Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that it has acquired a 100% stake in OAO Eurotel (Eurotel), one of the leading federal transit operators in Russia, from Mortfield Holdings Limited (Cyprus).

The purchase price amounts to $110 million with a portion payable by the end of February 2011 should the company satisfy certain conditions set forth in the agreement.

Eurotel has an extensive optical fiber network of 19.5 thousand km. The network currently connects such major cities as Moscow, Saint-Petersburg, Cherepovets, Petrozavodsk, Vologda, Krasnodar, Sochi, Novorossiysk, Ryazan, Tambov, Penza, Ulyanovsk, Samara, Ufa, Chelyabinsk, Yekaterinburg, Tyumen, Omsk, Krasnoyarsk and Novosibirsk. The network is operated using the Dense Wavelength-Division Multiplexing (DWDM) technology. Following the transaction, MTS’ network  now extends to around 35 thousand km.

Mr. Mikhail Shamolin, President and CEO of MTS, highlighted, “The acquisition will help us better realize our 3i Strategy as we look to provide our subscribers with the best possible customer experience. The build-out of our own federal backbone network will allow us to accommodate for the increasing demand levels for data services, as we roll out 3G, and to realize OPEX savings on line rental by decreasing our reliance on other companies’ networks. It will also create a platform that will enable us to launch innovative new services in the future.”

Eurotel’s financial results will be consolidated in the Company’s financial statements beginning from December 23, 2009.