Moscow, Russian Federation — JULY 17, 2006 — UMC, a leading Ukrainian mobile operator and 100% owned by Mobile Telesystems OJSC («MTS» — NYSE:MBT), announces the acquisition of a license to provide CDMA 450-BASED telecommunications services in Ukraine.

The new license will enable UMC to provide CDMA 450-based telecommunications services throughout the territory of Ukraine, where the Company has operated a GSM network since 1997.

CDMA 450 is a 3G telecommunication standard ratified by the International Telecommunication Union supporting all areas of CDMA 2000 development including CDMA 2000 1x EV-DO. This standard has a major advantage versus GSM, including a larger coverage zone and capability to support high speed subscriber data transmission.

«The acquisition of the new license marks the completion of a considerable step towards the construction of a new national network. Now we face the next large-scale objective — to roll out CDMA network construction in Ukraine that will enable the Company?s subscribers to use high-speed wireless Internet even in the most remote areas of the country. We are confident that the extensive network of sales and customer care centers of UMC covering the entire country will help us to offer new services to all comers» — said Adam Wojacki, Managing Director of UMC.

CDMA 450 supports data transmission and access to the Internet at up 3,2 Mbt/s. UMC will render the following services to the subscribers: provide services on roll out of wireless virtual data transmission networks, remote access to corporate mail, high speed access to the Internet, multimedia services (e. g. video on demand). The Company plans to provide services for both private and corporate subscribers.

Quality and accessible services, interesting value added services combined with the wide CDMA network coverage zone open new development horizons for UMC and will have positive effect on the Company’s subscriber base.