanding
shares of capital stock in OAO Comincom ("Comincom") held by Telenor. Upon
closure, Telenor will be issued our common stock such that Telenor will hold
19.5% of the outstanding common shares of GTI on the date of closing. The
consummation of the transaction is conditioned upon, among other things,
financial performance covenants for both parties, approval of GTI's shareholders
and the Board of Directors of Telenor, and the receipt of all necessary
regulatory approvals in the United States and Russia, which have been received.
Upon consummation of the transaction, we will own 100% of Comincom. The
transaction is expected to close before the end of 2003. The acquisition of
Comincom requires the Company to obtain the approval of our shareholders and as
such, we filed a definitive proxy statement with the SEC in October 2003.

CRITICAL ACCOUNTING POLICIES

         The fundamental objective of financial reporting is to provide useful
information that allows a reader to comprehend our business activities. To
assist that understanding, management has identified our "critical accounting
policies". These policies have the potential to have a significant impact on our
financial statements, either because of the significance of the financial
statement item to which they relate, or because they require judgment and
estimation due to the uncertainty involved in measuring, at a specific point in
time, events which are continuous in nature.

         Revenue recognition policies; we recognize operating revenues as
services are rendered or as products are delivered to customers. Certain
revenues, such as connection fees, are deferred in accordance with Staff
Accounting Bulletin ("SAB") No. 101. In connection with recording revenue,
estimates and assumptions are required in determining the expected conversion of
the revenue streams to cash collected. In line with guidance in SAB No. 101, we
also defer direct incremental costs related to connection fees, not exceeding
the revenue deferred. Deferred revenues are subsequently recognized over the
estimated average customer lives, which are periodically reassessed by us, and
such reassessment may impact our future operating results.

         Allowance for doubtful accounts policies; the allowance estimation
process requires management to make assumptions based on historical results,
future expectations, the economic and competitive environment, changes in the
creditworthiness of our customers, and other relevant factors. Changes in the
underlying assumptions may have a significant impact on the results of our
operations. In particular, we have certain amounts due to and from subsidiaries
of a European telecommunications operator who is currently subject to bankruptcy
proceedings. The ultimate resolution of this matter will be affected by a number
of factors including the determination of legal obligations of each party, the
course of the bankruptcy proceedings, and the enforceability of any
determinations. We have recognized provisions based on our preliminary estimate
of net exposure on the resolution of these receivables and payables. If our
assessment proves to be incorrect we may have to recognize an additional
provision of up to $1.6 million, net of tax, although management believes that
the possibility of such an adverse outcome is remote.

         Long-lived asset recovery policies; this policy is in relation to
long-lived assets, consisting primarily of property and equipment and
intangibles, which comprise a significant portion of our total assets. Changes
in technology or changes in our intended use of these assets may cause the
estimated period of use or the value of these assets to change. We perform
periodic internal studies to confirm the appropriateness of estimated economic
useful lives for each category of current property and equipment. Additionally,
long-lived assets, including intangibles, are reviewed for impairment whenever
events or changes in circumstances have indicated that their carrying amounts
may not be recoverable. Estimates and assumptions used in both setting useful
lives and testing for recoverability of our long-lived assets require the
exercise of management's judgment and estimation based on certain assumptions
concerning the expected life of any asset and expected future cash flows from
the use of an asset.

                                                                              19
<PAGE>

         Goodwill and assessment of impairment; Commencing from the adoption of
SFAS No. 142, "Goodwill and Other Intangible Assets", on January 1, 2002, we
will perform a goodwill impairment testing annually as of October 1 or whenever
impairment indicators exist. This test requires a significant degree of judgment
about the future events and it includes determination of the reporting units,
allocation of goodwill to the reporting units and comparison of the fair value
with the carrying amount of each reporting unit. Based on the discounted cash
flow valuations performed in 2002, we concluded that for all reporting units the
fair value is in excess of the respective carrying amounts.

         Valuation allowance for deferred tax asset; we record valuation
allowances related to tax effects of deductible temporary differences and loss
carryforwards when, in the opinion of management, it is more likely than not
that the respective tax assets will not be realized. Changes in our assessment
of probability of realization of deferred tax assets may impact our effective
income tax rate.

RECENT ACCOUNTING PRONOUNCEMENTS

         Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets." In
accordance with SFAS No. 142, we discontinued the amortization of goodwill as of
such date. We also reclassified to other intangible assets approximately $1.3
million previously classified as goodwill. Upon the adoption of SFAS No. 142, we
recorded a cumulative effect of a change in accounting principle for negative
goodwill (deferred credit) arising on our equity method investments in the
amount of $1.0 million.

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, "Accounting for Asset Retirement Obligations." This statement
provides the accounting for the cost of legal obligations associated with the
retirement of long-lived assets. SFAS No. 143 requires entities to record the
fair value of a legal liability for an asset retirement obligation in the period
it is incurred. This cost is initially capitalized and amortized over the
remaining life of the asset. Once the obligation is ultimately settled, any
difference between final cost and the recorded liability is recognized as a gain
or loss on disposition. We reviewed the requirements under SFAS No. 143 and have
determined that no material legal obligations to remove long-lived assets exist.
SFAS No. 143 is effective for years beginning after June 15, 2002. The adoption
of SFAS No. 143 did not have a material impact on our consolidated financial
position or results of operations.

         During the year ended December 31, 2002, the FASB issued several new
accounting standards including, SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections",
SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." In November 2002, the FASB also issued Interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others". These standards did not have a
material impact on our financial position or results of operations.

         In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which requires that a liability
for a cost associated with an exit or disposal activity be recognized when the
liability is incurred. This statement nullifies Emerging Issues Task Force No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)," which required that a liability for an exit cost be recognized
upon the entity's commitment to an exit plan. SFAS No. 146 is effective for exit
or disposal activities that are initiated after December 31, 2002. The adoption
of the provisions of SFAS No. 146 did not have an impact on our results of
operations or financial position.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure," which amends SFAS No.
123, "Accounting for Stock-Based Compensation", to provide alternative methods
of transition to SFAS No. 123's fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure provisions of
SFAS No. 123 and APB No. 28, "Interim Financial Reporting", to require
disclosure in the summary of significant accounting policies of the effects of
an entity's accounting policy with respect to stock-based employee compensation
on reported net income and earnings per share in annual and interim financial
statements. While the Statement does not amend SFAS No. 123 to require companies
to account for employee stock options using the fair value method, the
disclosure provisions of SFAS No. 148 are applicable to all companies with
stock-based employee compensation, regardless of whether they account for that
compensation using the fair value method of SFAS No. 123 or the intrinsic value
method of APB No. 25. SFAS No. 148 disclosure provisions are effective for years
ending after December 15, 2002. We have adopted the amendments to SFAS No. 123
disclosure provisions required under SFAS No. 148 but we will continue to use
the intrinsic value method under APB No. 25 to account for stock-based

                                                                              20
<PAGE>

compensation. As such, the adoption of SFAS No. 148 did not have a significant
impact on our consolidated financial position or results of operations.

