ROSTELECOM PJSC: Rostelecom announces rebranding, unveils new digital services

ROSTELECOM ANNOUNCES REBRANDING,

UNVEILS NEW DIGITAL SERVICES

A NEW BRAND EMPHASIZES ROSTELECOM'S CONTINUED EVOLUTION

INTO AN INNOVATIVE DIGITAL COMPANY

Moscow, Russia - September 26, 2018 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia's national telecommunications operator, announces its repositioning and rebranding, introduces new digital services and tariff options to reflect market trends and the Company's strategic priorities.

Strategy 2022 sets out Rostelecom's digital transformation from a telecoms operator into an IT-company, servicing retail, business clients and the Russian Government to embrace new opportunities in the digital world.

The success of Rostelecom's digital transformation is reflected by the contribution of more than half of the Company's revenue by digital and content services, Internet access, pay TV, cloud-based solutions, data centers, cybersecurity and other services. These segments are driving Rostelecom's growth and the Company is also undergoing significant organizational changes internally to reflect this. Rostelecom is establishing new teams and centers of excellence created to boost key focus areas, such as biometry, cybersecurity, IoT, smart home, etc.

Mikhail Oseevsky, CEO & President of Rostelecom, commented: "What really matters today is not the technologies, but their application, and the ways they can change lifestyle and bring comfort and safety. We are no longer focused on new subscriptions, but are embracing entire life areas, creating ecosystems, where every client will find the solution they need."

To reflect the new positioning, Rostelecom introduced a number of brand new services and tariffs for a number of segments. Vladimir Kirienko, First Vice President of Rostelecom, commented: "We do our best to anticipate our clients' aspirations and needs in every area of their lives, to continue delivering best-in-class services. With Rostelecom's technological solutions businesses grow more efficiently, and customers' day-to-day life becomes more comfortable and safer. The portfolio of brand-new products and tariffs now offers better flexibility - tailored services can be reassembled like pieces in a jigsaw puzzle to meet the particular needs of a family or a company".

A multimedia platform Wink has been added to the ecosystem of products for private clients, marking a significant evolution of IPTV, which is today popular among millions of families across Russia. Wink is a platform that brings together a mobile app, a website and a Smart TV app, combining more than 200 TV channels, 12,000 movies and series, as well as a full range of additional functions, from pausing and rewinding to providing a parental-control feature. In future, clients will be able to enjoy a much broader functionality of the service.

Online education, which is one of the key elements within the ecosystem, is represented by the "Rostelecom Lyceum" platform, which was launched to enhance quality, safety and accessibility of supplementary school education, and features specially selected content. On the platform, a personal supervisor can tailor student programmes and assist parents with tracking student performance and manage their schedules.

New products and services in the tariff line are conveniently named to ensure easier choice based on families' needs - "For Internet", "For peace of mind", "For new experiences", "For everyone", "Gaming".

On 1 October, Rostelecom will launch an updated platform to assist entrepreneurs "Be in the black", that allows businesses enjoy a high-speed internet access and mobile communication, with a 50% discount on additional services, such as Virtual PBX, SMS advertising, Wi-Fi, video monitoring or TV for business.

These and other changes signalled that Rostelecom needs a new, dynamic and evolving positioning and branding. Elena Dobrohotova, Marketing Director of Rostelecom, commented: "The mission of our new brand is to reflect fundamental change in our approach to products and clients. We no longer focus on technologies, addressing people's needs have become our top priority. That is why their experience and emotions are core to us. The diversity of graphic solutions and colours echoes the wide range of opportunities we are creating for people, businesses and the country. We wish to emphasize that on this new digital journey we have embarked on, we are looking to become a truly modern company with a stronger brand engagement with each of our customers, from gamers to government bodies".

The new brand identity was developed by a partnership of Bootleg (BBDO group) and Saffron Brand Consultants.

Ekaterina Shenets, managing director of Bootleg, commented: "The changes within the Company were a driving force for fundamental changes in the way Rostelecom connects with clients and partners. We were excited to be a part of the team, responsible for the development of Rostelecom's new style and message. Thanks to joint efforts in the marketing department, Saffron and Bootleg, the national Company now has a unique, powerful image and authentic voice to continue creating real value and evolving its digital footprint further on".

The first marketing campaign in new corporate style will be launched on 1 October 2018.

*   *   *

Rostelecom is one of the largest national telecommunications operators in Russia and Europe. The Company operates in all segments of the telecommunications market and covers millions of households in Russia.

Rostelecom is an undisputable leader of the broadband and pay-TV markets in Russia with over 13.0 million fixed-line broadband subscribers and over 10 million pay-TV subscribers, over 5.1 million of which are subscribed to Rostelecom's IPTV services.

In the first half of 2018, the Group generated RUB 153.6 billion of revenues, RUB 46.9 billion of OIBDA (30.5% of revenue) and RUB 7.0 billion of net income.

The Group is a market leader in providing telecommunications services to government bodies and corporates of all levels.

Rostelecom is an important innovator that provides solutions in the field of E-Government, cloud computing, healthcare, education, security and housing & utility services.

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

***

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.

Note: This announcement contains inside information in accordance with Article 7 of EU Regulation 596/2014 of November 10, 2014

Full name and position making the announcement - Ekaterina Ustinova, IR Director