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MTS acquires Bashcell
18 December 2007
Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that it has acquired 100% of Bashcell, a mobile phone operator in Russia’s Volga region. MTS acquired a 100% stake in Bashcell from Bashneft and local private companies for $38 million, a sum that includes the assumption of $32 million in debt.
“The acquisition helps MTS to further solidify its leading position in Bashkortostan by increasing its market share to 39%. The Company is continuing to execute on its 3+2 strategy in particular consolidation of the Russian mobile phone market and expansion of operations in the regions,” commented Mr. Mikhail Shamolin, Head of MTS Russia.
Ms. Svetlana Saprina, acting General Director of Bashcell highlighted, “This is an opportune time to align with Russia's leading operator in order to bring better service, quality and a wide variety of products to our customers.”
Bashcell is the GSM-1800 mobile services provider in the Republic of Bashkortostan, an oil-rich and heavily industrialized portion of Russia’s Volga region. It boasts a population of 4.1 million. The company provides service to roughly 142,000 subscribers1, which constitutes approximately 3% of the market2. Mobile penetration in the region is 102.4%3. The company is also licensed to provide DAMPS, zone, fixed-line, data transmission and telematic services.
According to the Russian Accounting Standards (RAS), revenues in 2006 amounted to $11 million with an EBITDA margin of 25%; the company’s current average monthly revenue per user (ARPU) is $6.6. Revenues for the first six months of 2007 were $8 million.
For further information, please contact:
Mobile TeleSystems, Moscow
Investor Relations
tel: +7 495 223 2025
e-mail: ir@mts.ru
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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 79.12 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).
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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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