Rostelecom gains interest in the share capital of the leading system integrator in IT security

Rostelecom gains interest in the share capital of the leading system integrator in IT security

Moscow, Russia - August 31, 2020 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest integrated digital service provider in Russia, today announces that it has signed through its subsidiary RTK Information Security a legally binding contract to acquire 49% of shares in ELVIS-PLUS, one of the leading system aggregators and technology vendors in Russia's IT security market.

ELVIS-PLUS provides a wide range of software development, supply and integration services to protect businesses' IT systems. The services are based on the company's proprietary solutions - special software and hardware devices for communication channels protection and network firewalls. Prominent Russian corporate and state organizations including the Russian Federal Tax Service, Bank of Russia and Unified Power Systems are among the company's clients.

The acquisition will make significant contribution to Rostelecom's system integration business in the area of information security, as well as the company's service offerings that help protect clients from cyberattacks.

Anna Shumeiko, Senior Vice-President, the Chief of Staff of the President of Rostelecom commented: "The acquisition of ELVIS-PLUS is a major step towards strengthening Rostelecom's leadership in information security services. Investing in such a large player will significantly upscale our system integration business division for its further transition to a product-as-a-service model. For more than 25 years ELVIS-PLUS has been operating in the market with a very successful track record of projects and solutions. Its strong and experienced team will make a strong contribution to our digital capabilities".

Alexander Galitsky, Founder and President of ELVIS-PLUS commented: "Rostelecom's leadership and deep expertise in information security service will contribute to our market position, and our partnership will support the synergy of competences and joint efforts".

Igor Lyapunov, Vice-President for information security at Rostelecom commented: "Our goal is to be able to provide our clients with information security technologies in three different forms: as products, services and as turnkey projects. We have made significant progress in upscaling our own competences in this area and believe that the partnership with ELVIS-PLUS will be a serious boost to increase our presence in both certain segments, but also across the entire market".

Further information is available at https://www.company.rt.ru/en/ir/news_calendar/.

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Rostelecom is the largest integrated digital services and products provider, operating in all segments of the telecommunications market in Russia. The Company serves millions of households, state and private enterprises across the country.

Rostelecom is Russia's undisputed market leader, providing high-speed Internet access and pay-TV. The total number of broadband users stands at over 13.4 mln users, it has more than 10.7 mln pay-TV customers, over 5.8 mln of which are subscribed to Rostelecom's IPTV services. Tele2 Russia, a Rostelecom subsidiary, is a major player in the mobile market with over 44 mln subscribers and the industry-leading NPS, a customer satisfaction benchmark.

During the first six months of 2020, the Group generated RUB 248.9 bln of revenues, RUB 95.9 bln of OIBDA (38.5% of revenue) and RUB 15.4 bln of net income.

The Group is the leading provider of telecommunications services to government bodies and corporates of all levels.

Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centers and cloud computing, biometry, healthcare, education and housing & utility services.

The Group's stable financial position is confirmed by its credit ratings. Rostelecom has been assigned 'BBB-' and 'BB+' international credit ratings by Fitch Ratings and Standard & Poor's respectively, and AA(RU) by ACRA.

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

Those forward-looking statements include, but are not limited to:

• Assessment of PAO Rostelecom's (the Company) future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
• The Company's plans to take ownership stakes in other organisations;
• the Company's anticipated capital expenditures and plans to construct and modernize its network;
• the Company's expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;
• the Company's plans with respect to improving its corporate governance practices;
• the Company's expectations as to its position in the telecommunications market and forecasts on the development of the market segments within which the Company operates;
• economic outlook and industry trends;
• the Company's expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company's activity;
• other statements regarding matters that are not historical facts.

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

• risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
• risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;
• risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company's services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;
• technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;
• other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company's Annual Report and the Company's other public filings.

Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances upon the annual report publication or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.