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GTI's Latest Buyout Marks Another Step East

Golden Telecom, Inc. may have its headquarters in Virginia in the U.S., but its heart is in central and eastern Europe.

The broadband, Internet and e-business services provider is just finishing up acquiring its outstanding interests in Sovam Teleport Kiev, increasing its ownership position from 49 percent to 100. The acquisition was completed through its Ukrainian subsidiary, Golden Telecom LLC.

According to GTI chief operating officer Stan Abbeloos, the merger of Sovam Teleport Kiev, a provider of data and Internet services across Ukraine, with Golden Telecom LLC, an independent provider of international telephony to Kiev-based businesses, "allows the combined company to be the first digital telecom network in Ukraine to offer integrated voice and data services on a nationwide basis."

Abbeloos said Golden Telecom LLC's new integrated product portfolio offers Ukrainian businesses an independent national corporate voice and data network, and international data services based on frame relay and private leased circuits, digital telephone lines, ISDN, banking services and countrywide high-speed Internet.

Earlier this month, GTI acquired STM-16 capacity (2.4 Gbps) from Moscow to Stockholm from Sonera Corp. In Stockholm, this capacity will connect directly to the Global TeleSystems (GTS) network, providing access to complementary broadband Internet and data networks in Europe and the United States.

Stewart Reich, GTI's chief executive officer, said Golden Telecom's Russia-On-Line service is currently the only dial-up ISP in Russia with over 35 points-of-presence (PoPs), including Moscow and St. Petersburg.

Russia-On-Line recently celebrated its fifth anniversary of dial-up World Wide Web services in Russia this year, providing a full range of dial-up services as well as other Internet-related services like Web hosting, co-location and domain-name registration for the "ru" domain.

Reich added that the recent acquisitions of Glasnet, a Moscow-based ISP, and Nevalink, a St. Petersburg ISP, "have allowed GTI to consolidate the bandwidth requirements of these organizations, which ultimately allows for significantly reduced access costs."

GTI acquired the capacity through a multimillion dollar, 15-year lease agreement that approximates an irrevocable right to use (IRU) on the new Sonera fiber optic network, Reich said.

Sonera's Russian subsidiary has a fiber network from Finland to Moscow using utility-company rights-of- way, he said, a network he expects to be commercially operational during the first quarter of this year. Initially, GTI will activate the equivalent of an STM-1 (155Mbps) and will upgrade to STM-4 (622 Mbps) and then to STM-16 as required, he said.

GTI also has city enterprise networks (CENs) operating in Paris, Geneva, Berlin, Prague and Budapest, with plans to expand that to 16 across Europe later this year, Abbeloos said.



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