Moscow, Russian Federation - March 7, 2003 - Mobile TeleSystems OJSC ("MTS" - NYSE: MBT), the largest mobile cellular operator in Russia and Central and Eastern Europe today announces that it has become the owner of a controlling stake in Ukrainian Mobile Communications (UMC).

A UMC general shareholders' meeting held on February 28, 2003, approved the transfer of a 57.7% stake in UMC to MTS. On 4 March, 2003 Ukranian registration authorities registered the transfer of the stake in favor of MTS.

MTS has acquired the 57.7% stake in UMC for $194.2 million from KPN (16.3%), Deutsche Telekom (16.3%) and Ukrtelecom (25%).

Commenting on the event, Mikhail Smirnov, President of MTS said: "By completing the deal MTS gains immediate access to a developing market in a country of 50 million, which gives us new opportunities for further growth. On the other hand, this strategic acquisition is in line with the world tendency of globalization of the telecommunications business, its spread over borders and formation of multi-national corporations".

MTS has also entered into option agreements with TDC and Ukrtelecom to purchase their respective ownership interests in UMC. If all options are exercised, MTS will own a 100% stake in UMC.

UMC is one of the two leading mobile operators in Ukraine providing services to over 1.7 million subscribers, representing a market share of approximately 46% (according to independent sources). It operates under nationwide GSM 900/1800 and NMT 450 licenses.

Acquisition of UMC further increases MTS' GSM license footprint to cover approximately 165.7 million people and its subscriber base to over nine million.

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Mobile TeleSystems OJSC (or "MTS") - is Russia's largest cellular operator serving over seven million subscribers. MTS together with its subsidiaries is licensed to provide GSM 900/1800 services in 57 regions of Russia and the territory of Ukraine with a total population of 165.7 million. Today, MTS' network operates in 47 regions of Central (including Moscow and Moscow region), Northwestern (including St Petersburg and Leningrad region), Southern, Volga, Urals, Siberia and Far-Eastern federal districts of the Russian Federation. MTS operates a joint venture in the Republic of Belarus, which has a total population of ten million. Since June 2000, MTS' shares have been listed on the New York Stock Exchange with the ticker symbol MBT. Additional information about MTS can be found on MTS' website at www.mtsgsm.com

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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" 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, volatility of stock price, financial risk management, and future growth subject to risks.

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For further enquiries contact:

Mobile TeleSystems, Moscow
Investor Relations
Andrey Braginski
tel: +7095 911 6553
e-mail: ir@mts.ru

Press Secretary
Eva Prokofieva
tel.: +7095 737 4530
e-mail: eva@mts.ru

Gavin Anderson & Company, London
Halldor Larusson / Yolande Stratford
tel: +44 (0) 20 7554 1400