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October 3, 2006

Semiannual Turnover of the CyberPlat® Payment System Has Exceeded 1 Billion Dollars

According to H1 results, CYBERPLAT® Has Secured its Lead in Cash Payment Acceptance Sector

Andrey Gribov, General Director of CYBERPLAT: "Our semiannual results have secured even a greater breakaway from the nearest rivals in the caliber of our business manifested by its turnover, as well as fault tolerance and reliability—according to these characteristics, CYBERPLAT (CyberPlat®) has outperformed the nearest competing system by almost five times." CyberPlat®, the first Russian payment system, was created in 1997. The first online payment was executed on 18 March 1998 for the benefit of the Garant-park Company, and for the benefit of the first mobile operator—VimpelCom—on 12 August 1998.

FINANCIAL INDICATORS
For the first six months of 2006, the total turnover of the CyberPlat® payment system has reached 1 billion 19 million US dollars; that exceeds the turnover for the same period of 2005 by a factor of 2.54. Thus, the CyberPlat® Company has not only proved, but firmly established its status of Russia's biggest payment system. Payments from mobile communication subscribers account for the biggest turnover share—97%; fixed-line communication services and the Internet comprise 2 % of the turnover, and less than 1% falls at the payments for satellite and cable television.

The financial development and business activity of the Company have been acknowledged by the leading players in the telecommunication market, and it conferred diplomas of the biggest mobile communications operators. OJSC VimpelCom (Beeline trade mark) awarded the CyberPlat® payment system an acknolegement certificate—"2005 Absolute Leader by the Total Volume of Payments Accepted from Beeline Subscribers in Telecommunications Salons and Independent Retail Outlets in."

Mobile TeleSystems ranked the CyberPlat® payment system first, by the total volume of payments accepted from their subscribers in 2005.

MegaFon mobile telecommunications operator has characterized the CyberPlat® payment system as the biggest partner accepting payments from subscribers. At the current stage of its development, CyberPlat®) accepts over 16 % of proceeds of each of the "big three" mobile operators.

VOLUMES OF TRANSACTIONS CARRIED OUT THROUGH THE PAYMENT SYSTEM
For the first six months of 2006, over 240 million transactions have been executed through the CyberPlat® payment system, and a threshold of 55 million transactions per month was surpassed, which is greater by a factor of 4.6 than the same period indicators of 2005. By the daily volumes of payments, CyberPlat® is presently the country's biggest payment system, which, according to experts, outperforms the Central Bank of the Russian Federation in the number of transactions. At that, it is noteworthy that payment operation processing in CyberPlat® is carried out online and takes no more than two seconds.

FAULT TOLERANCE
Recently, the CyberPlat® specialists performed the system's efficiency and reliability testing. The test results have shown: the system is capable of processing over 700 thousand transactions per hour or 200 transactions per second. Significantly, in peak load moments—including periods when, due to technical failures, other payment systems do not operate, or after a big mobile operator recovers the operating capability of its billing system and the flow of CyberPlat® payments is on a significant increase—the maximum load on the system remains within 200 thousand transactions per hour. This means that the CyberPlat®'s capacity is more than 3.5 times in excess of the current peak needs.

The CyberPlat®'s fault tolerance indicator outflanked the one of the nearest competitor over five times. The System simultaneously operates in two independent offices with the main office located in the Moscow World Trade Center. The second office is kept in reserve and operates in standby mode. The communication between the two offices is effected via two alternative channels. This type of reserve provision ensures a much higher fault tolerance of CyberPlat®, as well as independence from the majority of force majeure events, compared to competing platforms.

The CYBERPLAT Company, unlike other systems, possesses relevant licenses of the Federal Security Service of the Russian Federation, Federal Service for Technical and Export Control, and other agencies.

DEMAND
High demand for the system is predetermined by its advantages compared to the alternative means of payment, for example, scratch-cards. Payments via CyberPlat® take less time, they are significantly more comfortable and cheaper than other methods of personal account replenishment. Payments via the System exclude the risk of acquiring an expired or counterfeited scratch-card, free from the need of purchasing the card itself.

The CyberPlat® system fulfills a significant social function—its advantages are important for the low income consumers of mobile telecommunication services. For example: if a subscriber, perhaps, a school pupil does not have money to acquire a scratch-card with a minimum value of 150 rubles, he can reload his account through CyberPlat® even with 10-20 rubles (Beeline allows for a minimal payment of 2 rubles).

Figure. Shares of payments in the total volume of CyberPlat® transactions,
distributed by amounts (according to data as of H1 2006).

According to the results of the first half of 2006, the amount of an average transaction executed through CyberPlat® comprises 4.25 US dollars. Noteworthy, at present, the growth of 10-20-ruble transactions has been reported.

The use of the CyberPlat® system secures considerable benefits not only for subscribers but for the operators and their dealers as well. The economy on scratch-card issuance amounts to five per cent of the turnover volume. In their turn, retailers do not have to divert significant funds for scratch-card procurement.

PAYMENT ACCEPTANCE NETWORK
The overall number of the CyberPlat® system's payment acceptance points increased 60% in the first half of 2006 reaching over 24 000 by the beginning of July. Presently, by the number of payment acceptance points, CyberPlat® has outstripped the biggest bank—the Savings Bank of Russia possessing the most developed branch chain of more than 20 000 offices throughout the country. This sustained and dynamic growth has been facilitated by connecting new retail outlets, dealer companies, self-service terminal chains, different bank offices and branches to CyberPlat®, first of all, in the country's regions.

Specifically, in H1 2006, CyberPlat® participated in the launch of several projects organizing cash payment acceptance in large-scale retail chains, such as ALPI hypermarket chain, and others.

