The agency said in a statement the company's other ratings have been affirmed at issuer default 'B-' (B minus), short-term 'B', and national long-term 'BB+(rus)'.
Fitch has also assigned a 'BB+(rus)' rating to the company's 3-billion ruble ($111 million) fifth bond issue with maturing in August 2011.
Fitch attributed the upgrade to the company's position as a market leader in fixed-line communications in Russia's Central Federal District.
"It benefits from broad network coverage and a massive customer base. Its market share in the core fixed-line segment has been stable over the last two years and is not expected to come under additional pressure," the statement said.
However, the company remains heavily exposed to short-term refinancing risks, the agency said. At the end of 2005 its short-term debt (less than one year) accounted for 65% of total debt, rising to 70% in the first half of 2006.
CenterTelecom, which is part of Svyazinvest state telecoms holding, had charter capital of 6.31 billion rubles (about $234 million) as of July 1, 2006. The company's shares are listed on the Russian Trading System stock exchange and the Moscow Inter-Bank Currency Exchange, and its Level-1 American Depositary Receipts circulate on the U.S. over-the-counter market and the Berlin and Frankfurt stock exchanges.