         The effect of applying SFAS No. 123 on the net income as reported is
not representative of the effects on reported net income in future years due to
the vesting period of the stock options and the fair value of additional stock
options in future years.

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED        NINE MONTHS ENDED
                                                           SEPTEMBER 30,             SEPTEMBER 30,
                                                     -----------------------   -----------------------
                                                        2002         2003         2002         2003
                                                     ----------   ----------   ----------   ----------
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                                  <C>          <C>          <C>          <C>
Net income, as reported ..........................   $    7,879   $   12,506   $   16,839   $   37,161
Deduct:  total stock-based employee compensation
  expense determined under fair value based method
  for all awards, net of related tax effects .....        2,263          885        6,763        2,621
                                                     ----------   ----------   ----------   ----------
Pro forma net income .............................   $    5,616   $   11,621   $   10,076   $   34,540
                                                     ==========   ==========   ==========   ==========

Net income  per share:
  Basic - as reported ............................   $     0.32   $     0.44   $     0.73   $     1.35
  Basic - pro forma ..............................         0.23         0.41         0.44         1.25
  Diluted - as reported ..........................         0.32         0.43         0.71         1.32
  Diluted - pro forma ............................         0.23         0.40         0.43         1.22
</TABLE>

         In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest Entities". FIN No. 46 defines the concept of "variable interest" and
requires existing unconsolidated variable interest entities to be consolidated
into the financial statement of their primary beneficiaries if the variable
interest entities do not effectively disperse risks among the parties involved.
FIN No. 46 applies immediately to variable interest entities created after
January 31, 2003. It applies in the first fiscal year or interim period
beginning after June 15, 2003, to variable interest entities in which an
enterprise holds a variable interest that it acquires before February 1, 2003.
If it is reasonably possible that an enterprise will consolidate or disclose
information about a variable interest entity when FIN No. 46 becomes effective,
the enterprise must disclose information about those entities in all financial
statements issued after January 31, 2003. As of the date of this report, there
were no such entities created after January 31, 2003. The interpretation may be
applied prospectively with a cumulative-effect adjustment as of the date on
which it is first applied or by restating previously issued financial statements
for one or more years, with a cumulative-effect adjustment as of the beginning
of the first year restated. In October 2003, the FASB deferred the effective
date of FIN No. 46 to the fourth quarter of 2003 for variable interests acquired
before February 1, 2003. The adoption of the remaining provisions of FIN No. 46
did not have a material impact on our results of operations or financial
positions.

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. The new guidance amends SFAS No. 133 for decisions made: (a) as part of
the Derivatives Implementation Group process that effectively required
amendments to SFAS No. 133, (b) in connection with other Board projects dealing
with financial instruments, and (c) regarding implementation issues raised in
relation to the application of the definition of derivative. The amendments set
forth in SFAS No. 149 improve financial reporting by requiring that contracts
with comparable characteristics be accounted for similarly. SFAS No. 149 is
generally effective for contracts entered into or modified after June 30, 2003.
The adoption of the provisions of SFAS No. 149 did not have an impact on our
results of operations or financial position.

         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity". SFAS
No. 150 requires certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity to be classified
as liabilities. The provisions of SFAS No. 150 are effective for financial
instruments entered into or modified after May 31, 2003 and to all other
instruments that exist as of the beginning of the first interim financial
reporting period beginning after June 15, 2003. The Company does not have any
financial instruments that meet the provisions of SFAS No. 150, therefore,
adopting the provisions of SFAS No. 150 did not have an impact on our results of
operations or financial position.

                                                                              21

<PAGE>

RESULTS OF OPERATIONS

         GTI is a leading facilities-based provider of integrated
telecommunications and Internet services to businesses and other high-usage
customers and telecommunications operators in Moscow, Kiev, St. Petersburg,
Nizhny Novgorod, Krasnoyarsk and other major population centers throughout
Russia and other countries of the Commonwealth of Independent States. The
results of our four business groups from the operations of our consolidated
entities combined with the non-consolidated entities where we are actively
involved in the day-to-day management, are shown in footnote 6 "Segment
Information - Line of Business Data" to our condensed, consolidated financial
statements.

         Our functional currency is the US dollar, as the majority of our cash
flows are indexed to, or denominated in US dollars. Through December 31, 2002,
Russia has been considered to be a highly inflationary environment. From January
1, 2003, Russia ceased to be considered as a highly inflationary economy. As we
currently believe our functional currency is the US dollar, we do not expect
this change to have a material impact on our results of operations or financial
position.

         We have continued to integrate our acquisitions and improve operational
efficiency while at the same time controlling costs. We expect to incur further
costs in connection with overall streamlining of our operations in 2003. As of
April 15, 2003, all assets, liabilities, rights and obligations of TeleRoss were
transferred to Sovintel as part of the legal merger of these two wholly-owned
subsidiaries. This resulted in the reorganization of our operations along the
lines of customer characteristics as opposed to the types of telecommunications
products we provide. Therefore, in accordance with SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information", we have aligned our
operating segments in the manner that the chief operating decision maker manages
the operations for purposes of making operating decisions and allocating
resources.

     The discussion of our results of operations is organized as follows:

-        Consolidated Results of Operations. Consolidated Results of Operations
         for the Three Months Ended September 30, 2003 compared to the
         Consolidated Results of Operations for the Three Months Ended September
         30, 2002.

-        Consolidated Results of Operations. Consolidated Results of Operations
         for the Nine Months Ended September 30, 2003 compared to the
         Consolidated Results of Operations for the Nine Months Ended September
         30, 2002.

-        Consolidated Financial Positions. Significant changes in Consolidated
         Financial Position at September 30, 2003 compared to the Consolidated
         Financial Position at December 31, 2002.

