MTS Increases Ownership Stake in COMSTAR-UTS and MGTS

24 December 2009

Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that it has acquired through an exchange of shares an 11.06% stake in COMSTAR – United TeleSystems (“COMSTAR-UTS” – LSE: CMST), a leading supplier of integrated telecommunication solutions in Russia and the CIS, and indirectly an additional 14.20% stake in OAO Moscow City Telephone Network (MGTS), Moscow’s incumbent fixed-line telecommunications operator.

Through a series of transactions, a group of investment funds have exchanged their joint 14.20% stake in the OAO Moscow City Telephone Network (MGTS) for 31,816,462 ordinary MTS shares1, representing 1.60% shares outstanding, previously held in treasury and $7.3 million in cash.  The MGTS stake, represented by 2,462,687 ordinary shares and 11,135,428 preferred shares, will be held by a wholly owned subsidiary of Comstar-UTS.  Simultaneously, MTS will receive 46,232,000 shares, representing 11.06% of total shares outstanding, of Comstar-UTS from MGTS Finance S.A., a wholly owned subsidiary of MGTS.  In addition, MTS will pay Comstar-UTS a cash consideration of $8.3 million.

The transaction allows MTS to increase its share in Comstar-UTS to 61.97%, while share of Comstar-UTS in MGTS will rise to 69.93%.

1 Equal to RUB 7,171,430,534.80 based on the MICEX price on December 17, 2009, of 225.4 rubles per share per the terms of the agreement with MGTS shareholders.

For further information, please contact:

Joshua B. Tulgan
Director, Investor Relations
Mob: +7 985 220 4208

Department of Investor Relations
Mobile TeleSystems OJSC
Tel: +7 495 223 2025

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Mobile TeleSystems OJSC (“MTS”) is the largest mobile phone operator in Russia and the CIS. Together with its subsidiaries, the Company services over 97.11 million subscribers. The regions of Russia, as well as Armenia, Belarus, Turkmenistan, Ukraine, and Uzbekistan, in which MTS and its associates and subsidiaries are licensed to provide GSM services, have a total population of more than 230 million. Since June 2000, MTS’ Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT).

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might,” and the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. We refer you to the documents MTS files from time to time with the U.S. Securities and Exchange Commission, specifically the Company’s most recent Form 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures, rapid technological and market change, acquisition strategy, risks associated with telecommunications infrastructure, risks associated with operating in Russia and the CIS, volatility of stock price, financial risk management and future growth subject to risks.

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