The purchase of the leading regional cellular operator in Bashkortostan is a further important step in the implementation of Mobile TeleSystems’ strategy of expanding its national footprint into the more attractive regions of the country. As a part of the deal, Mobile TeleSystems’ buys out two share holdings: 60% of shares — from Bashsvyazinform, and 40% — from a private person. The total value of the transaction is US$41 million. “This region is strategically important for us. Bashkortostan’s mobile market is one of the most dynamic in the country. The purchase of a major regional mobile cellular operator in Bashkortostan is consistent with MTS general strategy of focusing on network coverage expansion”, — commented Mikhail Smirnov, President of MTS. “BM-Telecom is among the ten leading operators in Russia and is an indisputable leader on the local market. It is among the top telecommunications companies in terms of development rates. We think this transaction is a success for MTS.” During the past year, the subscriber base of BM-Telecom increased by over 4.5 times to 69,800 subscribers at the end of the year. By mid-May 2002 there were over 100,000 subscribers in the network. BM-Telecom holds over 75% of the market share in the Republic where mobile phone penetration is 3.4%. Revenues of BM-Telecom in 2001 were US$13.2 million, a year-on-year increase of 137%. ARPU in 2001 was US$25. EBITDA in 2001 amounted to US$9.1 million, which is an increase by 249% compared to 2000. EBITDA margin was 69%. Net income for 2001 was US$7.1 million compared to US$0.7 million in 2000. BM-Telecom long-term liabilities at year-end 2001 were US$26.4 million. At present, BM-Telecom’s network covers the area inhabited by over 70% of the republic’s population, and includes large cities: Ufa, Salavat, Sterlitamak, Tuymazy, Neftekamsk, Oktyabrsky, Belebey, Dyurtyuli, Birsk, Verhneyarkeevo. The network integrates a switching center with a capacity of 500,000 subscribers and 70 base stations by Ericsson is one of the few regional operators in Russia that employ GPRS. — ends — Bashkortostan Republic. The Republic’s capital is Ufa. The Republic has 21 cities, 41 smaller towns and around 5,000 villages. The largest cities are Ufa, Sterlitamak and Salavat. The Republic borders with Perm and Sverdlovsk regions in the North, with Chelyabinsk region in the East, with Orenburg region in the South-east and South-west, with the Republic of Tatarstan on the West and with the Republic of Udmurtiya on the North-West. The territory is crossed by important railroads and highways connecting the European part of Russia with Urals and Siberia. Bashkortostan has direct railway access to Western Kazakhstan, Northern Caucasus, Volga river, Uzbekistan and Turkmenistan. The Republic’s population is 4.1 million people (approximately 3% of the population of the Russian Federation). The Republic’s territory is 143.6 thousand sq. km. Bashkortostan has developed industry and agriculture.