CONSOLIDATED RESULTS-- CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 2003 COMPARED TO THE CONSOLIDATED RESULTS OF OPERATIONS FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 2002

REVENUE

         Our revenue increased by 95% to $90.1 million for the three months
ended September 30, 2003 from $46.3 million for the three months ended September
30, 2002. The breakdown of revenue by business group was as follows:

<TABLE>
<CAPTION>
                                           CONSOLIDATED REVENUE          CONSOLIDATED REVENUE
                                           FOR THE THREE MONTHS          FOR THE THREE MONTHS
                                         ENDED SEPTEMBER 30, 2002      ENDED SEPTEMBER 30, 2003
                                         ------------------------      ------------------------
                                                              (IN MILLIONS)
<S>                                      <C>                           <C>
REVENUE
  Business and Corporate Services ....           $ 20.3                        $ 46.7
  Carrier and Operator Services ......             18.3                          32.9
  Consumer Internet Services .........              5.2                           7.2
  Mobile Services ....................              3.3                           3.6
  Eliminations .......................             (0.8)                         (0.3)
                                                 ------                        ------
TOTAL REVENUE ........................           $ 46.3                        $ 90.1
</TABLE>

                                                                              22

<PAGE>

         Business and Corporate Services. Revenue from Business and Corporate
Services increased by 130% to $46.7 million for the three months ended September
30, 2003 from $20.3 million for the three months ended September 30, 2002. The
primary reason for the increase is due to the acquisition of the remaining 50%
ownership interest in Sovintel which was completed in the third quarter of 2002.
We began consolidating Sovintel into our results of operations from September
17, 2002. In addition, we had increases in our domestic traffic due to adding
456 new corporate customers and signing up 22 new multi-tenant business centers
in the three months ended September 30, 2003 along with actively promoting our
new services among our client base.

         Revenue for the Business and Corporate Services division of Golden
Telecom BTS increased by 15% to $4.7 million for the three months ended
September 30, 2003 from $4.1 million for the three months ended September 30,
2002. The increase in revenue was due to an increase in the total of intercity
minutes of use by business and corporate clients and monthly recurring charges.

         Carrier and Operator Services. Revenue from Carrier and Operator
Services increased by 80% to $32.9 million for the three months ended September
30, 2003 from $18.3 million for the three months ended September 30, 2002. The
primary reason for the increase is due to the acquisition of the remaining 50%
ownership interest in Sovintel which was completed in the third quarter of 2002.
We began consolidating Sovintel into our results of operations from September
17, 2002. In addition, we have added a number of new carriers with increased
volumes of traffic and increased the number of services that we offer to
cellular providers which have more than offset general tariff declines, although
pricing pressures still exists.

         Revenue for the Carrier and Operator Services division of Golden
Telecom BTS increased by 100% to $3.6 million for the three months ended
September 30, 2003 from $1.8 million for the three months ended September 30,
2002. The increase in revenue was due to increasing volumes of incoming
international traffic which we are able to terminate in a number of cities in
Ukraine as well as increasing volumes of outgoing international traffic.

         Consumer Internet Services. Revenue from Consumer Internet Services
increased by 38% to $7.2 million for the three months ended September 30, 2003
from $5.2 million for the three months ended September 30, 2002. The increase is
largely the result of increases in the number of dial-up Internet subscribers
from 191,707 at September 30, 2002 to 291,167 at September 30, 2003 offset by a
decrease in the average revenue per dial-up Internet subscriber from
approximately $8.18 per month to approximately $8.13 per month over the same
period.

         Mobile Services. Revenue from Mobile Services increased by 9% to $3.6
million for the three months ended September 30, 2003 from $3.3 million for the
three months ended September 30, 2002. Active subscribers increased from 35,576
at September 30, 2002 to 36,861 at September 30, 2003 and the average revenue
per active subscriber has increased by 8% to approximately $33.26 per month due
to an increasing number of subscribers on a tariff plan which allows for
unlimited local calls for a fixed payment of $99 per month.

EXPENSES

         The following table shows our principal expenses for the three months
ended September 30, 2003 and September 30, 2002:

<TABLE>
<CAPTION>
                                          CONSOLIDATED EXPENSES         CONSOLIDATED EXPENSES
                                           FOR THE THREE MONTHS          FOR THE THREE MONTHS
                                         ENDED SEPTEMBER 30, 2002      ENDED SEPTEMBER 30, 2003
                                         ------------------------      ------------------------
                                                              (IN MILLIONS)
<S>                                      <C>                           <C>
COST OF REVENUE
  Business and Corporate Services .....          $ 11.6                         $ 20.5
  Carrier and Operator Services .......             6.3                           19.1
  Consumer Internet Services ..........             3.7                            4.9
  Mobile Services .....................             0.7                            0.7
  Eliminations ........................            (0.8)                          (0.3)
                                                 ------                         ------
TOTAL COST OF REVENUE .................            21.5                           44.9
Selling, general and administrative ...            10.8                           15.8
Depreciation and amortization .........             7.3                           11.2
Equity in earnings of ventures ........            (3.3)                            --
Interest income .......................            (0.4)                          (0.3)
Interest expense ......................             0.5                            0.2
Foreign currency loss .................             0.1                            0.2
Provision for income taxes ............          $  1.6                         $  5.6
</TABLE>

                                                                              23

<PAGE>

Cost of Revenue

         Our cost of revenue increased by 109% to $44.9 million for the three
months ended September 30, 2003 from $21.5 million for the three months ended
September 30, 2002.

         Business and Corporate Services. Cost of revenue from Business and
Corporate Services increased by 77% to $20.5 million, or 44% of revenue, for the
three months ended September 30, 2003 from $11.6 million, or 57% of revenue, for
the three months ended September 30, 2002. The decrease in cost of revenue as a
percentage of revenue is due of the acquisition of the remaining 50% ownership
interest in Sovintel which was completed in the third quarter of 2002. We began
consolidating Sovintel into our results of operations from September 17, 2002.

         Cost of revenue for the Business and Corporate Services division of
Golden Telecom BTS increased by 11% to $2.1 million, or 45% of revenue, for the
three months ended September 30, 2003 from $1.9 million, or 46% of revenue, for
the three months ended September 30, 2002.

         Carrier and Operator Services. Cost of revenue from Carrier and
Operator Services increased by 203% to $19.1 million, or 58% of revenue, for the
three months ended September 30, 2003 from $6.3 million, or 34% of revenue, for
the three months ended September 30, 2002. The increase in cost of revenue as a
percentage of revenue is due to the acquisition of the remaining 50% ownership
interest in Sovintel which was completed in the third quarter of 2002. We began
consolidating Sovintel into our results of operations from September 17, 2002.

