01-2

Address of the Company's CEO

Dear shareholders, partners and colleagues!
On behalf of the Management Board of Transtelecom JSC I am pleased to present to you the Annual Report for 2017.

The year 2017 was the period when the transformation aimed at strengthening of historical competitive advantages, including technological leadership and a diversified portfolio of services has started. We adopted the Development Strategy until 2026, updated the organizational structure by dividing the business into Telco, IT and the Operating Blocks, and also enhanced the team responsible for the New Strategy implementation.

In 2017, we strengthened the position of Transtelecom JSC in the traditional and digital segments, and also continued to develop the directions which are promising for the Company. In accordance with our Strategy, the share of Transtelecom JSC's revenue from the sale of IT services for the past year has grown significantly and amounted to 87%. The revenue from the 1st port of the broadband network for the year increased by 7.4%.

Speaking about the services that ensured provision of the positive dynamics of revenue, the most significant growth was recorded in the sales of long distance and international telephony services by 33%, international transit services by 49%, and Internet access services by 56%.

On a separate point, Transtelecom JSC remains a reliable partner of the state: since 2017 it has provided free access to the Internet in all the Citizens Service Centers (CSC) in Astana. The main goal of the project is to provide people with instant access to the information they are interested in and increase the level of IT literacy among the citizens.

To date, Transtelecom JSC has started to develop and create smart digital solutions, introduce the best high-tech innovations and modernize communication facilities throughout the country.

Transtelecom JSC is implementing projects in the field of cybersecurity. Thus, the Company designed a new model of digital security based on the mature SIEM technology and is the first in Kazakhstan which established the SOC Information Security Monitoring Center.

Transtelecom JSC strives to be an effective company. In 2017, we continued to optimize the number of personnel, improved the efficiency of business processes and productivity. As a result, the income per employee reached 23,801.1 thousand tenge/person at the end of the year.

We are working to ensure a transparent and competitive remuneration system, a decent social package and opportunities for professional and personal development. We adjust the learning and development processes in a manner that gives each employee the opportunity to realize his professional and creative potential and succeed together with the Company.

An important element of the Company's strategy is the creation of a corporate culture, where the employees of Transtelecom JSC form their attitude to the company as their property. To this end, we are implementing a lean-based system that gives employees a tool for day-to-day progress and efficiency improvement.

Transtelecom JSC will continue to implement the strategic goal of becoming an integrated provider of digital services and improve the quality by offering convenient telecommunications services, increasing the efficiency of our customers' business. This means that we must become more flexible and client-oriented, faster and more innovative every day.

Striving for the further improvement of the corporate governance system, we are constantly looking for new ways to improve our corporate policies and procedures.

We recognize the importance and priority of the environmental factor in the implementation of any activity and strive to contribute to a healthy life for future generations.

I wish to conclude by thanking all the employees, partners and shareholders of Transtelecom JSC and expressing confidence that the high professional qualities, creativity and diligence of our team will continue to ensure the successful development of our Company's business.