The History of MTS
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The History of MTS

MTS was established as a closed joint stock company by Moscow City Telephone Network (MGTS), T-Mobile Deutschland GmbH (T-Mobile), an affiliate of Deutsche Telekom AG, Siemens AG (Siemens) and several other shareholders in October 1993. Four Russian companies collectively held 53% of the original share capital, while the German shareholders retained the balance of 47%. In late 1996, Sistema JSFC bought out the Russian shareholders and the Deutsche Telekom affiliate bought the remaining stake from Siemens.

On March 1, 2000, CJSC MTS and CJSC RTC merged to form Open Joint Stock Company (OJSC) Mobile TeleSystems. On April 28, 2000, the Federal Commission for Securities of the Russian Federation registered the initial issue of OJSC MTS shares. That same year MTS became the second Russian company to trade on the New York Stock Exchange by listing its shares through Level III American depositary reciepts.  MTS trades under the ticker symbol MBT.  Since 2003, MTS’ local shares have been listed and traded on MICEX,  the Moscow Interbank Currency Exchange, under the symbol MTSI.

After its beginnings in the Moscow License Area in 1994, MTS obtained additional licenses in Russia in 1997 and began its expansion into Tver and Tver region, Kostroma and Komi Republic. In 1998, MTS acquired Russian Telephone Company and licenses for network construction in Smolensk, Pskov, Kaluga, Tula, Vladimir and Ryazan regions. Participating in ReCom, MTS started network construction in Bryansk, Kursk, Orel, Lipetsk, Voronezh and Belgorod regions. Agreement between MTS and Rosico enabled MTS to develop GSM-1800 in 17 more regions of Central Russia and in 11 regions of the Urals.

In 2000, MTS started operations in Amur and Yaroslavl regions and the Republic of Udmurtia. In 2001, MTS continued its penetration into the regions of Russia and expanded its network to seven more regions. The same year MTS acquired Telecom XXI, thus entering the North-West region of Russia and its second city, St. Petersburg.

In April 2002, MTS acquired the largest mobile operator in southern Russia - Kuban GSM, which allowed expanding MTS network to major national resorts. In October MTS announced its acquisition of DonTelecom - another Southern District’s operator and thus strengthened its presence in this strategic region. MTS also acquired a leading Bashkortostan operator, while continued network construction in Perm and Chelyabinsk improved MTS’ position in the Urals. In 2002, MTS launched its networks in Murmansk, Tambov, Arkhangelsk, Nenets Autonomous District, Vologda, Tyumen, Republic of Karelia and Altai. In October, 2002 the Company expanded its license portfolio; its acquisition of Bit LLC MTS gave the company the licenses to provide GSM-900 mobile communication services in the four regions of Russia: Republic of Tuva, Sakhalin region, Chukotka Autonomous District and Republic of Kalmykia.

In June 2002, MTS launched its network in Republic of Belarus through a joint venture with Beltelecom, the national fixed line operator.

In August 2003, MTS entered Ukraine by acquiring the leading national operator UMC.  Meanwhile, MTS continued its expansion in Russia through its acquisition of Tatarstan’s largest operator TAIF Telecom.  MTS also bought additional leading regional mobile operators: Sibchallenge (Krasnoyarsky Territory, Republic of Khakassia, Taimyr (Dolgano-Nenets) Autonomous Districts); Tomskaya Sotovaya Svyaz (Tomsk region); MarMobile GSM (Republic of Marij El). In addition, through a series of deals, MTS entered into possession of 50% shares of Primtelefon (The Primorie Territory and Siberia), 50% shares of Astrakhan Mobile (Astrakhan region), and 50% shares of Volgograd Mobile (Volgograd region). By the end of the year, the Company’s license area in the Russian Federation expanded to 76 regions with the population of 127.3 mln.

MTS continued to expand internationally, entering the country of Uzbekistan in August 2004 through its acquisition of Uzdunrobita, the leading mobile phone operator in the country.  In June 2005, the Company acquired Barash Communications Technologies, Inc., the number one operator in Turkmenistan.  Most recently, in September 2007, MTS acquired K-Telecom, the leading mobile operator in Armenia.

In 2006, MTS carried out a comprehensive benchmarking program in which management compared the Company against other leading mobile operators throughout the world. Key outcomes of this exercise included a redefined approach to our customers through our new brand and marketing policies and an organizational transformation designed to promote better performance and efficiency throughout the Company.  In May, the company launched its new brand, the distinctive egg logo, representing our new covenant with our customers and corporate identity.

Today, OJSC Mobile TeleSystems is the largest mobile phone operator in Russia and the CIS. It boasts a population coverage area in excess of 230 million people and operates in six countries.  With a free-float now of 47%, most of which is traded through ADRs by investors around the world, MTS is not only a leading Russian blue-chip company, but truly a global organization.