         Cost of revenue for the Carrier and Operator Services division of
Golden Telecom BTS increased by 127% to $2.5 million, or 69% of revenue, for the
three months ended September 30, 2003 from $1.1 million, or 61% of revenue, for
the three months ended September 30, 2002. Cost of revenue increased as a
percentage of revenue due to the increased volumes of certain lower margin
international incoming traffic revenue.

         Consumer Internet Services. Cost of revenue from Consumer Internet
Services increased by 32% to $4.9 million, or 68% of revenue, for the three
months ended September 30, 2003 from $3.7 million, or 71% of revenue, for the
three months ended September 30, 2002. The decrease in cost of revenue as a
percentage of revenue was mainly due to additional low cost local interconnect
capacity becoming available in the third quarter of 2002.

         Mobile Services. Cost of revenue from Mobile Services was $0.7 million,
or 19% of revenue, for the three months ended September 30, 2003 level with the
$0.7 million, or 21% of revenue, for the three months ended September 30, 2002.
The decrease in cost of revenue as a percentage of revenue was mainly due to the
increased number of subscribers using the unlimited local call tariff plan which
does not lead to additional settlement costs with other operators.

Selling, General and Administrative

         Our selling, general and administrative expenses increased by 46% to
$15.8 million, or 18% of revenue, for the three months ended September 30, 2003
from $10.8 million, or 23% of revenue, for the three months ended September 30,
2002. This increase in selling, general and administrative expenses was mainly
due to increases in employee related costs, advertising, inventory obsolescence,
bad debt expense and other selling, general and administrative expenses arising
from the consolidation of Sovintel from September 17, 2002 into our results of
operations.

Depreciation and Amortization

         Our depreciation and amortization expenses increased by 53% to $11.2
million for the three months ended September 30, 2003 from $7.3 million for the
three months ended September 30, 2002. The increase was due in part to
depreciation on continuing capital expenditures of the consolidated entities,
but primarily relates to our acquisition of the remaining 50% of Sovintel and
subsequent consolidation of Sovintel as of September 17, 2002 into our results
of operations.

Equity in Earnings of Ventures

                                                                              24

<PAGE>

         The earnings after interest and tax charges from our investments in
non-consolidated ventures was negligible for the three months ended September
30, 2003 down from earnings of $3.3 million for the three months ended September
30, 2002. Our recognized earnings from Sovintel were $3.0 million for the three
months ended September 30, 2002. The primary decrease in equity in earnings was
due to the acquisition of the remaining 50% ownership interest in Sovintel which
was completed in the third quarter of 2002. We began consolidating Sovintel into
our results of operations from September 17, 2002.

Interest Income

         Our interest income was $0.3 million for the three months ended
September 30, 2003 down from $0.4 million for the three months ended September
30, 2002. The decrease in interest income mainly reflects lower interest rate
earned on deposits in short-term US money market funds.

Interest Expense

         Our interest expense was $0.2 million for the three months ended
September 30, 2003 down from $0.5 million for the three months ended September
30, 2002. The decrease in interest expense mainly reflects the effect of lower
balances of debt, including capital leases at September 30, 2003 as compared to
September 30, 2002. Debt, excluding capital lease obligations, at September 30,
2003 was $1.9 million as compared to $4.2 million at September 30, 2002.

Foreign Currency Loss

         Our foreign currency loss was $0.2 for the three months ended September
30, 2003, compared to a foreign currency loss of $0.1 million for the three
months ended September 30, 2002. The increase in foreign currency loss is due to
a combination of movements in exchange rates and changes in the amount of net
monetary assets that we have denominated in foreign currencies.

Provision for Income Taxes

         Our charge for income taxes was $5.6 million for the three months ended
September 30, 2003 compared to $1.6 million for the three months ended September
30, 2002. Our effective tax rate was 31% for the three months ended September
30, 2003 compared to 17% for the three months ended September 30, 2002. The
increase is primarily due to the acquisition of the remaining 50% of Sovintel
and subsequent consolidation of Sovintel from September 17, 2002 into our
results of operations. In addition, there were increased levels of taxable
profits being incurred in our Russian and Ukrainian subsidiaries in the three
months ended September 30, 2003 as compared to the three months ended September
30, 2002. By the fourth quarter of 2002, we had recognized the full amount of
carry-forward tax losses at our wholly-owned Russian subsidiary, Teleross, which
previously had been recognized on a quarterly basis.

Net Income and Net Income per Share

         Our net income for the three months ended September 30, 2003 was $12.5
million, compared to a net income of $7.9 million for the three months ended
September 30, 2002.

         Our net income per share of common stock increased to $0.44 for the
three months ended September 30, 2003, compared to a net income per share of
$0.32 for the three months ended September 30, 2002. The increase in net income
per share of common stock was due to the increase in net income partly offset by
an increase in the number of weighted average shares to 28,157,339 for the three
months ended September 30, 2003, compared to 24,250,734 for the three months
ended September 30, 2002.

         Our net income per share of common stock on a fully diluted basis
increased to $0.43 for the three months ended September 30, 2003, compared to a
net income per common share of $0.32 for the three months ended September 30,
2002. The increase in net income per share of common stock on a fully diluted
basis was due to the increase in net income partly offset by an increase in the
number of weighted average shares assuming dilution to 29,072,342 for the three
months ended September 30, 2003, compared to 24,666,489 for the three months
ended September 30, 2002.

CONSOLIDATED RESULTS-- CONSOLIDATED RESULTS OF OPERATIONS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2003 COMPARED TO THE CONSOLIDATED RESULTS OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2002

                                                                              25

<PAGE>

REVENUE

         Our revenue increased by 104% to $249.2 million for the nine months
ended September 30, 2003 from $121.9 million for the nine months ended September
30, 2002. The breakdown of revenue by business group was as follows:

<TABLE>
<CAPTION>
                                           CONSOLIDATED REVENUE          CONSOLIDATED REVENUE
                                           FOR THE NINE MONTHS           FOR THE NINE MONTHS
                                         ENDED SEPTEMBER 30, 2002      ENDED SEPTEMBER 30, 2003
                                         ------------------------      ------------------------
                                                              (IN MILLIONS)
<S>                                      <C>                           <C>
REVENUE
  Business and Corporate Services ....           $ 52.4                        $129.3
  Carrier and Operator Services ......             45.6                          89.5
  Consumer Internet Services .........             15.7                          21.5
  Mobile services ....................              9.9                          10.4
  Eliminations .......................             (1.7)                         (1.5)
                                                 ------                        ------
TOTAL REVENUE ........................           $121.9                        $249.2
</TABLE>

         Business and Corporate Services. Revenue from Business and Corporate
Services increased by 147% to $129.3 million for the nine months ended September
30, 2003 from $52.4 million for the nine months ended September 30, 2002. The
primary reason for the increase is due to the acquisition of the remaining 50%
ownership interest in Sovintel which was completed in the third quarter of 2002.
We began consolidating Sovintel into our results of operations from September
17, 2002. In addition, we had increases in our domestic traffic due to adding
1,374 new corporate customers and signing up 49 new multi-tenant business
centers in the nine months ended September 30, 2003 along with actively
promoting our new services among our client base.

