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Mobile TeleSystems

July 26, 2012

MTS resumes operations in Turkmenistan

Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” or the “Company” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that, having received licenses and obtained legal and technical conditions for operations in the country, it is resuming operations in Turkmenistan.

MTS and the state-owned provider of telecommunications services, State Enterprise for Electrocommunications “TurkmenTelecom”, acting in accordance with a decree issued by the President of Turkmenistan, signed an Agreement (“Agreement”) stipulating the terms and conditions for the operation of MTS’s wholly owned subsidiary “MTS-TURKMENISTAN” in the Republic of Turkmenistan.

The Agreement was signed for a period of five years and may be extended for another five year term subject to fulfillment of certain conditions. The Agreement stipulates that MTS-TURKMENISTAN will on a monthly basis pay to TurkmenTelecom 30% of its net profit1 derived from operations in Turkmenistan.

MTS-TURKMENISTAN has been granted GSM and 3G licenses for a three-year term, has signed a number of interconnect and access to infrastructure agreements with Turkmenistan state-owned telecommunications providers and has been allocated other technical resources enabling it to resume operations throughout Turkmenistan.

MTS’ infrastructure remains fully in place and MTS-TURKMENISTAN is currently working with the vendors to restore network’s capacity and to quickly relaunch services to its subscriber base of more than 2.4 mln customers.

MTS President and CEO Andrei Dubovskov commented, “We are pleased to announce the resumption of operations in Turkmenistan, a development of mutual benefit reached through a long negotiation process involving Government of Turkmenistan and management of both MTS and Sistema JSFC, our majority shareholder. The agreements reached and enabled by the decree of the President of Turkmenistan serve the interests of MTS shareholders and further support the development of the economy of Turkmenistan. Despite our lengthy absence in Turkmenistan, we are confident that the quality of our network, the strength of our brand and deep understanding of the local market will allow us to establish a strong competitive position in this very attractive market.”

On July 25, 2012, MTS, its wholly owned subsidiary BCTI, the Sovereign State of Turkmenistan, the Communications Ministry of Turkmenistan, state-owned operators Altyn Asyr and TurkmenTelecom signed a settlement agreement pursuant to which the parties undertake to withdraw all mutual legal claims relevant to the cessation of MTS’s activities in Turkmenistan in December 2010.

1The amount of net profit is calculated based on the financial statements prepared in accordance with Turkmen accounting standards subject to certain adjustments.

 

 

 

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