Large Federal mobile communication salon chains—Svyaznoy, Dixis, Yevroset, Mobile-Center, Beta-Link, Ultra Star, Tsifrograd, and many others—continued fruitful cooperation with the CyberPlat® payment system in the first half of 2006.

Successful advancement of the FSUE Post of Russia and CyberPlat® joint project for cash payment acceptance in the vast Russian post office network should particularly be emphasized. The number of regions in the Russian Federation where, nowadays, post offices accept payments has risen from 44 to 54 in the passed six months.

The scale of the CyberPlat® partner short-term crediting services has enlarged, thus enabling dealers to proceed with acceptance of payments even when their accounts balances are exhausted. That secures more comfort for the system's partners allowing them to increase their earnings even with the working capital deficit.

Almost all big companies with sustainable turnover growth and high level of technological and corporate culture have been partners to the CyberPlat® payment system—Federal mobile communication salon chains, supermarket and trade center chains, large service providing chains such as Post of Russia offices.

At that, recently, the share of middle-size and small businesses dealing with the Payment System has been growing steadily. For them the Company has developed special terms to ease and expedite the formal interaction procedures facilitating extra income in extremely comfortable conditions.

REGIONAL STRUCTURE OF THE CYBERPLAT® DEALER NETWORK
Currently, the CyberPlat® dealer network has the following regional structure. The greatest number of payment acceptance points is located in the Central Federal District (6920), Privolzhye Federal District ranks second (4554), Southern Federal District is the last in the leading three (4159).

Figure. Regional structure of the CyberPlat® dealer
network by Russia's Federal Districts, as of June 2006.

This year, the CyberPlat®'s Regional Directorates opened in Nizhny Novgorod, Samara, Krasnodar, Yekaterinburg, Saint-Petersburg and Novosibirsk.

At present, the share of regional dealer payments through the CyberPlat® system has drastically increased and already comprises over 64% of the Company's turnover; all the more significant is the fact that, according to the statistics, if in Moscow and the Moscow Region an average payment equals $7.2, in other regions it reaches only $3.1.

The CyberPlat® Regional Program developed by the Company is conducive to the expansion of the business, and complies with the strategy of the regional network development. The Program launch facilitates earning profit with minimal material and time inputs. You may register as the CyberPlat® Payment System Representative right now on the Company's Internet site: www.cyberplat.ru/agent/predstavitel.htm, or by telephone. The Payment System Representative does not need to set up payment acceptance outlets, invest his/her own finances or accept payments from the users and clients of telecommunications service providers and operators,-he/she receives money for attracting new dealers.

SERVICE PROVIDERS
In the first half of 2006, the number of online payment gateways to communication operators and service providers has grown from 42 up to 54. New operators and providers—MetrotelKazan, Astrakhan-GSM, Volgograd-GSM, Kodotel, SkyLink-Udmurtia, SIPNET (Moscow) and others—have become partners to CyberPlat®.

Besides, this year, the commercial television operator Tvoyo TV (Saint-Petersburg) was connected to the CyberPlat® System, and the list of Internet providers receiving our services has been enlarged with Butovo.com and Extreme (Maryino.Net) (Moscow) and Bit-Telecom (Perm).

TECHNOLOGICAL INNOVATIONS
1. For the last half year, to secure the users maximum convenience and perfect the System's operation, a number of technological innovations were implemented. Particularly, there was introduced a system of fast automatic registration enabling those interested to become dealers in mere 5 minutes.

In modernizing the system, there was used a number of innovations affecting the legalization of relationship between the CyberPlat® System and the dealers connected, and the procedure of initial Digital Signature (DS) formation was simplified.

The first part of alterations facilitated the connection to the CyberPlat® payment system merely by means of 5 steps. The Simplified Procedure employs the grounds stipulated in Article 428 of the Civil Code of the Russian Federation providing for a dealer's connection to the Payment Acceptance Agreement (Deed of Accession) by simply submitting a relevant application. The procedure drastically reduced the number of required documents.

The second part of alterations improved the dealer administrator DS (digital signature) formation. The optimization was implemented due to uniting all the relevant steps within a single Key Manager (setup.exe) software module, thus considerably simplifying DS key formation process and making it more user-friendly and clear.

Immediately after registration in the System, the participant's account is credited with 100 rubles, for the user to practically test the speed of payment processing for the benefit of various providers.

2. The development of information technology is to a great extent determined by applications with public codes. Therefore, CyberPlat® has given access to the source codes of client applications developed by the Company for mobile telephones, handheld PCs, cash-in payment terminals. This innovation ensured the ground for the CyberPlat®'s clients to adjust and integrate the applications into their accounting systems, enterprise management systems, information management systems, etc.

3. Following the development trends in the information technology market, new structural divisions have been formed within the Company. They develop peripheral software for various equipment (cash-in terminals, POS-terminals, teller machines, etc.)

4. CyberPlat® has developed a unique technology enabling users to generate and sign by DS any type of documents in a mobile phone. The new development is based on the Java platform and therefore is easy to install—it only needs to be uploaded into the mobile phone. The technology exclusively suffices for the use of a personal mobile telephone in generating payment orders, which, unconditionally, provides significant convenience. Owing to 512-bit key length DS (digital signature) integrated into the software, the documents created with it and transmitted to an addressee are absolutely legally valid, accepted by Russian courts, and are irrefutable.

The new technology may be used for:
• Executing payments;
• Forming requests for bank statements;
• Securities and currencies operations;
• Signing urgent documents;
• Other various instances.

The CyberPlat®'s development takes a new step forward in the development of document processing ergonomics and transaction performance. Indicatively, the program enables complete acceptance of payments from private individuals with the use of a single mobile telephone and a teller machine. At that, the transactions executed with the program are performed online and take only several seconds, including the number verification.

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