         Revenue for the Business and Corporate Services division of Golden
Telecom BTS increased by 12% to $13.5 million for the nine months ended
September 30, 2003 from $12.1 million for the nine months ended September 30,
2002. The increase in revenue was due to an increase in the total intercity
minutes of use by business and corporate clients and an increase in monthly
recurring charges offset by lower equipment sales.

         Carrier and Operator Services. Revenue from Carrier and Operator
Services increased by 96% to $89.5 million for the nine months ended September
30, 2003 from $45.6 million for the nine months ended September 30, 2002. The
primary reason for the increase is due to the acquisition of the remaining 50%
ownership interest in Sovintel which was completed in the third quarter of 2002.
We began consolidating Sovintel into our results of operations from September
17, 2002. In addition, we have added a number of new carriers with increased
volumes of traffic and increased the number of services that we offer to
cellular providers which has more than offset general tariff declines, although
pricing pressures still exists.

         Revenue for the Carrier and Operator Services division of Golden
Telecom BTS increased by 93% to $7.9 million for the nine months ended September
30, 2003 from $4.1 million for the nine months ended September 30, 2002. The
increase in revenue was due to increasing volumes of incoming international
traffic which we are able to terminate in a number of cities in Ukraine as well
as increasing volumes of outgoing international traffic.

         Consumer Internet Services. Revenue from Consumer Internet Services
increased by 37% to $21.5 million for the nine months ended September 30, 2003
from $15.7 million for the nine months ended September 30, 2002. The increase is
largely the result of increases in the number of dial-up Internet subscribers
from 191,707 at September 30, 2002 to 291,167 at September 30, 2003 partly
offset by the average revenue per dial-up Internet subscriber decreasing from
approximately $8.18 per month to approximately $8.13 per month over the same
period.

         Mobile Services. Revenue from Mobile Services increased by 5% to $10.4
million for the nine months ended September 30, 2003 from $9.9 million for the
nine months ended September 30, 2002. Active subscribers increased from 35,576
at September 30, 2002 to 36,861 at September 30, 2003 and the average revenue
per active subscriber has increased by 8% to approximately $33.26 per month due
to an increasing number of subscribers on a tariff plan which allows for
unlimited local calls for a fixed payment of $99 per month.

EXPENSES

                                                                              26

<PAGE>

         The following table shows our principal expenses for the nine months
ended September 30, 2003 and September 30, 2002:

<TABLE>
<CAPTION>
                                          CONSOLIDATED EXPENSES         CONSOLIDATED EXPENSES
                                           FOR THE NINE MONTHS           FOR THE NINE MONTHS
                                         ENDED SEPTEMBER 30, 2002      ENDED SEPTEMBER 30, 2003
                                         ------------------------      ------------------------
                                                              (IN MILLIONS)
<S>                                      <C>                           <C>
COST OF REVENUE
  Business and Corporate Services.....           $ 30.1                        $ 56.1
  Carrier and Operator Services.......             13.1                          50.8
  Consumer Internet Services..........             10.8                          14.4
  Mobile services.....................              2.2                           1.8
  Eliminations........................             (1.7)                         (1.5)
                                                 ------                        ------
TOTAL COST OF REVENUE.................             54.5                         121.6
Selling, general and administrative...             30.7                          42.6
Depreciation and amortization.........             19.6                          32.1
Equity in losses earnings
  of ventures.........................             (3.8)                           --
Interest income.......................             (1.2)                         (0.9)
Interest expense......................              1.4                           1.8
Foreign currency loss (gain)..........              0.6                           --
Provision for income taxes............              3.8                          14.6
</TABLE>

Cost of Revenue

         Our cost of revenue increased by 123% to $121.6 million for the nine
months ended September 30, 2003 from $54.5 million for the nine months ended
September 30, 2002.

         Business and Corporate Services. Cost of revenue from Business and
Corporate Services increased by 86% to $56.1 million, or 43% of revenue, for the
nine months ended September 30, 2003 from $30.1 million, or 57% of revenue, for
the nine months ended September 30, 2002. The decrease as a percentage of
revenue is due to the acquisition of the remaining 50% ownership interest in
Sovintel which was completed in the third quarter of 2002. We began
consolidating Sovintel into our results of operations from September 17, 2002.

         Cost of revenue for the Business and Corporate Services division of
Golden Telecom BTS increased by 9% to $6.2 million, or 46% of revenue, for the
nine months ended September 30, 2003 from $5.7 million, or 47% of revenue, for
the nine months ended September 30, 2002.

         Carrier and Operator Services. Cost of revenue from Carrier and
Operator Services increased by 288% to $50.8 million, or 57% of revenue, for the
nine months ended September 30, 2003 from $13.1 million, or 29% of revenue, for
the nine months ended September 30, 2002. The increase in cost of revenue as a
percentage of revenue is due to the acquisition of the remaining 50% ownership
interest in Sovintel which was completed in the third quarter of 2002. We began
consolidating Sovintel into our results of operations from September 17, 2002.

         Cost of revenue for the Carrier and Operator Services division of
Golden Telecom BTS increased by 108% to $5.4 million, or 68% of revenue, for the
nine months ended September 30, 2003 from $2.6 million, or 63% of revenue, for
the nine months ended September 30, 2002. Cost of revenue increased as a
percentage of revenue due to the increased volumes of lower margin international
incoming and outgoing traffic.

         Consumer Internet Services. Cost of revenue from Consumer Internet
Services increased by 33% to $14.4 million, or 67% of revenue, for the nine
months ended September 30, 2003 from $10.8 million, or 69% of revenue, for the
nine months ended September 30, 2002. The decrease as a percentage of revenue
was mainly due to additional low cost interconnect capacity becoming available
in the third quarter of 2002.

