Dear Shareholders and Investor community, We are pleased to inform you that we have taken a controlling interest in ReCom, our previously unconsolidated subsidiary. We increased our stake up to 53,9% from 49,9%. This will allow us to consolidate ReCom in our financial statements.

The additional 4% of shares were acquired from an independent off-shore company for the amount of US$1m.

ReCom holds GSM-900 licenses for the six South Black Earth regions of Russia: Voronezh, Lipetsk, Bryansk, Belgorod, Kursk and Orel. The licenses are valid till May 15, 2005. MTS’s 100% owned subsidiary Rosico also holds GSM 1800 licenses for these six regions.

Per April 25, 2001 ReCom had 28,000 subscribers and showed 15,000 subscribers at the end of 2000.

In 2000 ReCom showed revenues of $7.4m; EBITDA of $2.7m, and EBITDA margin of 36%. Net income was $0.6m.

Cumulative network investments at year end Y2000 had reached $17.2m; annual capital expenditures in the year 2000 were $10.4m.

ReCom’s average revenue per user per month (ARPU) in Y2000 was $65.