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Mobile TeleSystems

May 14, 2001

Mobile TeleSystems OJSC is on the way to a global informational environment

Moscow, Russian Federation — 14 May 2001 — Mobile TeleSystems (NYSE: MBT), Russia’s leading mobile operator, announced one of its main strategic goals to ensure mobility of the Internet using 2,5 and 3G technologies.

MTS is now developing technologies to provide its subscribers with non-voice services and mobile access to the Internet. This includes data transmission in GSM networks, SMS, WAP services, GPRS packet data transmission. Besides, MTS has already started working on a technical launch of the first test UMTS network in Moscow.

“We are now witnessing the creation of a global informational environment where state borders overlap, and such processes as exchange, storage and access to information become easier,” — said Dr Yuri Gromakov, Vice president of Mobile TeleSystems OJSC. — “Internet has become the main driving force of development of this environment. Our today’s goal is to provide Internet users with global mobility on the principles of free and inexpensive data exchange using packet transmission technologies and high speed radio access”.

Data transmission traffic in MTS network is constantly growing. During the year 2000 data transmission billable traffic within the “Mobile Internet” service showed a 20 times’ increase. As of today, total data transmission traffic has exceeded 300,000 minutes per month.

The most extensive growth in MTS network is in the increasing number of SMS messages. In the year 2000 the number of billable SMS messages per day increased 26 times and as of today it is over 300,000. In the light of increasing SMS traffic, Mobile TeleSystems is currently launching a new SMS-center (SMSC) capable to handle up to 100 SMS messages per second. Commenting on this event, Shagit Reznikov, Director of New technologies and Services of MTS OJSC, said: “The equipment we are installing can ensure processing of up to 200 SMS messages per second in future which corresponds to the highest level of development of this technology in the world. We are launching SMSC with “a reserve”, as explosive growth of SMS-traffic, accessible tariffs and popularity of SMS amongst low-active subscribers give us good expectations that the interest to this service will grow. That’s why we must ensure a considerable reserve of handling capacity in MTS network.”

Along with tremendous increase in SMS messages’ popularity, the number of connections of MTS subscribers to the Internet via WAP technology is constantly growing. Monthly number of inquiries to WAP within MTS network increases in average by 15 % and as of today is 400,000 per month.

The total number of WAP-users is now about 1.5% of the MTS subscriber base. Up to 40 subscribers can use MTS WAP-services simultaneously.

According to MTS experts’ expectations, the number of subscribers who use WAP services monthly will reach 10,000 people by October 2001, and 600 people will use this service every day.

Growing interest to WAP-resources supported by MTS demonstrates that the company had chosen the right strategy of developing its WAP-portal. This is now the most informative Russia’s WAP-portal. In December 2000 WAP-site inquiries made 30% of the total number of resources used by users, in January and February of 2001 — 33%, in April the number reached 36%. The most popular sections of MTS WAP-site are: WAP-chat, “Weather”, “Entertainment”, “Poster”, “News”.

In April 2001 “Mobile TeleSystems” launched a new WAP resource — “Moscow Guide”. It allows MTS subscribers to find data on state and commercial organizations, hospitals, shops, car service stations within several minutes. The resource’s features surpass a common paper guide. For instance, it has the search function on any organization by its name, phone number or address. As of today, the constantly updated database comprises over 150000 objects in Moscow.

WAP technology has become the first step towards a convergence between the Internet and cellular communications. The next step is introduction of packet data transmission technology — GPRS. Nowadays all MTS base stations within the Moscow license area are equipped with a commercial version of software produced by Motorola, which supports bases’ operations in packet transmission mode. GPRS in MTS network provides its subscribers with on-line access to the Internet and WAP over GPRS services.

On May 14, 2001 MTS announced a technical launch of GPRS networks in Tver, Smolensk, Yaroslavl and Kostroma regions.

Another step towards the global mobile Internet is introduction of 3G communications. MTS is now working on a technical launch of a test UMTS network in Moscow that integrates a UMSC switching center, a controller and three base stations.

For further information contact:

Press Secretary
Eva Prokofyeva
tel: +7 (095) 104-49-38

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. 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 statement to conform them to actual results. 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 F-1. 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.

Mobile TeleSystems OJSC (NYSE: MBT) is Russia’s leading GSM 900/1800 mobile cellular operator. MTS has GSM 900/1800 licenses to provide mobile cellular telephony services in 34 regions of the Russian Federation, covering 45% of the country’s population. It has commenced operations in 21 regions covering more than 41 million people. Information about MTS’s activities and services can be found on MTSs website at




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