         Mobile Services. Cost of revenue from Mobile Services decreased by 18%
to $1.8 million, or 17% of revenue, for the nine months ended September 30, 2003
from $2.2 million, or 22% of revenue, for the nine months ended September 30,
2002. The cost of revenue

                                                                              27

<PAGE>

as a percentage of revenue decreased due to the increased number of subscribers
using the unlimited local call tariff plan which does not lead to additional
settlement costs with other operators.

Selling, General and Administrative

         Our selling, general and administrative expenses increased by 39% to
$42.6 million, or 17% of revenue, for the nine months ended September 30, 2003
from $30.7 million, or 25% of revenue, for the nine months ended September 30,
2002. This increase in selling, general and administrative expenses was mainly
due to increases in employee related costs, advertising, inventory obsolescence,
bad debt expense, and other selling, general and administrative expenses arising
from the consolidation of Sovintel from September 17, 2002 into our results of
operations.

Depreciation and Amortization

         Our depreciation and amortization expenses increased by 64% to $32.1
million for the nine months ended September 30, 2003 from $19.6 million for the
nine months ended September 30, 2002. The increase was due in part to
depreciation on continuing capital expenditures of the consolidated entities,
but primarily relates to our acquisition of the remaining 50% of Sovintel and
subsequent consolidation of Sovintel as of September 17, 2002 into our results
of operations.

Equity in Earnings of Ventures

         The earnings after interest and tax charges from our investments in
non-consolidated ventures was negligible for the nine months ended September 30,
2003 down from earnings of $3.8 million for the nine months ended September 30,
2002. We recognized earnings at Sovintel of $9.0 million for the nine months
ended September 30, 2002, which more than offset our recognized losses in MCT.
The decrease in equity in earnings was due to the acquisition of the remaining
50% of Sovintel and its subsequent consolidation as of September 17, 2002 into
our results of operations partly offset by writing down our investment in MCT to
zero in the second quarter of 2002 thereby recognizing no more losses from this
equity investee.

Interest Income

         Our interest income was $0.9 million for the nine months ended
September 30, 2003 down from $1.2 million for the nine months ended September
30, 2002. The decrease in interest income mainly reflects lower interest rates
earned on deposits in short-term US money market funds.

Interest Expense

         Our interest expense was $1.8 million for the nine months ended
September 30, 2003 up from $1.4 million for the nine months ended September 30,
2002. The increase in overall interest expense mainly reflects the effect of
higher average balances of debt, including capital leases. Debt, excluding
capital lease obligations, at September 30, 2003 was $1.9 million compared to
$4.2 million at September 30, 2002. On June 30, 2003, we settled $30.0 million
of outstanding debt plus accrued interest under a credit facility with ZAO
Citibank. There was no penalty for the early settlement of this debt however an
additional $0.2 million of previously capitalized financing costs was recognized
during the second quarter of 2003 which was previously being recognized over the
life of the facility.

Foreign Currency Gain/Loss

         Our foreign currency gain was negligible for the nine months ended
September 30, 2003, compared to a foreign currency loss of $0.6 million for the
nine months ended September 30, 2002. The improvement in foreign currency loss
to negligible foreign currency gain is due to the combination of movements in
exchange rates and changes in the amount of net monetary assets that we have
denominated in foreign currencies.

Provision for Income Taxes

         Our charge for income taxes was $14.6 million for the nine months ended
September 30, 2003 compared to $3.8 million for the nine months ended September
30, 2002. Our effective tax rate was 28% for the nine months ended September 30,
2003 compared to 19% for the nine months ended September 30, 2002. The increase
is primarily due to the acquisition of the remaining 50% of Sovintel and
subsequent consolidation of Sovintel from September 17, 2002 into our results of
operations. In addition, there were increased

                                                                              28

<PAGE>

levels of taxable profits being incurred in our Russian and Ukrainian
subsidiaries in the nine months ended September 30, 2003 as compared to the nine
months ended September 30, 2002. By the fourth quarter of 2002, we had
recognized the full amount of carry-forward tax losses at our wholly-owned
Russian subsidiary, Teleross, which previously had been recognized on a
quarterly basis.

Cumulative Effect of a Change in Accounting Principle

         We adopted SFAS No. 142 "Accounting for Goodwill," effective from
January 1, 2002. As a result, we recorded a cumulative effect of a change in
accounting principle for negative goodwill (deferred credit) arising on our
equity method investments in the amount of $1.0 million for the nine months
ended September 30, 2002.

Net Income and Net Income per Share

         Our net income for the nine months ended September 30, 2003 was $37.2
million, compared to a net income of $16.8 million for the nine months ended
September 30, 2002.

         Our net income per share of common stock increased to $1.35 for the
nine months ended September 30, 2003, compared to a net income per share of
$0.73 for the nine months ended September 30, 2002. The increase in net income
per share of common stock was due to the increase in net income partly offset by
an increase in the number of weighted average shares to 27,569,748 for the nine
months ended September 30, 2003, compared to 23,151,810 for the nine months
ended September 30, 2002.

         Our net income per share of common stock on a fully diluted basis
increased to $1.32 for the nine months ended September 30, 2003, compared to a
net income per common share of $0.71 for the nine months ended September 30,
2002. The increase in net income per share of common stock on a fully diluted
basis was due to the increase in net income partly offset by an increase in the
number of weighted average shares assuming dilution to 28,251,106 for the nine
months ended September 30, 2003, compared to 23,602,715 for the nine months
ended September 30, 2002.

CONSOLIDATED FINANCIAL POSITION-- SIGNIFICANT CHANGES IN CONSOLIDATED FINANCIAL
     POSITION AT SEPTEMBER 30, 2003 COMPARED TO CONSOLIDATED FINANCIAL POSITION
     AT DECEMBER 31, 2002

Accounts Receivable

         Accounts receivable increased from December 31, 2002 to September 30,
2003 as a result of increased revenue during the period ended September 30, 2003
and delays in timing of certain cash collections as we commenced integrating
customer databases and billing information from TeleRoss into Sovintel.

Intangible Assets

         Our intangible assets increased at September 30, 2003 as compared to
December 31, 2002 as a result of our acquisition of Sibchallenge in August 2003.

Debt Obligations

         Our debt position decreased at September 30, 2003 as compared to
December 31, 2002 as a result of retiring our debt that consisted mainly of ROL
Holdings Citibank Credit Facility of $30.0 million.

Stockholders' Equity

         Shareholders' equity increased from December 31, 2002 to September 30,
2003 as a result of our net income of $37.2 million and proceeds of
approximately $20.3 million received from the exercise of stock options.

