28 November 2017

Moscow, Russian Federation (28 November 2017) — Public Joint Stock Company “MegaFon” (LSE: MFON), a leading Russian provider of integrated digital services (“MegaFon” or the “Company”), announces that it has signed a cooperation agreement with PJSC “Rostelecom” (“Rostelecom”) to jointly develop 5G network. This will allow reducing the cost of rollout the next generation standard.

As part of the cooperation, MegaFon and Rostelecom will develop optimal scenarios for rolling out 5G networks based on international experience and subject to the specifics of the Russian mobile communications market. The companies consider possibility of setting up a joint venture that would act as a single infrastructure operator for construction of 5G networks in Russia.

MegaFon and Rostelecom plan to set up a working group that will propose options for rolling out 5G networks in the 3.4 — 3.6 GHz and 26 GHz frequency bands. This will include giving consideration to the government program on the Digital Economy of the Russian Federation. Special attention will be paid to identifying and freeing up available space in the spectrum for 5G networks.

“In the current market conditions, the most logical and cost efficient option for deployment of the new standard is cooperation between several players. We are already working together successfully with Rostelecom as part of the working group on Information Infrastructure under the government program for Digital Economy and we see huge potential for further cooperation. I am confident that, through joint efforts, 5G can become the foundation for technological development in a number of sectors of the digital economy,” said MegaFon CEO Sergey Soldatenkov.

“For our company, one of the main aspects of the Digital Economy program is building the infrastructure that is needed for it to be created and function. Clearly 5G will become one of the technologies that forms the foundation for the digital economy,” commented Rostelecom President Mikhail Oseevskiy. “We believe that the creation of a fully-fledged 5G mobile network in Russia will require market players to join efforts. Our partnership with MegaFon is designed to demonstrate the success of such an approach to rolling out 5G networks.”

Both companies are actively involved in promoting the 5G standard together with leading international hardware manufacturers. For example, MegaFon is working on issues around the roll out of 5G as a member of GSMA, the international organization of mobile operators. This year, at the St Petersburg International Economic Forum, MegaFon set a record for the fastest ever mobile internet connection in Russia, demonstrating the operation of a 5G network at speeds of 35 GB/s. MegaFon is also the first mobile operator to obtain the 3400 — 3800 MHz and 25250 —29500 MHz frequency bands to deploy test 5G zones for the FIFA 2018 World Cup.

Rostelecom has the necessary network infrastructure, radio frequencies and project experience. Earlier the company signed an agreement to build 5G networks at Innopolis, the Skolkovo Innovation Center and the State Hermitage Museum.