MTS-BRANDED PHONES

Friday, February 12, 2010
          
MTS 835, 3G-enabled phone with a 2 megapixel camera and a 2.4 inch screen

We have been selling MTS-branded phones since the end of last year through our monobrand retail network in Russia. Currently, we have a total of four models on offer ranging from a basic model at 980 rubles* (or around $32**) - one of the most affordable in the market - to a 3G-enabled one at a very attractive price point  of 6,490 rubles (or around $215).
 
Lower-end phone models dominate in Russia, and we estimate that phones for under 5,000 rubles (around $165) accounted for over 35% of the market in 2009. This price point is attractive to customers who are buying their first phone, but also to those that want a phone for a second line or to use during vacation.

So far, we are quite pleased with the sales of MTS-branded phones. At the end of 2009, MTS was among the top five mobile phone brands, accounting for approximately 2% of the market in Q4’2009 (based on our estimates, in terms of sales of devices). During the months of November and December, MTS-branded phones accounted for 15% of phone sales through the MTS monobrand network. MTS-236, the entry-level model, was one of the 10 most popular models in December.

We have recently launched sales of MTS-236 in Armenia, and we are to planning to expand our branded device portfolio in our markets of operations going forward.

Additional information about our phones:
MTS-236 is an entry-level phone, one of the most affordable in the market, sold for 980 rubles (around $32). It offers basic calling capabilities with an attractive form factor.

MTS-733 is one of the cheapest 3G phones available in Russia, priced at 2,999 rubles (under $99), which is 4 times cheaper than the average 3G model in the market. This model has a 2 megapixel camera and 2 inch screen.

MTS-736 is a slider with a 2 inch screen and a 2 megapixel camera. It is sold for 4,490 rubles (around $148).

MTS-835 is the most advanced 3G model offered under our brand, featuring a 2.4 inch screen, a 2 megapixel main camera and a 0.3 megapixel front camera. The phone is priced at 6,490 rubles (around $215).

MTS-236 was developed by ZTE, and the other three phones are produced by Huawei. We are offering a 3-year warranty on our phones, if subscribers stay with MTS during that period.

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* The amounts quoted in this post refer to phone prices when bought with a new MTS tariff plan. Phones are unlocked and are available without the tariff for the following prices: MTS-236 for 1,050 rubles, MTS-733 for 3,490 rubles, MTS-736 for 4,990 rubles and MTS-835 for 6,990. While contract prices vary across the Russian regions, MTS-branded phones are uniformly priced across Russia.

** According to the Russian Central Bank exchange rate of 30.2462 RUB/USD as of February 11, 2010. Dollar amounts provided for reference only.

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