INCOME TAXES

                                                                              29

<PAGE>

         Our effective rate of income tax differs from the US statutory rate due
to the impact of the following factors (1) different income tax rates and
regulations apply in the countries where we operate; and (2) amortization of
certain acquired intangible assets is not deductible for income tax purposes. We
have not recorded a tax benefit in relation to our US net operating loss
carry-forward amount as our taxable US income is largely comprised of interest
income and dividends which we do not expect to continue over the longer term. In
2002, as a result of our Russian and Ukrainian subsidiaries profitability for
Russian and Ukrainian statutory purposes and reasonable certainty of future
profits, we recorded deferred tax assets in the respective Russian and Ukrainian
subsidiaries.

LIQUIDITY AND CAPITAL RESOURCES

         Our cash and cash equivalents were $54.9 million and $59.6 million as
of September 30, 2003 and December 31, 2002, respectively. Our total restricted
cash was $1.1 million and $1.5 million as of September 30, 2003, and December
31, 2002, respectively. The restricted cash is maintained in connection with
certain of our debt obligations as described below.

         During the nine months ended September 30, 2003 we had net cash inflows
of $63.1 million from our operating activities. During the nine months ended
September 30, 2002, we had net cash inflows of $28.8 million from our operating
activities. This increase in net cash inflows from operating activities at
September 30, 2003 is mainly due to the increase in net income, increased
revenues, and the consolidation of Sovintel into our results of operations and
financial position from September 17, 2002. We used cash of $55.7 million for
investing activities for the nine months ended September 30, 2003 which were
principally attributable to building our telecommunications networks and the
acquisition of Sibchallenge in August 2003. We had cash inflows of $5.9 million
from investing activities for the nine months ended September 30, 2002 which
were principally attributable to proceeds received from investments available
for sale and a $9.0 million loan received from an equity investee, partially
offset by cash outflows attributable to building our telecommunications
networks. Network investing activities totaled $42.8 million for the nine months
ended September 30, 2003 and included capital expenditures principally
attributable to building out our telecommunications network and the purchase of
additional numbering capacity. Network investing activities totaled $16.6
million for the nine months ended September 30, 2002 and included capital
expenditures principally attributable to building our telecommunications
network. For the nine months ended September 30, 2002, we recovered funds from
escrow of $3.0 million in association with our acquisition of PTK in June 2001.

         We had working capital of $68.1 million as of September 30, 2003 and
$56.5 million as of December 31, 2002. At September 30, 2003, we had total debt,
excluding capital lease obligations, of approximately $1.9 million, of which
$1.3 million were current maturities. At December 31, 2002, we had total debt,
excluding capital lease obligations, of approximately $33.1 million, of which
$9.0 million were current maturities. Total debt includes amounts that were
fully collateralized by restricted cash. At September 30, 2003 and December 31,
2002 none of our debt was at fixed interest rates. In June 2003, we settled
early $30.0 million of outstanding debt plus accrued interest under a credit
facility with ZAO Citibank. There was no penalty for the early settlement of
this debt however an additional $0.2 million of previously capitalized financing
costs was recognized as interest expense which was previously being recognized
over the life of the facility.

         Some of our operating companies have received debt financing through
direct loans from affiliated companies. In addition, certain operating companies
have borrowed funds under a back-to-back, seven-year credit facility for up to
$22.7 million from a Russian subsidiary of Citibank. Under this facility, we
provide full cash collateral, held in London, and recorded on our balance sheet
as restricted cash, for onshore loans made by the bank to our Russian registered
ventures. In a second, similar facility, we provide full cash collateral for a
short term back-to-back, revolving, credit facility for up to $10.0 million from
the same bank for Sovintel. The funding level as of September 30, 2003 for all
these facilities totaled $1.0 million, of which $0.2 million was funded to our
consolidated subsidiaries and $0.8 million was funded to our non-consolidated
entities.

         In order for us to compete successfully, we may require substantial
capital to continue to develop our networks and meet the funding requirements of
our operations and ventures, including possible losses from operations. We may
also require capital for our acquisition and business development initiatives.
The net proceeds from our IPO, our private placement and our operating cash
flows have been applied to these funding requirements. We also expect to fund
these requirements through additional cash flow from operations, proceeds from
additional equity and debt offerings that we may conduct, and debt financing
facilities.

         In October 2003, we entered into an agreement with Mobile TeleSystems
and Vimpelcom to build a fiber optic link ("FOL") between Moscow and Nizhny
Novgorod. Our expected cost of the project is approximately $2.9 million and the
link is expected to come on line in the second half of 2004. The FOL is expected
to follow the main highway between Moscow and Nizhny Novgorod,

                                                                              30

<PAGE>

connecting the base stations of the two mobile operators, as well as our
potential clients along the route. Three different FOL cables with 32 fiber
pairs each will be constructed in two plastic protection tubes. Each partner
will own its own electronics.

         In the future, we may execute especially large or numerous
acquisitions, which may require us to raise additional funds through a dilutive
equity issuance, through additional borrowings with collateralization and
through the divestment of non-core assets, or combinations of the above. In the
case especially large or numerous acquisitions do not materialize, we expect our
current sources of funding to finance our capital requirements for the next 12
to 18 months. The actual amount and timing of our future capital requirements
may differ materially from our current estimates because of changes or
fluctuations in our anticipated acquisitions, investments, revenue, operating
costs and network expansion plans and access to alternative sources of financing
on favorable terms. Further, in order for us to compete successfully, we may
require substantial capital to continue to develop our networks and meet the
funding requirements of our operations and ventures, including any possible
losses from operations. We will also require capital for other acquisition and
business development initiatives. We expect to fund these requirements through
our cash on hand, cash flow from operations, proceeds from additional equity and
debt offerings that we may conduct, and debt financing facilities.

        We may not be able to obtain additional financing on favorable terms. As
a result, we may be subject to restrictive financial covenants, our interest
obligations may increase significantly and our shareholders may be adversely
diluted. Our failure to generate sufficient funds in the future, whether from
operations or by raising additional debt or equity capital, may require us to
delay or abandon some or all of our anticipated expenditures, to sell assets, or
both, which could have a material adverse effect on our operations. We may be
required to offer some or all of our assets as collateral in any debt facility
thereby limiting our ability to attract any additional debt.

         As part of our drive to increase our network capacity, reduce costs and
improve the quality of our service, we have leased additional fiber optic and
satellite-based network capacity. The terms of these leases are generally five
years or more and can involve significant advance payments. As demand for our
telecommunication services increases we expect to enter into additional capacity
agreements and may make significant financial commitments, in addition to our
existing commitments.

