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Standard & Poor’s Ratings Services says its ratings and outlooks on Russian telecommunications operators will not be immediately affected by the decision of Russia ‘s Ministry for Antimonopoly Policy to replace the existing Integral Settlement Rate (ISR) for settlements between JSC Rostelecom (B-/Stable/–) and regional fixed-line telecoms operators.

The Ministry for Antimonopoly Policy has stated that the ISR should be replaced with a new interconnection pricing regime for domestic long-distance traffic transit commencing Aug. 1, 2003 .

Apart from Rostelecom, the companies concerned include:

JSC Central Telecommunications Co. (CCC+/Stable/–);

JSC Moscow City Telephone Network (B-/Stable/–);

JSC North-West Telecom (B-/Stable/–)

JSC Southern Telecommunications Co. (B-/Stable/–);

JSC Uralsviazinform (B/Stable/–); and

JSC VolgaTelecom (B/Stable/–).

“The net cashflows of the companies concerned from long-distance services should not be materially affected by the new regulatory initiative,” says Standard & Poor’s credit analyst Pavel Kochanov.

Furthermore, the introduction of separate settlement rates for transmission of outgoing domestic long-distance calls (payable to Rostelecom) and separate settlement rates for terminating incoming domestic long-distance calls (payable to Russian regional telecoms operators) should improve the overall settlement system. Cashflow generation from long-distance telephony services for Russian telecoms will be mainly driven by changes in regulated settlement rates and volumes of outgoing and incoming traffic as well as by final long-distance tariffs for customers.