         As of September 30, 2003, we had the following contractual obligations,
including short- and long-term debt arrangements, commitments for future
payments under non-cancelable lease arrangements and purchase obligations:

<TABLE>
<CAPTION>
                                          PAYMENTS DUE BY PERIOD
                                          ----------------------
                                               (IN THOUSANDS)

                                              LESS       1 - 3     4 - 5
                                 TOTAL     THAN 1 YEAR   YEARS     YEARS
                                 -------   -----------  -------   -------
<S>                              <C>       <C>          <C>       <C>
Short- and long-term debt ....   $ 1,874     $ 1,250    $   524   $   100
Capital lease obligations ....     6,459       2,281      4,178        --
Non-cancelable lease
  obligations ................     3,575       1,662      1,913        --
Purchase obligations .........    15,479      10,081      5,398        --
                                 -------     -------    -------   -------
Total contractual cash
  obligations ................   $27,387     $15,274    $12,013   $   100
                                 =======     =======    =======   =======
</TABLE>

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

         Certain statements contained in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and other parts of this
document, including, without limitation, those concerning (i) future
acquisitions and capital expenditures, including our plans to fund such
acquisitions and capital expenditures (ii) projected traffic volumes, tariff
levels, subscriber numbers and other growth indicators; (iii) anticipated
revenues and expenses, including taxes; (iv) the Company's competitive
environment; (v) the Company's potential liability for litigation; (vi) the
Company's future tax liability; (vii) future performance of consolidated and
equity method investments; (viii) the anticipated effect of recent accounting
pronouncements; (ix) recognition of doubtful accounts, (x) the political,
regulatory and financial situation in the markets in which we operate, including
the anticipated effect of the new law on telecommunication in Russia, and (xi)
the expected closing of the Comincom transaction are forward-looking and concern
the Company's projected operations, economic performance and financial
condition. These forward-looking statements are made pursuant to the safe harbor
provisions of the Securities Litigation Reform Act of 1995. It is important to
note that such statements involve risks and uncertainties and actual results may
differ materially from those expressed or implied by such forward-looking
statements. Among the key factors that have a direct bearing on the Company's
results of operations, economic performance and financial condition are the
commercial and execution risks associated with implementing the Company's
business plan, the political, economic and legal

                                                                              31

<PAGE>

environment in the markets in which the Company operates, increasing
competitiveness in the telecommunications and Internet-related businesses that
may limit growth opportunities, and increased and intense downward price
pressures on some of the services that we offer. These and other factors are
discussed herein under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this Report.

         Additional information concerning factors that could cause results to
differ materially from those in the forward looking statements are contained in
the Company's filings with the U.S. Securities and Exchange Commission ("SEC")
and especially in the Risk Factor sections therein, including, but not limited
to the Company's report on Form 10-K for the year ended December 31, 2002.

         In addition, any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions or future events or
performance (often, but not always, through the use of words or phrases such as
"will likely result," "are expected to," "estimated," "intends," "plans,"
"projection" and "outlook") are not historical facts and may be forward-looking
and, accordingly, such statements involve estimates, assumptions and
uncertainties which could cause actual results to differ materially from those
expressed in the forward-looking statements. Accordingly, any such statements
are qualified in their entirety by reference to, and are accompanied by, the
factors discussed throughout this Report and investors, therefore, should not
place undue reliance on any such forward-looking statements.

         Further, any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no obligation to update
any forward-looking statement or statements to reflect events or circumstances
after the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors may emerge from time to time, and it is not
possible for management to predict all of such factors. Further, management
cannot assess the impact of each such factor on the Company's business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures

         The Company maintains disclosure controls and procedures, which have
been designed to ensure that material information related to Golden Telecom,
Inc. including its consolidated and non-consolidated subsidiaries, is made known
to a disclosure committee on a regular basis. In response to recent legislation
and proposed regulations, the Company has reviewed the internal control
structure and disclosure controls and procedures pursuant to Rule 13a-14 and
15(d)-14(c) under the Securities and Exchange Act of 1934, as amended. Although
the Company believes that the pre-existing disclosure controls and procedures
were adequate to enable the Company to comply with the Company's disclosure
obligations, as a result of such review, the Company implemented minor changes,
primarily to formalize and document certain procedures already in place. The
Company also established a disclosure committee comprised of certain members of
the Company's senior management.

         As of September 30, 2003, the disclosure committee carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in causing material information
to be recorded, processed, summarized, and reported by management of the Company
on a timely basis and to ensure that the quality and timeliness of the Company's
public disclosures complies with the SEC disclosure requirements.

Changes in Controls and Procedures

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these internal controls after the date
of our most recent evaluation.

                                                                              32

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

DESIGNATION                             DESCRIPTION
------------      --------------------------------------------------------------
    31.1          Certification of the Chief Executive Officer Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

    31.2          Certification of the Chief Financial Officer Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

    32.1          Certification of the Chief Executive Officer Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

    32.2          Certification of the Chief Financial Officer Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

b) Reports on Form 8-K

DATE OF REPORT                          SUBJECT OF REPORT
---------------   --------------------------------------------------------------
August 6, 2003    Golden Telecom, Inc. announces signing of a share purchase
                  agreement to acquire 100% ownership interest in OOO
                  Sibchallenge Telecom and 100% of the issued and outstanding
                  shares of ZAO Tel.

August 13, 2003   Golden Telecom, Inc. announces second quarter 2003 results.

August 19, 2003   Golden Telecom, Inc. announces signing of a share exchange
                  agreement to acquire 100% ownership interest in OAO Comincom.

                                                                              33

<PAGE>

                                   SIGNATURES

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

                                 GOLDEN TELECOM, INC.
                                 (Registrant)

                                 By: /s/ DAVID STEWART
                                     -----------------
                                 Name:  David Stewart
                                 Title: Chief Financial Officer and Treasurer
                                        (Principal Financial Officer)

                                 By: /s/ MICHAEL D. WILSON
                                     ---------------------
                                 Name:  Michael D. Wilson
                                 Title: Corporate Controller
                                        (Principal Accounting Officer)

Date: November 12, 2003

                                                                              34

<PAGE>

                                INDEX TO EXHIBITS

DESIGNATION                             DESCRIPTION
------------      --------------------------------------------------------------
    31.1          Certification of the Chief Executive Officer Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

    31.2          Certification of the Chief Financial Officer Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

    32.1          Certification of the Chief Executive Officer Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

    32.2          Certification of the Chief Financial Officer Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002